From Europe to EuroFrom Europe to Euro

Elisabeth Prugl, Co-Director Elisabeth Prugl, Co-Director Miami-Florida European Union Center of ExcellenceMiami-Florida European Union Center of Excellence

What is the EU?What is the EU?

State? State?

International Organization? International Organization?

Economic UnionEconomic Union

Outline of PresentationOutline of Presentation

ConceptsConcepts• Economic IntegrationEconomic Integration• Intergovernmentalism vs. Intergovernmentalism vs.

SupranationalismSupranationalism

HistoryHistory• Widening and DeepeningWidening and Deepening

Economic IntegrationEconomic Integration

Free Trade AreaFree Trade Area• Free movement of goods and servicesFree movement of goods and services

Custom’s UnionCustom’s Union• Common external tariffCommon external tariff

Common MarketCommon Market• Free movement of capital and laborFree movement of capital and labor

Economic UnionEconomic Union• Common policies (including monetary Common policies (including monetary

policy)policy)

Intergovernmentalism SupranationalismIntergovernmentalism Supranationalism

Integration with strong Integration with strong state controlstate control

Every state should be Every state should be allowed vetoallowed veto

Integration with supra-Integration with supra-national institutionsnational institutions

There should be There should be majority votingmajority voting

Decision-makingDecision-making

European Commission

European Parliament

Council of the EU

CommissionCommission

““Guardian of the Treaty”Guardian of the Treaty”

Proposes legislationProposes legislation

ExecutiveExecutive

27 Commissioners and Bureaucracy 27 Commissioners and Bureaucracy in Brusselsin Brussels

ParliamentParliament

Directly elected by European citizens Directly elected by European citizens (875 members)(875 members)

With the Council, passes legislationWith the Council, passes legislation

CouncilCouncil

Ministers from member statesMinisters from member states

Main decision-making bodyMain decision-making body

Rotating presidencyRotating presidency

Court of JusticeCourt of Justice

Ensures that European laws are Ensures that European laws are interpreted and applied correctly and interpreted and applied correctly and uniformlyuniformly

HistoryHistory

European Coal and Steel European Coal and Steel Community (ECSC)Community (ECSC)

19511951 Heavy Heavy

industry (coal industry (coal and steel) put and steel) put under under European European managementmanagement

Creates Creates institutionsinstitutions

Treaties of RomeTreaties of Rome

19571957 European Economic Community European Economic Community

(EEC)(EEC)• Envisions customs union, common Envisions customs union, common

marketmarket• ““Ever closer union”Ever closer union”

European Atomic Energy Community European Atomic Energy Community (EURATOM)(EURATOM)

1960s1960s

Completion of Customs UnionCompletion of Customs Union

Development of Common Development of Common Agricultural PolicyAgricultural Policy

Reintroduction of veto (Charles De Reintroduction of veto (Charles De Gaulle)Gaulle)

1970s1970s

First EnlargementFirst Enlargement• 19731973• Denmark, Ireland, United KingdomDenmark, Ireland, United Kingdom

““Eurosclerosis”Eurosclerosis”

1980s: Widening and Deepening1980s: Widening and Deepening

Mediterranean Mediterranean Enlargement Enlargement • 1981: Greece1981: Greece• 1986: Spain, 1986: Spain,

PortugalPortugal• EU 12EU 12

Single European Single European ActAct

Single European ActSingle European Act

19861986 ““Relance”Relance” 1992 deadline for the completion of 1992 deadline for the completion of

the common marketthe common market• Eliminate physical, technical, fiscal Eliminate physical, technical, fiscal

barriersbarriers Introduces qualified majority voting Introduces qualified majority voting

in the Councilin the Council

19891989

Fall of Berlin WallFall of Berlin Wall• Prospect of unifying Prospect of unifying

allall of Europe of Europe

German unification German unification (1990)(1990)• ““hidden hidden

enlargement”enlargement”

1990s: Deepening and Widening1990s: Deepening and Widening

Maastricht Treaty (1993)Maastricht Treaty (1993)• ““Treaty of European Union”Treaty of European Union”• Monetary Union (Euro)Monetary Union (Euro)• Political Union (common foreign and Political Union (common foreign and

security policy)security policy)• More power to the parliamentMore power to the parliament• Difficult process of ratificationDifficult process of ratification

Enlargement: Austria, Sweden, Enlargement: Austria, Sweden, Finland join the EU in 1995Finland join the EU in 1995

EU 15EU 15

The EuroThe Euro

Convergence CriteriaConvergence Criteria

1999: Euro launched as unit of 1999: Euro launched as unit of account for 11 member statesaccount for 11 member states

2002: Euro notes and coins replace 2002: Euro notes and coins replace national currencies in 12 member national currencies in 12 member statesstates

Deepening and Widening the 21Deepening and Widening the 21stst CenturyCentury

Enlargements:Enlargements:• Eastern enlargement Eastern enlargement

adds 12 new adds 12 new countries (2004 and countries (2004 and 2007)2007)

Effort to write constitutional treaty – problems with ratification

Treaty of Lisbon 2007• Change in voting• “Foreign Minister”• Voted down in

Ireland

EU vs. Euro AreaEU vs. Euro Area Euro area:Euro area: Austria, Belgium,

Cyprus, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Malta, Netherlands, Portugal, Slovakia, Slovenia, Spain.

EU Member States obliged to EU Member States obliged to adopt the euro eventually:adopt the euro eventually: Bulgaria, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Sweden.

EU Member States with an opt out from adopting the euro: Denmark, United Kingdom.