The European Union

1. The European Union Craig Kelso, Sam Harrold, Jeff Benes, David Schon, and David Wilson

2. 15 Nations of the EU • Austria • Belgium • Denmark • Finland • France • Germany • Greece • Ireland • Italy • Luxembourg • The Netherlands • Portugal • Spain • Sweden • United Kingdom

3. 1997 EU Statistics • 1.249 billion square miles • 373.3 million people • 298.9 people per square mile • GDP $ 8.093 trillion

4. Preparing for a Unified Europe • World War II depleted resources • The German-French Problem to solve • The Communist Threat • Need for Unification • France- Economic • Germany- Political

5. Before there was an EU • European Coal and Steel Community (1951-1958) • Treaty of Paris April 1951 • European Economic Community (1958-1986) • Treaty of Rome March 1957 • European Community (1986-93) • The Single European Act February 1986 • European Union (1993- present) • Treaty of European Union February 1992

6. The Politics of the EU Sam Harrold

7. Maastricht February 7, 1992

8. European Parliament European Council Council of the European Union Institutions of the European Union • European Commission • Court of Justice • Court of Auditors

9. Decision Making in the European Union

10. EU AND INTERNATIONAL TRADE Jeff Benes

11. GENERAL TRADE POLICIES • Promote liberal trade • common external tariff • elimination of tariffs among members • reduced non-tariff barriers

12. EU TRADE WITH JAPAN • Key market for EU • EU key market for Japan • Both cooperate on multilateral trade issues • Bilateral trade relations have improved • Market access problems remain

13. EU TRADE WITH U.S. • EU & U.S. each other’s largest single trading partner • 19% in total EU imports, 17.8% in total EU exports (1995) • 21.2% of US exports, 17.7% of US imports (1995) • Trade between EU and US nearly 227 billion ECU (1 ECU=$1.134)

14. EU TRADE WITH U.S. • EU second largest market for US agricultural products • heavily concentrated in sophisticated high technology products • EU offers good opportunities for American suppliers of goods/services in telecommunications, health & medical, and environmental sectors

15. CONCERN OVER US TRADE POLICY • Extraterritoriality: persons/companies incorporated in EU to follow US laws or policies outside the US • Unilateralism: unilateral sanctions or retaliatory measures against “offending” countries or companies.

16. RECENT DEVELOPMENTS • 1990: EU and the US adopt a Transatlantic Declaration laying down principles for greater EU-US consultation and cooperation. • 1995: EU and US agree on a New Transatlantic Agenda (NTA) and Action Plan to promote cooperation, partnership, and joint action in areas ranging from trade liberalization to security.

17. RECENT DEVELOPMENTS CONT’D • 1998: EU-US Summit--moving closer to launching new drive to liberalize global trade in the twenty-first century • removed one of EU’s biggest complaints against US, the extraterritorial reach of its domestic laws

18. The Euro David Schon

19. What is the Euro? • The Euro is the much anticipated single European currency. • Many European Big Businesses hope that the Euro will cut transaction costs and encourage cross-border mergers. • They also hope that it will allow them to better compete in the global economy • Not being welcomed by all Nations... • It is expected to equal to about 2 marks ($1.18)

20. When will the Euro Arrive • The birth of the Euro will be on January 1st, 1999, at which time all participating currencies will be fixed against the Euro. • However, the physical Euro will not appear until January 1st, 2002. For these 3 years, old currencies will be used as some percentage of the Euro

21. Is the ECB another USFR? • The European Central Bank is not a duplicate of the US Federal Reserves • The US Federal Reserve has two primary goals, price stability & employment and economic growth. • The ECB has only one goal, to provide economic stability • The ECB also faces the problems associated with handling 11 politically diverse nations

22. What Effects will this have World-Wide. • In the United States, the Euro is expected to create an economic block that can compete with Domestic Economy. • “Euroland” will have a population that exceeds that of the US by 23 million • It will force firms to completely change their perspectives on international trade • On the up side, tourist will take no losses from border to border in Europe.

23. Will the Euro Work? • This is a good question. • One year ago, many did not feel that the Euro would be on track. • Today the idea of common currency uniting such diverse nations is still very questionable, especially with certain nations like Britain being excluded (for present). • Politics will ultimately make or break the Euro...

24. The Future of the EU David Wilson

25. By the year 2000…... • Set up a single currency, the “Euro” • Reform political machinery and policies to cater for larger union • Establish a new financial framework • Decide on guidelines for future defense • Economic and Monetary Union by Jan 1, 1999 • Denmark and Great Britain around 2002. • Euro becomes legal tender in 2002.

26. Increased World Effectiveness • More influential than ever before • Proactive rather than reactive to political and global changes • Assertion of “new identity” • A common (united) foreign security agreement • Possible common defense policy • The “Euro” • provide access to lower interest rates • better stability and reliability • eliminate inefficiencies in transactions • no internal exchange rate uncertainty • will attract foreign investment

27. A Citizens European Union • “In the future, the EU’s institutions will have to become more responsive to the needs of its citizens and to be more open, transparent and democratically accountable” Le Figaro • Reduced unemployment • New improved environmental protection policies • Protection of human rights • Voters will feel more involved in europe • Increased powers of justice • A more cohesive, inclusive society

28. Other United Fronts…... • One common energy (power) grid for the union • An integrated transportation network • Development in progress for a re-vamped common agricultural policy • Common policies on: • Immigration • Visas • Asylum • Expansion of area covered by NATO

29. Where to from here? • Expansion to the east - 100 million new members by early next decade • As many as 30 new members - • Hungary, Poland, Estonia, Czech Rep. and Slovenia to join union approximately 2003 • Bulgaria, Romania, Latvia, Lithuania and Slovakia (later on…) • Deepening economic and monetary union • Increased powers for the European Parliament??? • Build a Europe so strong, that it never splits again • New political reality - a new Europe • A leaner Union - less welfare

30. How will this affect the United States? • Business will be enticed to expand into europe because of a rapidly expanding but stable market opening up • Loss of defense contracts • New, higher level of competition with the US • The “euro” - competition as a world leading currency • European mergers will continue, offering stiff competition for US companies (eg. Airbus) • Possible stand-offs, trade wars and political stalemates as continents differ on global issues.

31. Potential Barriers to Unification • Division between: • larger and smaller countries • poorer and richer countries • northern and southern countries • economic liberals and protectionists • Disagreement between “federalists” (Germany and Benelux countries) and nation states (Great Britain) • Countries will have to swallow national pride • Steady erosion of social democratic parties due to re-orientation to profitability • Economic gap between EU nations and those preparing to enter the EU