INTRODUCTION TO THE EUROPEAN UNION

1. INTRODUCTION TO THE EUROPEAN UNION

2. From 6 to 27 • 1951/57: Benelux, Italy, France, Germany • 1973: United Kingdom, Ireland, Denmark • 1981-86: Greece, Spain, Portugal • 1995: Sweden, Austria, Finland • 2004: “big bang”– eight countries in Central and Eastern Europe plus Malta and Cyprus • 2007: Bulgaria and Romania

4. Future enlargements • 20??: Croatia, Macedonia, Turkey? • Balkans? • Since January 2007 the EU has 501 million people

5. Impact of successive enlargements (1958-2004)

6. Regional disparities in the enlarged EU

7. WHY IS THERE A EUROPEAN UNION?

8. I. War experience • World War I: ≈20 million dead • World War II: ≈70 million dead • Nationalism: the most deadly force in human history

9. II. Constraining Germany How was France to deal with Germany? “I could see only one solution: we must bind ourselves inextricably to Germany in a common undertaking in which our other neighbours could join.” Jean Monnet, First High Commissioner of the European Coal and Steel Community (ECSC)

10. Churchill calls for a “United States of Europe” • European integration is necessary for future peace. • The UK would not participate. • Franco-German cooperation at the core. … What is this sovereign remedy? It is to recreate the European Family or as much of it as we can and provide it with a structure under which it can dwell in peace, in safety and freedom. We must build a kind of United States of Europe…. Zurich, 19 Sept 1946

11. The solidarity in production thus established will make it plain that any war between France and Germany becomes not merely unthinkable, but materially impossible. . . . . . . Robert Schuman, 9 May 1950 The Schuman Declaration (1950): European Coal & Steel Community Europe will not be made all at once, or according to a single plan . . . . Franco-German production of coal and steel as a whole be placed under a common High Authority . . . . . as a first step in the federation of Europe.

12. How can war be averted? Building a web of rules • The European Coal and Steel Community (1951) • European Defense Community (1954) • The European Economic Community (1957)

13. III. The Cold War • No longer great powers and imperial rivals • Unity against the Soviet threat • US support: Marshall plan OEEC: Organization for European Economic Cooperation (1948)  OECD:Organization for Economic Cooperation & Development (1961)

14. IV. Benefits of multi-level governance • Large can be efficient • Externalities • Small is beautiful • Heterogeneity of preferences

15. Benefits of government across Europe • Single market -- eliminating trade barriers • comparative advantage • benefits of specialization • single currency • Single competition authority • International economic bargaining power (trade) • Environmental regulation

17. How does the European Union work?

18. Budget– Revenues (%) Ceiling=1.24% of EU GDP: appr. 293 Euro/ citizen 2010: 142 billion Euro VAT=Value-added tax (equivalent of sales tax) GNI=Gross National Product (richer countries pay larger share) Traditional own resources=customs and excise taxes, agricultural levies Other= e.g. fines, taxes paid by employees, third country contributions

19. Budget EU spending (2008) Social security War on terror 5% 18% Debt 5% Medicare €129 billion = $168 billion (expenditures)1.1% of EU GDP (revenues) $2,980 billion (expenditures)18.8% of US GDP (revenues)

20. US SEPARATION OF POWERS Presidency + Fed bureaucracy Supreme Court Presidential veto LEGISLATION House of Representatives Senate Federal Reserve

21. EU SEPARATION OF POWERS European Court of Justice European Commission HRFA National parliaments LEGISLATIVE PROPOSAL LEGISLATIVEPROPOSAL European Council European Parliament Council of Ministers EU LAWS European Central Bank