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Trade Policy and Economic Integration summarised all chapters for the Final plus an extensive review and summary of the EU reader part of the exam.
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Summary Trade Policy and Economic Integration final
EU reader plus chapters 5, 6, 8, 9 and 12
EU reader - A concise description of the past and present of European integration
Chapter 1 - Introduction
The EU is an intergovernmental organisation IGO meanings its made up of sovereign states.
Contrary to most IGOs the EU has several federal (meaning more central power) characteristics:
EU law is supreme over national law, the EU has its own parliament and bank.
Currently it has 28 member states up from 6 when the
European Coal and Steel Community ECSC was
founded in 1952. The ECSC in 1952 consisted of six
nations: The Benelux, Italy, France and Germany.
In 1973 Denmark, Ireland and the UK joined.
The 2004 Eastern enlargement added the Chech Rep.,
Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia
and Slovenia, as well as Malta and Cyprus.
In 2013 Croatia joined, Montenegro and Serbia are
discussing and Albania and Macedonia waiting.
The European Coal and Steel Community’s founders
regarded the European integration as a political rather
than economic project, its primary goal being preventing
another French-German war. Economic integration was the vehicle to bring about political
integration, which would prevent war.
Though originally aimed at modest
economic integration in 1952,
covering only coal and steel
sectors, key treaties increased the
scope and depth of integration.
Each treaty is agreed upon
unanimously by member states.
-So the EU is an intergovernmental
organisation with 28 members;
-Its predecessor the ESCS was
founded in 1952 by the Benelux,
France, Germany and Italy;
-Treaties expanded its scope.
Chapter 2 - History of the EU
50s and 60s: Early period of EU
integration. Between 1870 and 1945
France and Germany fought 3 wars and after the third one Robert Schuman and Jean Monnet,
the EU’s founding fathers, believed political integration could prevent this. Since political
integration was difficult to achieve, they proposed placing coal and steel sectors in both countries
under a supranational authority since these sectors were important in war.
Schuman and Monnet believed this economic cooperation would spread to other parts of the
economy and political cooperation. The European Coal and Steel Community ECSC was founded
in 1952 with the addition of France, NL, Belgium and Luxembourg. By abolishing import tariffs on
coal and steel they countries saw huge trade increases and the benefits of economic cooperation
showed.
The merits of integration caused the coming into force of the Treaty of Rome in 1958 which added
Euratom (since nuclear power was now a strategic industry) and the European Economic
Community EEC which had a customs union as main objective. To achieve a customs union the
,Treaty of Rome established the European Commission which would initiate policy proposals to
form such a union.
The Merger Treaty of 1967 merged Euratom, the European Economic Community and the ECSC
into the European Community which was a culmination of all the previous cooperation.
70s and 80s: From Eurosclerosis to Maastricht
The integration halted with the need for unanimous approval for any further important decisions,
which was made even harder with the accession to the European Community of Denmark, Ireland
and the UK in 1973. The now 7 member states were unable to make unanimous progress until
1986, and though tariffs were abolished other barriers such as regulations remained.
The Single European Act SEA of 1986 introduced majority voting which enabled the EC to form
the common market in 1991 by harmonising technical regulations and removing capital controls.
90s to present: Maastricht, Lisbon and beyond
The 1992 Maastricht Treaty established the European Union and created EU citizenship meaning
people could move and live freely. It also introduced the Common Foreign and Security Policy for
foreign policy, increased the European Parliament’s power, and defined a timetable for forming the
Economic and Monetary Union EMU and the European Central Bank ECB.
The Maastricht treaty made members agree upon a common market, a common currency
(coming into force with the 1999 introduction of the euro), a central bank and citizenship.
This deep integration and resulting loss of national sovereignty created controversy and
Euroscepticism criticising the democratic deficit among other things. The democratic deficit refers
to governments rather than parliaments agreeing upon EU legislation, decreasing representation.
The 2007 Treaty of Lisbon strengthened the EU parliament and gave national parliaments some
influence, but the 2008 financial and subsequent Eurocrisis as well as Brexit are among the many
problems facing the EU.
-The 1952 ECSC was to prevent another war;
-In 1958 the European Economic Community was to create a customs union;
-The 1992 Maastricht Treaty established the common market and a timetable for the euro.
Chapter 3 - EU institutions
Roughly in order of political importance we describe the European Council, European
Commission, Council of Ministers, European Parliament, European Court of Justice, and
European Central Bank.
The European Council is the most important and consists of member states’ presidents or prime
ministers (head of state). The Commission’s president is also member, and the Council elects its
own president, currently Donald Tusk. The council sets the EU’s general future direction,
discussing enlargements, institutional reform and urgent matters. It takes general decisions to be
worked out by e.g. the Commission, and generally works on consensus meaning every member
state should agree and it thus compromises. The 4 annual meetings are European Summits.
The European Commission is the EU’s government with 28 commissioners, one per member,
and each having their own policy area like a national minister would, e.g. Federica Mogerhini the
commissioner for foreign affairs. Its president is Jean-Claude Juncker.
It mostly makes EU legislative proposals and initiates virtually every piece of EU legislation which
is then send to other institutions for discussion. Secondly it executes EU decisions and guards EU
laws e.g. by enforcing competition and having the power to fine.
Lastly, it has exclusive authority in negotiating trade deals and therefore represents the EU in WTO
rounds where it is to stand apart from national interests and promote the EU as a whole. The 28
commissioners are not directly elected but accountable to parliament.
Every 5 years after European Parliament has been elected the different parliamentary groups each
propose their candidate for the commission’s presidency, and the largest group’s candidate forms
a Commission which has to be approved by parliament.
The Council of Ministers or officially the Council of the European Union is where national
governments discuss, modify and vote on EU legislation and policy. It consists of the national
, ministers responsible for the particular policy area being discussed, e.g. 28 finance ministers. The
Council represents national member states’ interests and has to agree on any significant piece of
legislation, meaning any important EU legislation has to be agreed upon by a majority of member
states. Not consensus but Qualified Majority Voting QMV is used, requiring 55% of member
states representing 65% of EU citizens to agree. Such a double majority prevents smaller
countries from having an outsized influence. Typically the Council of Ministers uses consensus.
The European Parliament is the only directly elected EU institution and has 751 Members of
European Parliament MEPs elected every 5 years. Candidates organise themselves in political
groups of similar orientation: The European People’s Party EPP are mostly christian democrats
and conservatives; the Progressive Alliance of Socialists and Democrats S&D are mostly social
democrats; and the Alliance of Liberals and Democrats for Europe ALDE are mostly centrists and
liberals.
The EPs main functions are voting on legislation, controlling the commission, controlling the EU
budget. Apart from voting on legislation the Parliament can amend it and send it back to the
Commission, though MEPs also work together with the Commission to draft proposals.
The European Court of Justice interprets and upholds EU law and consists of 28 judges.
National judges turn to the Court when unsure, and the Court acts as an arbiter in legal conflicts
between EU institutions, citizens and member states. EU law is supreme over national law, and its
decisions in favour of harmonisation of standards and competition helped complete the common
market.
The European Central Bank does monetary
policy and financial supervision of the largest
banks in the Eurozone: 19 countries with euro.
It is to maintain price stability (2%π) and
financial stability by preventing systematic risk
build-ups.
The Governing Council consists of the 19
national central bank governors, and added to
this are the members of the Executive Board:
The ECB president (Draghi), vice-president
and 4 other members appointed by the
European Council.
Much like the European Council, the
Governing Council determines general
monetary policy by determining key interest
rates. The Executive Board, much like the
European Commission, implements policy by the guidelines the Council sets.
The General Council consists of 28 Central Bank governors, EU not just 19 Eurozone countries,
as well as president and vice-president of the ECB and advises and coordinates.
The Supervisory Board consists of representatives from the ECB itself and national Central Banks,
supervising the Eurozone’s largest banks.
The ECBs political independence allows it to
focus on price and financial stability instead of
short term goals, and is ensured through non-
renewable 8-year terms on its Executive
Board.
-European Council: Heads of state
determining general direction;
-Commission: 28 commissioners writing
legislative proposals;
-Council of Ministers: 28 ministers for the
appropriate policy field, votes on legislation;
-Parliament 751 MEPs amend and vote on
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