European UnionEuropean Union

By: Joel Ahrendsen &By: Joel Ahrendsen &

Jodi CalvertJodi Calvert

OutlineOutline

• HistoryHistory

• Government Government

• FundingFunding

• ExpendituresExpenditures

• Common Agriculture Policy (CAP)Common Agriculture Policy (CAP)

• TradingTrading

• Global EconomyGlobal Economy

HistoryHistory

• European Coal and Steel Community European Coal and Steel Community

• European Economic Community European Economic Community

• European Atomic Energy Community European Atomic Energy Community

Three eventually came to be calledThree eventually came to be called European CommunitiesEuropean Communities

History Cont.History Cont.

• Euro adopted in 2002Euro adopted in 2002

• Member StatesMember States– AustriaAustria, , BelgiumBelgium, , BulgariaBulgaria, , CyprusCyprus, the , the

Czech RepublicCzech Republic, , DenmarkDenmark, , EstoniaEstonia, , FinlandFinland, , FranceFrance, , GermanyGermany, , GreeceGreece, , HungaryHungary, , IrelandIreland, , ItalyItaly, , LatviaLatvia, , LithuaniaLithuania, , LuxembourgLuxembourg, , MaltaMalta, the Netherlands, Poland, Portugal, , the Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Romania, Slovakia, Slovenia, Spain, Sweden, and the United KingdomSweden, and the United Kingdom

GovernmentGovernment

• CommissionCommission– Executive BranchExecutive Branch– 27 members27 members– Represent EU above own countryRepresent EU above own country– Legislative initiative powerLegislative initiative power– President elected for five year termsPresident elected for five year terms

•The president is part of the 27The president is part of the 27

Government Cont.Government Cont.

• CouncilCouncil– Legislative Branch (with Parliament) Legislative Branch (with Parliament) – Holds budgeting powerHolds budgeting power– 27 ministers for each topic in the EU27 ministers for each topic in the EU

• i.e. each member state as an agriculture i.e. each member state as an agriculture minister.minister.

– Have a six month rotating PresidencyHave a six month rotating Presidency•President is allowed to set the agenda President is allowed to set the agenda

during his or her termduring his or her term

Government Cont.Government Cont.

• ParliamentParliament– Only directly elected institution in the EUOnly directly elected institution in the EU– Makes up Legislative Branch (with Council) Makes up Legislative Branch (with Council)

•Over powered by council if not using co-decisionsOver powered by council if not using co-decisions

– 785 members - Represent Country before EU785 members - Represent Country before EU– Partied System, two main partiesPartied System, two main parties

•European Democrats and European SocialistsEuropean Democrats and European Socialists

– 22 committees 22 committees

FundingFunding

• Traditional TaxTraditional Tax– Generated Primarily through imports into Generated Primarily through imports into

member states. member states. – If a state does not meet the requirement, If a state does not meet the requirement,

remaining states must cover the loss.remaining states must cover the loss.

• Value Added Tax (VAT)Value Added Tax (VAT)– Tax to EU citizensTax to EU citizens– Rate capped at 50% of countries Gross Rate capped at 50% of countries Gross

IncomeIncome

Funding Cont.Funding Cont.

• Gross National Income (GNI)Gross National Income (GNI)– Largest source of EU fundsLargest source of EU funds– Rate is capped at 1.24% of GNI for the Rate is capped at 1.24% of GNI for the

EU as a wholeEU as a whole

• OtherOther– InterestInterest– Surpluses Surpluses – Roughly 1%Roughly 1%

Contributions & Contributions & ExpendituresExpenditures

% Contribution to the EU

UK11%

Other27%

Spain10%

Italy14%

France18%

Germany20%

% Expenditures from EU

Germany, 12.60%

Other, 40.60%

Spain, 13.20%

Italy, 11.20%

France, 13.90%

Common Agriculture Policy Common Agriculture Policy (CAP) (CAP)

• Origin 1962Origin 1962

• Helped struggling war countriesHelped struggling war countries

• Unified MarketUnified Market

• Internal Market vs. Foreign ProductsInternal Market vs. Foreign Products

• Financing Ag ProgramsFinancing Ag Programs

ReformsReforms

• 19931993– Direct PaymentsDirect Payments

• 20002000– Decreased Payments for New CountriesDecreased Payments for New Countries

• 20032003– Payments based on commoditiesPayments based on commodities

Agriculture's Share (%) of Gross Domestic Product 2005

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

5

Countries

Perc

enta

ge (%

)

Commodity PaymentsCommodity Payments

• Tariffs and export subsidiesTariffs and export subsidies

• Supply Limits/QuotasSupply Limits/Quotas– Dairy & sugarDairy & sugar

• Price levelsPrice levels

• Single farm paymentsSingle farm payments– Tobacco, cotton, & olive oilTobacco, cotton, & olive oil

Main EU Agricultural Production 2005

Potatoes2%

Fresh Vegetables

8%

Fresh Fruits4%

Olive Oil2%

Wine5%

Eggs & Poultry6%

Other16%

Oilseeds2%

Cereal17%

Cattle, pigs, sheep, & goats

22%

Dairy Products16%

Food SafetyFood Safety

• Country of OriginCountry of Origin– BSEBSE

• OrganicOrganic– Pass InspectionPass Inspection– Labeled Properly (vendor, inspection, Labeled Properly (vendor, inspection,

producer, & preparer)producer, & preparer)

Food Safety StrategiesFood Safety Strategies

• Provide consumers with information Provide consumers with information of where the products came of where the products came

• Provide scientific devices to the Provide scientific devices to the public through researchpublic through research

• Food and animal feed rulesFood and animal feed rules

• Be able to enforce these rules and Be able to enforce these rules and control processescontrol processes

EnvironmentEnvironment

• Voluntary Voluntary

• ProgramsPrograms– creating pondscreating ponds– planting treesplanting trees– reducing inputsreducing inputs– no tilling acres no tilling acres – using conventional farming practices. using conventional farming practices.

• GMO'sGMO's

Rural DevelopmentRural Development

• Education about new farming techniquesEducation about new farming techniques

• Assist retiring farmersAssist retiring farmers

• Assist beginning farmersAssist beginning farmers

• Assist in environmental and animal Assist in environmental and animal welfare standardswelfare standards

• Update buildings and machineryUpdate buildings and machinery

• Developing home food processing Developing home food processing facilitiesfacilities

Rural Development Cont.Rural Development Cont.

• Improving food quality and marketingImproving food quality and marketing

• Develop farming in mountainous areas Develop farming in mountainous areas and other areas not in farmingand other areas not in farming

• Encourage tourismEncourage tourism

• Protect heritage and customsProtect heritage and customs

• Develop strategies by local action Develop strategies by local action groups groups

TradingTrading

• 2nd Leading Exporter2nd Leading Exporter

• 1st Importer1st Importer

• Trade with developing countriesTrade with developing countries

• No tariffs or border controls in EUNo tariffs or border controls in EU

• Single CurrencySingle Currency

EU Exports

Sugar & covectionery

3%

Other41%

Flowers & plants 2%

Cereals, milling products, &

starches5%

Fats & oil4%

Beverages, spirits, & vinegar

22%

Preparations of fruit &

vegetables4%

Fresh Fruits & Vegetables

5%

Dairy products8%

Meat 6%

EU Imports

Edible fruits18%

Other36%

Meat5%

Cofee, tea, & spices 7%

Cereals, milling products, &

starches3%

Preparation of fruit & vegetables

6%Fats & Oils6%

Cocoa & cocoa preparations

5%

Beverages, spirits, & vinegar

6%

Oilseeds8%

Impacts of CAPImpacts of CAP

• Increased ProductionIncreased Production

• Provided incentives for farmersProvided incentives for farmers

• More people willing to invest in More people willing to invest in agricultureagriculture

EconomyEconomy

• All countries in the EU are recognized All countries in the EU are recognized as a single market under the WTO.as a single market under the WTO.– Free movement of goods, capital, Free movement of goods, capital,

people and servicepeople and service

• Generates U.S. equivalent of $17.6 Generates U.S. equivalent of $17.6 trilliontrillion– ~31% of the world's total economic ~31% of the world's total economic

outputoutput

EU

, 7.9%

Germ

any, 8.8%

Fran

ce, 8.6%

Italy, 6.1%

UK

, 5.4%

Sp

ain, 8.0%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

1

Unemployment

EU

Ge

rma

ny

Fra

nc

e Italy

UK

Spain

22,00023,00024,00025,00026,00027,00028,00029,00030,000

1

GDP per Capita (Euros)

Germ

any

Fran

ce

Italy

UK

Spain

0

500000

1000000

1500000

2000000

2500000

1

GDP (Euros)

EU

, 60.4%

Germ

any, 66.0%

Fran

ce, 65.6%

Italy, 105.8% UK

, 41.6%

Sp

ain, 48.9%

0.0%

20.0%

40.0%

60.0%

80.0%

100.0%

120.0%

1

Public Debt (% of GDP)

IssuesIssues

• IntegrationIntegration– Loss of Country identityLoss of Country identity– Conflict between EU and National interestsConflict between EU and National interests

• EnlargementEnlargement– Is it growing too fast? Is it growing too fast? – Can the EU support and control more Can the EU support and control more

countries?countries?

Dank für Zuhören

Irgendeine Fragen?