European Union Formation and Structure
1. Creation of the EU
1.1 The Need for a European Trading Bloc
Creating a European common market wasn’t a new idea. The Treaty of Rome, signed in 1957 by Germany, France, Italy, Belgium, the Netherlands, and Luxembourg, embodied the first viable proposals. The treaty foresaw that the European Economic Community’s (EEC) prosperity, and its political and economic unity, were interdependent. To achieve an internal market, the EEC established a concrete policy focused on the free movement of goods, services, people, and capital. It also encouraged measures like promoting competition and developing a common law for member states.
National markets couldn’t compete effectively with the resources and potential of the U.S. and Japan. Only a single market of millions could achieve economies of scale in manufacturing, research, and innovation.
1.2 1992: The European Union
The Treaty on European Union made the area of free movement without internal borders a reality. This treaty established the monetary unit, created mechanisms for citizen participation through European Parliament elections, established new citizen rights, set internal solidarity policies for less developed regions, and established common foreign policy and defense initiatives.
One of the most important effects was the Economic and Monetary Union (EMU). On January 1, 1999, the euro became the common currency for eleven of the fifteen member states. In 2002, the euro entered circulation. It eliminated many barriers to the free movement of people, goods, services, and capital.
1.3 Fundamental Values
EU member countries are governed by fundamental values: peace, democracy, the rule of law, and respect for human rights. The EU has raised its citizens’ living standards to unprecedented levels. It created a common market without internal borders and a single currency, the euro. The EU is a major economic power and the world’s leading aid provider.
2. The European Union
2.1 Objectives
The EU organizes relations between states in a supportive and consistent manner. Its objectives are:
- Economic and social progress: establishing a free or single market and introducing the single currency.
- Asserting European identity internationally: promoting humanitarian aid to countries outside the EU and participating in solving international problems.
- Implementing European citizenship: establishing common rights and duties for all EU citizens.
- Developing an area of freedom, security, and justice: allowing all EU citizens to move freely within member states.
- Maintaining and developing a sense of community: developing common laws or rules for all EU states.
2.2 Heterogeneity
The EU is a patchwork of states. Heterogeneity is evident in development levels and cultural diversity. Large social and economic differences exist among states and between regions within states. The Treaty on European Union made reducing regional differences more urgent. Some countries see EU integration as a threat to their national identity.
2.3 Joint Regional Economic Policy
The EU devotes over one-third of its budget to regional economic policy. This policy is based on structural and cohesion funds. These include:
- Granting loans for investments in the poorest regions.
- Creating transport infrastructure and energy supply.
- Public works to address environmental issues and provide general technical assistance.
- Developing common policies in culture, education, etc.
- Creating jobs.
- Granting loans and aid to support agriculture and fisheries.
2.4 Enlargement
EU enlargement has highlighted discrepancies between new and old members. These countries have very different levels of social, political, and economic development. A significant portion of EU funds is directed to new member countries. To address the structure and function of an ever-growing union, the draft European Constitution aims to achieve greater political integration, create a common space of freedom, security, and justice, and promote high employment levels.
3. Institutions of the European Union
The EU consists of supranational organizations, or institutions above individual states, which include representatives of these states.
3.1 The European Council
The European Council consists of the heads of state or government of member states, accompanied by their foreign ministers. It is the highest political body of the EU, responsible for defining the general political direction and development.
3.2 The Council of Ministers
The Council of Ministers is composed of representatives of the EU member states. Generally, the foreign ministers of the various member countries meet. Other ministers, such as those for Education or Health, attend when necessary. The Council of Ministers makes the most important decisions and coordinates the actions of the EU states. Decisions are taken unanimously or by majority vote, with each state’s votes depending on its population size.
3.3 The European Parliament
The European Parliament is elected by universal suffrage. Each state chooses its MEPs (Members of the European Parliament). MEPs are organized into political groups according to their parties. The Parliament exercises legislative function, making and amending laws and approving EU budgets. It is organized into committees to work on specific issues and monitors the Council of Ministers and the European Commission.
3.4 The European Commission
The European Commission performs the executive function. It ensures compliance with European standards, proposes laws to Parliament and the Council of Ministers, monitors compliance with agreements and treaties, and prepares budgets. The Commission comprises the President and Commissioners, elected by member states for four-year terms.
3.5 The Court of Justice
The Court of Justice performs the judicial function, ensuring compliance with, interpretation, and enforcement of EU law. It consists of one judge from each member country, renewed every five years. This court serves citizens and EU institutions.
3.6 The Ombudsman
Citizens can consult the Ombudsman if they believe they have been treated unfairly by any EU institution.
3.7 Other Institutions
Other institutions include the European Central Bank, which manages the euro and EU monetary policy, and the Court of Auditors, responsible for controlling EU expenditure. The EU also includes the Committee of the Regions, representing local and regional authorities; the European Investment Bank, which funds economic development; and the Economic and Social Committee, representing civil society organizations (unions, employers, consumers, etc.).
4. Agricultural and Fisheries Policy
4.1 Common Agricultural Policy
Initially, the EU enhanced agriculture to provide food security without relying on other countries. This policy helped modernize the sector, justifying the expense of encouraging intensive agriculture and improving production. The EU favored consolidating small farms, offered agricultural credits, and guaranteed attractive prices for products, buying surpluses if necessary. The EU also restricted food imports from outside, impacting the economies of underdeveloped countries that relied on agricultural exports to Europe.
4.2 Objectives of the CAP
The Common Agricultural Policy (CAP) aimed to achieve food self-sufficiency within the EU, resulting in large increases in crop and livestock production. This increase exceeded European consumption capacity, creating surpluses difficult to sell on the world market at competitive prices. To address excess production, the EU proposed:
- Reducing cultivated land, especially less fertile land, and livestock numbers.
- Converting cultivated land into forests or leisure areas.
- Significantly reducing guaranteed prices paid to farmers and ranchers, aligning them with world prices.
The CAP’s importance is evident in its large share of the EU budget. The European Agricultural Guidance and Guarantee Fund (EAGGF) determines each state’s share of agricultural and fisheries aid.
4.3 Common Fisheries Policy
Twenty-two of the 27 EU states have coastlines. Some, like Denmark, Spain, the United Kingdom, France, the Netherlands, and Italy, have important fishing industries, creating significant economic activity in related sectors like shipbuilding, canning, freezing, and distribution. The Common Fisheries Policy (CFP) establishes exclusive fishing zones, catch volumes and limits, and agreements with non-EU states. It also encourages modernization projects, research, and training in the fisheries sector.