INTRODUCTION TO THE EUROPEAN UNION

From 6 to 27  1951/57: Benelux, Italy, France, Germany  1973: United Kingdom, Ireland, Denmark  : Greece, Spain, Portugal  1995: Sweden, Austria, Finland  2004: “big bang”– eight countries in Central and Eastern Europe plus Malta and Cyprus  2007: Bulgaria and Romania

Future enlargements  20??: Croatia, Macedonia, Turkey?  Balkans?  Since January 2007 the EU has 501 million people

Impact of successive enlargements ( ) US Area (1000km) 1,1671,5241,6582,2523,2343,8924,343 9,631 Population (millions) Member States Official Languages Members of the EP

Regional disparities in the enlarged EU

WHY IS THERE A EUROPEAN UNION?

I. War experience  World War I: ≈20 million dead  World War II: ≈70 million dead  Nationalism: the most deadly force in human history

II. Constraining Germany How was France to deal with Germany? “I could see only one solution: we must bind ourselves inextricably to Germany in a common undertaking in which our other neighbours could join.” Jean Monnet, First High Commissioner of the European Coal and Steel Community (ECSC)

Churchill calls for a “United States of Europe”  European integration is necessary for future peace.  The UK would not participate.  Franco-German cooperation at the core. … What is this sovereign remedy? It is to recreate the European Family or as much of it as we can and provide it with a structure under which it can dwell in peace, in safety and freedom. We must build a kind of United States of Europe…. Zurich, 19 Sept 1946

The Schuman Declaration (1950): European Coal & Steel Community The solidarity in production thus established will make it plain that any war between France and Germany becomes not merely unthinkable, but materially impossible Robert Schuman, 9 May 1950 Europe will not be made all at once, or according to a single plan.... Franco-German production of coal and steel as a whole be placed under a common High Authority..... as a first step in the federation of Europe.

How can war be averted? Building a web of rules The European Coal and Steel Community (1951) European Defense Community (1954) The European Economic Community (1957)

III. The Cold War  No longer great powers and imperial rivals  Unity against the Soviet threat  US support: Marshall plan OEEC: Organization for European Economic Cooperation (1948)  OECD:Organization for Economic Cooperation & Development (1961)

IV. Benefits of multi-level governance  Large can be efficient  Externalities  Small is beautiful  Heterogeneity of preferences

Benefits of government across Europe  Single market -- eliminating trade barriers  comparative advantage  benefits of specialization  single currency  Single competition authority  International economic bargaining power (trade)  Environmental regulation

How does the European Union work?

Budget– Revenues (%) VAT=Value-added tax (equivalent of sales tax) GNI=Gross National Product (richer countries pay larger share) Traditional own resources=customs and excise taxes, agricultural levies Other= e.g. fines, taxes paid by employees, third country contributions Ceiling=1.24% of EU GDP: appr. 293 Euro/ citizen 2010: 142 billion Euro

Budget Social security Medicare Debt War on terror $2,980 billion ( expenditures ) 18.8% of US GDP ( revenues ) €129 billion = $168 billion (expenditures) 1.1% of EU GDP ( revenues ) EU spending (2008) 18% 5%

US SEPARATION OF POWERS Presidency + Fed bureaucracy Senate House of Representatives LEGISLATION Presidential veto Supreme Court Federal Reserve

EU SEPARATION OF POWERS European Commission Council of Ministers European Parliament European Council EU LAWS LEGISLATIVE PROPOSAL European Court of Justice European Central Bank National parliaments HRFA