Several correspondents at MyMac.com have referred to the European Union in their blogs and articles, but for many Americans the entire structure remains something of a mystery. To them I say, join the club. Most Europeans don’t fully comprehend the Union and what it is all about, though most Europeans do have very strong opinions about the thing.
So, in the interests of promoting informed discussion, I modestly submit a quick look at the European Union, what it is, how it works, and where it is evolving into.
— History —
The European Union was born quite literally from the ashes of the Second World War. The leaders of France and Germany wanted to ensure that their two countries would be unable to wage war against one another. The means to this end was economic integration, the idea that countries that depend upon one another are unlikely to fight one another. Besides France and West Germany, Belgium, Italy, Luxembourg, and the Netherlands also signed the Treaty of Paris that formed this new association. Initially based around the coal and steel industries, over time it was expanded to cover other industries including manufacturing and agriculture and the association was renamed the European Economic Community, or EEC. From 1973 onwards additional countries joined this economic alliance including the United Kingdom, Spain, and Ireland.
During the 1970s, the EEC was widely known in English-speaking countries as The Common Market, which stressed the notion that it was primarily a trade association concerned with making the exchange of goods and services between member states as easy as possible. Many politicans from the right maintain a desire to see the present European Union work much more along these kinds of lines. Members of the British Conservative Party, for example, espouse this sort of view; Margaret Thatcher is perhaps the best known of these ‘Eurosceptics’. But this isn’t ubiquitous to the right, and the German Kanzlerin (or chancellor), Angela Merkel, though politically right-of-centre, remains a strong advocate of the European Union as a social and political alliance.
In 1967, the EEC assumed the powers of two other pan-European bodies, the European Coal and Steel Community and the European Atomic Energy Community, forming the European Communities, or EC. A key change to the nature of this body came with the Maastricht Treaty of 1991. In essence this added political and social structure to the economic framework, and the EC became the European Union or EU. The EU acquired, for example, the ability to act independently of member states in foreign affairs.
The EU is made up of there key bodies: the European Parliament, the European Commission, and the Council of Ministers. There are additional components to the union, including the European Court of Justice and the European Central Bank. The former can be considered analgous to the Supereme Court in the United States, while the latter administers the common currency, the Euro, so is largely comparable to the US Federal Reserve. However, to keep things simple, let’s concentrate on the these three major bodies.
— The European Parliament —
The European Parliament is essentially the elected legislature. EU citizens (i.e., citizens of member states) vote for Members of the European Parliament (or MEPs) in just the same way as any other they would members of their national assemblies. Indeed, their is no single electoral mechanism, and each member state chooses the system for elections they prefer from a range of options. As with the House of Representatives in the United States, the number of MEPs each member state gets is proportional to their population. Germany, for example, has 99 MEPs, while Luxembourg only gets 6.
No single country has enough MEPs to dominate the European Parliament, and instead the coalitions within the European Parliament are built around political rather than nationalistic lines. Centre right parties, for example, for belong to an umbrella group known as the European People’s Party that includes the German Christian Democrats and the Irish Fine Gael. These coalitions broadly act as political parties, advocating certain sets of values and policies.
These MEPs server 5-year terms, and among their other duties is to approve the EU budget, which obviously gives them a great deal of power. However, within member states, turnout for MEP elections have been notoriously low. The reasons for this are complex, and in part reflect a broad trend of voter apathy throughout much of Europe and North America. But the remoteness of the European Parliament from the member states also makes the MEPs appear remote from the voters’ lives.
— The European Commission —
If the European Parliament is the legislature, then the European Commission is the executive. Commissioners are civil servants appointed by European Council of Ministers and approved by the European Parliament. There are currently 25 commissioners, and each is responsible for certain aspects of EU policy. They also run departments and can be considered analgous to the Cabinet Scretaries appointed by the US President. Much of what the Commission does is concerned with trade, both within the EU and outside. The Commission also ‘enforces’ the treaties signed by member states, having, for example, the ability to extract fines.
The European Commission has attracted a great deal of criticism over the years. Much has centred around corruption and waste. In 1999 the entire Commission resigned following one set of accusations. Another issue is the seeming remoteness of the Commission from the citizens of the member states. Commissioners do not ‘take orders’ from any body directly, either the European Parliament or the countries that appoint them, and in theory they act independently in the interests of EU citizens. But by acting in this way they are vulnerable to accusations of adding to their own power or acting against the particular interests of the countries that appointend them.
— The Council of Ministers —
The Council of Ministers is a legislative body operating in parallel with the European Parliament. The make-up of the council is complex. Depending on what is being discussed, the ‘sub councils’ within the Council of Ministers will contain ministers from each member state with responsibility for that issue. The Agriculture and Fisheries will be made up of the ministers for agriculture while the General Affairs and External Relations council will comprise the foreign affairs ministers. Presidency of the Council rotates between member states every six months; as of January 2006, the presidency is held by Austria.
The prime criticism of the Council of Ministers is that it is a secretive body that meets in closed session away from journalists and elected politicians such as MEPs. On the one hand, this can allow broadly beneficial deals to be cut without individual states losing face either to their own countrymen or special interest groups. To give a hypothetical example, the French representitive to the Council of Ministers would be able to make a deal on agriculture that he could not possibly make in public because of the strength of the farmer’s lobby in France. The flip side to this is that secret deals need not be beneficial, and without scrutiny or accountability, a key element of democracy is lost.
— The Euro —
The Euro is the single currency of the European Union, but it is not the only currency. Some member states continue to use their own currency, as with Britain and the Pound Sterling. Countries that do use the Euro sign up to certain fiscal policies, most notably concerning inflation, and the Euro therefore binds European economies that use it very tightly together. The advantages of the Euro are that it allows free trade and investment between member states without the hassle of fluctuating currency exchange rates. For example, a German factory can buy French steel at a fixed rate without worrying about exchange rate changes. Having a very broad ecomomic base, the Euro also attracts investor confidence, making it a ‘hard currency’ comparable to the US Dollar. For EU citizens, the biggest benefit is the ease with which they can travel and make purchases abroad without bank fees or currency exchange commission charges.
The downsides to the Euro are multiple and of varying significance depending on the country concerned. Some countries are hostile to the Euro primarily on emotional grounds: for many Britons, the Pound Sterling is a link with history and something few of them are eager to give up. But other countries are unwilling to give up mechanisms such as the ability to set interest rates, a key tool for managing economies.
— Euroscepticism —
A major trend in European politics has been Euroscepticism, in short, the belief that the European Union is developing in a way that weakens the authority of member states, reduces the influence of citizens over their government, and gives major powers to unelected bodies like the European Commission. Eurosceptics fear that the EU is tending towards a federal structure similar to that of the United States, with member states retaining only moderate powers compared with those of the EU.
Eurosceptics vary from wanting to deconstruct the European Union completely to merely wanting to roll back the social and political legislation and return it to a broadly economic body similar to the North American Free Trade Association, NAFTA. Eurosceptics come from both the left and right of the political spectrum, though as a very general rule there are more right-wing Eurosceptics than left-wing ones.
Euroscepticism is at the heart of the ‘unelectability’ of the British Conservative Party. After almost two decades of government led by Margaret Thatcher and John Major, the Conservatives have been out of power for almost ten years and show little sign of closing the gap between themselves and the left-of-centre Labour Party, led by Tony Blair. During their last few years in power, the Conservatives essentially split into two factions, the larger one Eurosceptic, but a sizeable minority being pro-European. After their defeat in 1997, these two factions shifted from mere opposition to all out war.
— The Future —
The European Union is an interesting entity. The CIA Factbook (see the link below) sums it up nicely: “Although the EU is not a federation in the strict sense, it is far more than a free-trade association such as ASEAN, NAFTA, or Mercosur, and it has many of the attributes associated with independent nations”. While the member states within the EU continue to act as free and sovereign nations, they have uniquely handed across powers to a body that they run jointly.
As a single entity, the EU has a Gross Domestic Product about the same as that of the United States, $11.65 trillion versus $11.75 trillion. The overall population of the EU is greater, around 500 million versus 300 million, and the GDP per capita is therefore somewhat less. Overall economic growth is also lower, 2.4% versus 4.4%, and unemployment is higher, 9.5% versus 5.5%. On the other hand, inflation is lower, 2.1% versus 2.5%, and imports and exports are more or less balanced, whereas the US imports almost twice as much as it exports. (These statistics are taken from the CIA Factbook, see the links below.)
However, this has not all happened smoothly, and there continue to be major economic and social issues. While the Euro itself has been a success, several of the countries using it have flouted the fiscal rules on which it is based, not sufficiently to harm investor confidence, but certainly enough to draw attention to the relatively loose mechanism upon which the Euro is based. There remain vast differences in the flow of cash between member states. Germany, for example, puts into the EU 8.5 billion Euros more than it takes out, whereas Spain gets out about 8 billion Euros more than it puts in. Broadly speaking, there is a flow of cash from the Northen and Nordic countries towards the Southern and Eastern ones, and this trend is likely to grow as additonal former-Eastern Bloc countries join the EU.
Agriculture and fisheries remain huge issues, from both economic and environmental perspectives. Agricultural subsidies in the European Union work much like those in the United States with which they are comprable in scale. Intended to maintain farming communities and food production self-sufficiency, these subsidies account for about a third of the EU’s budget. France has historically been far and away the biggest beneficiary. There are two problems here. Firstly, the newer member states, like Hungary and Poland, are expecting subsidies for their agricultural sectors, which largely lack the investment and sophistication of agriculture in northern Europe or the United States. Moreover, farmers in developing countries in Africa and Asia find it extremely difficult to export food to the EU (as well as the United States) because they cannot compete on price with subsidised farmers.
The European fishing industry in many sectors is on the verge of collapse after years of intensive harvesting by some of the most sophisticated fishing boats on the seas. The problem here is overfishing and the inability of governments to set (or enforce) quotas that would actually allow fish stocks to recover. While fisheries scientists agree that fisheries can only be managed at an international level, politicians have so far not found a way to reduce the size of the fishing fleets, realisically the only way to secure fish stocks over the long term.
Criticism of the EU within Europe has centred on its secrecy, the remoteness of those who run it from those they work for, and the relative shift of power away from member states towards the EU executive and legislature. Critics outside the EU, most notably conservatives in the United States, see it as a largely left-wing body setting itself up as an ‘alternative’ to America in global politics. Certainly, George W Bush has spent political capital on gaining the favour of smaller European states at the expense of the traditional powers like France and Germany. This antipathy has been enthusiastically returned by many European politicans.
Ultimately, the EU will stand or fall on its ability to deliver a democratic, economically stable mechanism that allows the European nations to work together. Precisely how this will be done remains to be seen.
http://en.wikipedia.org/wiki/EU
http://news.bbc.co.uk/1/hi/world/europe/country_profiles/3498746.stm
http://news.bbc.co.uk/1/shared/spl/hi/europe/04/money/html/who_pays_what.stm
http://news.bbc.co.uk/1/hi/world/europe/1717192.stm
http://www.cia.gov/cia/publications/factbook/geos/ee.html
http://www.cia.gov/cia/publications/factbook/geos/us.html
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