37.1.3: The European Union

Examples

• The European Union (EU) is a politico-economic union of 28 member states ocated primarily in Europe.
• The EU operates through a hybrid system of supranational and intergovernmental decision-making.
• The EU traces its origins from the European Coal and Steel Community (ECSC) and the European Economic Community (EEC), formed by the Inner Six countries in 1951 and 1958, respectively.
• The European Union was formally established when the Maastricht Treaty came into force on November 1, 1993. The treaty established the three pillars of the European Union: the European Communities pillar, which included the European Community (EC), the ECSC, and the EURATOM; the Common Foreign and Security Policy (CFSP) pillar; and the Justice and Home Affairs (JHA) pillar.
• The creation of the pillar system was the result of some member states wanting to extend the EEC while others felt those areas were too critical to their sovereignty to be managed by a supranational mechanism.
• The Maastricht, or convergence, criteria established minimum requirements for EU member states to enter the third stage of European Economic and Monetary Union (EMU) and adopt the euro as their currency. The four criteria impose controls over inflation, public debt and the public deficit, exchange rate stability, and the convergence of interest rates.
• On December 1, 2009, the Lisbon Treaty entered into force and reformed many aspects of the EU, including its legal structure.
• During the 2010s, the cohesion of the EU has been tested by several issues, including a debt crisis in some of the Eurozone countries, increasing migration from the Middle East, and the United Kingdom’s withdrawal from the EU.

The European Union (EU) is a politico-economic union of 28 member states located primarily in Europe. It has an area of 4,324,782 km² (1,669,808 sq mi) and an estimated population of over 510 million. The EU has developed an internal single market through a standardized system of laws that apply in all member states. EU policies aim to ensure the free movement of people, goods, services, and capital within the internal market, enact legislation in justice and home affairs, and maintain common policies on trade, agriculture, fisheries, and regional development. Within the Schengen Area, passport controls have been abolished. A monetary union was established in 1999 and came into full force in 2002, and is composed of 19 EU member states which use the euro currency.

The EU operates through a hybrid system of supranational and intergovernmental decision-making. The seven principal decision-making bodies—known as the institutions of the European Union—are the European Council, the Council of the European Union, the European Parliament, the European Commission, the Court of Justice of the European Union, the European Central Bank, and the European Court of Auditors.

The EU traces its origins from the European Coal and Steel Community (ECSC) and the European Economic Community (EEC), formed by the Inner Six countries in 1951 and 1958, respectively. The Community and its successors have grown in size by the accession of new member states and in power by the addition of policy areas to its remit.

Maastricht Treaty

The European Union was formally established when the Maastricht Treaty—whose main architects were Helmut Kohl and François Mitterrand—came into force on November 1, 1993. The treaty established the three pillars of the European Union: the European Communities pillar, which included the European Community (EC), the ECSC, and the EURATOM; the Common Foreign and Security Policy (CFSP) pillar; and the Justice and Home Affairs (JHA) pillar. The first pillar handled economic, social, and economic policies. The second pillar handled foreign policy and military matters, and the third pillar coordinated member states’ efforts in the fight against crime.

All three pillars were the extensions of existing policy structures. The European Community pillar was a continuation of the EEC. Additionally, coordination in foreign policy had taken place since the 1970s under the European Political Cooperation (EPC), first written into treaties by the Single European Act. While the JHA extended cooperation in law enforcement, criminal justice, asylum, and immigration as well as judicial cooperation in civil matters, some of these areas were already subject to intergovernmental cooperation under the Schengen Implementation Convention of 1990.

The creation of the pillar system was the result of the desire by many member states to extend the EEC to the areas of foreign policy, military, criminal justice, and judicial cooperation. This desire was met with misgivings by some member states, notably the United Kingdom, who thought some areas were too critical to their sovereignty to be managed by a supranational mechanism. The agreed compromise was that instead of completely renaming the European Economic Community as the European Union, the treaty would establish a legally separate European Union comprising the European Economic Community and entities overseeing intergovernmental policy areas such as foreign policy, military, criminal justice, and judicial cooperation. The structure greatly limited the powers of the European Commission, the European Parliament, and the European Court of Justice.

Euro Convergence Criteria

The Maastricht, or convergence, criteria established the minimum requirements for EU member states to enter the third stage of European Economic and Monetary Union (EMU) and adopt the euro as their currency. The four criteria are defined in article 121 of the treaty establishing the European Community. They impose control over inflation, public debt and the public deficit, exchange rate stability, and the convergence of interest rates. The purpose of this criteria was to maintain price stability within the Eurozone even with the inclusion of new member states.

• Inflation rates: No more than 1.5 percentage points higher than the average of the three best performing (lowest inflation) member states of the EU.
• Government finance:

1. Annual government deficit: The ratio of the annual government deficit to gross domestic product (GDP) must not exceed 3% at the end of the preceding fiscal year. If not, it must reach a level close to 3%. Only exceptional and temporary excesses would be granted for exceptional cases.
2. Government debt: The ratio of gross government debt to GDP must not exceed 60% at the end of the preceding fiscal year. Even if the target cannot be achieved due to specific conditions, the ratio must have sufficiently diminished and be approaching the reference value at a satisfactory pace. As of the end of 2014, of the countries in the Eurozone, only Estonia, Latvia, Lithuania, Slovakia, Luxembourg, and Finland still met this target.

• Exchange rate: Applicant countries should have joined the exchange-rate mechanism (ERM II) under the European Monetary System (EMS) for two consecutive years and should not have devalued its currency during the period.
• Long-term interest rates: The nominal long-term interest rate must not be more than 2 percentage points higher than in the three lowest-inflation member states.

Lisbon Treaty and Beyond

On December 1, 2009, the Lisbon Treaty reformed many aspects of the EU. In particular, it changed the legal structure, merging the three pillars system into a single legal entity provisioned with a legal personality; created a permanent President of the European Council; and strengthened the position of the High Representative of the Union for Foreign Affairs and Security Policy. During the 2010s, the cohesion of the EU has been tested by several issues, including a debt crisis in some of the Eurozone countries, increasing migration from the Middle East, and the United Kingdom’s withdrawal from the EU. As of December 2016, the UK has not yet initiated formal withdrawal procedures.

 

Attributions

• The European Union
  • “Maastricht Treaty.” https://en.wikipedia.org/wiki/Maastricht_Treaty. Wikipedia CC BY-SA 3.0.
  • “European Union.” https://en.wikipedia.org/wiki/European_Union. Wikipedia CC BY-SA 3.0.
  • “Schengen Area.” https://en.wikipedia.org/wiki/Schengen_Area. Wikipedia CC BY-SA 3.0.
  • “Three pillars of the European Union.” https://en.wikipedia.org/wiki/Three_pillars_of_the_European_Union. Wikipedia CC BY-SA 3.0.
  • “Tratado_de_Lisboa_13_12_2007_2808129.jpg.” https://commons.wikimedia.org/wiki/File:Tratado_de_Lisboa_13_12_2007_(081).jpg. Wikimedia Commons GNU FDL 1.2.
  • “Euro_banknotes_2002.png.” https://commons.wikimedia.org/wiki/File:Euro_banknotes_2002.png. Wikimedia Commons CC BY-SA 3.0.