Presentation on theme: "& the Euro – a historical overview"— Presentation transcript:
1& the Euro – a historical overview THE EUROPEAN UNION& the Euro – a historical overview
2Celebrating the European Union: A Half Century of Change and Progress Since the creation of the EU half a century ago, Europe has enjoyed the longest period of peace in its history.European political integration is unprecedented in history.EU enlargement has helped overcome the division of Europe – contributing to peace, prosperity, and stability across the continent.A single market and a common currency conditions for companies and consumers.European UnionUnited in diversity
3What is the European Union? Shared values: liberty, democracy, respect for human rights and fundamental freedoms, and the rule of law.Largest economic body in the world.A unique institution – Member States voluntarily cede national sovereignty in many areas to carry out common policies and governance.Not a super-state to replace existing states, nor just an organization for international cooperation.World’s largest & most open market for goods and commodities from developing countries.27Member StatesCombined population ofEU Member States490million7Percent of world’spopulationPercent ofglobal GDP30Percent of combinedworldwide OfficialDevelopment Assistance55
4Regional Integration (Theory) From Free Trade Area: the elimination of tariffsfor goods and services within region(NAFTA) via Customs Union: an FTA with a commonexternal tariff (EEC) to Single Market/Economic Union:eliminating all tariff and non-tariff barriersFreedom of goods, services, labor and capital“Harmonization” of regulationMay also have common currency (euro)
5European Commission President José Manuel Barroso EU InstitutionsEuropean Commission27 Commissioners, representing the European perspective, each responsible for a specific policy area.EU’s executive branch proposes legislation, manages Union’s day-to-day business and budget, and enforces rules.Negotiates trade agreements and manages Europe’s multilateral development cooperation.Council of the European UnionEU’s main decision-making body, comprised of ministers of 27 Member States, representing Member State’s point of view.Decides on foreign policy issues.Council presidency rotates among Member States every six months (changes soon: EU President)European Commission President José Manuel Barroso
6European Parliament in session EU InstitutionsEuropean ParliamentVoice of European citizens – members elected across EU for 5-year terms.With the Council, passes EU laws and adopts EU budgets (‘co-decision’ rights)Approves/Supervises EU Commissioners.European Court of JusticeHighest EU judicial authorityEnsures all EU laws are interpreted and applied correctly and uniformly.Can act as an independent policy maker/over-rules national law, only in (econ, agricultural) matters covered by the Treaties.European Parliament in session
7European Coal and Steel Community 1951:European Coal and Steel CommunityIn the aftermath of World War II, the aim was to secure peace among Europe’s victorious and vanquished nations and bring them together as equals, cooperating within shared institutions.Based on a plan by French Foreign Minister Robert Schuman.Six founding countries – Belgium, the Federal Republic of Germany, France, Italy, Luxembourg and the Netherlands – signed a treaty to run heavy industries (coal and steel) under common management.Jean Monnet and other leaders withthe first “European” ingot of steel
81957:Treaty of RomeThe six founding countries expanded cooperation to other economic sectors, creating the European Economic Community (EEC) – or “common market.”As a result, people, goods, services, and capital today move freely across the Union.Britain left out, formed EFTA instead1960s: Common Agricultural PolicySigning of the Treaty of Rome
12Single European Act & Maastricht Treaty Jacques Delors and the SEA (1986)Single Market by 1992Qualified Majority Voting (QMV)End of Cold War ( ) and Maastricht Treaty (1991/3)Single currency in 3 steps by 1999:CFSP (Common Foreign & Security Policy)Three pillar structure: Eur econ. Policies, CFSP and Justice & Home Affairs
16Candidate Countries Potential CroatiaFormer Yugoslav Republic of MacedoniaTurkeyPotentialAlbaniaBosnia & HerzegovinaMontenegroSerbia including Kosovo under UN Security Council Resolution 1244
17The €uroWith German reunification, EMU presents opportunity to tie a unified Germany to the EU by creating common ‘bandwidth’ of currency fluctuations & deciding which countries can take part (by 1998) (Stage 1)Jan 1, 1999 =launch of currency at $ and ECB creation (Stage 2)Final money intro/circulation on Jan 1, 2002 (Stage 3)Reduces cost of business/transaction costs, reduces exchange rate risks, but also reduces national monetary flexibilityThe euro is as stable as the best-performing currencies previously used in the euro area countries (currently: too high, making EU products expensive as compared to US)€
19The euro was introduced in 1999 European Central BankThe European Central Bank (ECB) is the central bank for Europe's single currency, the euro.The ECB’s main task is to maintain the euro's purchasing power and thus price stability in the euro area.The euro area comprises currently the 16 EU countries that have introduced the euro since 1999.The ECB operates independently from Member State governments (supervised by ECB board members from nat. central banks)The euro was introduced in 1999
20Addressing Global Challenges TradeEuropean Commission represents all 27 EU Member States before the World Trade Organization.Supports free trade and open markets, within the rules-based structure of the WTO, to promote growth and jobs in both industrialized and developing countries.The world's most open market for products and commodities from developing countries – 40% of all EU imports are from developing countries.
21A Dynamic Transatlantic Economy EU and U.S. together account for 40% of total global trade (more than $1.5 billion in transatlantic trade every day).The $3 trillion EU-U.S. transatlantic economy employs 14 million workers on both sides of the Atlantic.In 2005, Europe accounted for roughly two-thirds of total global investment flows into the U.S. – by far the most significant source of foreign investment in the U.S. economy.