European Union
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The European Union (EU) is a political and economic community of twenty-seven member states with supranational and intergovernmental features, located primarily in Europe. It traces its origins to the European Economic Community (EEC) formed in 1957 by the Treaty of Rome between six European countries. Since then the EU has grown in size through the accession of new member states and has increased its powers by the addition of new policy areas to its remit. In 1993, the Maastricht Treaty established the current legal framework. The Lisbon Treaty signed in December 2007 initiates a ratification process in 2008 and is amending the existing treaties. It is intended to come into force on 1 January 2009.
The EU creates a single market by a system of laws which apply in all member states, guaranteeing the freedom of movement of people, goods, services and capital.[2] It maintains a common trade policy, agricultural and fisheries policies, and a regional development policy.[3] In 1999 the EU introduced a common currency, the euro, which has been adopted by fifteen member states. It has also developed a role in foreign policy, and in justice and home affairs. Passport control between many member states has been abolished under the Schengen Agreement.[4]
With almost 500 million citizens, the EU generates an estimated 31% share of the world's nominal GDP (US$16.6 trillion) in 2007.[1] It represents its members in the WTO and observes at G8 summits and at the UN. Twenty-one EU countries are members of NATO. Important institutions of the EU include the European Commission, the European Parliament, the Council of the European Union, the European Council, the European Court of Justice and the European Central Bank. EU citizens elect the Parliament every five years.
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[edit] History
The political climate after the end of World War II favoured Western European unity, seen by many as an escape from the extreme forms of nationalism which had devastated the continent.[5] One successful proposal for European cooperation came in 1951 with the European Coal and Steel Community. This had the aim of bringing together control of the coal and steel industries of its member states (principally France and West Germany), with the aim that war between them would not then be possible. Its founders declared it "a first step in the federation of Europe", with the hope that this would enable Europe to pursue the development of Africa. [6] The other founding members were Belgium, Italy, Luxembourg, and the Netherlands.[7]
Two additional communities were created in 1957: the European Economic Community (EEC) establishing a Customs Union, and the European Atomic Energy Community (Euratom) for cooperation in developing nuclear energy.[7] In 1967 the Merger Treaty created a single set of institutions for the three communities, which were collectively referred to as the European Communities, although more commonly just as the European Community (EC).[8]
In 1973 the European Communities enlarged to include Denmark, the Republic of Ireland and the United Kingdom.[9] Norway had negotiated to join at the same time but a referendum rejected membership and so it remained outside. The first direct, democratic elections of members of the European Parliament were held in 1979.[10]
Greece, Spain and Portugal joined in the 1980s.[11] In 1985 the Schengen Agreement created largely open borders without passport controls between those states adopting it.[12] In 1986 the European flag began to be used and leaders signed the Single European Act. This revised the way community decision making operated in light of its greater membership, aimed to further reduce trade barriers and introduce greater European Political Cooperation. In 1990 after the fall of the iron curtain, the former East Germany became part of the Community as part of a newly reunited Germany.[13] With enlargement toward eastern Europe on the agenda, the Copenhagen Criteria for candidate members to join the European Union were agreed.
The Maastricht Treaty came into force on 1 November 1993.[14] Maastricht established a revised structure and the name 'European Community' officially replaced the earlier 'European Communities'. At the same time the name 'European Union' was adopted in relation to foreign policy co-operation, which was the responsibility of the Council and not the institutions of the Community. However, thereafter 'European Union' became the name in general use (and the 'Union' will replace the 'Community' when the Treaty of Lisbon comes into force).
Austria, Sweden and Finland joined in 1995. The Amsterdam Treaty in 1997 amended the Maastricht treaty in areas such as democracy and foreign policy. Amsterdam was followed by the Treaty of Nice in 2001, which revised the Rome and Maastricht treaties to allow the EU to cope with further enlargement to the east. In 2002 euro notes and coins replaced national currencies in 12 of the member states. In 2004 ten new countries (eight of which had formerly been Eastern Bloc countries) joined the EU.[15] At the start of 2007 Romania and Bulgaria joined the EU and the euro was adopted by Slovenia.[15]
A treaty establishing a constitution for the EU was signed in Rome in 2004, intended to replace all previous treaties with a new single document. However, it never completed ratification after rejection by French and Dutch voters in referenda. In 2007, it was agreed to replace that proposal with a new Reform Treaty, that would amend rather than replace the existing treaties. This treaty was signed on December 13th in Lisbon and will be known as the Lisbon treaty. It will come in effect in January 2009 if ratified by that date.
[edit] Member states
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The European Union currently has 27 independent sovereign countries which are collectively known as member states: Austria, Belgium, Bulgaria, Cyprus, the Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, and the United Kingdom.[16] There are currently three official candidate countries, Croatia, the Republic of Macedonia and Turkey. In addition the western Balkan countries of Albania, Bosnia and Herzegovina, Montenegro and Serbia are officially recognised as potential candidates.[17]
To join the EU, a country must meet the Copenhagen criteria, defined at the 1993 Copenhagen European Council. These require a stable democracy which respects human rights and the rule of law; a functioning market economy capable of competition within the EU; and the acceptance of the obligations of membership, including EU law. Evaluation of a country's fulfilment of the criteria rests with the European Council.[18]
A number of Western European countries who have chosen not to join the EU have nevertheless been partly integrated into the EU's economy. Iceland, Liechtenstein and Norway are a part of the Single market through the European Economic Area while Switzerland has similar ties through bilateral treaties. The microstates' relationships[19] include use of the euro and other co-operation.[20][21][22]
[edit] Geography
The territory of the EU consists of the combined territories of its 27 member states with some exceptions outlined below. The territory of the EU is not the same as that of Europe, as significant parts of the continent, such as Switzerland, Norway and European Russia, are outside the EU. Some parts of member countries are not part of the EU, despite these territories forming part of the European continent (examples include the Channel Islands and Faroe Islands). Several territories associated with member states that are outside geographic Europe are also not part of the EU (such as Greenland, Aruba, the Netherlands Antilles and all the non-European territories associated with the United Kingdom). Some overseas territories are formally part of the EU even if they are not geographically part of Europe, such as the Azores, the Canary Islands, French Guiana, Guadeloupe, Madeira, Martinique and Réunion.[23][24][25]
The EU's member states cover a combined area of 4,422,773 square kilometres (1,707,642 sq mi).[26] The total territory of the EU is the seventh largest territory in the world by area and its highest peak is Mont Blanc in the Alps at 4807 metres above sea level. The landscape, climate and economy of the EU are heavily influenced by its long coastline, which is 65,993 kilometres (41,006 mi) long. The EU has the second longest coastline, after Canada. The combined member states share land borders with 21 non-member states for a total of 12,441 kilometres (7,730 mi), the fifth longest border in the world.[27][28][29]
When the overseas territories of member states are included, the EU includes most types of climate from Arctic to tropical, rendering meteorological averages for the EU as a whole meaningless. In practice, the majority of the population lives either in areas with a Mediterranean climate (Southern Europe), a temperate maritime climate (Western Europe), or a warm summer continental or hemiboreal climate (Eastern Europe).[30]
[edit] Governance
The EU is regulated by a number of institutions, primarily the Council of the European Union, the European Commission, and European Parliament.
The Commission acts as the EU's executive arm and is responsible for the day-to-day running of the EU. It is currently composed of 27 commissioners, one from each member state. The President of the Commission and all the other commissioners are nominated by the Council. Appointment of the Commission President and also the Commission in its entirety, have to be confirmed by Parliament.[31]
The Council of the European Union (also known as the Council of Ministers, and called the European Council if composed of the heads of government) forms one half of the EU's legislative branch. It is composed of the national ministers responsible for the area of policy being addressed. Although the Council meets in different compositions, it is considered to be one single body.[32] In addition to its legislative functions, the Council also exercises executive functions in relations to the Common Foreign and Security Policy.
Highest-ranking political leadership in the EU is primarily provided by the European Council (not to be mistaken for the Council of Europe), which is the Council of the European Union, meeting in the specific composition of the heads of government of the member states (e.g. the prime minister in case of the United Kingdom), plus the President of the European Commission. The European Council meets up to four times a year, is headed by the head of government of the member state which is holding the Presidency of the Council of the European Union, and has the task to define overall EU policy and to deal with matters that could not be resolved by the ministers at normal Council meetings.[33]
The rotating presidency in the Council is taken by each member state in turn for a period of six months, during which the relevant member chairs all meetings of the European Council and the Council of ministers.[34] The member state holding the presidency typically uses it to drive a particular policy agenda such as economic reform, reform of the EU itself, enlargement or furthering European integration.
The other half of the EU's legislative branch is the European Parliament. The 785 Members of the European Parliament (MEPs) are directly elected by EU citizens every five years. Although members of parliament are elected on a national basis, they sit according to political groups rather than their nationality. Each country has a set number of seats. Parliament has near-equal legislative powers with the Council in Community matters and has the power to reject or censure the Commission. The President of the European Parliament carries out the role of speaker in parliament and represents it to other organisations. The president and vice presidents are elected by MEPs every two and a half years.[35] Some parties (most actively the Greens) are forming European parties.[35]
In all but a few cases, the Commission has the sole right to initiate legislation. This is usually in the form of a regulation, a directly applicable act, or a directive which states must implement under national law.[36] Once legislation has been proposed there are three alternative EU legislative procedures which may be followed to implement it. In most cases it is the codecision procedure which gives equal rights to Parliament and Council who must both agree before it comes into force. In other procedures, the Parliament has fewer powers.[37]
[edit] Politics
The EU is often described as being divided into three areas of responsibility, called "pillars". The original European Community policies form the first pillar, while the second consists of Common Foreign and Security Policy. The third pillar originally consisted of Justice and Home Affairs, however owing to changes introduced by the Amsterdam and Nice treaties, it currently only consists of Police and Judicial Co-operation in Criminal Matters. Broadly speaking, the second and third pillars can be described as the intergovernmental pillars because the supranational institutions of the Commission, Parliament and the Court of Justice play less of a role or none at all, while the lead is taken by the intergovernmental Council (of ministers) and the European Council. Most activities of the EU come under the first, Community pillar. This is mostly economically orientated and the supranational institutions have more influence.[38]
Two major political issues for the EU are European integration and enlargement. Enlargement, the accession of new states to the EU, is a highly politicised issue. Supporters argue it aids democracy in new members, as well as supporting the European economy as a whole. Opponents fear the EU is expanding beyond its current political capabilities, and/or cultural boundaries. Public opinion, and hence political party viewpoint, has been more sceptical towards enlargement since the simultaneous accession of 10 members in 2004. This is most acute in relation to the candidacy of Turkey.[39][40][41]
Integration is another political issue, where the public view is sometimes that national interest conflicts with that of the EU. The aim of increasing harmonisation between states has meant that national powers have been transferred to the European level. This is criticised by eurosceptics who fear the loss of national sovereignty.[42] In 2004 the European Constitution was agreed between national leaders and the EU institutions. However it did not come into force after it was rejected in referenda in two countries, with the prospect of further rejections had attempts at ratification continued. In October 2007 European leaders finalised a new Treaty of Lisbon which contains much of the now defunct constitution, without the latter's constitutional baggage.
It is expected to come into force in 2009. If ratified the treaty will introduce more majority voting in the Council and increase the powers of the European Parliament. The treaty also proposes to abolish the EU's pillar system. More aspects of foreign policy will now be subject to the supranational, as opposed to intergovernmental, institutions.[43][44]
[edit] Legal system
- Further information: Law of the European Union, European Court of Justice, and Treaties of the European Union
The EU is based on a series of treaties. These first established the European Community and the EU, and then made amendments to those founding treaties.[45] The treaties lay down the broad policy goals of the organisation and establish institutions with the necessary legal powers to implement those goals. These legal powers include the ability to enact legislation[46] which can directly affect all member states and their inhabitants (principle of 'Direct effect').[47] National courts are required to enforce the EU treaties and the laws enacted under them, as provided for in national legislation when each country joins the EU. In the case of a conflict where a law stemming from EU legislation conflicts with another national law, the EU law is considered to take precedence (principle of 'Supremacy').[48] Decisions regarding EU legislation may be appealed to the European Court of Justice.
[edit] Legislation
Although the Treaties are the ultimate source of EU Law, there are a number of legislative instruments available to the EU institutions. The three main instruments are Regulations, Directives and Decisions. There is no formal hierarchy regarding the three types.
Regulations are legislative acts which become law in all member states the moment they come into force, without the requirement for any implementing measures to have been taken by member states.[49] Once in force their contents automatically override conflicting domestic provisions, as a result of having direct effect in the national law of the member states.[46]
Directives require member states to achieve a certain result while leaving them discretion as to how to achieve the result within a certain time period. Directives are generally utilised where it is thought preferable to leave the precise details of legislative implementation to national governments.[50] Once the stated time period has passed, under certain conditions provisions within a Directive may have direct effect in national law against Member States.
Decisions offer an alternative to the two above modes of legislation. The Council and the Commission may publish in the official journal a decision, notified to a particular addressee, such as an individual trader or a company. Decisions will be found most commonly in Competition Law, or on rulings on State Aid, and can be challenged by the addressee under certain circumstances before the EU courts.
The EU's legal system contains a multiplicity of legislative procedures used to enact the above legislation. The treaties provide the basis for all legislation and lay down the different ways of adopting legislation for different policy areas.[51] A common feature of the EU's legislative procedures, however, is that almost all legislation must be proposed by the Commission, rather than member states or European parliamentarians.[52] The two most common procedures are co-decision, under which the European Parliament can veto proposed legislation, and consultation, under which Parliament is only permitted to give an opinion which can, subsequently, be ignored by European leaders.
[edit] Courts
The judicial branch of the EU consists of the European Court of Justice and the Court of First Instance (to be renamed the "General Court" upon the entering into force of the Treaty of Lisbon). Together they interpret and apply the treaties and the law of the EU.[53] The Court of First Instance mainly deals with cases taken by individuals and companies directly before the EU's courts. While the Court of Justice deals with cases taken by member states, the institutions and cases referred to the EU's courts by the courts of member states.[54] Decisions from the Court of First Instance can be appealed to the Court of Justice but only on a point of law.[55]
National courts within the Member States also play a key role in the EU as enforcers of EU law, and a "spirit of cooperation" between EU and national courts is laid down in the Treaties. National courts can apply EU law in domestic cases, and if they require clarification on the interpretation or validity of any EU legislation related to the case it may make a reference for a preliminary ruling to the ECJ. The right to declare EU legislation invalid however is reserved to the EU courts.
[edit] Justice, freedom and security
- Further information: Police and Judicial Co-operation in Criminal Matters and European Commissioner for Justice, Freedom & Security
Much of the EU's competence in the justice and home affairs area originates from the signing of the Schengen Agreement in 1985 on gradual abolition of border controls between six of the then ten European Community member states. In order to implement the Schengen Agreement, the signatory states included measures designed to compensate for effect of the reduced border controls in the areas of asylum, immigration and criminal justice.[56] The Maastricht Treaty transferred the Schengen acquis to the EU.[57] Additional competencies were assigned to the EU by the Maastricht Treaty to facilitate the freedom of movement of people by adopting common rules in civil matters, such as contract and family law.[57] The Maastricht Treaty also introduced the concept of citizenship of the European Union, which is complementary to national citizenship.[58]
Amendments to these treaties by the Amsterdam Treaty added a new aim of the EU as the creation of an "area of Justice, Freedom and Security".[59] That treaty also made it easier to pass laws in the justice and home affairs area and more difficult for member states to veto them. It also increased the powers of the European Parliament in relation to Justice and Home affairs' measures.[60] Recent legislation include the European Arrest Warrant[61] and directives on family law.[62]
The EU has established agencies to co-ordinate its actions in the justice and home affairs area: Europol for co-operation of police forces,[63] Eurojust for co-operation between prosecutors,[64] and Frontex for co-operation between border control authorities.[65] The EU also operates the Schengen Information System[4] which provides a common database for police and immigration authorities.
[edit] Fundamental rights
The EU has developed a role in human rights protection. Prohibitions against sexual and nationality discrimination have a long standing in the treaties.[66] The Amsterdam Treaty supplemented these, by supporting further legislation against discrimination based on race, religion, disability, age and sexual orientation.[67] Using these powers the EU has enacted legislation on sexual discrimination in the work-place, age discrimination and racial discrimination.[68] All EU states have abolished the death penalty for all crimes and the EU has been a prominent campaigner for global abolition.[69]
Signing the 1950 European Convention on Human Rights (ECHR) is a condition for EU membership, however the institutions of the EU are not covered by this. As the EU was not capable of signing the ECHR without a treaty change, the EU drew up the Charter of Fundamental Rights. The charter consolidated not only the rights of the ECHR but from other UN and EU agreements, covering economic, political and social rights including "third generation" rights such as good governance and a clean environment. Although it was proclaimed in 2000, it has no legal force at present (2007).[70] Under the Reform Treaty, the Charter would become legally binding and the EU would accede to the ECHR,[71] which would make the European Court of Human Rights, currently totally separate from the EU, the highest court in the EU for Human Rights, above the EU's Court of Justice. Even without joining, the Court of Justice and Court of Human Rights co-operate to ensure their case-law does not conflict, thus the Court of Justice already treats the ECHR as though it was part of EU law.[72]
[edit] Foreign relations
- Further information: Foreign relations of the European Union and Common Foreign and Security Policy
The foreign relations of the EU are primarily dealt with through the Common Foreign and Security Policy (CFSP). Co-operation in international trade negotiations, under the Common Commercial Policy, dates back to the establishment of the Community in 1957.[73] The CFSP itself has its origins in the formation of European Political Co-operation in 1970.[74] European Political Co-operation was an informal consultation process between member states on foreign policy matters, with the aim of forming common policies. It was formally introduced into the then European Community by the Single European Act and subsequently renamed as the "Common Foreign and Security Policy" by the Maastricht Treaty.[74]
The Maastricht Treaty gives the Common Foreign and Security Policy the aims of promoting both the EU's own interests and those of the international community as a whole. This includes promoting international co-operation, respect for human rights, democracy and the rule of law.[75]
The Amsterdam Treaty created the office of the High Representative for the Common Foreign and Security Policy (currently held by Javier Solana) to co-ordinate the EU's foreign policy.[76] The High Representative, in conjunction with the current Presidency, speaks on behalf of the EU in foreign policy matters and can have the task of articulating ambiguous policy positions created by disagreements among member states. The Common Foreign and Security Policy requires unanimity among the now 27 member states on the appropriate policy to follow on any particular policy. The unanimity and difficult issues treated under the CFSP makes disagreements, such as those which occurred over the war in Iraq,[77] not uncommon.
Besides the emerging international policy of the European Union, the international influence of the EU is also felt through the enlargement. The perceived benefits of becoming a member of the EU act as an incentive for both political and economic reform in states wishing to fulfil the EU's accession criteria, and are considered a major factor contributing to the reform of former Communist countries in Eastern Europe.[40] This influence on the internal affairs of other countries is generally referred to as "soft power", as opposed to military "hard power".[78] Finnish Prime Minister, Matti Vanhanen, cited the common foreign policy as a factor why Finland is, de facto, no longer a neutral country. It is not known if this view is shared by the leaders of the other neutral countries in the EU.[79]
Besides the CFSP, the Commission is also has its own representation in international organisations, its representation in international bodies is primarily through the European Commissioner for External Relations, who works along side the High Representative. In the UN the EU has gained influence in areas such as aid due to its large contributions in that field (see below).[80] In the G8, the EU has the rights of membership besides that of chairing/hosting summit meetings. The EU is represented at the G8 by the presidents of the Commission and the Council.[81] In the World Trade Organisation (WTO), where all 27 member states are represented, the EU as a body is represented by Trade Commissioner Peter Mandelson.[82]
[edit] Humanitarian aid
- Further information: ECHO (European Commission)
The European Community humanitarian aid office, or "ECHO", provides humanitarian aid from the EU to developing countries. In 2006 its budget amounted to 671 million euro, 48% of which went to the ACP countries.[83] Counting the EU's own contributions and those of its member states together, the EU is the largest aid donor in the world.[84]
The EU's aid has previously been criticised by the think-tank Open Europe for being inefficient, mis-targeted and linked to economic objectives.[85] Furthermore, some charities have claimed European governments have inflated the amount they have spent on aid by incorrectly including money spent on debt relief, foreign students, and refugees. Under the de-inflated figures, the EU did not reach its internal aid target in 2006[86] and the EU would not reach the international target of 0.7% of GNP until 2015. However only a few countries have reached that target. In 2005 EU aid was 0.34% of the GNP which was higher than that of the United States and Japan.[87] The current commissioner for aid, Louis Michel, has called for aid to be delivered more rapidly, to greater effect, and on humanitarian principles.[84]
[edit] Military and defence
Member states are responsible for their own territorial defence. Many EU members are also members of NATO. The Western European Union (WEU) is a European security organisation related to the EU. In 1992, the WEU's relationship with the EU was defined, when the EU assigned it the "Petersberg tasks" (humanitarian missions such as peacekeeping and crisis management). These tasks were later transferred from the WEU to the EU by the Amsterdam Treaty; they formed part of the new CFSP and the European Security and Defence Policy. Elements of the WEU are currently being merged into the EU's CFSP, and the President of the WEU is currently CFSP High Representative.[88][89]
Following the Kosovo war in 1999, the European Council agreed that "the Union must have the capacity for autonomous action, backed by credible military forces, the means to decide to use them, and the readiness to do so, in order to respond to international crises without prejudice to actions by NATO." To that end, a number of efforts were made to increase the EU's military capability, notably the Helsinki Headline Goal process. After much discussion, the most concrete result was the EU Battlegroups initiative, each of which is planned to be able to deploy quickly about 1500 men each.[90] EU forces have been deployed on peacekeeping missions from Africa to the former Yugoslavia and the middle east.[91] EU military operations are supported by a number of bodies, including the European Defence Agency, satellite centre and the military staff.[92]
[edit] Economy
The EU operates a single economic market[93] across the territory of all its members and uses a single currency between the 15 members[94] of the eurozone. Considered as a single economy, the EU has a nominal gross domestic product of (US$16.6 trillion) [1] (in 2007) amounting to 31% of the world's total economic output[1] It is also the largest exporter,[95] the second largest importer[96] and the biggest trading partner to many countries including very large markets such as India[97] and is one of the top trade partners for many others such as China[98]. 163 of the top 500 largest corporations (measured by revenue, the Fortune Global 500) are headquartered in the EU.[99] In May 2007 unemployment in the EU stood at 7%[100] while investment was at 21.4 percent, inflation at 2.2% and public deficit was -0.9% of GDP.[101]
[edit] Single market
- Further information: Four Freedoms (European Union)
>€20,000 >€17,000 >€14,000 >€10,000 >€7,000
The EU was originally created as an economic union. The oldest and largest constituent organisation, the European Community, was founded as the European Economic Community. Creating and maintaining the EU's single market has been a prominent goal of the Community since its inception in 1993. It seeks to guarantee four freedoms: these relate to ensuring the free movement of goods, services and capital around the EU's internal market as well as the flow of people within the area.[93] The freedoms are extended to the non-member states of Iceland, Liechtenstein and Norway via the European Economic Area.[20]
The principle of free movement of goods ensures produce can be taken anywhere within the whole market to be sold, though with exceptions for anything which might pose a public health risk. Half the trade in the EU is covered by legislation harmonised by the EU.[102] Services account for between sixty and seventy percent of GDP, although legislation permitting free movement is not as established as in other sectors. This is addressed by the recently passed Directive on services in the internal market which aims to liberalise this area of the market.[103] Free movement of capital is intended to permit movement of investments such as property purchases and buying of shares between countries, but as with services national rules still vary in some cases.[104]
Free movement of people means citizens can move freely between member states to live, work, study or retire in another country. This required the lowering of administrative borders and recognition of professional qualifications of other states.[105] An example of its impact is the Bosman ruling which prohibited national football leagues from imposing quotas on foreign players with European citizenship.[106]
[edit] Monetary union
- Further information: Euro and Economic and Monetary Union of the European Union
A single currency for the EU has been an official objective since 1969 and work began in 1990 on Economic and Monetary Union. Nine years later the euro was launched in eleven of the then fifteen member states as an accounting currency, meaning that national currencies remained in use but with exchange rates locked to the euro. On 1 January 2002, euro notes and coins were issued and the national currencies were phased out. Membership increased to twelve in 2002 and now fifteen countries belong to the Eurozone using the euro as their sole official currency. All other EU members except Denmark and the United Kingdom have agreed to join as a condition of being members of the EU. Cyprus and Malta adopted the euro on the 1 January 2008 and dates for others will be set when economic conditions have been met. Public opinion in Denmark currently favours joining, but Sweden has pointedly failed to take necessary economic steps. There are fourteen other currencies used in the EU.[94] A number of other countries outside the EU, such as Montenegro, also use the euro unofficially.[22] The euro, and the monetary policies of those who have adopted it, are under the control of the European Central Bank (ECB).[107]
The euro is designed to help build the single market by, for example: easing travel of citizens and goods, eliminating exchange rate problems, providing price transparency, creating a single financial market, price stability, low interest rates, having a currency used internationally and protecting against shocks due to the large amount of internal trade within the eurozone. It is also intended as a political symbol of integration and stimulus for further integration.[94] In recent years holdings of the euro have grown, and there is some speculation that if the eurozone continues to enlarge, or the U.S. dollar continues to fall, the euro possibly could become the main reserve currency in the world.[108]
[edit] Competition
- Further information: European Community competition law and European Commissioner for Competition
The EU operates a competition policy aimed at furthering its aim of ensuring undistorted competition within the single market.[109] The Commission as the competition regulator for the single market is responsible for antitrust issues, approving mergers, breaking up cartels, working for economic liberalisation and preventing state aid.[110]
The Competition Commissioner, currently Neelie Kroes, is one of the most powerful positions in the Commission, notable in effecting trans-national corporations.[111] For example, in 2001 the Commission for the first time prevented the merger between between two companies who were both based in the United States and had approval from their national authority.[112] A further recent high profile case, European Union v. Microsoft, resulted in the Commission fining Microsoft over 777 million euro following nine years of legal action.[113]
However in negotiations on the Treaty of Lisbon, French President Nicolas Sarkozy succeeded in removing words "free and undistorted competition" from the treaties. However as the requirement is maintained in an annex, it is unclear whether this would have any practical effect on EU policy.[114]
[edit] Development policy
[edit] Agriculture
The Common Agricultural Policy (CAP) is one the oldest policies of the European Community and was one of its core aims.[115] The policy has the objectives of increasing agricultural production, providing certainty in food supplies, ensuring a high quality of life for farmers, stabilising markets and ensuring reasonable prices for consumers. (article 33 of the Treaty of Rome).[24] It was, until recently, operated by a system of subsidies and market intervention. Until the 1990s the policy accounted for over 60% of the then