CEE Transition and EU Accession

The 8 TracksJorden Redford, Eric Neilan, Michael Chatterton, Josh Wangsgard, Mitzi Moore, and Melissa Todd

November 30, 2006

History of the European Union 1951: The European Coal and Steel Community

Integrated the coal and steel industries of Western Europe 1957: Treaties of Rome

European Atomic Energy Community European Economic Community Moved towards removing trade barriers and forming a “common

market” 1967: Institutions of three European communities merged

Single Commission Single Council of Ministers European Parliament

1992: Treaty of Maastricht Introduced new forms of co-operation between the member state

governments This additional inter-governmental co-operation created the

European Union

The Single Market

Common PoliciesEconomic/Political integration entails joint

decisions on many matters1992 marked the formal completion of a

single market Goods, services, people and capital could

move freely Financial services still not completely unified

1990’s…greater mobility for EU citizens

The growing family

The EU has continued to grow Grown from six to twenty five nations, with two more likely to join

in 2007, bring the EU’s population to nearly half a billion.

Treaty of Nice…February 1, 2003 Governs the size of EU institutions and the way they work

EU Constitution 2006 upon approval

Cultural Cooperation

Since the inclusion of culture in the Maastricht Treaty cultural cooperation has been a priority.

Actions taken: Culture 2000 7-year program European Capital of Culture program European cultural month event Media plus program Grants to 233 cultural programs in 2004

The Euro

Managed and administered by the Frankfurt-based European Central Bank (ECB) and the European System of Central Banks (ESCB) ESCB composed of the central banks of its

member states

History of the Euro February 7, 1992: Maastricht Treaty

Established the Euro December 16, 1995: EU leaders meet in

Madrid Adoption of the Madrid scenario

Named the Euro

January 1, 1999: Birth of the euro

Exchange rates permanently fixed to euro

Launched as accounting currency

History (continued)

September 2001:Pre-circulation distribution of euro notes and coins

Banks and post offices

December 2001: Distribution of starter kits

4.6 billion coins

Worth 1.6 billion Euros

January 1, 2002: Euro notes and coins enter circulation

February 28, 2002: Withdrawal of national currencies

Transition to Euros

Convert former national currencies Formally adopted

Exchange rateCurrency had to be exchanged for Euros

Current Euro Area- 3 year transition1 year for GreeceDual circulation- 6 month max.

Current Current Euro Area:

12 EU Member States Belgium Germany Greece Spain France Ireland

Italy Luxembourg The

Netherlands Austria Portugal Finland

Also: Guadeloupe, French Guyana, Martinique and Reunion, Madeira, and the Canary Islands

Monaco, the Vatican City and San Marino have adopted the Euro as their national currency through agreements.

Non-participating EU countries:Denmark, the United Kingdom, and Sweden

Future

EU Economics and Finance Ministers adopted a decision allowing Slovenia to join the euro area as of January 1, 2007 at their Council meeting on July 11, 2006 in Brussels

Post-2004 EU members- required by their accession treaty to join the euro January 2008- Cyprus, Estonia, Latvia, and Malta January 2009- Slovakia and Lithuania January 2010- Bulgaria and the Czech Republic January 2011- Hungary, Poland, Romania

Benefits

Traveling Inside and outside the Euro AreaDo not have to exchange, widely accepted

PoliticalSymbol of common identityStimulus for further integration

More Benefits

Elimination of some transaction costs Lower exchange costs Decreased exchange rate fluctuations

More stable environment

Reduced uncertainty Price transparency

Compare prices Increased competition

Disadvantages of the Euro

Loss of monetary policy control Differing business cycles

Requires contradictory monetary policyCentral bank cannot set inflation at level

appropriate for all countries Flexibility of labor market within member

countriesLimited primarily by language

Loss of national sovereignty

The European Union looks like what creature?

European Union and scorpion comparison

European Union Scorpion, Chinese Chicken, and Russian Rabbit

European Union Framework

Not Just a Confederation: new and historically unique structure

Common Institutions: treaties allow countries delegate some sovereignty so decisions are made at the European level

Institutional Triangle: Council of EU (represents member states) European Parliament (represents citizens) European Commission (represents EU interests)

New Member Requirements

Political: stable democratic institutions Economic: functioning market economy Capacity to take on obligations of membership,

i.e. adherence to political and economic objectives

Adoption of European legislation

EU Current Events11/20-11/24

Good Governance Crucial For Africa 11/20/05

European Development Days conferences on 13-17 November

Poverty reduction and sustainable development in Africa will require major improvements in governance

€9bn Technology Boost For Europe11/21/05

EU has announced a budget of €9bn for its new technology research program.

The leading information society technology event – IST2006, in Helsinki on Nov 21‑23

New technologies, the latest research results, workshops, robots, etc

Trade Agreement To Spur On Iraqi Recovery

11/22/05

EU and Iraq set to intensify trade relations Boost economic stability and aid long-term

recovery Trade agreement to integrate the country

in the world economy

“AIDS-Remember Me?” Campaign Gets Underway

11/23/05 Awareness-raising initiative launched by

the EU "Night of the HIV/AIDS TV commercials" in

Brussels on 30 November. The message: AIDS is still with us, so

protect yourself. A prize will be awarded for the best

HIV/AIDS infomercial.

Russia's year-old ban on Polish agricultural products

Energy Economic integration External affairs.

EU-Russia Summit Goes Ahead11/24/06

Република България (Bulgaria)

Република БългарияRandom Trivia Questions about Bulgaria

for Points in Heaven (but no candy)

Name the capital of Bulgaria?

Sofia

2005 Per Capita GDP?

$9,600 (66th)

Under King Teres, Bulgaria was initally united in what year?

About 500 BC as Odrysia

Bulgaria's economy suffered significantly after 1989 with the loss of the market of the Council for Mutual Economic Assistance (COMECON) member states

Standard of Living fell by 40% and didn’t fully rebound until 2004.

UN sanctions on Yugoslavia and Iraq 1992-1995

1994 Inflation: 122% 1995 Inflation: 32.9% 1996 Inflation: 311%

1996: Collapse of the LEV

Bulgaria’s Economic Woes

Economic Recovery

Since 1997 the country has been on the path to recovery, with GDP growing at a 4 – 5% rate per year

Accelerated Privatization

Nuclear Power production (Kozloduy, Belene, Maritza Iztok)

Agriculture

România (Romania)

RomâniaRandom Trivia Questions for charity

(but still no candy)

Name the capital of Romania?

Bucharest

2005 Per Capita GDP?

$8,785 (67th)

The oldest human fossil ever in Europe found wasfound in Romania. How old do scientist think it is?

Between 34,000 and 36,000 years old (that’s beforeAdam & Eve, I think)

After the Communist regime was overthrown in late 1989, the country experienced a decade of economic instability and decline, led in part by an obsolete industrial base and a lack of structural reform. (Wikipedia)

2004 GDP growth: 8.4%

2005: Flat tax of 16% (personal and corporate)

Unemployment rate as of September 2006: 5.0%

Romania’s Economy: Past and Present

January 1, 2007: Bulgaria and Romania will officially become members of the European Union, but with heavy restrictions

Organized crime and high-level government corruption

Food export bans due to outbreaks of animal diseases

Bulgaria’s planes are banned from flying into EU airspace until the country improves its air safety standards

Migration restrictions for both countries will probably be three years.

Bulgaria and Romania’s Accession to the EU

Future Enlargement Possibilities

Near Future Candidates

Bosniaand

HerzegovinaMembership application submitted 1987 2003 2004 (2007) (2007) (2007) (2007)Candidate status received 1999 2004 2005 (2008) (2008) (2008) (2008)Membership negotiations start 2005 2005 (2007) (2009) (2009) (2009) (2009)Expected negotiations end (2012) (2007) (2010) (2012) (2012) (2012) (2012)Expected EU joining date (2015) (2010) (2012) (2015) (2015) (2015) (2015)

Countries Turkey Croatia Macedonia Albania Serbia Montenegro

Candidates Potential candidates

s - screening of the chapterfs - finished screeningo - open chapterx - closed chapter

Countries

Expected EU joining date 2015 2010 2012Event Turkey Croatia Macedonia

Candidates

non-acquis chapter - nothing to adoptno major difficulties expectedfurther efforts needed

considerable efforts neededvery hard to adoptcurrent situation totally incompatible with EU acquis

1. Free Movement of Goods fs fs -2. Freedom of Movement for Workers fs fs -3. Right of Establishment & Freedom to provide Services fs fs -4. Free Movement of Capital fs fs -5. Public Procurement fs fs -6. Company Law fs fs -7. Intellectual Property Law fs fs -8. Competition Policy o o -9. Financial Services fs fs -10. Information Society & Media fs fs -11. Agriculture & Rural Development fs fs -12. Food safety, Veterinary & Phytosanitary Policy fs fs -13. Fisheries fs fs -14. Transport Policy fs fs -15. Energy fs fs -16. Taxation fs fs -17. Economic & Monetary Policy fs fs -

s - screening of the chapterfs - finished screeningo - open chapterx - closed chapter

Countries

Expected EU joining date 2015 2010 2012Event Turkey Croatia Macedonia

Candidates

non-acquis chapter - nothing to adoptno major difficulties expectedfurther efforts needed

considerable efforts neededvery hard to adoptcurrent situation totally incompatible with EU acquis

18. Statistics fs fs -

19. Social Policy & Employment2 fs o -20. Enterprise & Industrial Policy fs fs -21. Trans-European Networks fs fs -

22. Regional Policy & Coordination of Structural Instruments fs fs -23. Judiciary & Fundamental Rights fs fs -24. Justice, Freedom & Security fs o -25. Science & Research x x -26. Education & Culture fs fs -27. Environment fs fs -28. Consumer & Health Protection fs fs -29. Customs Union fs o -30. External Relations fs fs -31. Foreign, Security & Defence Policy fs fs -32. Financial Control fs fs -33. Financial & Budgetary Provisions fs fs -34. Institutions - - -35. Other Issues - - -

The European Free Trade Association

Iceland

Norway

Switzerland

Liechtenstein

Eastern Europe

Russia

Belarus

Ukraine

Moldova

Kazakhstan

South Caucasus

Georgia

Armenia

Azerbaijan

Microstates

Monaco

Andorra

San Marino

Vatican

Dependencies of EU Member States

Greenland

Faroe Islands

UK Sovereign Base Areas

Guadeloupe

New Caledonia

Netherlands Antilles and Aruba

Cyprus

Non-European States

Israel

Morocco

Cape Verde

Questions?

Thank You