Management: European Union
jakovljevicjana
2aEuropeanUnion1.pptxEuropean Union
The regional trading blocs
Major regional economic groupings
| Group | Type | Popul. | GDP $bn |
| Mercosur | Customs Union | 217 | 11457 |
| ASEAN | Free Trade Area | 500 | 15759 |
| EU15 | Monetary Union | 376 | 14752 |
| NAFTA | Free Trade Area | 404 | 24214 |
Global $GDP is $80trillion (US=22tr, EU27=19tr)
Introduction
One notable trend in the global economy has been the accelerated movement toward regional economic integration.
Regional economic integration: agreements between countries in a geographic region to reduce barriers to the free flow of goods and factors of production between them.
Integration broadly proceeds as follows:
Free movement of goods/services (Free Trade area)
Free trade enhanced with common trade policy for non-members (Customs Union)
Free movement of labour and capital (Common or Single Market) then
Adoption of a common currency (Monetary or Economic union)and finally
Political Union with fiscal union e.g. constitution, single governing authority to varying degrees
Political Case for Integration
Politically, integration is attractive:
making countries dependent on each other, and forming a structure where they regularly have to interact, the likelihood of violent conflict and war will decrease (initial motivation for the European Union after the 2nd War)
by linking countries together, they have greater clout and are politically much stronger in dealing with other nations and regions (current motivation plus losses from potential break-up)
Impediments to Integration
There are three main impediments to integration
it can be costly - while a nation as a whole may benefit, certain groups may lose (corporations/workers of uncompetitive products or even uncompetitive countries within Union- e.g. European South)
it can result in a loss of national sovereignty (most economic policies with supranational authority)
Possible conflict between nations with stronger versus weaker economies (North v South Europe)
The European Union
The European flag is a symbol of the EU and of Europe’s unity
and identity in a wider sense.
In ancient Greece, the number 12 stood for harmony.
Traditionally it symbolizes perfection, completeness and unity;
thus the circle of 12 golden stars represents the ideal harmony
between the peoples of Europe.
Number of stars does not dependent on number of member states.
European Union evolution
27 Member States of the European Union
EU Members
France (FR)
Italy (IT)
Cyprus (CY)
Latvia (LV)
Lithuania (LT)
Luxembourg (LU)
Hungary (HU)
Malta (MT)
Netherlands (NL)
Austria (AT)
Poland (PL)
Portugal (PT)
Romania (RO)
Slovenia (SI)
Slovakia (SK)
Finland (FI)
Sweden (SE)
United Kingdom (UK)
Belgium (BE)
Bulgaria (BG)
Czech Repub. (CZ)
Denmark (DK)
Germany (DE)
Estonia (EE)
Ireland (IE)
Greece (EL)
Spain (ES)
EU-27 – The current membership
EU-25 – The EU in 2004
EU-15 – The EU in its pre-2004 formation
EU: The three Pillars
1. Internal common policies, Economic & Monetary union
2. Common foreign & security policy
Common foreign policy
Defending human rights
Common security policy
Defence co-operation
3. Justice & Home Affairs
Judicial,
police,
customs,
asylum,
Borders
(The Acquis Communitaire: 32 chapters embodying all aspects of European law and economic-monetary union)
Co-operation
How Does the EU Work?
The EU has four main institutions:
1. European Commission (EC)
- Represents the common interest of the EU
- Main executive body
- Proposes EU legislation
- Responsible for implementing EU law and monitoring member states to ensure compliance (Note: EU law stands above national law)
2. Council of the European Union (also known as the Council of Ministers)
- Represents the member states
- EU’s main decision-making body (has legislative power, which it shares with the European Parliament under the “co-decision procedure”)
- When it meets at Heads of State/Government level, it is called the European Council and provides political impetus on key issues
- The ultimate controlling authority within the EU
3. European Parliament (EP)
- Represents the people, meets in France
- Debates legislation proposed by the commission and forwarded to it by the council
4. Court of Justice
- The supreme appeals court for EU law
- Located in Luxembourg, one judge from each EU country
The Eur. Council meets 4 times per year. It is chaired by the Pres. Or Pr. Minister of the country holding the presidency of the Council of the EU at the time.
The Institutional Framework of the European Union
How the EU governance system works: co-decision
The EC issues proposals for legislation to the EP and Council of Ministers
EP reviews the Commission proposal and the Council’s position on the proposal
If common ground, proposal is accepted and issued by the EC as a Directive
If not, then: arbitration committee to achieve agreement between EP and EC
Co-decision not fully endowed to EP: policy areas with EP having powers of co-operation or consultation only
EP supervisory powers: over the EC, the EU budget
Other consultation from : Committee of the Regions, Economic and Social Committee (on competition, industrial, environmental and social policies)
Any policy initiative issued as EU law needs to be endorsed by the member states. It stands above the national law and constitution.
Theories of Political Integration and the EU
Functionalism
Minimum institutional apparatus for interstate cooperation, national sovereignty not compromised, no need for formal institution. Popular with UK and Scandinavians.
Neo-functionalism
Extends functionalism to include social actors and political elites with the latter providing the political leadership. The supranational institutions have jurisdiction over national states. This elite-driven process relies on consensus elite-coalition. This was dominant at the earlier stages of EU integration
Theories of Political Integration and the EU
Federalism
A union amongst states with a central supranational authority. The process relies on a formal constitution. The Acquis Communautaire (common EU law) is of a federalist inception giving the EU a quasi-federal character. Smaller peripheral countries prefer it.
Confederalism
Reasserts importance of national state sovereignty and Community of states with a limited supranational authority. European core larger countries prefer it.
EU unique paradigm: supranational governance and compromise
Stronger voting power for the large countries of Core Europe via the Council of Ministers.
European Commission strengthened with veto power over decisions by Council of Ministers. The European Parliament has enhanced authorities on budgetary and legal issues including final endorsement powers over most legal matters. This is supported by smaller countries at European periphery.
The EU via EC is acting as a coordinator of actors and common-ground finder of conflicting interests rather than a commander. Hence it is constantly in a structural influx and has developed the ability to reinvent itself in a fast changing world.
The multi-layer governance model of the EU has been imposed by realities rather than being a conscious devise
Multilevel governance networks have arisen combining: local, regional, national and Supranational actors via dispersion of power rather than increasing the power of nation-states or Brussels
