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Ghanshyamdas Saraf College Affiliated to University of Mumbai

& Durgadevi Saraf Junior College (ARTS & COMMERCE) S.V. Road, Malad (w) Mumbai 400064

Ghanshyamdas Saraf College Affiliated to University of Mumbai

& Durgadevi Saraf Junior College (ARTS & COMMERCE) S.V. Road, Malad (w) Mumbai 400064

CERTIFICATE I Prof.Shilpa Verma here by certify that Ms.Riddhi Rajesh Shah Student of Ghanshyamdas Saraf College of M.COM (Mng, part I) (semester I), has completed the project on Economics in the Academic Year 2013-14. This information submitted is true and Original to the best of my Knowledge. External Examiner: Date: Principal:

Project Co-coordinator Date:

College Seal:

I take this opportunity to thank the UNIVERSITY OF MUMBAI for giving me a chance to do this project. I express my sincere gratitude to the principal Dr. SUJATA KARMARKAR, course co-coordinator Prajnya Shetty and our librarian and teachers for their Constant support and help for completing the project. I am grateful to my friends for giving support in my project. Lastly, I would like to thank each and every person who helped me in completing my project especially MY PARENTS.

Signature of Student

I Miss Riddhi Rajesh Shah a student of Ghanshyamdas Saraf College of Arts and Commerce, Malad (w) M.COM (Mng) PART I (Semester I) hereby declare that I have completed the project on Economics of European Union in the academic year 2013-14. This information submitted by me is true and original to the best of my knowledge.


Signature of Student

Sr. No. 1. Sub Topic Introduction Of Economic Integration Pg No. 1


Introduction Of European Union(Eu)



Preamble To The Treaty Of Rome, 1957



Advantages And Disadvantages Of Being A Member Of Eu


5. 6.

Objectives Of European Union Overview Of The European Union At Work And Its Major Achievements Barriers To Trade Within The European Union

18 19






9. 10.

Current Eu Issues Bibliography

32 35

European Union
Economic integration is the unification of economic policies between different states through the partial or full abolition of tariff and non-tariff restrictions on trade taking place among them prior to their integration. This is meant in turn to lead to lower prices for distributors and consumers with the goal of increasing the combined economic productivity of the states. The trade stimulation effects intended by means of economic integration are part of the contemporary economic Theory of the Second Best: where, in theory, the best option is free trade, with free competition and no trade barriers whatsoever. Free trade is treated as an idealistic option, and although realized within certain developed states, economic integration has been thought of as the "second best" option for global trade where barriers to full free trade exist. Definition EU. The economic association of over two dozen European countries which seek to create a unified, barrier-free market for products and services throughout the continent, as well as a common currency with a unified authority over that currency. The European Union was established in 1993 by the Treaty of Maastricht, and was based on the European Economic Community. The EU is formed of three areas, or pillars, which are the European Community, Common Foreign and Security Policy, and Police and Judicial Co-operation in Criminal Matters. The EU has a wide variety of legislative bodies, including the European Parliament, the Council of the European Union, and the European Commission. The European Court of Justice and the Court of First Instance are the two main judicial bodies for the European Union. The format and principles of the EU have their roots in the European Coal and Steel Community, created in the early 1950s.

The increase of trade integration can be traced to the 1930s and 1940s.[1] Fritz Machlup credits Eli Heckscher, Herbert Gaedicke and Gert von Eyern as the first users of the term economic integration in its current sense. According to Machlup, such usage first appears in the 1935 English translation of Hecksher's 1931 book Mercantilism (Mercantilism in English), and independently in Gaedicke's and von Eyern's 1933 two-volume between member states of economic unions is meant to lead to higher productivity. This is one of the reasons for the global scale development of economic integration, a phenomenon now realized in continental economic blocks such as ASEAN, NAFTA, SACN, the European Union, and the Eurasian Economic Community; and proposed for intercontinental economic blocks, such as the Comprehensive Economic Partnership for East Asia and the Transatlantic Free Trade Area.

Comparative advantage refers to the ability of a person or a country to produce a particular good or service at a lower marginal and opportunity cost over another. Comparative advantage was first described by David Ricardo who explained it in his 1817 book On the Principles of Political Economy and Taxation in an example involving England and Portugal.[3] In Portugal it is possible to produce both wine and cloth with less labor than it would take to produce the same quantities in England. However the relative costs of producing those two goods are different in the two countries. In England it is very hard to produce wine, and only moderately difficult to produce cloth. In Portugal both are easy to produce. Therefore while it is cheaper to produce cloth in Portugal than England, it is cheaper still for Portugal to produce excess wine, and trade that for English cloth. Conversely England benefits from this trade because its cost for producing cloth has not changed but it can now get wine at a lower price, closer to the cost of cloth. The conclusion drawn is that each country can gain by specializing in the good where it has comparative advantage, and trading that good for the other. Economies of scale refers to the cost advantages that an enterprise obtains due to expansion. There are factors that cause a producer‘s average cost per unit to fall as the scale of output is increased. Economies of scale are a long run concept and refer to reductions in unit cost as the size of a facility and the usage levels of other inputs increase.[4] Economies of scale is also a justification for economic integration, since some economies of scale may require a larger market than is possible within a particular country — for example, it would not be efficient for Liechtenstein to have its own car maker, if they would only sell to their local market. A lone car maker may be profitable, however, if they export cars to global markets in addition to selling to the local market.


Stages of economic integration around the World: (Each country colored according to the most advanced agreement that it participates into.) Economic and Monetary Union (CSME/EC$, EU/€) Economic union (CSME, EU) Customs and Monetary Union (CEMAC/franc, UEMOA/franc) Common market (EEA, EFTA, CES) Customs union (CAN, CUBKR, EAC, EUCU, MERCOSUR, SACU)


Free trade around the World: Multilateral free trade agreements or more advanced agreements Bilateral free trade agreements advanced agreements No free trade agreements, but World Trade Organization members

A world map of World Trade Organization participation: Members Members, dually represented with the European Union Observer Non-member

The degree of economic integration can be categorized into seven stages: 1. Preferential trading area

2. 3. 4. 5. 6. 7.

Free trade area, Monetary union Customs union, Common market Economic union, Customs and monetary union Economic and monetary union Fiscal union Complete economic integration

These differ in the degree of unification of economic policies, with the highest one being the political union of the states. A "free trade area" (FTA) is formed when at least two states partially or fully abolish custom tariffs on their inner border. To exclude regional exploitation of zero tariffs within the FTA there is a rule of certificate of origin for the goods originating from the territory of a member state of an FTA. A "customs union" introduces unified tariffs on the exterior borders of the union (CET, common external tariffs). A "monetary union" introduces a shared currency. A "common market" add to a FTA the free movement of services, capital and labor. An "economic union" combines customs union with a common market. A "fiscal union" introduces a shared fiscal and budgetary policy. In order to be successful the more advanced integration steps are typically accompanied by unification of economic policies (tax, social welfare benefits, etc.), reductions in the rest of the trade barriers, introduction of supranational bodies, and gradual moves towards the final stage, a "political union".

• DETERMINED to lay the foundations of an ever closer union among the peoples of Europe.

• RESOLVED to ensure the economic and social progress of their countries by common action to eliminate the barriers which divine Europe. • AFFIRMING as the essential objective of their efforts the constant improvements of the living and working conditions of their peoples, • RECOGNIZING that the removal of existing obstacles calls for concerted action in order to guarantee steady expansion, balanced trade and fair competition,

• ANXIOUS to strengthen the unity of their economies and to ensure their harmonious development by reducing the differences existing between the various regions and the backwardness of the less favored regions, • DESIRING to contribute, by means of a common commercial policy, to the progressive abolition of restrictions on international trade, • INTENDING to confirm the solidarity which binds Europe and the overseas countries and desiring to ensure the development of their prosperity, in accordance with the principles of the Charter of the United Nations, • RESOLVED by thus pooling their resources to preserve and strengthen peace and liberty, and calling upon the other peoples of Europe who share their ideal to join in their efforts, • HAVE DECIDED to create a EUROPEAN COMMUNITY

The Preamble to the Treaty of Rome, 1957
The European Union
The European Union (EU) was created by the Maastricht Treaty on November 1st 1993. It is a political and economic union between European countries which makes its own policies concerning the members‘ economies, societies, and laws and to some extent security. To some, the EU is an overblown bureaucracy which drains money and compromises the power of sovereign states. For others, the EU is the best way to meet challenges smaller nations might struggle with – such as economic growth or negotiations with larger nations – and worth surrendering some sovereignty to achieve. Despite many years of integration, opposition remains strong, but states have acted pragmatically, at times, to create the union.

Origins of the EU

The European Union was not created in one go by the Maastricht Treaty, but was the result of gradual integration since 1945, an evolution when one level of union has been seen to work, giving confidence and impetus for a next level. In this way the EU can be said to have been formed by the demands of its member nations. The end of the Second World War left Europe divided between the communist, Soviet dominated, eastern bloc, and the largely democratic western nations. There were fears over what direction a rebuilt Germany would take, and in the west thoughts of a federal European union reemerged, hoping to bind Germany into pan-European democratic institutions to the extent that it, and any other allied European nation, both wouldn‘t be able to start a new war, and would resist the expansion of the communist east. As of the end of 2009, there are twenty-seven countries in the European Union.

Dates of Joining:
1957: Belgium, France, West Germany, Italy, Luxembourg, Netherlands 1973: Denmark, Ireland, United Kingdom 1981: Greece 1986: Portugal, Spain 1995: Austria, Finland and Sweden 2004: Czech Republic, Cyprus, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovak Republic, Slovenia. 2007: Bulgaria, Romania

Types of European Law
There are four main types of European law they are treaties, directives, regulations and decisions. A treaty is a primary source of law (the most important treaty being the Treaty of Rome). Treaties are binding agreements between all member states and individuals so far as they apply to them. In practice, the treaties govern mainly the organization of the Community and the relationships between the Member States, but some of them affect individuals directly. For example, Art.8 (1) of the Treaty on European Union gives all European citizens the right to vote

(and even stand for election) in any member state also Art.141 establishes the principle of equal pay between men and women. An individual citizen can under certain circumstances rely on the provisions of the treaties when taking legal action against a government or another individual. There are many examples of cases that have involved this. For example, Clean Car Auto service v Wien [1998]. A company set up a branch in Austria and appointed a German manager; Austrian domestic law required such managers to be resident in Austria. The Court said this rule amounted to indirect discrimination violating Art.39 of the Treaty, which guarantees the free movement of workers, and could be relied upon by an employer just as by an employee. Another example would be Diocese of Hallam v Connaughton [1996].A woman resigned as Diocesan Director of Music (having been the first holder of that post), and a man was appointed to succeed her at almost twice the salary. She brought a claim for sex discrimination under Art.119 of the EC Treaty. In preliminary proceedings, remitting the case to the Industrial Tribunal for a hearing, judge Holland J said it was established that comparison could be made with a predecessor.

Regulations made by the Council (with the consent of the Parliament) or the Commission (within its delegated powers) have general application. They are binding in their entirety and are directly applicable in all Member States. Regulations can deal with matters of minor detail or with fundamental issues. Council Regulation 1612/68, for example, sets out principles for promoting the free movement of workers (including students) by abolishing discrimination with regards to employment, trade union rights, housing, social and tax benefits, and access to training.  There are four main types of European law:  The Treaties  The Directives  Regulations  Decisions.  The final court of appeal for any matter involving European law is the Court of Justice. The Treaties  The Treaties are often used together to form a type of constitution for the European Union.

Many of the rules governing European law are found in the EC Treaty (the name for the Treaty of Rome since 1993).

Directives  The European Union has the right to issue directives under Article 249 (ex 189) of the EC Treaty. [The term ex 189 means that this was the Article‘s number under the original Treaty of Rome.]  A directive must not break a Treaty. If a directive is against a Treaty then the Court of Justice can annul it. Regulations  These are laws made by the European Union under Article 249 (ex 189) of the EC Treaty.  Regulations automatically apply in each member state and do not require a member state to pass their own laws to introduce them.  A regulation must not break a Treaty. If a regulation is against a Treaty then the Court of Justice can annul it. Decisions  These are issued under Article 249 (ex 189) of the EC Treaty by the different institutions (such as the Commission, etc.).  No institution can issue a decision unless it has been given the power to do so under a Treaty (usually the EC Treaty).  Decisions are addressed to specific people or organisations or member states and have the force of law.  They automatically apply and do not require a member state to pass their own laws to introduce them. A decision must not break a Treaty. If a decision is against a Treaty then the Court of Justice can annul it. Recommendations and Opinions  Article 249 of the EC Treaty also gives the institutions the power to make opinions and recommendations.

 They do not have the power of law although they can be very persuasive particularly if they come from the Court of Justice.

“What are the advantages and disadvantages of being a member of EU”?
A variety of articles written on European Union and its membership have concentrated on the advantages and disadvantages that the EU provides to its member states .Most of them which were written on the advantages of EU membership claim that: the European Single Market which enables companies to trade in an international market, a Monetary Union, environment protection and war prevention as the main advantages .However, there are also some disadvantages to be considered. The disadvantages that are usually mentioned are the loss of national sovereignty and little influence that small state shave.To begin with, the European Single Market is the first advantage of being a member of EU. According to Europa (2009) the EU member states have formed a single market with more than 500 million people .This enable companies to trade in the international market. In addition he mentions that without this platform, competing individually and Making products and services in the EU states would be more expensive and difficult. Derhan(2010) in his article, ―European Union: Risk - Benefit Analysis‖, says that both EU citizens and businesses have the benefits of the single market. According to him, 2.15% of the Gross Domestic Product (GDP) comes from the money that citizens get from the single market which was approximately 708 EUROS per person in 2006. In addition to this, the single market has contributed to reduce the number of unemployed. According to CEC (2008) as a result of the Lisbon Strategy, more than six million jobs were created in the last decade and the European industry has contributed a lot to increase the number of jobs within European Member States. Another advantage of European Union membership is a monetary union. Monnet (2005) claims that a unique currency makes the trade easier because any alteration in the prices is noticeable. Furthermore, he mentions that the buying and the selling prices are equal in different countries which shows transparence and makes a single market in Europe. What is more, a monetary union brings many facilities. According to Ilskovitz, Dierx and Sousa (2007) a single currency facilitates not only customers but also businessmen in their transitions costs as there is no need to

use different currencies. In addition they mention that with the introduction of a new currency (EURO), EU member states have the same prices and this make the trade between them easier. By eliminating the national currencies, EU member states have been forced to reduce the prices of their products so that they can stay at the same level. Another advantage of European Union membership is the environmental protection and war prevention. The health of the environmental is important for human being so it is important to preserve it. Derhan (2010) states that the EU has created policies with a purpose to protect the environment. Apart from this, EU has created policies to prevent people from turning to terrorism. Council of the European Union (2008) states that these policies are concentrated on the radiation of the terrorist group like Al Qaeda and the groups that it inspires. The treaty of Lisbon (2007) also states that the EU‘s priority is to ensure the safety and security of its members. As a result, EU has been working with the regions that are across its borders like the Balkans, North Africa, the Caucasus and the Middle East, all together with its allies. The European Single Market, monetary union, environmental protection and war prevention are the main advantages of being a member of EU; however, there are some disadvantages as well. The first disadvantage is the loss of national sovereignty. According to Derhan (2010) when new members join the EU, they agree to obey all the regulations even if it is against their national rules and by signing or joining they put away some of their nationals over eignty. Moreover, Curia (2010) also states that when the member states are found in fault, the European Court of Justice (ECJ) ask them to take care of the situation in control. The members pay a penalty if they fail to fix or take the situation in control. Derhan in his article claims that ―the legal system provides the most evidence of national sovereignty being eroded at the national level and replaced by control. The ECJ is the enforcer of EU law‖ That is, the national sovereignty is reduced gradually as the member states follow the EU law. Another disadvantage of EU membership is little influence of small states. Denti (2007) says that ―for what concerns policy areas, it can be seen that the influence of small states has been weaker on security issues (e.g. the case of the contact group for the Balkans, a directorate of the big states in the EU), while they have proved to be path finders on the other fields‖. In other words, it can be understood that the small states have less participation on security issues. In addition to this, Derhan (2010) claims that larger member like France and Germany have more geo-political influence than small states, i.e., small states have less of voice. Furthermore, they are overruling

because of their size without respect their citizen‘s concerns. From what have already been written above, it could be concluded that the European Union membership has many advantages such as the European Single Market, which enable companies to trade in an international market, a monetary union, environment protection and war prevention. On the other hand, of course, there are some disadvantages like the loss of national sovereignty and little influence that small states have. It is obvious that the EU is a big organization and there is an obvious appeal for many European States to join the EU, however, joining EU is a very controversial subject. Turkey has been trying for EU membership since the 1950s and now Turkey‘s relations with the EU entered a new era with the start of accession negotiations. European Union should accept Turkish membership taking account of its remarkable progress in economy and Turkish‘s strategic localization. Those opposed to Turkish membership in the European Union point out several issue. First, they claim that Turkey is large in terms of population and small in economic size. Hughes (2004) claims that Turkey is a country with a huge population and very small in economic terms with political and economic implications. He further states that in economic terms, Turkey will have a small impact on the European Union Market. Hughes might have a point; however, the reality is very different from what he states. Turkey‘s population is not adults now, most of them are children. This means that they will contribute to the progress of Turkish economy in the near future. What is more, Turkey‘s economy has been growing significantly if we compare with some other countries which are already members of European Union. Domaniç (2007) claims that 20% of the Turkish population is children now but as some studies show, by 2020 they will reach their working age and will contribute to the development of the country. Furthermore, he states that Turkish economy has been growing at any significant rate and this has contributed to the stability of the macro-economy as well. As a result of this, not only the inflation but also the public sector deficit and debt have reduced. Second, those opposed to Turkish membership to the EU claim that there is not a good relation between Turkey and its neighbors and EU security will be in danger. Gasparini (2007) claims that Turkish accession to the EU will bring negative impacts as it will increase the area and the border of the EU touching areas with a lot of conflicts such as Caucas us and the Middle East. Apart from this, he further states that Turkey has been involved in conflicts with its neighbors so they need to resolve and take control of it in order to maintain its border safe. Gasparini may

have a point, but Turkey has solved most of the problems with its neighbors, in fact, Turkey has now a good relationship with countries like Greece and Armenia that used to be enemy. Ünluhisarciklı (2010) claims that although Turkey has some unsolved problems with its neighbors; Turkey has given an important step to resolve those conflicts. Turkey improved their relation with Greece, they are no longer adversaries. Apart from this, Turkey and Armenia have established a diplomatic relation. He further states that Turkey has a new foreign policy and with this policy, Turkey will better improve the relationship with its neighborhood and will play the role of mediator in regional conflicts contributing to the peace and stability between them. In security terms, Turkey has already a good experience in this area. Domaniç (2007) claim that in 1952, Turkey joined NATO and since then Turkey has been contributing to the European Security and Defense Policy (ESDP) so EU can take this advantage and Turkey‘s strategic localization to stabilize the highly volatile regions. The Opponents also mention the Cyprus problem. Gasparini(2007) claims that the Cyprus problem is a big issue and has serious implications for the negotiations between the EU and Turkey, the possibility of any integration is out of question if the Cyprus question is not answered. Yet, this idea cannot be more than just a claim, because Turkey actually voted for the reunification and it was the Greek Cypriots who did not accept it. ABHaber (2008) claims that the current situation between these countries is the result of EU‘s faulty strategy when they accept Southern Cyprus as a member representing the whole of the is land. In addition to this, Hannay (2006) states that Greek Cypriots voted against by rejecting the reunification of the island in April 2004, in fact it was the Turkish Cypriots who voted in favor. The last claim of those opposed to Turkish membership in the EU is that Turkish culture and value are different. Rosenberg (2008) claims that Muslim and Christian culture are not alike. He further states that Turkish population is 99% Muslim and the Europe population is based in Christianity. However, he might get it wrong because the integration of Turkey in the EU not only will strengthen the dialogue between Christian and Muslim but also bring democracy between them, That is, their integration would enrich religious freedoms in the EU. Domaniç (2007) says that Turkey will contribute positively to the unification and the intercultural dialogue between the Christian and the Muslim population. More over, it would strengthen Turkish Democracy and shows that Islam and democracy can co exist. The number of Muslim living within the borders of EU has been increasing daily so it is safe to say that Islam is already a part of the European

Culture. The integration of Turkey would show that Muslim culture is accepted in the EU. In addition to this, İnaç (2003) claims that Turkish‘s accession to the EU will enrich religious freedoms bringing Muslim and Christian together. All in all, the proponents of Turkish accession to the European Union should rethink their points and claims, taking account of Turkish remarkable progress in economy and Turkish strategic localization, without any biased and subjective thoughts. On the other hand, Turkish authority should convince the opponents of their integration to the EU that their integration to the EU will provide valuable benefits to the organization. Once they do this, the opponents will understand the importance of the Turkish membership in the EU and start to support their integration to the organization

Objectives of the EU The Union‘s objectives can be read in the Lisbon Treaty Art. 3 TEU and include, among others:
   

the promotion of peace and the well-being of the Union´ s citizens an area of freedom, security and justice without internal frontiers sustainable development based on balanced economic growth and social justice a social market economy - highly competitive and aiming at full employment and social progress

a free single market

The Union shall also combat social exclusion and discrimination and promote social justice and protection, equality between women and men, solidarity between generations and the protection of children s' rights. The European Union also establishes a set of values in Article 2 TEU. The EU Court can take values and aims into account when it decides on case law.

Values of the European Union list of the Union's values. The Union shall respect human dignity, liberty, democracy, equality, the rule of law and human rights.

Overview of the European Union at work and its major achievements For many years, the EU institutions have been thought of as a huge bureaucracy far removed from citizens‘ daily lives and concerns. Yet the EU deals with issues which are critical for all Europeans. Examples include efforts to develop liberty, prosperity, education, peace, security, justice, the protection of the environment and health, thereby helping to disseminate basic human values at the global level. The euro: the most visible and concrete expression of the European project Euro notes and coins have, quite successfully, been in circulation since 1 January 2002. The single currency creates a sentiment of involvement among citizens by giving them a visible, concrete example of the European project at work. An added benefit is a stable economic climate which encourages trade and growth, as well increased competitiveness for EU products and service. There are 16 Member States in the euro zone: Austria, Belgium, Cyprus, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Malta, the Netherlands, Portugal, Slovakia, Slovania and Spain. To date, the other EU Member States have not yet adopted the single European currency. Specific result:

With the euro, the single currency with the symbol "€‖, it has become easier to travel in Europe and compare prices without having to deal with the uncertainties of daily foreign exchange rates. A free area One of the EU‘s greatest success stories was rounded off in 1993 with the full entry into force of the internal market (free movement of people, goods, services and capital). Specific results:    People, goods, services, capital and, to a great extent, services, can move freely within the European Union as if they were in the same country. Individuals can travel across most borders without any formality and it has become much easier to work, holiday or study in another EU Member State. Citizens all have a similar EU passport.

Consumers have access to a greater range of goods and service and comparing prices is easier since the introduction of the euro.

Peace and stability in Europe and throughout the world Having learned the lessons from the armed conflicts of the early 20th century (the first and second World Wars) and more recent hostilities (in ex-Yugoslavia and Kosovo) which took place on its soil, Europe has taken a resolute stance to promote peace and stability both within its own borders and at the global level. This is first and foremost achieved by promoting human rights, democracy and active diplomacy focussing on conflict prevention, and the reason why the EU has developed a Common Foreign and Security Policy (CFSP). Similarly, the EU also aims to build a genuine common European Security and Defence Policy (ESDP) to protect EU territory and carry out peacekeeping missions. Specific result:

Since 2003, the EU is capable of deploying a European combat force of about 60,000 troops. This combat force can act either independently or in conjunction with NATO units. This has enabled the EU to launch civilian and military crisis management operations in the Balkans (Former Yugoslav Republic of Macedonia and Bosnia-Herzegovina), Africa (Democratic Republic of the Congo) and Afghanistan. A unique area of freedom, security and justice One of the EU‘s priorities (which has been given added weight in the European Constitution) is to guarantee Europeans a unique area of freedom, security and justice. All too often, the authority of police services and courts is limited to their national territory while crime and terrorism do not stop at a country‘s borders. For this reason, the European Union decided to take a series of common measures to effectively combat these scourges in all Member States. These measures include more effective protection

of basic individual rights, promoting initiatives in the field of European citizenship and a common policy for managing migration flows, developing a common European asylum policy and judicial cooperation in civil matters, promoting a coherent prosecution policy and intensifying the fight against terrorism. Specific results:

With regard to crime, national police forces are working more closely together, notably through Europol. Databases make it possible to gather, analyse and share information on criminal activities.

With regard to terrorism, the attacks of 11 September 2001 in the United States prompted the Members States to pass laws ensuring a certain level of consistency in the definition of acts of terrorism and for sentencing measures.

With regard to justice, citizens must be able to call on the courts and authorities of all Members States as easily as they would in their own country. For example, rulings and decisions must be complied with and implemented in all EU countries, the goal being greater compatibility and convergence among the various Member States‘ legal systems. A common commercial policy The common commercial policy, which is based on the Member States‘ Customs Union, includes common arrangements for imports as well as a common external tariff uniformly applied to all Member States. The policy‘s objective is to contribute to the harmonious development of world trade and the reduction of customs barriers. It has been clearly shown that free trade based on fair rules is beneficial to stability and development not only for the EU, but also far beyond its borders. Through the common commercial policy, EU countries take part in trade negotiations as a single group and thereby further promote Europe‘s image throughout the world. Efforts are also made to bear in mind the poorest countries when developing the EU‘s common commercial policy, although they often accuse it of refusing to let in more of their exports, particularly agricultural products. Nevertheless, in its Generalised System of Preferences (GSP) the EU grants duty-free access or preferential access at a reduced rate to its market for certain

imports from developing countries or economies in transition. Exports from the world‘s 49 poorest countries (with the exception of weapons) have also been granted duty-free access to the European market. Specific result:

Products entering the EU are charged the same duties regardless of whether they are imported, for example, via the port of Antwerp or via the port of Athens. A common agricultural policy The European Union set up the Common Agricultural Policy (CAP) to increase agricultural productivity, provide for an adequate standard of living for agricultural workers, stabilise markets, guarantee security of supply and ensure reasonable prices for consumers. While maintaining these initial objectives, the most recent CAP reforms also take account of growing societal concerns regarding food safety and quality, environmental protection issues and animal welfare. Specific result:

From now on, payments of direct aid to farmers will be contingent on compliance with food safety, environmental and animal health and welfare standards, in addition to the application of good agricultural practices. Through its rural development programmes, the CAP also makes an essential contribution to boosting the competitiveness of agriculture, improving the rural environment and spaces and diversifying economic activities in rural areas. Compliance with European legislation stemming from the common agricultural policy is the responsibility of various verification bodies at both the federal and regional level. Social Europe and the cohesion policy Social considerations continue to play an important role in the European project. Through its Directives, the EU aims to arrive at a convergence between the laws of Member States in fields such as employment, social protection and working conditions to develop a common, basic set of rules at the European level.

To do this, the EU has developed measures to encourage convergence and advocates coordination methods between Members States. With regard to employment and growth, the EU actively tries to involve the social partners in order to ensure that the interests of all parties are adequately represented. Lastly, solidarity in Europe is also the cohesion policy, which aims to gradually work away development shortcomings or stimulate conversions in certain regions of the EU.

Specific results:

the free movement of workers and the coordination of social security systems: all EU nationals are entitled to work, without any discrimination, in another Members State and to benefit from its social insurance system;

gender equality: five Directives have been issued since 1975 to guarantee equal treatment at work, the same salary for the same job and access to social security cover;

labour law: protection of individual and collective rights and a guarantee of safety and security in the workplace;

 

the fight against various forms of discrimination; Several Belgian provinces have benefited from EU funds to support their development initiatives or to assist in their economic conversion (specifically Hainaut, Liege, Limburg and Antwerp). Protecting health and the environment Taking care of the environment to safeguard quality of life for current and future generations is one of the EU‘s main priorities, and it has embarked on the ambitious project to combine environmental protection and economic growth. The main priorities are as follows: preventing climate change and fighting global warming, protecting nature areas and the wild flora and fauna, dealing with health and environmental problems and finding better waste management solutions.

Clearly, very many environmental problems go far beyond the EU‘s borders and this is why it has signed international programmes and conventions tackling problems such as acid rain, biodiversity, climate change and greenhouse gases. Specific results:

The Ecolabel scheme helps European consumers make more eco-friendly choices when selecting products or services;

The European Environment Agency monitors the state of the environment and issues alerts when problems are detected. This in turn makes it possible for the EU to take the necessary legislative measures;

The well-known Kyoto protocol (greenhouse gas reduction) was in part initiated by the EU, which remains one its most fervent proponents, and it symbolises the beginning of global awareness of the risk of climate change;

In the 1990s, the EU decided to require catalytic converters on all vehicles and to lead to petrol.

stop adding

A knowledge-based society The European Union has set itself the objective of becoming the most competitive and dynamic knowledge-based society in the world. As a result, education, professional training and support for young people have become three major priority areas. Every year, thousands of European citizens benefit from cross-border education or training programmes which foster intercultural understanding and make it possible to live, study, specialise and work in other European countries. Educational qualifications are accredited in other EU countries and citizens‘ access to training, whether in their own country or another Member State, is made easier through partnerships, exchange programmes and the elimination of numerous administrative hurdles. Specific results:

Below are a few examples of education and training programmes included in the broad range of options offered by the EU:

Socrates, an education programme which includes Erasmus, the oldest and probably best-known cross-border education programme financed by the EU. Each year, Erasmus provides grants to students and teachers which enable them to attend universities in other Member States to follow or teach courses.

Leonardo da Vinci promotes international exchanges and cross-border projects in the field of vocational training and education.

Europass-training makes it possible to establish a record of achievement for the education received or the time spent training in another country.

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Gruntvig is designed for adult students and their teachers. Comenius is specifically reserved for schools and teachers. Lingua promotes language learning. Minerva covers the use of new technologies in education. Conclusion This overview of achievements and specific results show how the European Union has been active in numerous sectors for decades. Although we don‘t always realize it, the EU‘ s work regularly influences many aspects of our daily lives. Trade Policy in the EU The EU is the world's largest trading bloc. Together, the 27 EU Member States account for 19 per cent of the world‘s imports and exports. The EU Member States negotiate collectively and are represented by the EU Trade commissioner, Karel de Gucht.

Free Trade Agreemet between india Negotiations between the EU and India on a free trade agreement were launched in June 2007. The negotiations are part of the EU‘s strategy of signing free trade agreements with the EU‘s largest trading partners to secure EU external competitiveness, and hereby contribute to increased growth and employment. Among the Members States there seems to be general agreement on the overall advantages and

importance of the agreement in regard to the EU‘s strategic partnership with India. The European Parliament has expressed special interest in particularly the political aspects of a future agreement, which according to the EU is to include sustainable development and political clauses on human rights among other things.

Review of the GSP Regulation In May 2011, Commissioner for Trade Karel De Gucht submitted a proposal for a review of the GSP (Generalised System of Preferences) regulation regarding a new scheme for developing countries on market access. The proposal consists of a major differentiation amongst developing countries, which is a result of the rapid economic growth in and competition from a number of developing countries. In general the Council has received the proposal positively, although some Members States have requested that the GSP regulation should be more development-friendly, whilst others prefer that the GSP regulation should be less comprehensive. The Danish EU Presidency will make an extraordinary effort to conclude the negotiations on a new GSP regulation. Furthermore, it is important to strengthen the GSP regulation as a political tool in trade regulation for the purpose of promoting the integration of developing countries in the international trade system and contributing to growth and employment in the respective countries.

Barriers to trade within the European Union

Tariffs on trade within the European Union were abolished decades ago. But research by Natalie Chen and Dennis Novy finds that significant trade barriers remain, notably "technical barriers to trade," such as health and safety requirements as well as packaging and labelling requirements. European economic integration was launched in the 1960s with the creation of customs unions, abolishing internal tariffs and trade quotas. The process was revived within the European Union (EU) by the Single European Act of 1986, which aimed to complete a Single European Market by the end of 1992.

More recently, the introduction of the single European currency – the euro – was intended to accelerate the process of trade integration by eliminating exchange rate uncertainty and increasing transparency and competition across markets. The single market was motivated by the observation that in the 1980s, trade within Europe was still impeded by significant barriers to trade. In particular, there remained many non-tariff barriers, including so-called "technical barriers to trade." The costs of technical barriers to trade eclipse the costs associated with being outside the euro area These barriers result from regulations that affect the sale of goods in some markets by requiring specific product characteristics or production processes, for example, a certain package size for food products. With intra-EU tariff barriers having been completely eliminated by 1968, technical barriers have become increasingly visible. They are also a key concern in today's global trade negotiations, with the World Trade Organisation (WTO) seeking to ensure that (from the WTO Agreement on Technical Barriers to Trade) So how much progress has the EU made in removing internal barriers to trade? Our research measures trade integration within the EU by examining 166 manufacturing industries in 11 member states over the period 1999-2003. We find that significant trade barriers remain and, apart from the inevitable transport costs, the most substantial costs are technical barriers. Indeed, the costs of these barriers eclipse the costs associated with being outside the euro area. They also eclipse the costs of not abolishing physical border controls – between continental Europe and the UK – by opting out of the Schengen Agreement. Policy action could lead to further gains from the reduction of trade barriers within Europe In quantitative terms, we find that the costs associated with geography and transport explain 25% of the variation in trade integration. The most important factor is the weight to value of traded goods (17%), followed by the distance between the origin and destination of shipments (5%).

Policy factors explain 7% of the variation in trade integration, which is far from negligible. Technical barriers to trade are the most important factor (5%), while public procurement, Schengen and the euro only play very minor roles. The policy implications of these results are clear. While the barriers related to geography and transport costs arise from the very nature of spatial separation between markets, policy barriers such as technical barriers to trade are in principle removable. This suggests that there is room left for policy action and that further gains are possible through the reduction of trade barriers in Europe. OVERVIEW This curriculum deals with two crucial, ongoing events in current affairs: the enlargement of both the European Union and NATO. As the EU and NATO grow, they face an array of political, social, and economic challenges that could reshape the world we live in. For that reason, this is an important topic for American students to study. One of the objectives of this unit is to inform students about Europe and its increasing economic, cultural, and political importance in an interdependent and interconnected world. Current EU Issues Recent stories on the EU covered on this site include: Unemployment up 1.8m in EU in past year. Now at 10% of labor force Ireland's total tax-take is among the lowest in the EU Belgian Presidency of EU will be challenging on social agenda EU Commissioner raises concerns about emergency plans as social programmers take the brunt of cutbacks EU heads of government produce lop-sided strategy and fudge poverty target Ignoring poverty could lead to serious problems according to EU Commissioner European Parliament passes resolution on taxing speculative financial transactions 8 Irish MEPs attend launch of Zero Poverty Campaign in Brussels

Arguments for the European Union The EU represents one of the greatest experiments in political history. For the first time nations have chosen to surrender aspects of their national sovereignty to a central body that has a responsibility to ensure that they act for the good not only of themselves but of other nations as well. Those who support the concept of the EU are called pro-Europeans or Europhiles. They base a lot of their arguments on the themes outlined below. These are opinions - you should decide if you agree with them or not. The EU safeguards peace The European Community was established to ensure that the great European powers that had been at war for hundreds of years would never again enter into armed conflict with each other. By creating a European Coal and Steel Community (ECSC) the intention was to make France, Germany, the Netherlands, Belgium, Luxembourg and Italy co-operate by forcing them to share their coal and steel resources in the rebuilding of Western Europe after World War II. This rapidly evolved into a wider European Community and eventually the European Union. When the Berlin Wall came down in 1989 there were predictions that the former communist states in Eastern Europe would degenerate into civil war. Instead, thanks to the efforts of the EU, within fifteen years nearly all of those nations had become democratic and been welcomed into the EU. It is now inconceivable that a major European war will occur, something that people could not have imagined at the end of either World War II or the Cold War. This has been achieved because European nations are now locked into reliance on each other, with shared laws, shared political leadership from Brussels, shared economic policies and even shared defense. The EU provides the first example of a truly supranational body where the ambitions of nations are curbed by a need to co-operate in order to succeed. This body has helped to bring incredible political stability to Europe and to remove the chance of a repeat of World War II within its boundaries. The EU gives states more power on the global stage EU membership gives states increased influence on the global stage. While nations would find it easy to ignore Britain or any European nation acting on its own, the combined influence of all twenty-seven member states acting together is harder to ignore. As other nations begin to club together in multi-national bodies, such as the Association of South-East Asian Nations (ASEAN) or the African Union, it will become more and more difficult for individual European nations to make their voices heard without the support of the EU as a whole. One major example of this is in the World Trade Organization (WTO) talks, where global trading rules and standards, including tariffs, are set and monitored. When the EU

negotiates on behalf of its members in this organization, it represents the world's biggest single market and as a result has more influence. Other nations are much keener to make concessions to the EU than to individual member states as they see the rewards of gaining access to the EU market as much greater than the rewards of gaining access to any individual national market. The EU makes us better off A principle aim of the European Community has been to enable the rebuilding of the European economy after the disasters of the Great Depression and World War II. By creating a customs union and later the single it has been hugely successful at doing this. Since January 1993, the Commission estimates that the single market created 2.5 million jobs and €877 billion of extra prosperity, thereby upholding the principle of an open liberal market economy in Europe and making everyone wealthier. The EU encourages our neighbors’ to reform The EU shares land or sea borders with a great variety of nations including Egypt, Libya, Serbia, Turkey, Syria and Israel, with unstable governments, histories of conflict or different cultural and political outlooks to our own. Despite this, the EU's European Neighborhood Policy (ENP) ensures stability with the region by offering favorable relations with the EU in exchange for nations living up to standards such as the rule of law and democracy. Meanwhile, nations that look to join the EU are encouraged to reform their national institutions in order to fit in with the European liberal democratic model. This encourages wider stability and improves people's lives.

Bibliography General information on the EU, including enlargement

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