From Europe to Euro Elisabeth Prugl, Co-Director Miami-Florida European Union Center of Excellence

What is the EU? State? State? International Organization? International Organization? Economic Union Economic Union

Outline of Presentation Concepts Concepts Economic IntegrationEconomic Integration Intergovernmentalism vs. SupranationalismIntergovernmentalism vs. Supranationalism History History Widening and DeepeningWidening and Deepening

Economic Integration Free Trade Area Free Trade Area Free movement of goods and servicesFree movement of goods and services Custom’s Union Custom’s Union Common external tariffCommon external tariff Common Market Common Market Free movement of capital and laborFree movement of capital and labor Economic Union Economic Union Common policies (including monetary policy)Common policies (including monetary policy)

Intergovernmentalism Supranationalism Integration with strong state control Integration with strong state control Every state should be allowed veto Every state should be allowed veto Integration with supra- national institutions Integration with supra- national institutions There should be majority voting There should be majority voting

Decision-making European Commission European Parliament Council of the EU

Commission “Guardian of the Treaty” “Guardian of the Treaty” Proposes legislation Proposes legislation Executive Executive 27 Commissioners and Bureaucracy in Brussels 27 Commissioners and Bureaucracy in Brussels

Parliament Directly elected by European citizens (875 members) Directly elected by European citizens (875 members) With the Council, passes legislation With the Council, passes legislation

Council Ministers from member states Ministers from member states Main decision-making body Main decision-making body Rotating presidency Rotating presidency

Court of Justice Ensures that European laws are interpreted and applied correctly and uniformly Ensures that European laws are interpreted and applied correctly and uniformly

History

European Coal and Steel Community (ECSC) Heavy industry (coal and steel) put under European management Heavy industry (coal and steel) put under European management Creates institutions Creates institutions

Treaties of Rome European Economic Community (EEC) European Economic Community (EEC) Envisions customs union, common marketEnvisions customs union, common market “Ever closer union”“Ever closer union” European Atomic Energy Community (EURATOM) European Atomic Energy Community (EURATOM)

1960s Completion of Customs Union Completion of Customs Union Development of Common Agricultural Policy Development of Common Agricultural Policy Reintroduction of veto (Charles De Gaulle) Reintroduction of veto (Charles De Gaulle)

1970s First Enlargement First Enlargement Denmark, Ireland, United KingdomDenmark, Ireland, United Kingdom “Eurosclerosis” “Eurosclerosis”

1980s: Widening and Deepening Mediterranean Enlargement Mediterranean Enlargement 1981: Greece1981: Greece 1986: Spain, Portugal1986: Spain, Portugal EU 12EU 12 Single European Act Single European Act

Single European Act “Relance” “Relance” 1992 deadline for the completion of the common market 1992 deadline for the completion of the common market Eliminate physical, technical, fiscal barriersEliminate physical, technical, fiscal barriers Introduces qualified majority voting in the Council Introduces qualified majority voting in the Council

1989 Fall of Berlin Wall Fall of Berlin Wall Prospect of unifying all of EuropeProspect of unifying all of Europe German unification (1990) German unification (1990) “hidden enlargement”“hidden enlargement”

1990s: Deepening and Widening Maastricht Treaty (1993) Maastricht Treaty (1993) “Treaty of European Union”“Treaty of European Union” Monetary Union (Euro)Monetary Union (Euro) Political Union (common foreign and security policy)Political Union (common foreign and security policy) More power to the parliamentMore power to the parliament Difficult process of ratificationDifficult process of ratification Enlargement: Austria, Sweden, Finland join the EU in 1995 Enlargement: Austria, Sweden, Finland join the EU in 1995

EU 15

The Euro Convergence Criteria Convergence Criteria 1999: Euro launched as unit of account for 11 member states 1999: Euro launched as unit of account for 11 member states 2002: Euro notes and coins replace national currencies in 12 member states 2002: Euro notes and coins replace national currencies in 12 member states

Deepening and Widening the 21 st Century Enlargements: Enlargements: Eastern enlargement adds 12 new countries (2004 and 2007)Eastern enlargement adds 12 new countries (2004 and 2007) Effort to write constitutional treaty – problems with ratification Treaty of Lisbon 2007 Change in voting “Foreign Minister” Voted down in Ireland

EU vs. Euro Area Euro area: Euro area: Austria, Belgium, Cyprus, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Malta, Netherlands, Portugal, Slovakia, Slovenia, Spain. EU Member States obliged to adopt the euro eventually: EU Member States obliged to adopt the euro eventually: Bulgaria, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Sweden. EU Member States with an opt out from adopting the euro: Denmark, United Kingdom.