THE EUROPEAN
UNION
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At-a-GlanceThe European Union (EU) represents a further stage of political and economic integration in the history of Europe.
It is, by far, the most ambitious attempt at regional integration attempted in modern history.
Politically, the EU is a cross between an international governmental organization (IGO) and a regional government.
Its institutions are a hybrid those geared towards consensus-building and those oriented towards policy administration.
Economically, the EU is an example of an economic union.
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Types of Economic Integration
Free Trade Area
Customs Union
Common Market
Economic Union
Free Trade among
members √ √ √ √Free Factor
Mobility X X √ √Common Economic Policies
X X X √
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Rationale Behind European UnionPolitical Stability
Desire to overcome the historical French-German rivalry by tying the interests of both to that of the broader European community.
Attempt to check potential German nationalism by integrating unified Germany with the rest of Europe.
Economic Stability
To stabilize the continent’s monetary affairs, making the continent attractive for investment.
International Importance
To reassert European influence on the international stage.
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Views on Regional IntegrationFederalist
Emphasis on maintaining the sovereignty of independent member-states.
Regional integration should result in a Federal structure that recognizes the equality of each member state.
Functionalist
Emphasis on the relative power of member-states.
Regional arrangements must account for the relative importance of member-states to the region (and thus would include mostly very similar states).
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Goals of European UnionUnified Economic and Monetary Policy
Coordinated economic policies and subsequent adoption of a common currency.
Common economic policy as a means of ensuring continental stability and thereafter further political unity.
Unified Foreign and Security Policy
Decreased dependence on American military support.
Unified Social Policy
Common policies on migration, welfare, and those towards organized labor.
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A History of the European Union
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A History of the European UnionOriginal EEC Members:
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A History of the European UnionEC Members:
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A History of the European UnionEC Members:
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A History of the European UnionOriginal EU Members:
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A History of the European UnionEU Members:
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A History of the European UnionCurrent EU Members:
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A History of the European UnionCurrent EU Members:
Candidates for Membership:
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The Structure of the EU
EU CITIZENS
MEMBER STATE GOVERNMENTS
EU CITIZENSEUROPEAN COMMISSION
COUNCIL OF THE EU
EUROPEAN COUNCIL
EUROPEAN PARLIAMENT
COMMITTEE OF THE REGIONS
ECONOMIC AND SOCIAL COMMITTEE
Advisory
Individual Country Ministers
Members Proposed by Member States
Heads of State and Governments of Member States
PRESIDENT PRESIDENTPRESIDENCY OF THE EU
EUROPEAN COURT OF JUSTICE
Judicial
EUROPEAN COURT OF AUDITORS
Economic
EUROPEAN CENTRAL BANK
EBRD
Directly Electedby PR system
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The Copenhagen CriteriaConditions established in 1993 that applicant countries must fulfill in order to join the EU:
Political: Stable institutions that guarantee democracy, the rule of law, human rights and the protection of minorities.
Economic: A functioning market economy and the capacity to handle competition arising within the EU’s internal market.
Administrative: Institutions and infrastructure that can implement the EU’s laws.
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Convergence CriteriaFive criteria that countries have to meet in order to join the final stages of economic and monetary union:
Deficit: Government deficit must be below 3% of GDP.
Debt: Government debt must fall below 60% of GDP.
Inflation: Inflation rate must be within 1.5% of the three lowest inflation rates in the EU.
Interest Rates: Long-term rates must be within 2% of the three lowest rates in the EU.
Exchange Rates: Rates must be within normal fluctuating margins within the ERM.
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Benefits of Monetary UnionIncreased market efficiency given the elimination of price uncertainties.
Decreased transaction costs (no more currency valuations).
Elimination of competitive currency devaluations across the region.
Increased transparency in economic policy and transactions.
Acceleration of political integration and the preparation for fiscal federalism.
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Criticism of European UnionOptimum Currency Area
When the setting of nominal exchange rates between currencies does not impose real costs on their economies.
If labor and capital are perfectly mobile.
If prices and wages are flexible.
The EU is not an optimum currency area.
Prices and wages are not flexible: a recession hitting one country is likely to affect the rest of the region badly.
Labor and capital are realistically tied to specific places.
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Hindsight: Lessons Learned The evolution of the EU has entailed managing different facets of political-economic integration.
Its workings are at once international, multinational, and supranational.
It is both an international arena and an international actor.
The experience of European integration demonstrates that political union (or at the very least political will) furthers economic union.
The opposite, however, does not appear to hold.
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Going ForwardThe political debate: Can attempts at regional governance work elsewhere?
“Is Europe’s present Asia’s future?”
The economic debate: Is there a place for regional arrangements such as this in the broader global economy?
How to reconcile regionalism and globalization?
The administrative question: If successful, how to resolve regional interests and the dilemma of the “democratic deficit”?
Who exactly are “Eurocrats” accountable to?
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