The European Union Craig Kelso, Sam Harrold, Jeff Benes, David Schon, and David Wilson
15 Nations of the EU • Austria • Belgium • Denmark • Finland • France • Germany • Greece • Ireland • Italy • Luxembourg • The Netherlands • Portugal • Spain • Sweden • United Kingdom
1997 EU Statistics • 1.249 billion square miles • 373.3 million people • 298.9 people per square mile • GDP $ 8.093 trillion
Preparing for a Unified Europe • World War II depleted resources • The German-French Problem to solve • The Communist Threat • Need for Unification • France- Economic • Germany- Political
Before there was an EU • European Coal and Steel Community (1951-1958) • Treaty of Paris April 1951 • European Economic Community (1958-1986) • Treaty of Rome March 1957 • European Community (1986-93) • The Single European Act February 1986 • European Union (1993- present) • Treaty of European Union February 1992
The Politics of the EU Sam Harrold
European Parliament European Council Council of the European Union Institutions of the European Union • European Commission • Court of Justice • Court of Auditors
EU AND INTERNATIONAL TRADE Jeff Benes
GENERAL TRADE POLICIES • Promote liberal trade • common external tariff • elimination of tariffs among members • reduced non-tariff barriers
EU TRADE WITH JAPAN • Key market for EU • EU key market for Japan • Both cooperate on multilateral trade issues • Bilateral trade relations have improved • Market access problems remain
EU TRADE WITH U.S. • EU & U.S. each other’s largest single trading partner • 19% in total EU imports, 17.8% in total EU exports (1995) • 21.2% of US exports, 17.7% of US imports (1995) • Trade between EU and US nearly 227 billion ECU (1 ECU=$1.134)
EU TRADE WITH U.S. • EU second largest market for US agricultural products • heavily concentrated in sophisticated high technology products • EU offers good opportunities for American suppliers of goods/services in telecommunications, health & medical, and environmental sectors
CONCERN OVER US TRADE POLICY • Extraterritoriality: persons/companies incorporated in EU to follow US laws or policies outside the US • Unilateralism: unilateral sanctions or retaliatory measures against “offending” countries or companies.
RECENT DEVELOPMENTS • 1990: EU and the US adopt a Transatlantic Declaration laying down principles for greater EU-US consultation and cooperation. • 1995: EU and US agree on a New Transatlantic Agenda (NTA) and Action Plan to promote cooperation, partnership, and joint action in areas ranging from trade liberalization to security.
RECENT DEVELOPMENTS CONT’D • 1998: EU-US Summit--moving closer to launching new drive to liberalize global trade in the twenty-first century • removed one of EU’s biggest complaints against US, the extraterritorial reach of its domestic laws
The Euro David Schon
What is the Euro? • The Euro is the much anticipated single European currency. • Many European Big Businesses hope that the Euro will cut transaction costs and encourage cross-border mergers. • They also hope that it will allow them to better compete in the global economy • Not being welcomed by all Nations... • It is expected to equal to about 2 marks ($1.18)
When will the Euro Arrive • The birth of the Euro will be on January 1st, 1999, at which time all participating currencies will be fixed against the Euro. • However, the physical Euro will not appear until January 1st, 2002. For these 3 years, old currencies will be used as some percentage of the Euro
Is the ECB another USFR? • The European Central Bank is not a duplicate of the US Federal Reserves • The US Federal Reserve has two primary goals, price stability & employment and economic growth. • The ECB has only one goal, to provide economic stability • The ECB also faces the problems associated with handling 11 politically diverse nations
What Effects will this have World-Wide. • In the United States, the Euro is expected to create an economic block that can compete with Domestic Economy. • “Euroland” will have a population that exceeds that of the US by 23 million • It will force firms to completely change their perspectives on international trade • On the up side, tourist will take no losses from border to border in Europe.
Will the Euro Work? • This is a good question. • One year ago, many did not feel that the Euro would be on track. • Today the idea of common currency uniting such diverse nations is still very questionable, especially with certain nations like Britain being excluded (for present). • Politics will ultimately make or break the Euro...
The Future of the EU David Wilson
By the year 2000…... • Set up a single currency, the “Euro” • Reform political machinery and policies to cater for larger union • Establish a new financial framework • Decide on guidelines for future defense • Economic and Monetary Union by Jan 1, 1999 • Denmark and Great Britain around 2002. • Euro becomes legal tender in 2002.
Increased World Effectiveness • More influential than ever before • Proactive rather than reactive to political and global changes • Assertion of “new identity” • A common (united) foreign security agreement • Possible common defense policy • The “Euro” • provide access to lower interest rates • better stability and reliability • eliminate inefficiencies in transactions • no internal exchange rate uncertainty • will attract foreign investment
A Citizens European Union • “In the future, the EU’s institutions will have to become more responsive to the needs of its citizens and to be more open, transparent and democratically accountable” Le Figaro • Reduced unemployment • New improved environmental protection policies • Protection of human rights • Voters will feel more involved in europe • Increased powers of justice • A more cohesive, inclusive society
Other United Fronts…... • One common energy (power) grid for the union • An integrated transportation network • Development in progress for a re-vamped common agricultural policy • Common policies on: • Immigration • Visas • Asylum • Expansion of area covered by NATO
Where to from here? • Expansion to the east - 100 million new members by early next decade • As many as 30 new members - • Hungary, Poland, Estonia, Czech Rep. and Slovenia to join union approximately 2003 • Bulgaria, Romania, Latvia, Lithuania and Slovakia (later on…) • Deepening economic and monetary union • Increased powers for the European Parliament??? • Build a Europe so strong, that it never splits again • New political reality - a new Europe • A leaner Union - less welfare
How will this affect the United States? • Business will be enticed to expand into europe because of a rapidly expanding but stable market opening up • Loss of defense contracts • New, higher level of competition with the US • The “euro” - competition as a world leading currency • European mergers will continue, offering stiff competition for US companies (eg. Airbus) • Possible stand-offs, trade wars and political stalemates as continents differ on global issues.
Potential Barriers to Unification • Division between: • larger and smaller countries • poorer and richer countries • northern and southern countries • economic liberals and protectionists • Disagreement between “federalists” (Germany and Benelux countries) and nation states (Great Britain) • Countries will have to swallow national pride • Steady erosion of social democratic parties due to re-orientation to profitability • Economic gap between EU nations and those preparing to enter the EU