European Union Tomas Cahlik European Union Tomas Cahlik

Outline EU Deepening EU Deepening EU Enlargement EU Enlargement Transition in the Central and East European Countries Transition in the Central and East European Countries Market Preserving Federalism-EU-US Market Preserving Federalism-EU-US Common Market Common Market EMU EMU Budget Budget EU Problems EU Problems

Since WWII, two basic processes have been forming Europe: Since WWII, two basic processes have been forming Europe: EU Deepening EU Deepening EU Enlargement EU Enlargement

EU Deepening: EU Deepening: From the Sectoral Integration in the European Coal and Steel Community (ECSC) and Euratom to: From the Sectoral Integration in the European Coal and Steel Community (ECSC) and Euratom to: Free Trade Area Free Trade Area Customs Union Customs Union Common Market (1992 ?) Common Market (1992 ?) Full Economic Intergration Full Economic Intergration (Eurozone 2002 ?) Full Political Integration ? Full Political Integration ?

Introduction EU Enlargement: EU Enlargement: 1957: six founding members: Belgium, France, Germany, Italy, Luxembourg and the Netherlands 1957: six founding members: Belgium, France, Germany, Italy, Luxembourg and the Netherlands 1973: Denmark, Ireland and the United Kingdom 1973: Denmark, Ireland and the United Kingdom 1981: Greece 1981: Greece 1986: Portugal and Spain 1986: Portugal and Spain 1995: Austria, Finland and Sweden 1995: Austria, Finland and Sweden 2004: 8 former socialist countries + Cyprus and Malta 2004: 8 former socialist countries + Cyprus and Malta 2007: Romania, Bulgaria 2007: Romania, Bulgaria Farther countries are on the waiting list Farther countries are on the waiting list

Enlargement In the 1st half of the 90s, EU slowly accepted the idea for the eastern enlargement In the 1st half of the 90s, EU slowly accepted the idea for the eastern enlargement Geo-political costs and benefits Geo-political costs and benefits Economic costs and benefits Economic costs and benefits Normative costs and benefits Normative costs and benefits Enthusiasm for joining the EU was higher in the CEECs in that time Enthusiasm for joining the EU was higher in the CEECs in that time

Enlargement Enlargement Policy since 1990s: Enlargement Policy since 1990s: Copenhagen Criteria – 1993 – for EU accession: Copenhagen Criteria – 1993 – for EU accession: Political Criterion Political Criterion Economic Criterion Economic Criterion Criterion concerning adoption of the Community „acquis“ Criterion concerning adoption of the Community „acquis“

Since 1989, the third process has added: Since 1989, the third process has added: The Transition of Central and East European Countries (CEECc) from totalitarian dictatorships to liberal democracies The Transition of Central and East European Countries (CEECc) from totalitarian dictatorships to liberal democracies

Transition in the CEECs How it started? How it started? The Collapse of the Soviet Union (as a fundamental change in external conditions) The Collapse of the Soviet Union (as a fundamental change in external conditions)+ The Support of Population The Support of Population Opened the Window of Opportunity for The Leading Forces to remove the communist leaders The Leading Forces to remove the communist leaders

Market Preserving Federalism – EU - US

EU Internal Market EU Internal Market Internal Market – the main achievement of the EU Internal Market – the main achievement of the EU Indicator of its importance for the EU: First four of the 31 negotiating chapters in the enlargement negotiations were about 4 basic freedoms on the internal market: Indicator of its importance for the EU: First four of the 31 negotiating chapters in the enlargement negotiations were about 4 basic freedoms on the internal market: Free movement of goods Free movement of goods Free movement of persons Free movement of persons Free movement of services Free movement of services Free movement of capital Free movement of capital

EMU EMU The Eurozone: 16 member states of the EU that have a common currency (the Euro) and a common monetary policy The Eurozone: 16 member states of the EU that have a common currency (the Euro) and a common monetary policy

EMU EMU Maastrich criteria for accesion into the Eurozone: Maastrich criteria for accesion into the Eurozone: Low inflation Low inflation Low interest rate Low interest rate Low public deficit Low public deficit Low public debt Low public debt 2 years membership in the ERM II (practically fixing of the exchange rate of domestic curency to Euro) 2 years membership in the ERM II (practically fixing of the exchange rate of domestic curency to Euro)

EU Budget EU Budget Relatively low in comparison with the USA federal budget Relatively low in comparison with the USA federal budget Multianual financial framework Multianual financial framework Main outlay categories Main outlay categories Sustainable growth Sustainable growth Competitiveness for growth and employment Competitiveness for growth and employment Cohesion for growth and employment Cohesion for growth and employment Preservation and management of natural resources Preservation and management of natural resources Citizenship, freedom, security and justice Citizenship, freedom, security and justice The European Union as a global partner The European Union as a global partner

EU Problems Deficit Problem Deficit Problem Public Debt Problem Public Debt Problem Economic and Political Solutions Economic and Political Solutions

EU Problems Unemployment Unemployment Quality of Public Governance Quality of Public Governance Demographic Change and Sustainability of Public Finances Demographic Change and Sustainability of Public Finances Pension Reform Pension Reform Healthcare reform Healthcare reform Social Policy Efficiency Social Policy Efficiency