EUROPEAN UNION

• Students will be able to:

• Identify and describe the goals, functions and structure of the
European Union
• Examine and explain the challenges confronting this regional
arrangement
• Ernst Haas (1968: 16) provided a definition of European political
integration (regional integration) as a process, whereby:
• Political actors in several distinct national settings are persuaded to
shift their loyalties, expectations and political activities toward a new
center, whose institutions possess or demand jurisdiction over the
pre-existing national states.
• The end result of a process of political integration is a new political
community, superimposed over the pre-existing ones.
• Bella Balassa (1961), defined economic regional integration as both :
• “a process …designed to abolish discrimination between economic units belonging to
different national states; … it can be represented by the absence of various forms of
discrimination between national economies.”

• Accordingly, regional integration (political integration) is a process transferring

loyalty, expectations and political decision making power, or ‘sovereignty’ to a
new centre.
• Regional cooperation refers to the political and institutional
mechanisms that countries in a general geographical region devise to
find and strengthen common interests as well as promoting their
national interests, through mutual cooperation and dialogue.
• Regional integration can take place both within an
economic and a political sphere but that the
highest ‘stage’ of both economic and political
integration includes full regional integration.
• What distinguishes regional integration from
cooperation is the presence of a supranational
decision-making body.
• The stages of economic integration
• Moving from economic cooperation to supranational
integration, beginning with the lowering and removal of
trade barriers and ending with an economic union
• Free Trade – Customs Union – Common Market –
Economic Union
• Source: Holden (2003, 2006)
Supranationalism
• This refers to laws or institutions which are above the state and to
which the state must comply.
• The term refers to decision making bodies which may supercede or
override the authority of the individual nation states who are
constituent members of the organisation.
• The basic principle is that individual nation states cede or forego
sovereignty in specific areas such as trade, defence, the economy or
the environment for mutual benefit or gain.
• The clearest and most obvious example of a supranational
organisation is the EU
Member States of the European Union
These are the 28
Member States of the
European Union.

8
Enlargement: from six to 28 countries

Belgium, France, Germany,

1952 Italy, Luxembourg, the
Netherlands

Denmark, Ireland, the

1973
United Kingdom
1981 Greece
1986 Portugal, Spain
1995 Austria, Finland, Sweden

Cyprus, Czech Republic,

Estonia, Hungary, Latvia,
2004
Lithuania, Malta, Poland,
Slovakia, Slovenia

2007 Bulgaria, Romania

2013 Croatia

9
• Treaty of Paris (1951). The treaty that was signed on 18 April 1951 between Belgium, Luxembourg, the Netherlands, France, Italy and West
Germany established the European Coal and Steel Community (ECSC). It is traditionally regarded as the foundation of the EU because it led
to political and economic stability in western Europe as well as provided the basis for the modern EU.
• Treaty of Rome (1957). The treaty that was signed by the founders of the ECSC on 25 March 1957 led to the creation of the European
Economic Community (EEC) that was formally founded on 1 January 1958. The aim of the EEC was to increase economic integration
between the signatory states.
• Merger Treaty (1965). The treaty was signed between the founding states of the ESCS and EEC on 8 April 1965 and resulted in the creation
of first joint institutions. The Merger Treaty resulted in the creation of a single set of institutions for the ESCS, EEC and the European Atomic
Energy Community. The later was founded with a separate treaty that was singed in Rome on the same day as the Treaty of Rome (1957).
• Schengen Agreement (1985). The treaty that was signed on 14 June 1985 resulted in abolition of the border checks between the members
of the EU. The so-called Schengen Area, however, was created only in 1995. Two states remained outside the Schengen Area – the UK and
Ireland. Outside the Schengen Area also remain Romania, Bulgaria and Cyprus. On the other hand, Schengen Area includes Norway, Iceland
and Switzerland which are not members of the EU.
• Single European Act (1986). The treaty that was signed between 12 members of the EEC revised the Treaty of Rome and provided the basis
for foundation of a single market. It also formalised the European Political Cooperation, the precursor of the EU’s Common Foreign and
Security Policy.
• Maastricht Treaty (1992). The treaty which is named after the place it was signed – Maastricht, the Netherlands was signed between 12
members of the EEC on 7 February 1992. It is one of the most important EU treaties not only because it formally created the EU but also
because it laid the foundation for formation of the eurozone.
• Amsterdam Treaty (1997). Signed on 2 October 1997 by the members of the EU, the Treaty of Amsterdam defined EU citizenship and
individual’s rights in terms of justice, freedom and security. It also dealt with the Common Foreign and Security Policy and the reform of the
EU institutions in future enlargements but the work on the reform of the EU institutions is still ongoing.
• Treaty of Lisbon (2007). The treaty was signed by all EU member states on 13 December 2007 with an aim to complete the reform process,
started by the Amsterdam Treaty. It entered into force on 1 December 2009.
• The Treaty of Maastricht identified five goals designed to unify Europe
in more ways than just economically. The goals are:
• 1) To strengthen the democratic governing of participating nations.
2) To improve the efficiency of the nations.
3) To establish an economic and financial unification.
4) To develop the "Community social dimension."
5) To establish a security policy for involved nations.
• Maastricht Treaty
• The Maastricht Treaty involved three pillars of the European Union.
1. The European Community (EC) pillar.
2. The Common Foreign and Security Policy (CFSP) pillar
3. The Justice and Home Affairs (JHA) pillar
• The first pillar described in the Maastricht Treaty was the European
Community (EC) pillar.
• This pillar is based on the principle of supranationalism, which means
that EU member states should cooperate with each other to achieve
common goals.
• These states share the Union's supra-national institutions — the
Commission, the European Parliament and the Court of Justice —
which have the most power.
The Common Foreign and Security Policy (CFSP) is the second pillar of the
Maastricht Treaty and places emphasis on coordination in foreign policy.

• The Common Foreign and Security Policy (CFSP) is the organised, agreed
foreign policy of the European Union (EU) for mainly security and defence
diplomacy and actions.
• CFSP deals only with a specific part of the EU's external relations, which
domains include Trade and Commercial Policy and other areas such as
funding to third countries, as well as, development assistance, humanitarian
aid and crisis response.
• Decisions require unanimity among member states in the Council of the
European Union.
• Foreign policy is chaired and represented by the EU's High Representative,
who is appointed by the European Council.
• The Justice and Home Affairs (JHA) pillar is the third ground stone of the
Maastricht Treaty.

• Within the EU, citizens have a right to live in any EU country.

• Borders can be crossed almost without noticing since the Schengen Agreement
abolished checks at the EU's internal borders (with the exception of Bulgaria,
Croatia, Cyprus, Ireland, Romania and the United Kingdom).
• Ireland and the United Kingdom – maintain opt-outs

(Opt-outs meaning they do not have to participate in certain policy areas)

• The Schengen area and cooperation are founded on the Schengen Agreement of 1985.
• The Schengen area represents a territory where the free movement of persons is
guaranteed.
• The signatory states to the agreement have abolished all internal borders in lieu of a
single external border.
• Here common rules and procedures are applied with regard to visas for short stays,
asylum requests and border controls.
• Simultaneously, to guarantee security within the Schengen area, cooperation and
coordination between police services and judicial authorities have been stepped up.
• Schengen cooperation has been incorporated into the European Union (EU) legal
framework by the Treaty of Amsterdam of 1997.
THE EURO
• The euro – Europe's new single currency - represents the
consolidation and culmination of European economic
integration.

• Its introduction on January 1, 1999, marked the final

phase of Economic and Monetary Union (EMU), a three-
stage process that was launched in 1990 as EU member
states prepared for the 1992 single market.
• 1999: the Euro was introduced as the
single currency for eleven EU member
states: Austria, Belgium, Finland, France,
Germany, Ireland, Italy, Luxembourg, the
Netherlands, Portugal, and Spain.
The EURO
1999-Present • 1999-2002: The Euro and the
previous national currencies
were concurrently used in
participating states.

• 2002: The participating

countries had their previous
national currencies withdrawn
permanently as legal tender.
• Banknotes and coins were
introduced on 1 January 2002.
Which countries use the euro?
The euro (€) is the official currency of 19 out of 28 EU member countries. These
countries, known collectively as the Eurozone are:

• Austria • Ireland • Slovenia

• Belgium • Italy • Spain
• Cyprus • Latvia
• Estonia • Luxembourg
• Finland • Malta
• France • the Netherlands
• Germany • Portugal
• Greece • Slovakia
• Who can join and when?
• All Member States of the European Union, except Denmark and the
United Kingdom, are required to adopt the euro and join the euro
area. To do this they must meet certain conditions known as
'convergence criteria'.
• All EU Member States are part of Economic and Monetary Union,
which means they coordinate their economic policies for the benefit
of the EU as a whole. However, not all EU Member States are in the
euro area – only those having adopted the euro are members of the
euro area.
What are the convergence criteria?
• The convergence criteria are formally defined as a set of
macroeconomic indicators which measure:
• Price stability, to show inflation is controlled;
• Soundness and sustainability of public finances, through limits on
government borrowing and national debt to avoid excessive deficit;
• Exchange-rate stability: "the observance of the normal fluctuation
margins provided for by the exchange-rate mechanism of the
European Monetary System, for at least two years, without devaluing
its currency"
• Long-term interest rates: should not exceed that of the best
performing members.
How to Become a Member of the European Union
Copenhagen criteria
• Any country that satisfies the conditions for membership can apply.

• Becoming a member of the EU is a complex procedure which does not

happen overnight. Once an applicant country meets the conditions for
membership, it must implement EU rules and regulations in all areas.

• These conditions are known as the ‘Copenhagen criteria’ and include a

free-market economy, a stable democracy and the rule of law, and the
acceptance of all EU legislation, including of the euro.
• The Copenhagen criteria
• In 1993, the Copenhagen European Council identified the economic and
political requirements candidate countries will need to fulfil to join the
EU. It also concluded that accession could take place as soon as they
were capable of fulfilling them.

The criteria are:

• the political criteria: stability of institutions guaranteeing democracy, the
rule of law, human rights, and respect for and protection of minorities;
• the economic criteria: the existence of a functioning market economy as
well as the capacity to cope with competitive pressures and market
forces within the Union;
• the institutional criteria: This requires the administrative capacity to
transpose European Community legislation into national law, to
implement it and to effectively enforce it through appropriate
administrative and judicial structures.
• Becoming a Member of the EU
• A country wishing to join the EU submits a membership application
to the Council, which asks the Commission to assess the applicant’s
ability to meet the Copenhagen criteria.
• If the Commission’s opinion is positive, the Council must then agree
upon a negotiating mandate.
• Negotiations are then formally opened on a subject-by-subject
basis.
• Due to the huge volume of EU rules and regulations each candidate
country must adopt as national law, the negotiations take time to
complete.
• The candidates are supported financially, administratively and
technically during this pre-accession period.
Member states of the EU
(year of entry)
The European Union (EU) is a unification of 28 member states united to create a political and
economic community throughout Europe.

• Austria (1995) • Germany (1952) • Poland (2004)

• Belgium (1952) • Greece (1981) • Portugal (1986)
• Bulgaria (2007) • Hungary (2004) • Romania (2007)
• Croatia (2013) • Ireland (1973) • Slovakia (2004)
• Cyprus (2004) • Italy (1952) • Slovenia (2004)
• Czech Republic (2004) • Latvia (2004) • Spain (1986)
• Denmark (1973) • Lithuania (2004) • Sweden (1995)
• Estonia (2004) • Luxembourg (1952) • United Kingdom (1973)
• Finland (1995) • Malta (2004)
• France (1952) • Netherlands (1952)
NORWAY?
• Norway has never been a member of the
EU, but is ‘partners’ with EU for certain
economic reasons.
• Norway and EU enjoy good and close
relations, although Norway is not a
member of the European Union.
• Norway is a part of the Internal Market
through the EEA Agreement and is an
associated member of Schengen

• Their economy has historically been very

good and they had no desire to ‘merge’
with lesser economies.

• As of 2002, the Norwegian economy

began to decline. There is a now a
developing majority of Norwegian that
want Norway to join the EU.
SWITZERLAND?
• Switzerland has
never been a
member of the EU,
but is ‘partners’
with EU for certain
economic reasons.

• Switzerland
Just joined
UN in 2002.

• Swiss Government want Switzerland to join for

economic reasons but the Swiss people continue to
vote against joining the EU.
On the road to EU membership

Candidate countries • Countries, which are not current

• Albania EU members, can be divided into
• Iceland candidate countries and
• Montenegro potential candidate countries.
• Serbia
• Candidates are in the process of
• The former Yugoslav Republic of Macedonia
'transposing' (or integrating) EU
• Turkey
legislation into national law,
Potential candidates
• Bosnia and Herzegovina • Potential candidate countries do
• Kosovo not yet fulfill the requirements
for EU membership
Can a country withdraw from the EU or be thrown out?

• Yes a country can indeed leave the EU.

• Article 50 in the Lisbon Treaty proscribes the procedure if a member state wishes to withdraw from
the European Union.
• First of all the member state must inform the Council of its intentions, whereby the Union will
negotiate on a withdrawal agreement with the member state.
• Afterwards the Council will obtain consent from the European Parliament and will itself vote on the
agreement, acting by a qualified majority.
• A country cannot be expelled from the EU.
• On the other hand, it is possible for certain of a country’s rights in the EU, including voting rights in
the Council, to be suspended.
• This can happen if a Member State has seriously and consistently violated the principles on which the
EU is based: freedom, democracy, respect for human rights and fundamental freedoms and the
principle of the rule of law, which means that the EU’s rules are applied and their observance is
ensured.
.

Article 50
•
1. Any Member State may decide to withdraw from the Union in accordance with its own
constitutional requirements.

2. A Member State which decides to withdraw shall notify the European Council of its
intention. In the light of the guidelines provided by the European Council, the Union shall
negotiate and conclude an agreement with that State, setting out the arrangements for
its withdrawal, taking account of the framework for its future relationship with the Union.
That agreement shall be negotiated in accordance with Article 218(3) of the Treaty on
the Functioning of the European Union. It shall be concluded on behalf of the Union by
the Council, acting by a qualified majority, after obtaining the consent of the European
Parliament.

3. The Treaties shall cease to apply to the State in question from the date of entry into
force of the withdrawal agreement or, failing that, two years after the notification referred
to in paragraph 2, unless the European Council, in agreement with the Member State
concerned, unanimously decides to extend this period.
Article 50 of the Lisbon Treaty outlines the provisions under which a country
can leave the EU. Below is the text of the article:
1. Any Member State may decide to withdraw from the Union in accordance
with its own constitutional requirements.
2. A Member State which decides to withdraw shall notify the European Council
of its intention. In the light of the guidelines provided by the European Council,
the Union shall negotiate and conclude an agreement with that State, setting
out the arrangements for its withdrawal, taking account of the framework for its
future relationship with the Union. That agreement shall be negotiated in
accordance with Article 218(3) of the Treaty on the Functioning of the European
Union. It shall be concluded on behalf of the Union by the Council, acting by a
qualified majority, after obtaining the consent of the European Parliament.
3. The Treaties shall cease to apply to the State in question from the date of
entry into force of the withdrawal agreement or, failing that, two years after the
notification referred to in paragraph 2, unless the European Council, in
agreement with the Member State concerned, unanimously decides to extend
this period.
4. For the purposes of paragraphs 2 and 3, the member of the European Council
or of the Council representing the withdrawing Member State shall not
participate in the discussions of the European Council or Council or in decisions
concerning it.
A qualified majority shall be defined in accordance with Article 238(3)(b) of the
Treaty on the Functioning of the European Union.
5. If a State which has withdrawn from the Union asks to rejoin, its request shall
be subject to the procedure referred to in Article 49.
Structure of the EU:
Administration and Decision making in the EU
• EU institutions and bodies in brief
• European Parliament
• European Council
• Council of the European Union
• European Commission
• Court of Justice of the European Union (CJEU)
• European Central Bank (ECB)
• European Court of Auditors (ECA)
• European External Action Service (EEAS)
• European Economic and Social Committee (EESC)
• European Committee of the Regions (CoR)
• European Investment Bank (EIB)
• European Ombudsman
• European Data Protection Supervisor (EDPS)
• Interinstitutional bodies
• A unique institutional set-up
• In the EU's unique institutional set-up:
• the EU's broad priorities are set by the European Council, which brings
together national and EU-level leaders
• directly elected MEPs represent European citizens in the European
Parliament
• the interests of the EU as a whole are promoted by the European
Commission, whose members are appointed by national governments
• governments defend their own country's national interests in the Council
of the European Union.
• European Council
• Setting the agenda
• The European Council sets the EU's overall political direction – but has
no powers to pass laws. Led by its President and comprising national
heads of state or government and the President of the Commission, it
meets for a few days at a time at least twice every 6 months.
• Role: Defines the general political direction and priorities of the
European Union
• Members: Heads of state or government of EU countries, European
Commission President, High Representative for Foreign Affairs &
Security Policy
• Established in: 1974 (informal forum), 1992 (formal status), 2009
(official EU institution)
• Location: Brussels (Belgium)
Today, treaties and laws are created by the
"institutional triangle" that is composed of
• Law-making
• There are 3 main institutions involved in EU legislation:
• the European Parliament, which represents the EU’s citizens and is directly elected
by them;
• the Council of the European Union, which represents the governments of the
individual member countries. The Presidency of the Council is shared by the
member states on a rotating basis.
• the European Commission, which represents the interests of the Union as a whole.
• In principle, the Commission proposes new laws, and the Parliament and Council
adopt them. The Commission and the member countries then implement them,
and the Commission ensures that the laws are properly applied and implemented.
EUROPEAN PARLIAMENT
• Directly elected by EU voters every 5 years, members of the European
Parliament (MEPs) represent the people. Parliament is one of the EU’s
main law-making institutions, along with the Council of the European
Union ('the Council').
• The European Parliament has three main roles:
• debating and passing European laws, with the Council
• scrutinising other EU institutions, particularly the Commission, to
make sure they are working democratically
• debating and adopting the EU's budget, with the Council.
• The European Parliament is the only directly-elected EU body and one
of the largest democratic assemblies in the world.
• Its 751 Members are there to represent the EU's 500 million citizens.
• Once elected, Members organise along political lines. They form
political groups to better defend their positions. Currently there are
seven groups. (Christian Democrats, Socialist and Democrats,
Conservatives and Reformist, Liberals and Democrats, Nordic Green
Left, European Free Alliance, Freedom and Direct Democracy )
• Most of Parliament's in-depth work is done in specialised committees
that prepare reports that will later be voted on in the plenary
• Composition
• The number of MEPs for each country is roughly proportionate to its
population. No country can have fewer than 6 or more than 96 and
the total number cannot exceed 751 (750 plus the President). MEPs
are grouped by political affiliation, not by nationality.
• Passing European laws
• In many areas, such as consumer protection and the environment,
Parliament works together with the Council (representing national
governments) to decide on the content of EU laws and officially adopt them.
This process is called "Ordinary legislative procedure" (ex "co-decision").
• Under the Lisbon Treaty, the range of policies covered by the new ordinary
legislative procedure has increased, giving Parliament more power to
influence the content of laws in areas including agriculture, energy policy,
immigration and EU funds.
• Parliament must also give its permission for other important decisions, such
as allowing new countries to join the EU.
THE COUNCIL OF THE EUROPEAN
UNION
• Also informally known as the EU Council, this is where national ministers from
each EU country meet to adopt laws and coordinate policies.
• What does it do?
• Passes EU laws.
• Coordinates the broad economic policies of EU member countries.
• Signs agreements between the EU and other countries.
• Approves the annual EU budget
• Develops the EU's foreign and defence policies.
• Coordinates cooperation between courts and police forces of member
countries.
The European Commission
• The European Commission is one of the main institutions of the European
Union. It represents and upholds the interests of the EU as a whole. It
drafts proposals for new European laws. It manages the day-to-day
business of implementing EU policies and spending EU funds.
Purpose
It oversees and implements EU policies by:
• proposing new laws to Parliament and the Council
• managing the EU's budget and allocating funding
• enforcing EU law (together with the Court of Justice)
• representing the EU internationally, for example, by negotiating
agreements between the EU and other countries.
The Court of Justice of the European Union
• The Court of Justice interprets EU law to make sure it is applied in the same way in all EU countries. It
also settles legal disputes between EU governments and EU institutions. Individuals, companies or
organisations can also bring cases before the Court if they feel their rights have been infringed by an
EU institution.
• Composition
• The Court of Justice has one judge per EU country.
• The Court is helped by nine ‘advocates-general’ whose job is to present opinions on the cases brought
before the Court. They must do so publicly and impartially.
• Each judge and advocate-general is appointed for a term of six years, which can be renewed. The
governments of EU countries agree on whom they want to appoint.
• To help the Court of Justice cope with the large number of cases brought before it, and to offer
citizens better legal protection, a ‘General Court’ deals with cases brought forward by private
individuals, companies and some organisations, and cases relating to competition law.
• The ‘EU Civil Service Tribunal’ rules on disputes between the European Union and its staff.
• Types of cases
• The Court gives rulings on the cases brought before it. The five most common types of cases
are:
• requests for a preliminary ruling – when national courts ask the Court of Justice to interpret a
point of EU law
• actions for failure to fulfil an obligation – brought against EU governments for not applying EU
law
• actions for annulment – against EU laws thought to violate the EU treaties or fundamental
rights
• actions for failure to act – against EU institutions for failing to make decisions required of them
• direct actions – brought by individuals, companies or organisations against EU decisions or
actions
Challenges facing the EU
• Migration
• BREXIT
• Economic
• Political Challenges
• Nationality vs Sovereignty
• Migrant Crisis and Impact on Europe
• Immigration – Free movement of Citizens
Challenges facing the EU
• The European Union regulations on immigrations affect some
countries' policies. For instance, member countries lack the authority
to turn away large numbers of refugees. Such limitations strain
members’ financial resources.
• The policy on immigration can encourage loss of experienced staff. It
allows free movement of people from one member state to another.
The bureaucracy of the European Union is a threat to weaker nations.
The members are appointed and not elected, thus contributing to a
lack of democratic representation. The appointed members make
rules that affect member states without consent.
• Europe’s 2015 migration crisis created a political crisis
• Arrivals via the Mediterranean peaked that year at more than 1 million,
migrant numbers … according to the UN.
• EU’s Dublin principle that asylum-seekers should stay in the first state they
landed in
• Germany has said all EU countries should accept a share of refugees and
economic migrants or see their EU funding cut.
• EU members especially Italy, Spain and France disagree
• But polls show migration has become voters’ number one concern across the
bloc and the issue has swayed elections including in France, Germany, Austria,
Italy and Hungary
• BREXIT and the EU
• The Brexit vote is strengthening anti-immigration parties throughout
Europe. As a result, Germany's Chancellor Merkel has already announced
she will not run for re-election. If these parties gain enough ground in France
and Germany, they could force an anti-EU vote. If either of those countries
left, the EU would lose its most robust economies and would dissolve.
• On the other hand, new polls show that many in Europe feel a new
cohesiveness. The U.K. often voted against many EU policies that other
members supported.
• International Monetary Fund Director Christine Lagarde said, “The years are
over when Europe cannot follow a course because the British will object.”
She added, “Now the British are going, Europe can find a new elan.”
• EU and Economic Challenges
• European Union membership costs are high, making it hard for poor
economies to participate. On average, the cost of European Union
membership runs to the excess of 83 billion British pounds.
• 2008 Global Financial Crisis and the EU
• The European recovery is sustained and unemployment is steadily
going down. The number of Member States belonging to the euro has
increased from 12 to 19 and the euro is now the second-most
important currency in the world. Out of the eight EU Member States
that received financial assistance, only Greece is still under a
programme and is due to exit it in mid-2018.
Nationalism vs Regionalism
• The Treaty of Rome (1957) foresaw ‘…ever closer economic and political union…’
• Subsequent treaties such as the Single European Act (1986) and the Maastricht Treaty (1992)
have attempted to give expression to these aims by…
• removing barriers to trade in goods services and people and
• paving the way for a single European Currency with interest rates set by the European Central
Bank for the whole of the Euro Zone.
• Even proponents of ‘…ever closer economic and political union…’ are wary of the term Euro-
federalism, given the negative implications firstly of a loss of sovereignty and secondly
because of the implications of remoteness, bureaucracy and lack of accountability.
• In particular British conservatives often use the term to denote some aspect of EU
development or integration with which they disagree. Thus the recently proposed EU
constitution is negatively attacked as being federalist or yet another step on the road to the
creation of a federalist Europe. The direct implication is a loss of national sovereignty.
• Subsidiarity.
• A relatively straightforward concept used with regard to supranational institutions such as the EU and the member
nation states.
• It implies that decisions should be taken at the most appropriate level, i.e at the level at which it is
most practical to take the decision and at the level at which the ramifications of the decision are
most likely to be felt. This necessitates a degree of autonomy from the centre which may be
manifested in increased national control vis a vis Europe or increased devolution from Westminster.
• Decisions affecting trade or the environment might be most appropriately taken at the supranational level.
• Decisions affecting a state’s security or vital and strategic interests might be most appropriately taken at the
national level.
• Decisions affecting a local or regional economy might be most appropriately taken at a sub national level by
regional assemblies, local authorities or parliaments or assemblies such as those established in Scotland and
Wales in 1999.
• The essence of subsidiarity is that it reinforces claims for the supremacy of national sovereignty over those of the
supranational institution.
• No word in the debate about Britain and the European Union causes
more confusion than the word “sovereignty” yet it has been central to
arguments about British membership since the 1950s.
• The EU does not have an army. But to help it respond more quickly to
international conflicts and natural disasters, some EU countries
provide troops for a rapid reaction force, whose role is limited to
humanitarian work, rescues and peace-keeping.
• Over the last 15 years the EU has seen the development of differing levels of
participation in aspects of EU policy. Currently 18 Member States share a
common currency in the euro and 10 do not.
• Similarly, 26 European countries belong to the Schengen passport free area
• There are specific opt-outs for the UK, Ireland and Denmark in other areas
too. This development of differing levels of participation within the EU has
challenged the notion of the EU as a single block in which all Member States
pool their sovereignty to an identical degree and in a uniform system.
• The reality is that Member States are, in some specific areas, sharing
differing amounts of sovereignty according to their own calculation of where
their national interest lies.
• Current opt-outs
• 1.1 Schengen Agreement – Ireland and United Kingdom
• 1.2 Economic and Monetary Union – Denmark and the United Kingdom
• 1.3 Defence – Denmark
• 1.4 Charter of Fundamental Rights of the European Union – Poland and the
United Kingdom
• 1.4.1 Proposed Czech opt-out
• 1.5 Area of freedom, security and justice – Denmark, Ireland and the United
Kingdom
• EXTRA NOTES
HOW THE EU WORKS
• With so many different nations participating, the governance of the EU is
challenging, however, it is a structure that continually changes to become the
most effective for the conditions of the time.
• Treaties and Laws
• the Council of the European Union, representing national governments,
• the European Parliament representing the people,
• and the European Commission that is responsible for holding up Europe's main interests.
• In addition to these three main divisions, the EU also has courts, committees,
and banks which participate on certain issues and aid in successful management.
• SEVEN INSTITUTIONS: European Council, Council of the EU, EU Commission, EU
Parliament, EU Court of Justice, Central Bank, European Court of Auditors
EU treaties
• The European Union is based on the rule of law.
• This means that every action taken by the EU is founded on treaties that have
been approved voluntarily and democratically by all EU member countries.
For example, if a policy area is not cited in a treaty, the Commission cannot
propose a law in that area.
• A treaty is a binding agreement between EU member countries.
• It sets out EU objectives, rules for EU institutions, how decisions are made
and the relationship between the EU and its member countries.
• Treaties are amended to make the EU more efficient and transparent, to
prepare for new member countries and to introduce new areas of
cooperation – such as the single currency.
How is the EU funded?
How is the EU funded?
• The EU's sources of income include contributions from member countries, import duties
on products from outside the EU and fines imposed when businesses fail to comply with
EU rules. The EU countries agree on the size of the budget and how it is to be financed
several years in advance.
• The 3 main sources of revenue are:
• a small percentage of gross national income (usually around 0.7%) contributed by all EU
countries - the largest source of budget revenue. The underlying principles are solidarity
and ability to pay – though the amount may be adjusted to avoid over-burdening
particular countries.
• a small percentage of each EU country’s standardised value-added tax revenue, usually
around 0.3%.
• a large share of import duties on non-EU products (the country that collects the duty
retains a small percentage).
• The EU also receives income tax from EU staff, contributions by non-EU countries to
certain EU programmes and fines on companies that breach EU rules and regulations.
The EU budget supports growth and job creation. Under the cohesion policy, it funds investment to
help bridge economic gaps between EU countries and regions. It also helps develop rural areas in
Europe.
The EU budget also finances activities ranging from conserving the environment to protecting
external borders and promoting human rights.

• Currently the largest share goes on

creating growth and jobs and
reducing economic gaps between
the EU's various regions.
• Agriculture, rural development,
fisheries and environmental
protection also account for a major
share.
• Other areas of expenditure include
combating terrorism, organised
crime and illegal immigration.
Policy and Surveillance
• The Stability and Growth Pact (SGP) is a rule-based framework for the
coordination of national fiscal policies in the European Union. It was
established to safeguard sound public finances, based on the principle
that economic policies are a matter of shared concern for all Member
States
• The Two Pack
• Recognizing the extent and potential consequences of spillovers among euro
area Member States' economic and budgetary situations, the Two Pack
Regulations, which entered into force on May 30, 2013, introduced additional
surveillance and monitoring procedures for euro area Member States.
• The Two Pack Regulations established a comprehensive surveillance regime
for those Member States in the euro area threatened with or experiencing
serious difficulties with respect to their financial stability.
• To support the effective implementation of the Two Pack legislation, Member
States and the Commission have agreed on harmonised frameworks for the
draft budgetary plans and for the debt issuance reports