European Union in Global Context

European Union’s Importance Largest, most successful free trade agreement in history Rivals U.S. and China as economic power Helps pacify world’s most war-torn region Solidifies democracy after fascism, S. European dictatorships, and Communism Model for economic integration around the world

Origins of European Integration 1870’s to 1914: “first era of globalization” Europe center of new world economy: international trade up 30 times Inventions—examples? Germany: steel production = Britain, France, and Russia combined New industries and power sources? Nationalism and nation-states still strong

Foundations of Integration Free trade treaties and Gold Standard (British Sterling/Latin Monetary Union) support trade and investment International agreements: Postal Union, shipping, health, railroads aid integration World more globalized in 1914 than today in migration, agriculture, utilities Iron and steel: where is coal and iron?

World Wars and Dis-Unity Blockades, sequestration, end of Gold Standard, war debts and reparations 11,000 miles of new borders in Europe U.S. and Japan: new economic powers Communism, fascism: : 22 democracies, 1 dictatorships to 11 and 12 Depression: “Import substitution,” colonies Grossraumwirtschaft

Cold War and De-colonization : U.S. and USSR as superpowers Soviets impose Communism in E. Europe NATO, 1949 Britain, France, Netherlands lose colonies U.S. Marshall Plan forces cooperation Council of Europe encourages cooperation but not economic or political integration Europe needs new identity

Europe within a New World System U.S vs : Bretton-Woods: U.S. holds gold, others hold dollars, int’l economy transacted in dollars 2. International Monetary Fund (IMF) helps finance trade deficits and, later, weak currencies 3. World Bank makes loans for reconstruction 4. GATT, Marshall Plan,

European Unity 1951, Eur. Coal and Steel Community : Treaty of Rome: 1959 “Common Market” = free trade w/in Six , most of W. Europe joins End of Cold War brings in N. & E. Europe Encourages democracy, rule of law after Cold War 2002 European Union and Euro

Why European Unity? World Wars discredit nationalism European economic power as way to counter U.S. and USSR superpowers Christian Democrats—De Gasperi, Schuman, Adenauer—as Third Way Monnet: “functionalism” before federalism “Subsidiarity” not centralism

Europe as Counterpart of U.S. EU economy = U.S.: 500 million, without trade deficit Freer, larger market spurs European firms to expand and draws U.S., Asian, and oil money into Europe EU provides model for Latin America, southeast Asia in terms of integration

Globalization, 1970s on EU goal to re-capture late 19 th century free trade and globalizing tendencies : FDI $15 Billion to $2 Trillion IBM sales ¾’s outside US OPEC Crises create “petro-dollars” 1989, fall of Berlin Wall Deng Xiaoping: Chinese reforms, 1979

How EU Affects You Euratom: European Atomic Energy Commission, 1957: “God particle” Leading nuclear physics research in world Question: Who is Timothy Berners-Lee?

Answer He was a British technician working at CERN (Centre Europenne de Recherche Nucleaire, an institution of the EU under Euratom) in Switzerland, who invented the worldwide web in and decided not to patent it or make any money off of it!

EU’s strengths European Court enshrines human rights EU’s adhesion process forces democracy, rule of law in S. and E. Europe EU funds ease transition to EU for less developed countries “Single Market” and Euro unite economies EU along with U.S. creates globalizing international agreements

EU’s Weaknesses CAP is hugely wasteful, anti-development “Democratic deficit” of elites vs. voters Brussels seen as remote bureaucracy Official languages and legalism choke EU’s ability to lead Eurozone not fiscal union France-German axis rules EU?

Is the EU a state? Acts like one in rule of law—European Court is a quasi-Supreme Court EU acts as one in WTO, international negotiations on trade, laws, cooperation EU member states not act as one in foreign policy, at UN Euro only unites 17 of 27 member states European Bank not yet “Federal Reserve”