1. An analysis of the evolution of the EMU and its future

2.  1973 – UK, Demark and Ireland join EC. Norway rejects membership in national referendum. UK referendum I 1975 supports entry 2:1.  1981 – Greece joins EC  1986 – Spain and Portugal join EC  1987 – European Single Act signed  1988 – Regional Aid doubled. The expansion of structural funds to poorer regions and countries  1993 – Maastricht Treaty ratified  1995 – Borders come down as result of Schengen Agreement. UK does not join and Norway rejects membership of EU in second referendum  1998 – Talks start for major enlargement

3.  Croatia – quite soon  Bosnia – Herzegovina – early next decade  Macedonia – 2012 or possibly before  Montenegro – again within the next 4 to 6 years  Serbia – probably early next decade, depends on both economic and political issues  Albania – 2015?  Turkey – 2015?

4.  Europe continues to enjoy economic growth, solidarity, the spread of democratic forces in countries once under dictatorship  Also – job creation, safer products, lower prices, greater choice in such sectors as telecommunications, banking and travel  The EU is NOT just about wealth it has values – peace, prosperity, freedom and social justice

5.  Stabilisation and Association Agreements  Work towards acquis – the 35 chapters of The EU  Regular progress reports  Inflows of funds – since 1991 Western Balkans have received Euro 20 billion in assistance. Funds now simplified into Instrument of Pre-Accession Assistance (IPA)  The EU considers itself to be dynamic and as David Milliband said in Bruges last year it should expand further

6.  Though EU = 7% of world population it = 20% of world trade  Risk is a major deciding factor of the way in which a is treated - public health, the environment and consumer protection dictate the rules that govern its trade, so chemicals are more closely regulated than pasta  The high risk products are more harmonised than the low risk – countries can restrict trade under certain situations e.g. British beef  Approximately 50% of all intra trade is covered by harmonised legislation

7.  Has the internal market had benefits – 2.5m - 3.5m extra jobs, 900 billion Euros of wealth, which is equivalent to 6000 Euros per family.  This should increase with the introduction of services agreement  Next stage is internal market for capital – make funds is available as in US?

8.  How have the ‘new’ members faired since 2004 - 2010 and the largest single enlargement since the founding of the EU?  How have the ‘older’ members adjusted since the arrival of the new members?  Will deeper or wider integration be the way forward?

9.  New members trade with other EU countries  Czech Rep = 79%  Estonia = 73%  Cyprus = 60%  Latvia = 77%  Lithuania = 58%  Hungary = 72%  Malta = 60%  Poland = 75%  Slovenia = 72%  Slovakia = 80%  UK = 57%

10.  Belgium 75%  Denmark 72%  Germany 85% (highest)  France 70%  Ireland 65%  Italy 62%  Spain 72%  Luxembourg 59%  Netherlands 68%  Austria 78%  Portugal 80%  Finland 54%  Sweden 65%

11. Euro billion China Export 483 Imports 436 EU Exports 883 Imports 941 Japan Exports 499 Imports 405 US Exports 765 Imports 1380

12.  Bulgaria 5.5 Bulgaria  Cyprus 3.7 Cyprus  Czech Republic 6.1 Czech Republic  Estonia 9.8 Estonia  Hungary 4.1 Hungary  Latvia 10.2 Latvia  Lithuania 7.6 Lithuania  Malta 2.5 Malta  Poland 3.4 Poland  Romania 8.5 Romania  Slovakia 6.1 Slovakia  Slovenia4.0 Slovenia

13.  Austria 2.0 Austria  Belgium 1.5 Belgium  Denmark 3.2 Denmark  Finland 2.9 Finland  France 1.2 France  Germany 0.9 Germany  Greece 3.7 Greece  Republic of Ireland 5.5 Republic of Ireland  Italy 0.0 Italy  Luxembourg 4.0Luxembourg  Netherlands 1.5 Netherlands  Portugal 0.4 Portugal  Spain 3.4 Spain  Sweden 2.7Sweden  United Kingdom 2.25 United Kingdom

14.  Does the centralised state lose authority as more decisions are taken in Brussels? If so, can European Social Democracy adapt or will less government intervention styled politics emerge?  How have the once members of the Warsaw Pact adapted? Were the wrongs of Yalta put right?  Are some of the new members more Atlanticist in approach and so easier for UK to get on with?

15.  The US likes EU expansion – why?  Does the introduction of new laws mean a real change in attitude – e.g. gypsies?  Will there actually be a unified foreign and defence policy – if there had been might US have stalled with invasion of Iraq?  What of the relations with Russia post enlargement?

16.  Kaliningrad  Shift in Russian focus to Asia and China and EU- Russia relations are now at best ‘cool’  Flex of economic might in recent energy problems  However, it’s not all good news for US – look at problems of basing missiles in Czech Republic and Poland  Will the problems of recent expansion cause Turkish entry to be delayed – will social and cultural compatibility be added to the list of human rights, power of military etc?  Is it best to resolve these issues at national or Pan- European level?

17.  500 million and set to rise  By global standards – high earners  Standardised tastes  Credit facilities  Few barriers  Trans national networks  Benefits to AD  Benefits to AS

18.  What you must show before entering the Euro Zone   Price stability, measured according to the rate of inflation in the three best performing Member States;  Long-term interest rates close to the rates in the countries with the best inflation results;  An annual budget deficit which does not exceed 3% of gross domestic product (GDP) and total government debt which does not exceed 60% of GDP or which is falling steadily towards that figure;  Stability in the exchange rate of the national currency on exchange markets The exchange-rate mechanism of the European Monetary System requires this stability to be demonstrated and sustained for two years.

19.  Stability and international recognition  Price transparency/comparisons/one catalogue/bank account/potentially lower interest rates – EU wide capital market?  Disadvantages – we probably know these  Cyprus and Malta to join in 2008  Baltic States moving towards criteria  Possible Hungary and Slovakia  EU thinks all new members in by early next decade – out Denmark(?), Sweden – may be a new referendum and UK

20.  Regional/Cohesion Policies  Converging economies  Economic independence  ECB transparency  Stability of Euro  Foreign Reserve holdings  Will it survive the current crisis?

21.  Taken as a single entity, the European Union has the largest economy in the world, with an estimated nominal GDP of €11.6 ($14.5) trillion in 2006 accounting for 35% of world GDP (the second largest economy is USA, with a GDP of $13.2 trillion).USA

22. It appears that the EU has attained the capacity for higher growth that is historically due to the EU's new member states potential to expand at a higher rate than traditional industrial powers of Europe. Possibility for a twin speed Europe?

23.  Differences between member states are also significant. GDP per capita is often 10% to 25% higher than the EU average in the "older" western member states, but only comprises one-third to two-thirds of the EU average in most eastern member states, as well as in potential membership candidates such as Croatia, the former Yugoslav Republic of Macedonia and Turkey

24.  By comparison, United States GDP per capita is 35% higher than the EU average: Japanese GDP per capita is approximately 15% higher  The EU currently imports 82% of its oil and 57% of its gas, making it the world's leading importer of these fuelsoilgas  So, there is someway to go!

25.  After growing almost 3% as a whole in 2006 the EU economy is predicted to stay robust well into 2008 with average growth over those two years averaging over 2.5% growth. Many economists agree the EU has attained the capacity for higher growth than historically due to the EU's new member states potential to expand at a higher rate than traditional industrial powers of Europe.  But some countries are more poorer – what should be done about this?

26. Three new objectives  Convergence (like old Obj 1: greater scope) RED on MAP  Competitiveness (old Obj 2&3, tie to Lisbon) BLUE ON MAP  Territorial co-operation (former Interreg) (and REC)  A method based on what works: Programming, Partnership and Decentralised management  Trying things out: then main streaming  Loans for the first time in the regulations

28. Making Europe and its regions a more attractive place to invest and work  expand and improve transport infrastructures  improve the environmental contribution to growth and jobs  address the intensive use of traditional energy sources II) Knowledge and innovation for growth  increase and improve investment in RTD  facilitate innovation and promote entrepreneurship  promote the information society for all  improve access to finance

29. III) More and better jobs  attract and retain more people in employment and modernise social protection systems  improve adaptability of workers and enterprises and the flexibility of the labour market  increase investment in human capital through better education and skills  administrative capacity  health and the labour force

31.  Does it work? ◦ across Member States yes ◦ within Member States less  What will enlargement do (Poland 40 million, Spain 40 million) ◦ from 15 to 27 Member States and may be 30 soon ◦ new Member States are much poorer ◦ pressure on budget  Causes friction between member-states ◦ Poor vs. rich ◦ South vs. North ◦ East vs. West

32.  Think the future of UK in the global economy  Changes in P5 membership  Emergence of BRIC countries + Indonesia  Greater integration – probably wider and not deeper  Will UK ever join Euro  How many more members could EU absorb?  Any questions?