INTRODUCTION TO THE INTRODUCTION TO THE EUROPEAN UNIONEUROPEAN UNION

From 6 to 27From 6 to 27

1951/57: Benelux, Italy, France, Germany 1973: United Kingdom, Ireland, Denmark 1981-86: 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 enlargementsFuture enlargements

20??: Croatia, Macedonia, Turkey?

Balkans? Since January

2007 the EU has 501 million people

Impact of successive enlargements (1958-2004)

 195

81973 1981 1986 1995 2004 2007 US

Area (1000km) 1,167 1,524 1,658 2,252 3,234 3,892 4,343 9,631

Population (millions)

185 273 287 338 370 457 501 300

Member States 6 9 10 12 15 25 27 50

OfficialLanguages

4 6 7 9 11 20 22 1

Members of the EP

142 198 434 518 626 732 750 435+6

Regional disparities in the

enlarged EU

WHY IS THERE A WHY IS THERE A EUROPEAN EUROPEAN

UNION?UNION?

I. WarI. War experience experience World War I: ≈20 million dead

World War II: ≈70 million dead

Nationalism: the most deadly force in human history

IIII. . Constraining Constraining GermanyGermany

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 Churchill calls for a “United States of Europe”“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 inpeace, in safety and freedom. We mustbuild 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 WarIII. 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 leviesOther= 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

37%

34%

10%

4%

5%

5%5%

cohesion policy

agriculture

rural development

research

administration

external relations

other

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%

5%

US SEPARATION OF POWERSPresidency +

Fed bureaucracy

Senate House of Representatives

LEGISLATION

Presidential veto

Supreme Court

Federal Reserve

EU SEPARATION OF POWERSEuropean

Commission

Council of Ministers

European Parliament

European Council

EU LAWS

LEGISLATIVE PROPOSAL

LEGISLATIVEPROPOSAL

European Court of Justice

European Central Bank

National parliaments

HRFA