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European Union

EU(European Union)
• The European Union or EU is
organisation of Eropean countries, which
currently has 27 member states. Founded
to enhance political, economic and social
co-operation. The Union was established
under that name by the Treaty on
European Union (commonly known as the
Maastricht Treaty) in 1992. The European
Union is the most powerful regional
organisation in existence.
The objectives of the EU
– Elimination of customs duties among member
states.
– Elimination of obstacles to the free flow of import
and export of goods and services among member
nations.
– Establishment of common customs duties and
united industrial/ commercial policies regarding
countries outside the community.
– Free movement of capital and people within the
block.
The objectives of the EU cont..
– Acceptance of common agricultural policies,
transportation policies, technical standards, health
and safety regulations.
– Common measures for consumer protection.
– Common laws to maintain competition throughout
the community and to fight monopolies or illegal
cartels.
– Regional funds to encourage the economic
development of certain regions.
– Greater monetary and fiscal coordination among
member states and certain common fiscal policies.
Flag of European Union
Development:
• First successful regional organization
(1957) European Economic Community
(EEC)
• EEC became European Community (EC)
(1986)
• EC became European Union (EU) (1993)
• Essentially borderless, once inside the EU
• Freedom of movement of capital, labour,
services, people
Political structure of the European
Union
• European council
– Heads of state and commission
– President resolves policy issues and sets policy
direction
• European Commission
– 20 Commissioners appointed by members for 4 year
terms
– Proposing, implementing and monitoring legislation
Political structure of the European
Union cont…
• Court of justice
– One judge from each country
– Hears appeals of EU laws
• Council of ministers
– One representative from each member
country
– Ultimate controlling authority
– No EU laws without approval
The 27 EU Member States:

• Belgium, Bulgaria, Czech


• Republic, Denmark, Germany,
• Estonia, Greece, Spain,
• France, Ireland, Italy, Cyprus,
• Latvia,Lithuania,
• Luxembourg, Hungary, Malta,
• the Netherlands, Austria,
• Poland, Portugal, Romania,
• Slovenia, Slovakia, Finland,
• Sweden and the United
• Kingdom.
Oraganisation structure

EUROPEAN COUNCIL;

COURT OF JUSTICE COURT OF AUDITORS EUROPEAN COMMISSION EUROPEAN PARLIMENT ADVISORY COMMITTEES
European Act
• Single market program predicted to give
EC firms greater opportunities to exploit
economies of scale
• Removal of trade barriers increases
competition forces EC firms to be more
efficient
• Name changed to EU
The Euro: Benefits and costs
• Benefits:
– Savings from using only one currency
– Easy to compare prices, resulting in lower prices
– Forces efficiency and slashing costs.
– Creates liquid pan-Europe capital market.
– Increases range of investments for individuals and
institutions
– As of 2004 Euro strong against the dollar and
expected to rise
Costs:

– Countries lose monetary policy control.


– European Central Bank controls policy for the “Euro
zone”
– EU is not an” optimal currency area”.
– Country economies are different
– Euro puts the economic cart before the political horse
– Strong Euro (2004) makes it harder for Euro zone
exporters to sell their goods