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European Union (Encyclopedia of Business and Finance)
The European Union is an ever-evolving alliance of fifteen European countries designed to foster economic cooperation among its members. With its roots stretching back to just after World War II, this alliance has the ultimate goal of unifying the economic interests of these countries in order to reduce the chance of widespread armed conflict returning to the European continent.
In the early 1950s, Germany and France spear headed the establishment of the European Coal and Steel Community. At this time, West Ger many was in the process of rebuilding its war ravaged steel industry under the direction of the United States and Great Britain. This was an understandable source of concern for France, as German industrial might had been used against the French in the two world wars earlier in the century. Consequently, a federation that would govern these important economic resources won the approval of both the French and Germans. They were also joined by Italy, Belgium, Luxembourg, and the Netherlands as the original six founding nations of what would eventually be come the European Union.
The European Coal and Steel Community was later followed by the establishment of the European Economic Community under the Treaty of Rome, which was signed by the same six countries in 1957. This treaty established the framework for the six member countries to pursue an economic and monetary union by creating a single market to further their economic development. The European Economic Community established a customs union for re moving trade barriers, such as tariffs and quotas, between member countries over a period of several years. Also, common external tariffs were phased in for goods entering the union.
The single market established by the European Economic Community also opened the door for the free movement of workers, businesses, and capital throughout the community. Border stops and customs checks were eliminated, companies expanded across national borders, and financial institutions expanded with them.
To further facilitate trade within this single market, European leaders felt a single currency should be created to eliminate foreign-exchange hurdles encountered by companies doing business across European borders. After several intervening rounds of negotiations and agreements, the Treaty on European Union was signed in Maastricht in December 1991. The European Union was formally established as the successor to the European Economic Community, and the treaty laid the groundwork for the completion of the economic and monetary union by calling for a new European currency.
The European Union introduced this new currency on January 1, 1999, christening it the "euro." Like many other changes implemented by the European Union, the euro was not launched without difficulties. By the time the euro was introduced in 1999, nine more countries had joined the original six members. The European Union had added Denmark, Ireland, and the United Kingdom to its ranks in 1973; Greece in 1981; Portugal and Spain in 1986; and Austria, Finland, and Sweden ratified membership in 1995. During the launch of the euro, the United Kingdom, Sweden, and Denmark all chose to "opt out" of participation due to political pressures in each country. One other member, Greece, failed to satisfy the economic criteria for convergence, which required members of the "euro zone" to meet targets for price stability, long-term interest rates, government budget deficits, and government debt. Consequently, the conversion to the euro was initiated in only eleven of the fifteen member states in 1999.
Transactions in member states beginning in 1999 could be denominated in euros. The actual euro currency and coins will begin circulation in 2002. In the "interim period," transactions can be carried out in either euros or the former national currencies of the member states.
The governance of the European Union is quite complex. The European Commission, based in Brussels, introduces legislation and negotiates all trade agreements between the European Union and other countries. The five largest countries in the union appoint two members and other countries one member to the European Commission. The European Parliament, which is the only elected body, also has legislative and veto authority in some specific areas. The Council of Ministers, comprised of civil servants from each country, acts on the legislation proposed by the European Commission. Most decisions are by a majority vote, but some require unanimity.
Monetary policy in the countries adopting the euro is governed by the European Central Bank. The primary mission of this independent institution is to maintain stable prices. It is also responsible for foreign-exchange operations and managing foreign reserves in the euro zone. Although it is a relatively new currency, the euro has joined the U.S. dollar and Japanese yen as a reserve currency held by central banks.
The fifteen members of the European Union in 1999 have a combined population 40 percent larger than that of the United States, creating an attractive business marketplace without internal trade barriers. Many American companiesrom Ford, which sells 15 million vehicles a year in Europe, to Coca-Cola, Inc., which serves 209 million of its beverages to European customers every dayave a long-established presence in Europe. Other companies, such as software giant Microsoft, have entered the European market in recent years and been successful in the European Union's single market. If the European Union continues to add new members, it may be only a matter of time before the European marketplace begins to challenge the United States as the premier business market in the world.
European companies, with their enhanced size due to expansion across Europe, have also set their sights across the Atlantic. The purchases of Chrysler by Daimler-Benz and Amoco by British Petroleum in the late 1990s were but two of the many examples of large European companies strengthening their positions in the American marketplace. With the majority of foreign investment in the United States coming from members of the European Union, economic interests have continued to become more intertwined as multi-national companies now operate on both sides of the Atlantic.
In the future, the size of the European Union will likely expand because numerous other countries, primarily in Central and Eastern Europe, have expressed an interest in joining the union. Many of these countries are in the process of making the structural changes needed to meet the criteria for membership in the European Union. Admitting these countries would add to the European Union's stature in global trade negotiations, further the cause of social stability in the region, and add yet another chapter to the story of this dynamic union.
Dinan, Desmond, ed. (1998). Encyclopedia of the European Union. (1998). Boulder, CO: Lynne Rienner.
How Does the European Union Work?, 2d ed. (1998). Luxembourg: Office for Official Publications of the European Communities.
Leonard, R. L. (1998). The Economist Guide to the European Union. London: The Economist in association with Profile.
Redmond, John, and Rosenthal, Glenda G., eds. (1998). The Expanding European Union: Past, Present, Future. Boulder, CO: Lynne Rienner.
European Union (Encyclopedia of Management)
The European Union (EU) is an economic and political federation comprising 25 countries. The 15 original member nations are: Austria, Belgium, Denmark, Finland, France, Germany, Greece, Italy, Luxembourg, the Netherlands, Portugal, the Republic of Ireland, Spain, Sweden, and the United Kingdom. Ten new members as of May 2004 are: Cyprus, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia, and Slovenia. The EU represents the latest and most successful in a series of efforts to unify Europe, including many attempts to achieve unity through force of arms such as those seen in the campaigns of Napoleon Bonaparte and World War II.
In the wake of the Second World War, which devastated the European infrastructure and economies, efforts began to forge political union through increasing economic interdependence. In 1951 the European Coal and Steel Community (ECSC) was formed to coordinate the production and trading of coal and steel within Europe. In 1957 the member states of the ECSC ratified two treaties creating the European Atomic Energy Community (Euratom) for the collaborative development of commercial nuclear power, and the European Economic Community (EEC), an international trade body whose role was to gradually eliminate national tariffs and other barriers to international trade involving member countries. Initially the EEC, or, as it was more frequently referred to at the time, the Common Market, called for a twelve to fifteen year period for the institution of a common external tariff among its members, but the timetable was accelerated and a common tariff was instituted in 1967.
Despite this initial success, participation in the EEC was limited to Belgium, France, Germany, Italy, Luxembourg, and the Netherlands. Immediately following the creation of the EEC a rival trade confederation known as the European Free Trade Association (EFTA) was created by Austria, Britain, Denmark, Finland, Norway, Portugal, Sweden, and Switzerland. Although its goals were less comprehensive than those of the EEC, the existence of the EFTA delayed European economic and political unity.
By 1961 the United Kingdom indicated its willingness to join the Common Market if allowed to retain certain tariff structures which favored trade between Britain and its Commonwealth. Negotiations between the EEC and the United Kingdom began, but insurmountable differences arose and Britain was denied access to the Common Market in 1963. Following this setback, however, the Common Market countries worked to strengthen the ties between themselves, culminating in the merger of the ECSC, EEC, and Euratom to form the European Community (EC) in 1967. In the interim the importance of the Commonwealth to the British economy waned considerably and by 1973 Britain, Denmark, and the Republic of Ireland had joined the EC. Greece followed suit in 1981, followed by Portugal and Spain in 1986 and Austria, Finland, and Sweden in 1995.
Even as it expanded the EC worked to strengthen the economic integration of its membership, establishing a European Monetary System (EMS), featuring the European Currency Unit (ECU, later known as the Euro), in 1979 and passing the Single European Act, which strengthened the EC's ability to regulate the economic, social, and foreign policies of its members, in 1987. The EC took its largest step to date toward true economic integration among its members with the 1992 ratification of the Treaty of European Union, after which the EC changed its name to the European Union (EU). The Treaty of European Union also created a central banking system for EU members, established the mechanisms and timetable for the adoption of the Euro as the common currency among members, and further strengthened the EU's ability to influence the public and foreign policies of its members.
Although the EU has accomplished a great deal in its first four years of existence, many hurdles must still be crossed before true European economic unity can be achieved. Many EU nations experienced great difficulty in meeting the provisions required by the EU for joining the EMS, although eleven countries met them by the 1 January 1999 deadline. Meeting these provisions forced several EU members, including Italy and Spain, to adopt politically unpopular domestic economic policies. Others, such as the United Kingdom, chose not to take politically unpopular action and thus failed to qualify for participation. Even though the Euro was introduced according to schedule, economic unity has far outstripped political cooperation among EU members to date and real and potential political disagreements within the EU remain a threat to its further development.
The EU maintains four administrative bodies dealing with specific areas of economic and political activity.
The Council of Ministers comprises representatives, usually the foreign ministers, of member states. The presidency of the council rotates between the members on a semiannual basis. When issues of particular concern arise, members may send their heads of state to sit on the council. At such times the council is known as the European Council, and has final authority on all issues not specifically covered in the various treaties creating the EU and its predecessor organizations. The Council of Ministers also maintains the Committee of Permanent Representatives (COREPER), with permanent headquarters in Brussels, Belgium, to sit during the intervals between the council's meetings; and operates an extensive secretariat monitoring economic and political activities within the EU. The Council of Ministers and European Council decide matters involving relations between member states in areas including administration, agriculture and fisheries, internal market and industrial policy, research, energy, transportation, environmental protection, and economic and social affairs. Members of the Council of Ministers or European Council are expected to represent the particular interests of their home country before the EU as a whole.
The European Commission serves as the executive organization of the EU. Currently each country has one commissioner except for the five largest countries that have two. The Commission enlarges as more countries join. The European Commission seeks to serve the interests of Europe as a whole in matters including external relations, economic affairs, finance, industrial affairs, and agricultural policies. The European Commission maintains twenty-three directorates general to oversee specific areas of administration and commerce within the EU. It also retains a large staff to translate all EU documents into each of the EU's twenty official languages. Representatives sitting on the European Commission are expected to remain impartial and view the interests of the EU as a whole rather than the particular interests of their home countries.
The European Parliament comprises representatives of the EU member nations who are selected by direct election in their home countries. Although it serves as a forum for the discussion of issues of interest to the individual member states and the EU as a whole, the European Parliament has no power to create or implement legislation. It does, however, have some control over the EU budget, and can pose questions for the consideration of either the Council of Ministers or the European Commission.
The Court of Justice comprises thirteen judges and six advocates general appointed by EU member governments. Its function is to interpret EU laws and regulations, and its decisions are binding on the EU, its member governments, and firms and individuals in EU member states.
From its creation the EU has maintained the Economic and Social Committee (ESC), an appointed advisory body representing the interests of employers, labor, and consumers before the EU as a whole. Although many of the ESC's responsibilities are now duplicated by the European Parliament, the committee still serves as an advocacy forum for labor unions, industrial and commercial agricultural organizations, and other interest groups.
One ongoing area of contention among the members of the EU is agricultural policy. Each European nation has in place a series of incentives and subsidies designed to benefit its own farmers and ensure a domestically grown food supply. Often these policies are decidedly not beneficial to the EU as a whole, and lead to conflict between rival national organizations representing agricultural and fisheries industries. The degree of contention on agricultural and fisheries issues within the EU can be seen in the fact that nearly 70 percent of EU expenditures are made to address agricultural issues, even though agriculture employs less than 8 percent of the EU workforce. In an attempt to reduce conflict between national agricultural industries while still supporting European farmers, the EU adopted a Common Agricultural Policy (CAP) as part of the Treaty of European Union.
The CAP seeks to increase agricultural productivity, ensure livable wages for agricultural workers, stabilize agricultural markets, and assure availability of affordable produce throughout the EU. Although the CAP has reduced conflicts within the EU, it has also led to the overproduction of many commodities, including butter, wine, and sugar, and has led to disagreements involving the EU and agricultural exporting nations including the United States and Australia.
The European Social Fund (ESF) and the European Regional Development Fund (ERDF) were established to facilitate the harmonization of social policies within EU member states. The ESF focuses on training and retraining workers to ensure their employability in a changing economic environment, while the ERDF concentrates on building economic infrastructure in the less-developed countries of the EU.
The European Investment Bank (EIB) receives capital contributions from the EU member states, and borrows from international capital markets to fund approved projects. EIB funding may be granted only to those projects of common interest to EU members that are designed to improve the overall international competitiveness of EU industries. EIB loans are also sometimes given to infrastructure development programs operating in less-developed areas of the EU.
The EU recognizes twently official languages: Danish, Dutch, English, Finnish, French, German, Greek, Italian, Portuguese, Spanish, and Swedish. Other languages spoken in Europe, such as Irish Gaelic, are considered "treaty languages" or "working languages," while dialects such as Catalan are considered "minority languages." Treaty or working languages are those into which the EU translates only its basic legal texts; it is up to each member state to translate whatever EU documents it deems important into minority languages. All EU documents are available in the twenty official languages.
The EU added ten new members on May 1, 2004: Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Romania, Poland, Slovakia and Slovenia. There are obstacles to inclusion of new members to the EU, however, in both the political and economic spheres. Any new members must conform to the national economic policy stipulations of the 1992 Treaty of European Union signed at Maastricht, and must also meet acceptable standards of internal political freedom. Turkey, for instance, was denied admission to the EU in 1997 due to its repression of its Kurdish minority, among other considerations. Similarly, Croatia was denied consideration for entrance due to its participation in ethnic cleansing activities during the Bosnian conflicts of the early to mid-1990s.
The major future event facing the EU since the adoption of the Treaty of European Union has been the adoption of the Euro as a single currency for members, which occurred in 2002.
The 1992 Maastricht Agreement established conditions that EU member nations would be expected to meet before they would be allowed to participate in the introduction of the single European currency. These conditions were designed to create a "convergence" among the various national economies of Europe to ease the transition to a single currency and ensure that no single country would benefit or be harmed unduly by its introduction. Such a convergence would also create greater uniformity among the various national economies of the EU, making administration of economic activity within the single-currency area more feasible. The conditions set for participation in the introduction of the Euro and inclusion in the single-currency area include:
- Maintaining international currency exchange rates within a specified range (called the Exchange Rate Mechanism or ERM) for at least two years prior to the introduction of the Euro.
- Maintaining long-term interest rates with 2 percent of the national inflation rate and within 1.5 percent of the three best-performing EU member states in terms of price stability.
- Maintaining public debt at no more than 3 percent of the gross domestic product.
- Maintaining total government debt at no more than 60 percent of gross domestic product.
These conditions have proven very difficult to meet for many EU members, and the United Kingdom was rejected for participation in the introduction of the Euro due to its failure to meet the provisions of the ERM in September 1992.
Despite these difficulties, implementation of the Euro has gone ahead on schedule through the three phases set forth at Maastricht. Phase one began in 1998 with an EU summit in Brussels, Belgium, that determined which of the fifteen member states had achieved sufficient convergence to participate in the introduction of the Euro. The selected participants were Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, the Netherlands, Portugal, and Spain (exceptions were Demark, Greece, Sweden and the UK). Phase two, which commenced on 1 January 1999, introduced the Euro as legal tender within the eleven selected countries, referred to as the single-currency area, although the new currency would only exist as a "currency of account," that is, it would exist only
Country | 1990 | 1991 | 1992 | 1993 | 1994 | Approved for Participation in Euro Introduction |
Austria | 4 | 4 | 3 | 2 | 3 | Y |
Belgium | 2 | 3 | 3 | 3 | 3 | Y |
Denmark | 5 | 4 | 4 | 3 | 3 | N |
Finland | 2 | 2 | 1 | 1 | 2 | Y |
France | 5 | 5 | 4 | 4 | 4 | Y |
Germany | 5 | 4 | 4 | 3 | 5 | Y |
Greece | 0 | 0 | 0 | 0 | 0 | N |
Italy | 0 | 0 | 0 | 0 | 0 | Y |
Luxembourg | 5 | 5 | 5 | 4 | 5 | Y |
The Netherlands | 3 | 4 | 3 | 3 | 3 | Y |
Portugal | 0 | 0 | 0 | 0 | 0 | Y |
Republic of Ireland | 4 | 4 | 4 | 3 | 3 | Y |
Spain | 1 | 1 | 1 | 1 | 0 | Y |
Sweden | 2 | 3 | 2 | 1 | 1 | N |
United Kingdom | 3 | 3 | 2 | 2 | 3 | N |
on paper or for electronic transactions, as no Euro notes or coins were yet in circulation. Instead, the existing currencies of the participating countries functioned as fixed denominations of the Euro. Phase two also included the subordination of the eleven national banks in the single-currency area to the European Central Bank. Phase three, which began on 1 January 2002 set the Euro banknotes and coins into circulation and by July 2002 it became the legal tender of the EMU countries replacing the national currencies. At the time of introduction there were twelve countries in the Euro area are: Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, Netherlands, Portugal, Spain and Greece. Demark, Sweden and the UK are not using the Euro.
The initial introduction of the Euro as a currency of account began with a resounding success, as the new currency rose immediately to an exchange rate of 1.17 U.S. dollars to the Euro. Uncertainties about the further progress of European Union raised by conflicts in the Balkans in 1999 soon dampened investor interest in the Euro, however, and its value fell to 1.04 U.S. dollars per Euro by the summer of that year. In fact there was a steady decline of the value of the Euro compared to the dollar. On January 1999 the value of the Euro was set at U.S. $1.18, but by mid-1999 it had dropped to $1.08 and by the end of the year it dropped to $1.01 and by mid 2000 it had fallen to $0.95.
Future implications of the adoption of a single currency within the twelve selected EU countries are a matter of speculation, but a few general observations can be made. Surveys conducted by the international accounting firm KPMG in the late 1990s reveal that major European corporations feel that the introduction of the Euro will cause prices to fall and wages to rise within the single-currency area, since corporations will no longer have to allow for fluctuations in currency exchange rates when establishing their prices.
Other implications of the adoption of a single currency are also foreseeable. International trade within the single currency area will be greatly facilitated by the establishment of what amounts to a single market, complete with uniform pricing and regulation, in place of twelve national markets. The creation of a single market will also spur increased competition and the development of more niche products, and ease the acquisition of corporate financing, particularly in what would formerly have been international trade among members of the single currency area. Finally, in the long term, the establishment of the single currency area should simplify European corporate structures, since in time nearly all regulatory statutes within the single currency area should become uniform.
Another question regarding the Euro's future involves the exclusion of the United Kingdom from the single-currency area. Although the U.K. continues to attempt to meet the Maastricht provisions, its entry
1952 | Six countries - Belgium, France, the Federal Republic of Germany, Italy, Luxembourg and the Netherlands - create the European Coal and Steel Community (ECSC) by pooling their coal and steel resources in a common market controlled by an independent supranational authority. |
1958 | The Rome Treaties set up the European Economic Community (EEC) and the European Atomic Energy Community (Euratom), extending the common market for coal and steel to all economic sectors in the member countries. |
1965 | The Merger Treaty is signed in Brussels on April 8. It provides for a Single Commission and a Single Council of the then three European Communities. |
1967 | The Merger Treaty enters into force on July 1. |
1973 | The United Kingdom, Ireland, and Denmark join the European Community (EC). |
1979 | The European Parliament is elected, for the first time, by direct universal suffrage and the European Monetary System (EMS) becomes operative. |
1981 | Greece becomes the 10th member state. |
1985 | The program to complete the Single Market by 1992 is launched. |
1986 | Spain and Portugal become the 11th and 12th member states. |
1987 | The Single European Act (SEA) introduces majority voting on Single Market legislation and increases the power of the European Parliament. |
1989 | The Madrid European Council launches the plan for achievement of Economic and Monetary Union (EMU). |
1990 | East and West Germany are reunited after the fall of the Berlin Wall. |
1991 | Two parallel intergovernmental conferences produce the Treaty on European Union (Maastricht) which EU leaders approve at the Maastricht European Council. |
1992 | Treaty on European Union signed in Maastricht and sent to member states for ratification. First referendum in Denmark rejects the Treaty. |
1993 | The Single Market enters into force on January 1. In May, a second Danish referendum ratifies the Maastricht Treaty, which takes effect in November. |
1994 | The EU and the 7-member European Free Trade Association (EFTA) form the European Economic Area, a single market of 19 countries. The EU completes membership negotiations with EFTA members Austria, Finland, Norway and Sweden. |
1995 | Austria, Finland and Sweden join the EU on January 1. Norway fails to ratify its accession treaty. The EU prepares the 1996 Intergovernmental Conference on institutional reform. |
1997 | The Treaty of Amsterdam, resulting from the 1996 Intergovernmental Conference, is signed on October 2. |
1999 | The Euro is introduced on January 1 electronically in 12 participating member states, with complete introduction to occur in 2002. The Amsterdam Treaty enters into force on May 1. |
2001 | The Treaty of Nice results from the 2000 Intergovernmental Conference. |
2002 | The Euro is fully launched on January 1. The European Convention begins, as part of the debate on the future of Europe, to propose a new framework and structures for the European Union--geared to changes in the world situation, the needs of the citizens of Europe and the future development of the European Union. On October 9, the European Commission recommends that candidate countries Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, the Slovak Republic and Slovenia be the first to join the EU under the latest enlargement process, possibly in time for the elections to the European Parliament scheduled for June 2004. |
2003 | The Treaty of Nice enters into force on February 1. |
2004 | Ten countries (Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, the Slovak Republic and Slovenia) join the European Union on May 1. (Bulgarian and Romanian accession are anticipated for 2007. At the summit on December 16 and 17, the European Council decides whether Turkey is ready to begin accession negotiations. On June 18, the European Council accepted Croatia as a candidate country. On March 22, the Former Yugoslav Republic of Macedonia [FYROM] applied for EU membership.) A new European Parliament is elected on June 10 to 13. A new European Commission takes office on November 22. |
into the single-currency area is unlikely in the near future. Having said this, British financial and insurance institutions, some of which are among the largest in the world, have already made provisions to trade in euros, as have many other financial institutions world-wide. Furthermore, the London and Frankfurt stock exchanges announced a planned alliance in 1998, to which the Spanish, Italian, and Dutch exchanges also
EU15 Member States: | Member States as of May 1, 2004: EU25: | Candidate Countries: |
ustria | Cyprus | Bulgaria |
elgium | Czech Republic | Croatia |
enmark | Estonia | Romania |
inland | Hungary | Turkey |
rance | Latvia | Application Pending: |
ermany | Lithuania | Former Yugoslav Republic of Macedonia |
reece | Malta | |
reland | Poland | |
taly | Slovakia | |
uxembourg | Slovenia | |
he Netherlands | ||
ortugal | ||
pain | ||
weden | ||
nited Kingdom |
expressed an interest in joining. As such, it appears clear that the United Kingdom will eventually join the single-currency area.
Although the single-currency area, also referred to as "Euroland," represents a formidable force in international trade, the EU faces several grave challenges as it strives to form an ever closer linkage of its national constituents.
Among the most intractable problems faced by Euroland is the fact that while economic interconnection has gone forward at a rather rapid pace through-out the history of the EU, political integration has progressed relatively slowly. For example, despite the fact that the Treaty of European Union created a central bank to supercede the national banks of its members, responsibility for the creation of fiscal policies remains in the hands of each national government. As such, there is great potential for the central authority and national economic policy making agencies to adopt conflicting programs. Furthermore, national political institutions within the EU are likely to be more responsive to the desires of their national constituencies than to the well being of Euroland as a whole, especially in times of economic instability. It is difficult to see how voters in the nations of the EU will be able to put the good of Euroland ahead of their own particular interests, but it must also be said that the EU has surmounted similar obstacles in its history to date.
A second problem also arises out of the composition of Euroland. According to the optimal currency theory first posed by American Robert Mundell in 1961, in order for a single currency to succeed in a multinational area several conditions must be met. There should be no barriers to the movement of labor forces across national, cultural, or linguistic borders within the single-currency area; wage stability throughout the single currency area; and an area-wide system to stabilize imbalanced transfers of labor, goods, or capital within the single-currency area. These conditions do not exist in present-day Europe, where labor mobility is small and wages vary widely among EU member countries.
Furthermore, the present administrative structure of the EU is not powerful enough to redress imbalanced transfers, which are bound to occur periodically. Such imbalances would engage the sort of political response discussed previously, to the detriment of the EU as a whole.
Optimal currency theory also holds that for a single currency area to be viable it must not be prone to asymmetric shocks, that is, economic events that lead to imbalanced transfers. Ideally, a single-currency area should comprise similar economies that are likely to be on similar cycles, thus minimizing imbalances. Similarly, the need for a freely transferable labor force within the single-currency area is also necessary to minimize imbalances, since each national member of the area must be able to respond flexibly to changes in wage and price structures.
The EU has made remarkable progress during its first forty-seven years. Although the further strengthening of the EU, especially in political matters, faces major obstacles, the continued enhancement of economic ties binding members is likely to increase the political unity of EU members over time. That this is feasible is evidenced by the efforts of EU nations to conform to the stipulations of the Maastricht Agreement. Maintaining stable currency exchange rates, reducing public and overall government debt, and controlling long-term interest rates are all areas in which national governments and fiscal agencies had exercised complete autonomy in the past. Before the implementation of the Euro's second phase, many doubted that the EU member states could put aside their own internal interests to meet the Maastricht provisions; however, eleven of the fifteen managed to do so. Significantly, many had to experience economic slowdowns and increased unemployment in order to do so. Such resolve bodes well for continued strengthening of European unification in both political and economic areas. In fact, the history of the EU to date has been one of overcoming obstacles similar to those faced during the first two phases of the introduction of the Euro, and a unified Europe is and will remain a fact of international economic life for the foreseeable future.
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"Europe Ten Years from Now." International Economy 18, no. 3 (2004): 349.
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McCormick, J. Understanding the European Union: A Concise Introduction. 2nd ed. New York: Palgrave, 2002.
Phinnemore, D., and L. McGowan. A Dictionary of the European Union. London and Chicago: Europa, 2002.
Pinder, J. The European Union: A Very Short Introduction. New York: Oxford University Press, 2001.
Reid, T.R. The United States of Europe: The New Superpower and the End of American Supremacy. New York: Penguin Press, 2004.
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European Union (EU) (Encyclopedia of Small Business)
The European Union (EU), formerly known as the European Community (EC), was formed in the 1950s to encourage and oversee political and economic cooperation between numerous European nations. In the nearly half-century since it was formed, the EU has gradually succeeded in becoming the dominant governing economic body in Europe, and it now affects every aspect of business in its member states.
After World War II, European leaders realized that drastic changes needed to be made to ensure that the armed conflicts that had plagued the continent for more than half a century would become a thing of the past. Leaders of the democratic European nations decided that some form of governing body was needed that would encourage cooperation on all levels and have the power to set economic policy for the entire region.
The first signs of cooperation came in 1948, when the United Kingdom, France, and three other countries formed the West European Union, which was primarily concerned with defense issues. Also in 1948, the Organization for European Economic Cooperation (OEEC) was formed by 16 nations that were not under the influence of the Soviet Union. The OEEC oversaw the implementation of the Marshall Plan, which was the plan created by the United States to get Europe back on its feet after World War II. The OEEC later became the Organization for Economic Cooperation and Development (OECD), which now also includes the United States and Japan.
In the 1950s, three important treaties were signed that signaled the actual birth of a European union. In 1951, the European Coal and Steel Community (ECSC) was created to oversee those industries. The treaty creating that organization is an important one, because it marked the first time that any European nations had allowed a supranational organization to control an important policy area. The ECSC sprang from the Schulman Plan, a 1950 proposal that coordinated steel and coal production between France and Germany. This plan signaled the re-entry of Germany into peacetime Europe and is considered to be the most important date in the history of European unification.
In 1957, a second treaty created the European Atomic Energy Community (Euratom), and in 1958, the European Economic Community (EEC) was brought into being by yet another treaty. These two treaties together are known as the Treaties of Rome, and the creation of the EEC was seen as the first step in creating a common economic market in Europe that would allow for free trade between members and the free movement of people, services, and capital. Official governing bodies were put into place for the first time, as an assembly was convened to oversee the ECSC and the first European Parliament was established. The parliament first met in March 1958 and initially included 142 members from all member states. It was intended that direct elections would be held in each nation to fill parliament seats, but various conflicts over how the system would work led to a 20-year delay in the election process, which was finally launched in January 1979. Prior to that time, members of the European Parliament were nominated by their national parliaments.
In 1967, the name European Community (EC) was used to describe the new, independent institution that was created to oversee the ECSC, EEC, and Euratom. The EC came into being as a result of the Merger Treaty, which was ratified in 1965. The term European Community was used as the main name for the organization for more than 25 years, before the current European Union was adopted in 1993.
The 1970s and 1980s were a period of growth for the EU. In 1973, Denmark, Ireland, and the United Kingdom joined for the first time, and the parliament expanded to 198 members. In 1981 Greece joined the union, and in 1986, Spain and Portugal did the same. The parliamenthich had greatly expanded in 1979 to 410 membersrew again, this time to 518 members.
After the growth period ended in 1986, the union sought to strengthen its powers in the late 1980s and early 1990s. In 1986, the Single European Act (SEA) was passed, which targeted the end of 1992 as the date for the formation of a common market and also emphasized political cooperation in foreign policy. To aid unification, the parliament saw its powers increased, as participants had the power to vote on new members for the first time and also had an increased role in setting budgets.
The year 1992 would prove to be a watershed in the growth of the union. That year, the Maastricht Treaty was ratified, representing the most comprehensive treaty since the Treaties of Rome. The treaty also marked a distinct shift toward an emphasis on using economic policy as the main tool to increase European unification. The treaty, which went into effect in 1993, officially changed the name of the European Community to the European Union. In addition, it outlined a three-stage plan for conversion to a common market that included the establishment of a central bank and the creation of a common European currency.
In 1994, the EU combined with the seven-member European Free Trade Association (EFTA) to form the European Economic Area, a zone of 19 countries that formed a single market with no trade restrictions. As a result of that cooperative effort, EFTA members Austria, Finland, and Sweden joined the EU for the first time on January 1, 1995. This triggered a concurrent growth in the European Parliament, which expanded to 626 members. In 1997, the Treaty of Amsterdam was ratified, which cleared the way for the third stage of the plan proposed under the Maastricht Treaty.
The European Union is comprised of several governing bodies that oversee different aspects of the union's operations. In addition, each country in the union takes turn acting as chairman, with the position changing hands every six months. The European Commission (EC) is perhaps the most important of the governing bodies, as it proposes policies and is the only body that is allowed to propose legislation (besides the national governments of each state). It also oversees the day-to-day operations of the union and ensures that treaties are being carried out as intended. The commission is comprised of 20 commissioners, including a president, who are appointed by member states and approved by the parliament.
Once legislation is passed, it is administered by the European Council, which enforces legislation throughout the union and seeks to improve cooperation between governments. The council is comprised of ministers who represent the national governments of the 15 members of the union. Power in the council is based on the size of the member nations. Germany, France, Italy, and the UK have 10 votes each on the council; Spain has 8 votes; Belgium, Greece, the Netherlands, and Portugal have 5 each; Austria and Sweden have 4 each; Ireland, Denmark, and Finland have 2 each; and Luxembourg has 1 vote. Some issues, such as environmental items, require what is known as a qualified majority (62 votes) to pass. However, any items affecting nuclear policy must be passed unanimously.
Members of the European Parliament are directly elected by the people of each nation, and members serve five-year terms. While the parliament did gain some legislative power from the Maastricht Treaty, it mainly serves as the public forum of the EU, holding open debates on important issues and overseeing the activities of the council and the commission. Finally, the Court of Justice oversees EU laws and regulations and issues rulings when conflicts arise. All decisions issued by the court, which includes 15 judges and 9 advocates, are binding on member states.
Because one of the main roles of the union is to oversee economic cooperation between members, it plays a very large role in how business is conducted throughout Europe. It has established a single market trading system with low, or no, taxes and tariffs, and it encourages economic development.
The most important economic changes in the union have occurred in the last few decades. In 1979, the European Monetary System (EMS) was established to create greater price stability between the currencies of all union members. The core of the EMS was the Exchange Rate Mechanism (ERM), a voluntary system that fixed the price of currencies against each other; rates could be adjusted within a narrow range of prices. Every nation except England participated in the ERM when it was launched. England did eventually participate, beginning in 1990, but it joined Italy in pulling out of the ERM in 1992 on a day that is now remembered as "Black Wednesday."
The ratification of the Maastricht Treaty in 1992 launched the union's current economic policy by creating a timetable to enact a three-stage plan for implementing a single market economy across Europe. Stage 1 of the plan took effect when the treaty was ratified. It officially recognized that the goal of the European Union was to create an Economic and Monetary Union (EMU) of all member states in which members would strive to cooperate more closely than in the past in managing their economies.
Stage 2 of the Maastricht plan was launched in 1994 with the creation of the European Monetary Institute in Frankfurt, Germany. This was a central banking institution that was the forerunner of the European Central Bank (ECB), which now oversees the control of currencies throughout the union. The Central Bank is the hub of the centralized banking system that also includes 15 national Central Banks that serve as the main bank in each of the member states.
One year after stage 2 was completed, union members agreed that stage 3 would begin on January 1, 1999. On that day, the union officially began the move towards a single European currency unit, which is called the euro. Currency conversion rates in participating member states were fixed, and a single monetary policy and foreign exchange rate were implemented. A "euro zone" was created that included the following participating countries: Belgium, Germany, Spain, France, Ireland, Italy, Luxembourg, the Netherlands, Austria, Portugal, and Finland; Greece agreed to participate, but did not become an active member until 2001. Noticeably absent were the United Kingdom, Denmark, and Sweden. As of 2001, those countries still had not joined the euro zone.
Between January 1, 1999 and 2001, countries in the euro zone began the conversion to the single currency. The euro was still a non-cash currency during that transition period, but it was used for almost all non-cash transactions, such as bank transfers, credit card payments, and check or money order payments. Dual pricing systems were set up, establishing prices in national currencies and in euro dollars. Changes were made in software, automatic teller machines, vending machines, and other components to prepare for the euro, and consumers were allowed to open euro bank accounts.
On January 1, 2002, the transition will be completed and the euro will become the official currency of the participating nations. For a two-month period, national currencies and the newly launched euro coins and paper bills will remain in circulation at the same time. At the end of that period, only the euro will be accepted for all financial transactions. Plans call for 12 billion euro banknotes and 50 billion euro coins to go into circulation initially. The full changeover to the new currency is expected to be completed no later than July 1, 2002. At that point, the European Union will have completed its greatest achievement. By converting to a single currency, union leaders hope to achieve benefits that include price stability, greater confidence among investors, a simpler single market economy, a reduction in transaction costs due to the absence of currency exchanges, and an integrated banking system. It is expected that international business and currency transactions will also become simpler and more efficient under the euro. The ultimate goal is a strong and stable Europe that features open markets.
"A Brief History of the European Union."
"Economic and Monetary Union. From Rome to Maastricht: A Brief History of EMU." http://europa.eu.int/scadplus/leg/en/lvb/125007.htm.
"The Euro in the Internal Market." http://europa.eu.int/business/en/advice/theeuro/index.html.
The European Union in the United States Web site:
Weidenfeld, Werner. Europe from A to Z: A Guide to European Integration. Office for Official Publications of the European Communities, 1997.
European Union (Encyclopedia of Business)
What started off in 1957 as the European Economic Community (EEC, popularly called the Common Market) evolved into the European Community (EC) by 1967, a change that implied a social as well as an economic order. In 1993 the European Community gave way to the European Union under the Maastricht Treaty, which brought together 370 million people under a common economic and quasi-political entity that constitutes the world's largest trading power.
The European Union (EU) is an organization of 15 western European nations that joined together to promote economic, political, and social cooperation, including varying degrees of integration. Notable successes of the EU include the creation of a single economic market free of internal constraints of trade; stabilization of currency exchange rates through the European Monetary System (EMS); and a single currency unit of exchange known as the euro, which replaced the European Currency Unit (ECU). In the realm of political integration, the EU is evolving toward the abrogation of frontiers between member states, harmonized defense and foreign policy, the unimpeded movement of labor and capital, and European citizenship. Members in 1999 included Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal, Spain, Sweden, and the United Kingdom.
The EU is governed by four major administrative bodies which are responsible for the organization's executive, judicial, and legislative operations. Essentially, policy is set by the European Commission and the Council of the European Union. Decisions made by these institutions are sent to the European Parliament. Once parliament has been consulted and has given its advice, the decision returns to the commission for execution. When the Common Market consisted of only six members, decisions had to be unanimous. After 1986, when the EC had enlarged to 12 members, this was changed to majority voting on most matters, except for decisions on revenues. The Court of Justice, finally, enforces legislation and arbitrates disputes. The various institutions of the EU are based in several different European cities, particularly in Brussels, Belgium; Strasbourg, France; Frankfurt, Germany; and Luxembourg.
Headquartered in Brussels, the European Commission is made up of two representatives from each large state and one from each small state. Commissioners serve four-year terms. These commissioners, in a sense, represent Europe and owe their loyalty strictly to the European Union. The European Commission is responsible for the application of treaty provisions and for formulating recommendations for the implementation of treaty provisions. The commission also initiates proposals for legislation and manages EU policies and international trade relationships.
Often called the Council of Ministers, this body represents the individual states and usually is composed of their foreign ministers. Because ministers come and go, another entity, the Committee of Permanent Representatives (COREPER), supports and advises the council and is made up of permanent civil servants of the European Union. The council meets twice a year to adopt or reject major policy decisions concerned with the future of the EU. The Council of Ministers is where the member states set the union's political objectives and coordinate their national policies.
Members of the European Parliament (MEPs) are democratically elected by the electorate of each member state. They represent Europe's citizens proportionally (hence, Germany has more MEPs than Luxembourg). The parliament originally served only a consultative function, and could neither make laws nor raise taxes. Far from being a rubber stamp, however, it was an important forum for discussion and debate (the commissioners appeared regularly before the parliament) and had the ultimate power to dismiss the commission or to veto the EC's budget. In recent years, parliament's powers have been significantly expanded in order to bring policy decisions closer to Europe's citizenry. MEPs now enjoy "codecision" privileges along with the European Commission, moving them closer to the decision-making process. The European Parliament's 600-plus members also maintain certain veto powers, and by a two-thirds vote can expel the commission.
The permanent European Court of Justice in Luxembourg is the arbiter of disputes between institutions as well as the enforcer of EU laws. These laws are based on decisions of the commission and council, on the major treaties signed among the member states, on international conventions and treaties, and the special agreements made when a new member is accepted into the ranks of the EU. The European Court of Justice decides under the treaty on the legality of actions taken by the commission, the council, actions taken by member states relating to the EU, and private organizations dealing with the EU.
In addition to Parliament, the Economic and Social Committee advises Parliament as well as the Commission and Council. It is one third the size of Parliament and consists of representatives of unions, employers, and others in the workforce. The Court of Auditors acts as the "taxpayers' representative," monitoring the allocation of EU money to ensure it accords with budgetary rules. The Committee of the Regions acts to safeguard regional and local identities in the development and implementation of EU policies. Any EU citizen who feels his or her fundamental rights as a citizen have been infringed by EU policies or institutions may appeal to the European Ombudsman.
While the dream of a united Europe is an ancient one, few early in the 20th century would have imagined that it could be realized in their century. However, never were there more compelling reasons for Europeans to establish a permanent peace as there were after World War II. Torn to shreds by the ugliest forms of ethnic and national hatred, and geographically situated in the middle of a global power system in which the failing of peace could mean global annihilation, Europeans established a framework in which regional cooperation and peace could be fostered. However, even after the establishment of the "Common Market," which did not take place until 1957, few could have foreseen the dizzying pace of European integration thereafter.
With western Europe battered at the end of World War II, the United States stepped forward with its multibillion-dollar Marshall Plan aid and reconstruction package. The U.S. government imposed one condition on this plan; namely, that it was to be administered by Europeans in some form of joint organization. In due course the Organization for European Economic Cooperation (OEEC) was formed, in which Europeans formulated a common economic policy and sowed the seeds of the much more elaborate Common Market.
The philosophical father of the EU was the French businessman and statesman Jean Monnet (1888-1979). Monnet advocated a gradual political, social, and economic unification of the countries of Western Europe. Monnet believed, to paraphrase one of his ideas, in the uniting of men, not the merging of states. The first step toward this unification was the 1951 signing of the Treaty of Paris by Belgium, France, Italy, Luxembourg, the Netherlands, and West Germany, which established the European Coal and Steel Community (ECSC). This gave birth to a single common market covering iron ore, coal, scrap metal, and steel produced by the six countries. The treaty broke down trade barriers for these products and allowed the free movement of labor, regardless of nationality, working in these industries.
The success of the ECSC led to the birth of the European Economic Community, or Common Market, when the respective prime ministers and foreign ministers of the six members of the ECSC signed the Treaty of Rome in 1957. The Common Market derived its name from the pre-war French statesman Aristide Briand (1862-1932), who in 1929 introduced a scheme for a European "common market" before the League of Nations, the predecessor to the United Nations. While nothing came of it, his plan was resurrected and formed the basis of the later EEC. Two notable features of the Treaty of Rome was its tacit acceptance of the idea of eventual political union and the irrevocable commitment by states to the Common Marketo nation had a right to secede. In addition, the European Atomic Energy Community (EAEC) was established, and the institutions of the ECSC were adopted by the new EEC. In 1967 the governing agencies of these three organizations (ECSC, EAEC, and EEC) merged to form the European Community (EC). Headquarters were located mainly in Brussels, but also in Luxembourg, as well as in Strasbourg, France. The French insisted that a condition of French membership would be the location of at least some EEC institutions in France.
In a move that signaled the seriousness with which the EC nations envisioned a united Europe, the member states yielded some of their sovereignty to a collective leadership for the sake of harmony in Europe and greater prosperity. The EC's goals were to eliminate trade barriers among its members, to endow their citizens with equal rights, which included the elimination of internal tariffs and complete freedom of movement, and to provide free transfer of their goods and funds. The EC quickly moved to implement these goals; tariffs were eliminated on goods traded amongst its members, and a common tariff was established on goods imported from other countries. In 1979 the EC established the European Monetary System (EMS) in response to the economic and inflationary woes of the 1970s. In a major step toward monetary integration, the EMS regulated exchange rates and established a common unit of currency, the ECU, which was not a currency in the normal sense, but served in the financial markets as a breadbasket of member currencies.
Italian statesman Altiero Spinelli worked out a plan in the 1970s for a single European Community that served as the model for the one eventually adopted in 1986. The Single Market Act became law that year after government leaders of the majority of Common Market states had sent the European Commission a proposal to speed up the attainment of a single internal market. The plan, which called for the completion of a single internal market by January 1, 1993, would make tiny western Europe the largest and richest free trade zone in the world. In 1987 the EC ratified the Single European Act which expedited the ending of customs regulations and other barriers to the unimpeded movement of goods, services, labor, and capital amongst EC members. Implementation of the act, however, was gradual.
While only one-third of the nations of western Europe were included initially in the Common Market, there was a procedure in place for voting in new members. The criteria for acceptance of a prospective member were (and still are): that its government be democratic (a condition historically intended to exclude any communist or fascist state), and that it have a viable economy that would not constitute a strain on the economies of the other member states.
A crack in the Common Market's outward harmony appeared in the early 1960s when the British government decided to apply for membership. Surprisingly, the application took years to approve, even though five of the six member states were eager to strengthen the Common Market by the addition of this valuable neighbor. Great Britain's admission was stalled by President Charles de Gaulle of France (1890-1970), who was convinced that British membership would pave the way for overwhelming American influence in Europe. Only in 1973 did the French government come to regard the British as a counterweight to the economic clout of the West Germans, and thus the United Kingdom was accepted that year, along with Ireland and Denmark. Within a decade, Greece joined, followed in 1986 by Spain and Portugal. Within 30 years of the signing of the Treaty of Rome, the Common Market had doubled in size.
By the early 1990s, communism had fallen in eastern Europe and Russia, and eastern Germany had begun to reunite with its western sibling. This opened the possibility of broadening the EC beyond its 12 members: Finland no longer would be compelled to abstain from membership because of Soviet objections, while Austria did not have to adhere to its Soviet-imposed policy of official neutrality. It also raised the prospectlmost unimaginable to manyhat eastern Europe might join a free-market community as well.
In fact, the most stable of the eastern European stateshe Czech Republic, Slovakia, Poland, and Hungaryost little time in signaling to the EC that they would begin to transform themselves into a free-trade zone as a first step toward their eventual goal of inclusion in the EC. Consequently, in December 1992, they signed the Central European Free Trade Agreement (CEFIA), which created a semblance of a common market in eastern Europe.
With the goal of a free internal market just two years from being realized, Chancellor Helmut Kohl of Germany and President François Mitterand of France took the initiative to propose the groundwork for a union that would go far beyond full economic integration. In 1992 the 12 member states of the EC signed the Treaty on European Union in Maastricht, the Netherlands, creating the European Union effective I November 1993. The Maastricht Treaty was the single greatest step in European history toward unification of its western countries. It went beyond the Treaty of Rome in that it contained provisions for not only further economic integration but also political and social integration. The Maastricht accord called for the EC to expand its activities and responsibilities to eventually include health care, consumer protection, common industrial planning, and environmental protection.
The central purpose of the Maastricht Treaty, however, was to continue and accelerate the economic integration process begun with the signing of the Treaty of Rome. The Maastricht accord called for the establishment of the European System of Central Banks and a European Central Bank. The European Central Bank's function is to oversee a single monetary policy for the EU. Another important provision of the treaty was the establishment of the European Monetary Union charged with implementing plans for a single European currency (the euro) by 1999.
The European Union that the Maastricht Treaty envisaged was not yet a political union, but only the framework for one. At the heart of the treaty was an article making "subsidiarity" a principle of the new Union; namely, member states would voluntarily yield to a central authority those functions which they could not perform as well on their own. This entailed, in addition to a uniform monetary policy and common currency, a common foreign policy, as well as common policies on many police and justice matters.
These radical changes required getting used to the idea of a central bank and to an enhanced central authority, although this authority would reside in the collective entities of the European Commission and the Council. To calm fears of some menacing new government gaining control over sovereign states, the Maastricht Treaty also extended the powers of the European Parliament.
Although all of these changes were foreseen as far back as the 1957 Rome Treaty, they were so radical that the Maastricht Treaty would engender much rancorous debate and friction each time it was put before the voters of an EC state. Denmark rejected it the first time around but relented the second time after special concessions were made; and Switzerland soundly defeated it. Eventually, however, the whole of the European Community ratified the treaty.
In 1994 the European Union joined with three of the four members of the European Free Trade Association (EFTA) to form the European Economic Area (EEA). The EEA is a cooperative trade agreement which removed barriers to the free movement of capital, people, services, and nonagricultural products between Iceland, Norway, Liechtenstein, and EU members. Switzerland, the fourth EFTA member, did not sign the accord. In 1995 Austria, Finland, and Sweden became EU members, bringing the total to 15.
With monetary union around the corner and further expansion on the horizon, the European Union met in the Netherlands to write the Treaty of Amsterdam, which was signed on 1 February 1997. All member states had completed ratification by 30 March 1999, and the treaty went into effect on 1 May 1999.
The primary function of the Treaty of Amsterdam was to provide for a more cooperative, integrated Europe that would be able to meet the challenging planned expansion over the following decade. The treaty focused on increasing "flexibility," which was included a streamlined financial plan that would account for the various stages of economic development and prosperity among its member states. Specifically, it would allow those countries moving at a slower pace to catch up.
In the political sphere, Amsterdam established a formal mechanism for revising treaties, for safeguarding against all violations of citizens' fundamental rights, and for the redress of breaches thereof. It was instrumental in expanding the political powers of the European Parliament. More broadly, Amsterdam revitalized the EU's structure with an eye toward expansion. Furthermore, the Conference of European Affairs Committees (COSAC)he organization that brings together all the member states' national policies for discussionas authorized to comment on all EU decisions and legislation before final decisions are passed. Finally, the number of MEPs was limited to 700, regardless of the number of member states.
In the social realm, Amsterdam set as a major EU objective a high level of employment throughout its domain. Social justice issues were further addressed by the inclusion of nondiscrimination clauses, including provisions for gender equality in employment. In an effort to bridge what many saw as too great a gap in research and education, the treaty called for greater exchange of information and research, establishing research centers throughout Europe that would bring together scientists and researchers from various countries for the purpose of exchanging and discussing of information. Without specifically implementing any provisions, the treaty also established a legislative framework to implement broader, more uniform environmental regulation.
To coincide with its conditions for greater internal movement of goods and people, Amsterdam also recognized the need for greater cooperation between member states on crime prevention, including knowledge-sharing, especially relating to international crime and organized criminal activities. Each member state, however, remained responsible for its own internal security policy.
Finally, Amsterdam streamlined and expanded the European Union's Common Foreign and Security Policy (CFSP) with calls for greater cooperation of military and diplomatic policy and strategy between member states. The treaty allows the EU to carry out humanitarian aid and peacekeeping tasks, both inside its borders and globally. Moreover, the signers inserted an abstention clause to allow individual members to refrain from a foreign operation or policy without nullifying it for the whole union.
On 1 January 1999 Europe's monetary union officially began, by which countries who have signed on (called the "ins") saw their currencies subsumed under the euro. These national currencies are to coexist with the euro until July 2002, when they will be phased out entirely, at which time the euro will become the sole legal tender. Until then, participating members' currencies function as denominations of the euro and have fixed relations to one another. The euro's physical bills and coins were scheduled to be introduced in January 2002. Meanwhile, financial regulation, including the setting of interest rates, was removed from the jurisdiction of the national governments and placed in the hands of the European Central Bank.
The United Kingdom, Sweden, and Denmark are the sole EU countries who presently have opted to remain outside the monetary union. They are joined on the list of "pre-ins" by Greece, which has agreed to join the monetary union in 2001. U.K. Prime Minister Tony Blair, however, has made subtle hints to the effect that the United Kingdom may embrace the euro in coming years.
Nowadays, no one is surprised that a nation such as economically depressed Bulgaria is planning to apply for membership one day. It is taken for granted that CEFTA countries will join. Indeed, the majority of EU administrators assume that the bulk of eastern Europe will become part of the union over the first decade and a half of the 21st century. Even the prospect of Russia becoming a member, however long that may take, is not even so remote. Many of these countries have already expressed interest; applicant countries include Bulgaria, Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia, and Slovenia. Turkey has long courted the idea of joining, though their accession remains particularly problematic due to reported human rights abuses and the country's illegal occupation of much of Cyprus since 1974.
The specific time frame for these nations' admission remains contentious both within those countries and in the existing EU. Many eastern European nations face the choice of (1) waiting until their economies reach a greater stage of development, so as to gain leverage within the EU and not see their domestic industries crumble under foreign competition; or (2) jumping in earlier so as to take advantage of increased market access and the other advantages of aligning with the union.
Furthermore, the issue of farm subsidies is expected to account for a great deal of debate within the EU as these countries move closer to accession. Most of the applicant countries maintain large farm industries, and thus their accession could necessitate a significantly higher tax burden on the economically advanced countries of western Europe. This could cause some friction; Germany, for example, which supplies a far greater sum to the EU budget than it receives in return, has already expressed interest in redressing this imbalance.
The smooth pace of the transition to the European Union was disrupted on 15 March 1999 by the sudden resignation of entire 20-member European Commission amid charges of fraud and gross mismanagement. This was the first such administrative shake-up of the EU's history. In response, the EU called for an inter-governmental conference to overhaul the commission's operating structure to ensure tighter auditing procedures, tighter disciplinary procedures for improved accountability, and, perhaps, a new financial management system.
In 1999 talks began within the EU on its Agenda 2000 program to try to settle these and other issues before they get out of hand. The plan is primarily intended to pave the way for the admission of up to a dozen new members from central and eastern Europe, many in the first decade of the 21st century. The agreement reached in March 1999 established a framework to strengthen and reform EU policies so they can deal with enlargement and deliver sustainable growth, higher employment, and better living conditions to all new and existing citizens.
Duina, Francesco G., and John A. Hall. Harmonizing Europe: Nation-States within the Common Market. New York: State University of New York Press, 1999.
Eichengreen, Barry, and Jeffrey Frieder, eds. Forging an Integrated Europe. Ann Arbor, MI: University of Michigan Press, 1998.
European Commission. Welcome to Europa. Brussels, 1999. Available from europa.eu.int/index-en.htm.
Hoeller, Peter. The European Union's Trade Policies and Their Economic Effects. Paris: OECO Economics Department, 1998.
Journal of Common Market Studies, monthly.
Kauffman, Mark A. The European Community: An Essential Guide Toward Knowing and Understanding the EC. Mansfield, OH: Stone & Quill, 1993.
McNamara, Kathleen R. The Currency of Ideas: Monetary Politics in the European Union. Ithaca, NY: Cornell University Press, 1998.
Neal, Larry. The Economics of the European Union and the Economics of Europe. New York: Oxford University Press, 1998.
Ungerer, Horst. A Concise History of European Monetary Integration. London: Quorum Books, 1997.
Urwin, Derek W. The Community of Europe: A History of European Integration Since 1945. 2nd ed. Reading, MA: Addison Wesley Longman, 1995.
Source: Encyclopedia of Business, ©2000 Gale Cengage. All Rights Reserved. Full copyright.
Source: Encyclopedia of Business and Finance, ©2001 Gale Cengage. All Rights Reserved. Full copyright.
Source: Encyclopedia of Management, ©2006 Gale Cengage. All Rights Reserved. Full copyright.
Source: Encyclopedia of Small Business, ©2002 Gale Cengage. All Rights Reserved. Full copyright.


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5 lbs lean pork in bone,thawed,bone removed and washed
1/4 cup soy sauce or to taste
3:Check the seasoning..Remove from heat and cool completely before store in clean air tight container.Serve as it's or with bread or rice or porridge..
What a great idea! I always love pork floss too. And same as your family, my family doesn't eat the pork in soup as well, we always end up throwing them away. Now I have a handy recipe to use my left over soup pork. Can't wait to try this out with my next batch of soup. Thank you for sharing this recipe.
ReplyDeleteI like homemade floss. I sometimes do that too. I remember during my confinement month, there was so much chicken meat left over my mother-in-law turned them all into chicken floss. The flavour was just so awesome....wine and spices....mmmm. We gave bottles away to other family members and they were so thankful to us :D
if you make soup save the meat..if not just buy some lean meat to make this but must boil the meat first until tender..oh yes!! this floss is CNY goodies right?
Thank you for dropping by:) sure I will visit your blog soon!!
no...la,,where got hard working??? sometimes got mood,try to make this and that...oh yea..talking about CNY it's about the corner..I dunno,but if I make CNY cookies,I will make some nian gao or kuih ros aka bee hives cake for some friends....there is nothing much to prepare,maybe just deco home for Mishu to see..At least she know we also celebrate CNY..I bought few bags of CNY deco from Malaysia,so it's should be good..
Thank you:) yes if you always make soup,save the meat!!
I remember someone told me that floss from store is not really safe,we have no idea what type of the animal part it's..but we still love the store bought one bcos it's easy and delicious!.If I live in Asia now I'm sure not going to make floss myself but too bad the floss they sold here is very very expensive!! Chinatown in Manhattan there are few Malaysia Jerky store owned by Malaysian..I bought once or twice,it's taste OK but the price is really superb expensive!! a friend told me making jerky at home is easy but I yet to try...


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This past fall, She Writers from around the world were abuzz with our "Why I Write" Six Word Memoir Contest. The winner, Amy Hartl Sherman, wrote this beauty which became our newest She Writes t-shirt: "Write it down. Set it free."
Now, it's time to dig in to that box of chocolates and your imagination once again: In theme with Valentine's Day, SMITH Magazine has invited She Writes members to weigh in on how YOU sum up Love & Heartbreak in 6 Words.
What say you, wise and witty She Writers? We can't wait to hear your pithy insights!
**Also, for any She Writers in NY, SMITH is hosting "Married by Elvis. Divorced by Friday": A Six-Word Memoir Story Slam on Love & Heartbreak" tonight, Monday, Feb. 14th, at the 92Y Tribeca.
Tags: #nonfiction, contest, memoir, personal, romance
© 2013 Created by Kamy Wicoff.


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To the Editor:
I have guided in tarpon tournaments ever since I started taking clients for tarpon in Boca Grande more than two decades ago. We have participated in World's Richest, Miller's Tarpon Tide, World Tarpon and PTTS.
My family has roots in Boca Grande that cover a hundred years and date back to the earliest of 1900's. The Markett's were a pioneer Arcadia family and my grand and great-grandfathers were with the railroad. I have guided clients for tarpon in Boca Grande Pass and the surrounding sounds, beaches and Charlotte Harbor for a long time. My son and his family live on the island and it is my grandson Dalton's only home. Capt. Lou Baggett and I started the Boca Grande Pass Cleanup during a Miller's Tarpon Tide Tournament years ago and I was actively involved in that effort as long as it existed.
To read more of this letter from Capt Dave Markett, check the June 22 edition of the Boca Beacon or subscribe to our e-edition.


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April 3, 2012
TexasHoops.com staff TexasHoops.com
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Editors' Picks:
- Budget deal to get quick vote in the House
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- Sebelius calls for review of Obamacare rollout woes
- American dream dying, but many see free market as solution: Poll
- Air Force base in South Carolina boots Nativity scene
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- Mandela service sign language interpreter: 'He made up his own signs'
- Pope Francis named Time's 'Person of the Year'
- Ben Affleck: Fundraising for Democrats started to 'feel gross'
White House scandals turn enthusiastic supporters into critics
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Dan Holman's double ensures Braintree's promotion charge is back on track with victory at struggling 10-man Chester.
07 Dec » BBC SportAlex Titchiner's loan spell at Chester is cut short and the club also terminate Lee Pugh's contract because of injuries.
06 Dec » BBC SportJames Chester is set for his first appearance since September when Hull take on Arsenal at the Emirates Stadium tonight.
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28 Nov » SkySports.comJohn Rooney, the younger brother of Manchester United star Wayne, joins Chester on a one-month loan deal from Bury.
28 Nov » BBC SportA late Louis Moult goal earns Nuneaton victory over Conference Premier strugglers Chester.
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- On October 24th representatives of the School of Languages, Cultures and Linguistics attended the official opening of the new Southeast University (SEU) – Monash University ... Read more
- Dr Jeremy Breaden and Dr Robert Irving have been successful in grant submissions for AsiaBound funding as part of the Monash Abroad – Global Engagement ... Read more
- A general information session on Study Abroad in the School of Languages, Cultures and Linguistics was held on Wednesday 4 September in the Japanese Studies ... Read more
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- The Melbourne workshop of the PLE Conference 2013 was held at Monash Caulfield Campus July 11-12. As always, I (@SarahConf) tweeted throughout the conference, and ... Read more
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I.... uh...... what
This requires a little collusion among players and good luck, and yes, i know Im dreaming, buttt......
1) Bobcats win lottery.
2) Trade Kemba, Reggie W, Corey M, and the #1 pick to magic for Dwight Howard
3) Amnesty TT
4) Sign Deron Wiliams and Gerald wallace back.
Opening day line up of Deron W, Gerald H, Crash, BB, and Howard.
I know, i know.
Still need a good 3 shooter who could play minutes, but thats a great defensive team and a top 4 in the east, right?
Okay, I gotta go back to sleep......
I.... uh...... what
and then what happens when howard leaves after next year?
Well, obviously hes staying with his buddy deron.
Dude, lighten up, its a dream, remember?
More realistic for the Nets but I have thought about a Deron, Crash, Howard big three. That would be fun to watch.
Get at me on twitter @dcarnys
I would rather have AD than DH
Yeah Davis will be a lot cheaper and his body is not as battled and bruised as howards
Founder and Writer @ http://thelotterymafia.com/
Follow me here: @jamesplowright for insightful tweets about the NBA and Bobcats News
If you are interested in writing about the NBA, web design or PR please get in touch. we will accept all applications irreverent of experience:
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You're watching...
Sen. Jack Reed on Moody's Bank Downgrades
Sen. Jack Reed, (R-R.I.), on Moody's downgrade of 15 banks' credit ratings.
Jun 21, 2012
You're watching...
Sen. Jack Reed, (R-R.I.), on Moody's downgrade of 15 banks' credit ratings.
Jun 21, 2012
Also in this playlist...
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Jack -- who's a Democrat from Rhode Island and was on the banking committee and we're gonna get his reaction to these downgrades.
Right now.
We have -- with -- different areas aren't what what is your reaction to the downgrades that you've heard from Moody's of these.
Thanks well -- as you pointed out these are consistent with other rating agencies over the last several weeks and it.
To two points that were made -- about there cushion of capital but also there.
Processes and you know I I think one of the values -- like to see is that in rating agencies -- asking tough questions and making.
Good judgments that.
Again I think the banks themselves have they are gonna respond to these.
Ratings and there and they don't come as much of this prize -- the market probably fully discounted all of this information already.
Yeah actually have a sense of what we heard from Marty Nesbitt recruitment timing impacts that that he thinks the situations -- roots.
You know that this reaction -- things that unit to that we his situation was a little while back to you agree with -- -- died and I.
-- heard him indicate that these are typically lagged variables in terms of the analysis has been done has evaluated by the rating agency and then publish that there is not clear.
-- -- And I have not conversant enough about the balance -- the banks to be as insightful as as on the accommodative but.
I think again.
One good point here.
Is that all of these institutions are undergoing much more stringent scrutiny by the rating agencies than existed several years ago.
Land and I think that scrutiny.
It raises the bar in terms of what they have to do.
And provides the public with much more accurate information and frankly I I think that kind information is helpful in the long run so.
That this should be looked upon as just you know frankly -- -- tougher scrutiny it -- level of analysis and that could contribute to the success of the banks.
Sure because a lot of people in the financial community -- this situation with the rating agencies hasn't really changed that much.
And anti crisis and that's one of the things that we need to work on mountains.
Well I think they had taken a much.
More delivered him and much more careful and much more.
You know judgmental -- I'm -- the criticism of the rating agencies particularly not so much institutional rating the ratings of the securities is that it was rather a lack sit.
You know there are many securities that were -- at high levels that didn't pan out obviously.
And I think that one of the lessons has been for the regime he's is that they have to ask tough questions and make tough Paulson.
If -- -- to -- ear to ear on the side of being a little more strict.
That's one I think -- that -- that something that's happened though that that's a positive development whether it's continued.
We'll -- Concerned are you about the situation in Europe aunts and impacting our banking system here how closely watched in -- case.
Watching it very closely what happened in Europe we'll have definite around vacations here.
That that the elections in Greece.
World positive sign that it wasn't decisive.
That the European leaders are gathering they have to start taking some very.
Tough actions to key actor obviously is Germany.
There has to be a recognition that an austerity program alone is not going to be helpful it has to be balanced by growth initiatives that they've talked about a common.
You know banking evaluation system and regulation system that's a positive step.
And the other thing they have to -- move quickly mean seems every several months is another crisis -- a sort of and somehow worked the way through that crisis but just delay.
The next crisis and I think they have to be much more decisive much more comprehensive.
And Germany will be the key actor.
I mean what if they don't behavior -- -- there's a lot of people here that wonder.
You know is it possible to let -- -- currencies are obviously our financial system from how much impact ask.
You know there are some analysts who can tell you down to -- The decimal point what the impact might be up my sense over and and it's and I think it's.
Shared by many is that there's an international financial situation is so.
-- connected so interrelated when you have derivatives when you have products that are counter parties that you may be outside of Europe but have risk in Europe.
How all of this is gonna produce both AM immediate financial effect in and it's also the psychological effect.
You know it's serious problems -- hear -- -- investors here consumers here will I think be a little bit more portions and that doesn't help.
In terms of our economy so there's clearly I think both of financial and a psychological.
Interaction that can't be ignored.
All right thank you so much for joining us thank you very react to this -- we really appreciate it.
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Isn't every GM willing to make trades on draft day?
"If you need braggin' on, let someone else do it"-my dad
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I read a lot of it as him in a rebuilding mode for the next 3-4 years. I don't know about that.
To be honest we are so use to the dog and pony show the King would bring out. It got really tiring, but frankly it was the only thing we knew for so long. It is amazing to be able to listen to someone that doesn't seem pissed off, paranoid, and confrontational.
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I read into it as being two things:
+Rebuilding through the draft means he's more then willing to dump some veteran guys this year (watchout Tony)
+No fear of packaging draft picks consisting of the current draft year as well as future draft picks
I really think that Pioli is savvy enough that if he wants to trade down he'll find a way to trade down. I for one wouldn't be suprised if a scenario such as him packaging this years pick with another pick from the latter rounds in next years draft (if he had too) if he wanted to trade down to a more favorable position to help the team through FA to preserve some cap space in near future to further the teams quality with free agents rather then unproven rookies.
Just a thought
Last edited by DT14PRIEST; 02-22-2009 at 02:28 PM.
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The pats have recently done a good job with trading for and against 'next years draft picks'. Look for Pioli to adopt the same attitude in KC~