The European Union

1. The European Union

2. Early Post War Period • A Climate for Radical Change

3. Rotterdam, 1940

4. Europe after World War II • Diminished power after World War II • All were defeated except Britain • All losing colonies • All losing market share to US and USSR • Jean Monnet (Anglo-French wartime supply WWI and II; Deputy secretary of League of Nations until 1923; French Planning Commission that rebuilds postwar France.) • “If the countries of Europe once more protect themselves against each other, it will once more be necessary to build up vast armies….The countries of Europe are too small to give their peoples the prosperity that is now attainable and therefore necessary. They need wider markets.”

5. European Economic Cooperation • 1947  General Agreement on Tariffs and Trade [GATT] • 23 nations. • Became the foundation of postwar global commerce. • Procedures to handle commercial complaints and framework for continuing negotiations [“rounds”]. • By 1990, 99 nations were participating. • Marshall Plan (also known as European Recovery Program), 1947-1952. $12 billion; • Organization for European Economic Cooperation (OEEC) was the umbrella organization that distributed aid and encouraged freedom of trade.

6. The Cold War deepens • As Cold War got more war-like, West Germany rearmament became necessary • Wide-spread feeling that it was best to embed an economically and militarily strong W. Germany in European superstructure • OEEC was too loose to avoid future war among Western European powers

7. How can we avoid WWIII? • French Foreign Minister Robert Schuman, who was ethnically French, born in Alsace-Lorainne, forced to fight in German army in WWI, proposes a European Union on May 9, 1950. • “The French gov’t proposes that the entire Franco-German production of coal and steel be placed under a common High Authority in an organization open to the participation of other countries of Europe….The production interdependence thus created will mean that warfare between France and Germany would be not only unthinkable but materially impossible.” • (Today May 9 is celebrated as Europe Day.)

8. Treaty of Paris, 1951 • Founds the European Coal and Steel Community • By the Six (Benelux, France, Italy, Germany) • Monnet heads it 1952-1955 • Eliminates quotas and tariffs • Doubles output 1951-1963 with the same number of man-hours. The Signature of the Treaty of Paris, April 18, 1951

9. Defense is another story • European Defense Community for a Western European army is defeated by France in 1954 • France withdraws from NATO in 1966 and builds her own nuclear arsenal.

10. Treaty of Rome, 1957 • EEC (European Economic Community, also called the Common Market) • EURATOM (the European Atomic Energy Commission) • Eliminates all trade barriers. • One common tariff with the outside world. • Free movement of capital & labor. The Signature of the Treaty of Rome, March 27, 1957

11. European Community, 1967 • Combination of the ECSC & EEC • European Parliament in Brussels • “Eurocrats.” • 518 members [elected by all voters in Europe]. • Only limited legislative power. • Court of Justice.

12. The Single European Act , 1987 • In 1985, EU firms enjoy duty-free access to each other’s markets but numerous trade-inhibiting barriers remain (different technical standards, capital controls, preferential public procurement etc.) • Adopted 1987, implemented by 1992.

13. The collapse of Communism • By the 1980s, Western European system clearly superior due to the creeping failure of planned economies • Up to 1980s, Soviets thwarted reform efforts (economic & military pressure). Then changes in USSR due to inadequacy of economic system • timid pro-market reforms (perestroika) • openness (glasnost) • Pro-democracy forces in central and eastern European countries (CEECs) found little resistance from Moscow in the late 1980s • Starting with Poland, CEECs democratised rapidly in 1989/90. Soviet Union collapsed end 1991.

14. EU reacts • The European Union reacted by providing emergency aid and loans to the fledgling democracies—computers and roads to Slovakia • But initially reluctant to have CEEC countries joining • EU finally says CEECs can join the EU (June 1993). Sets out Copenhagen criteria for membership (democracy, rule of law, human rights, functioning market economy)

15. Map of the European Union and CandidateCountries

16. The 25 Members of the European Union …and when they joined: 1951 Belgium 1951 France 1951 Germany 1951 Italy 1951 Luxembourg 1951 The Netherlands 1973 Denmark 1973 Ireland 1973 United Kingdom 1981 Greece 1986 Spain 1986 Portugal 1995 Austria 1995 Finland 1995 Sweden 2004 Cyprus 2004 Czech Republic 2004 Estonia 2004 Hungary 2004 Latvia 2004 Lithuania 2004 Malta 2004 Poland 2004 Slovakia 2004 Slovenia

17. Treaty of Maastricht, 1992 • German unification raises concerns; decide to up the economic ties • Creates the EU, or European Union • One passport, one market, one culture (museums and universities, health care) • 2002: Euro introduced by EMU (optional) • 2003: 60,000 men EU rapid defense force

18. Net Contribution by Member

19. Problems Remain • The “Acquis”—a zillion regulations • Old guys are “grandfathered.” Is that fair? • Constitutional convention, 2002-2003 • Rejected by Dutch and French in 2005. Is the EU dead?

20. The Welfare State • Socialist Clement Attlee coins the term • Labour Party, 1945-1951 • Natl. Insurance Act • Natl. Health Service Act • Nationalized coal mines, public utilities, steel industry, the Bank of England, RRs, motor transportation, and aviation. • Social insurance legislation: “Cradle-to-Grave” security. • Guaranteed secondary education

21. T. H. Marshall theory, 1950 • 17th/18th centuries: Lockean civil rights • Freedom of religion • Freedom of property • Freedom of contract • 19th century: political rights • 20th century: “social rights” • Economic welfare • Security • Share “social heritage” in full