EVOLUTION OF THE EUROPEAN UNION

The European Union (EU) is the product of two political factors: (1) the devastation of western Europe during two world wars, and the desire for a lasting peace, and (2) the European nations’ desire to hold their own on the world’s political and economic stage. In addition, many Europeans were aware of the potential economic benefits of closer economic integration of the countries.

European Union (EU)

An economic group of 27 European nations; established as a customs union, it is moving toward economic union; formerly the European Community.

The forerunner of the EU, the European Coal and Steel Community, was formed in 1951 by Belgium, France, West Germany, Italy, Luxembourg, and the Netherlands. Its objective was to remove barriers to intragroup shipments of coal, iron, steel, and scrap metal. With the signing of the Treaty of Rome in 1957, the European Community was established. The name changed again in 1993 when the European Community became the European Union following the ratification of the Maastricht Treaty (discussed later).

Treaty of Rome

The 1957 treaty that established the European Community.

The Treaty of Rome provided for the creation of a common market. Article 3 of the treaty laid down the key objectives of the new community, calling for the elimination of internal trade barriers and the creation of a common external tariff and requiring member-states to abolish obstacles to the free movement of factors of production among the members. To facilitate the free movement of goods, services, and factors of production, the treaty provided for any necessary harmonization of the member-states’ laws. Furthermore, the treaty committed the EC to establish common policies in agriculture and transportation.

The community grew in 1973, when Great Britain, Ireland, and Denmark joined. These three were followed in 1981 by Greece; in 1986 by Spain and Portugal; and in 1995 by Austria, Finland, and Sweden—bringing the total membership to 15 (East Germany became part of the EC after the reunification of Germany in 1990). Another 10 countries joined the EU on May 1, 2004—8 of them from eastern Europe plus the small Mediterranean nations of Malta and Cyprus. Bulgaria and Romania joined in 2007, bringing the total number of member states to 27 (see Map 9.1). With a population of almost 500 million and a GDP of €12.5 trillion, the EU is larger than the United States. Through these enlargements, the EU has become a global superpower.7

MAP 9.1 Member-States of the European Union in 2011

Source: Copyright © European Communities, 1995–2009. Reproduced with permission.

POLITICAL STRUCTURE OF THE EUROPEAN UNION

The economic policies of the EU are formulated and implemented by a complex and still-evolving political structure. The four main institutions in this structure are the European Commission, the Council of the European Union, the European Parliament, and the Court of Justice.8

The European Commission is responsible for proposing EU legislation, implementing it, and monitoring compliance with EU laws by member-states. Headquartered in Brussels, Belgium, the commission has around 23,000 employees. It is run by a group of commissioners appointed by each member country for five-year renewable terms. There are 27 commissioners, one from each member state. A president of the commission is chosen by member-states, and the president then chooses other members in consultation with the states. The entire commission has to be approved by the European Parliament before it can begin work. The commission has a monopoly in proposing European Union legislation. The commission makes a proposal, which goes to the Council of the European Union and then to the European Parliament. The council cannot legislate without a commission proposal in front of it. The commission is also responsible for implementing aspects of EU law, although in practice much of this must be delegated to member-states. Another responsibility of the commission is to monitor member-states to make sure they are complying with EU laws. In this policing role, the commission will normally ask a state to comply with any EU laws that are being broken. If this persuasion is not sufficient, the commission can refer a case to the Court of Justice.