Presentation of the European Union from the Economic Integration view. Explain the different stages of the European Economic Integration.

1. Isis Quinones 2009535001 The European Union (EU) Isis Quinones

2. Table of Contents Introduction: Let’s go to the essentials of EU. The European Union Conclusions: The EU Future History of the EU The Microeconomics behind the European Union 5 4 3 2 1

3. REFERENCES Wilem Molle (2006). The Economics of European Integration: Theory, Practice, Policy, London: Ashgate. John Gllingham (2003). European Integration. 1950-2003 Superstate or New Market Economy, Cambridge University Press.

5. Isis Quinones 2009535001 The European Union (EU) HISTORY OF THE EU

6. Isis Quinones 2009535001 1815-1870

14. Founders New ideas for lasting peace and prosperity… Konrad Adenauer Robert Schuman Winston Churchill Alcide De Gasperi Jean Monnet Founders Founders

15. History of EU On the 9th of May 1950 , Robert Schuman presented his proposal on the creation of an organized Europe, indispensable to the maintenance of peaceful relations. This proposal, known as the "Schuman declaration", is considered to be the beginning of the creation of what is now the EU. Today, the 9th of May has become a European symbol (Europe Day).

16. 1952 The European Steel and Coal Community 1958 The treaties of Rome: The European Economic Community The European Atomic Energy Community (EURATOM) 1987 The European Single Act: the Single Market 1993 Treaty of European Union – Maastricht 1999 Treaty of Amsterdam 2003 Treaty of Nice

17. European Coal and Steel Community ( ECSC ) History of EU 18 April 1951 Based on the Schuman plan , six countries sign a treaty to run their heavy industries under a common management. In this way, none can on its own make the weapons of war to turn against the other, as in the past. The six are Germany, France, Italy, the Netherlands, Belgium and Luxembourg.

20. 1952 The European Steel and Coal Community 1958 The treaties of Rome: The European Economic Community The European Atomic Energy Community (EURATOM) 1987 The European Single Act: the Single Market 1993 Treaty of European Union – Maastricht 1999 Treaty of Amsterdam 2003 Treaty of Nice

21. TREATY OF ROME 25 March 1957 Building on the success of the Coal and Steel Treaty , the six countries expand cooperation to other economic sectors. They sign the TREATY OF ROME , creating the European Economic Community (EEC), or ‘ common market ’. The idea is for people, goods, capital and services to move freely across borders.

22. COMMON AGRICULTURAL POLICY 30 July 1962 The EEC starts its ‘ COMMON AGRICULTURAL POLICY ’ giving the countries joint control over food production. The EEC grows enough food for its needs and farmers earn well. The unwanted side-effect is overproduction with mountains of surplus produce. Since the 1990s, priorities have been to cut surpluses and raise food quality

23. 1 July 1968 The six remove customs duties on goods imported from each other, allowing free cross-border trade for the first time. They also apply the same duties on their imports from outside countries. The world’s biggest trading group is born . Trade among the six and between the EEC and the rest of the world grows rapidly. 24 April 1972 The EU’s first plan for a single currency dates from 1970. To maintain monetary stability, EU members decide to allow their currencies to fluctuate against each other only within narrow limits. This exchange rate mechanism (ERM), created in 1972 through the European Monetary System the, is a first step towards the introduction of the euro, 30 years later. 1 January 1973 The six become nine when Denmark, Ireland and the United Kingdom formally enter the EU. 1 January 1981 Membership of the EU reaches double figures when Greece joins.

28. 1 January 1986 Spain and Portugal enter the EU, bringing membership to 12. 17 February 1986 Although customs duties disappeared in 1968, trade is not flowing freely across EU borders.

29. 1952 The European Steel and Coal Community 1958 The treaties of Rome: The European Economic Community The European Atomic Energy Community (EURATOM) 1987 The European Single Act: the Single Market 1993 Treaty of European Union – Maastricht 1999 Treaty of Amsterdam 2003 Treaty of Nice

33. The United States and Globalization: Challenges To Europe Globalization brings ideological, organizational, financial and technological dimensions. The Expansion of World Trade in the 1970s brought: 1- Increase Cross-Border Capital Flows. 2- Advances in micro processing that reduced manufacturing costs, improved design and performance and stimulated product development. 3- Changes in America was the 3 rd ingredient in Globalization! If Europe do not change in combination with the United States it would have to become dependent of United States !TINA ! (There is not Alternative)

35. According to Reagan’s former director of the council of economic advisors, Mr. Martin Feldstein: “ Much of our supply-side economics was a return to basic ideas about creating capacity and removing government impediments to individual initiative that were central in Adam Smith’s Wealth of Nations , and in the writings of the classical economists of the nineteenth century (that) has characterized most economic policy analysis during the past two hundred years”.

37. 1952 The European Steel and Coal Community 1958 The treaties of Rome: The European Economic Community The European Atomic Energy Community (EURATOM) 1987 The European Single Act: the Single Market 1993 Treaty of European Union – Maastricht 1999 Treaty of Amsterdam 2003 Treaty of Nice

39. 1 January 1993 The single market and its four freedoms are established: the free movement of goods, services, people and money is now reality. 1 January 1995 Austria, Finland and Sweden join the EU.

41. 1952 The European Steel and Coal Community 1958 The treaties of Rome: The European Economic Community The European Atomic Energy Community (EURATOM) 1987 The European Single Act: the Single Market 1993 Treaty of European Union – Maastricht 1999 Treaty of Amsterdam 2003 Treaty of Nice

42. Treaty of Amsterdam 2 October 1997 The Treaty of Amsterdam meant a greater emphasis on citizenship and the rights of individuals, an attempt to achieve more democracy in the shape of increased powers for the European Parliament. Entered into force on 1 May 1999 ; it made substantial changes to the Treaty on European Union, which had been signed at Maastricht in 1992.

43. “ Schengen”:  No police or customs checks at borders between most EU countries  Controls strengthened at EU external borders  More cooperation between police from different EU countries  You can buy and bring back any goods for personal use when you travel between EU countries Free to move © Corbis Free to move

44. 1952 The European Steel and Coal Community 1958 The treaties of Rome: The European Economic Community The European Atomic Energy Community (EURATOM) 1987 The European Single Act: the Single Market 1993 Treaty of European Union – Maastricht 1999 Treaty of Amsterdam 2003 Treaty of Nice

46. 13 December 1997 EU leaders agree to start the process of membership negotiations with 10 countries of central and eastern Europe: Bulgaria, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia and Slovenia. 1 January 1999 The euro is introduced in 11 countries (joined by Greece in 2001) for commercial and financial transactions only. Notes and coins will come later. Accomplishing EMU . 1 January 2002 Euro notes and coins arrive. Printing, minting and distributing them in 12 countries is a major logistical operation. At the moment 16 countries use the Euro. Eight countries of central and eastern Europe — the Czech Republic, Estonia, Latvia, Lithuania, Hungary, Poland, Slovenia and Slovakia — join the EU.

47. The euro – a single currency for Europeans EU countries using the euro EU countries not using the euro Can be used everywhere in the euro area  Coins: one side with national symbols, one side common  Notes: no national side The EURO – a single currency for Europeans

49. Treaty Of Lisboan

50. 1952 The European Steel and Coal Community 1958 The treaties of Rome: The European Economic Community The European Atomic Energy Community (EURATOM) 1987 The European Single Act: the Single Market 1993 Treaty of European Union – Maastricht 1999 Treaty of Amsterdam 2003 Treaty of Nice

51. Treaty of Lisbon Is an International agreement that amends the two treaties which comprise the constitutional basis of the EU. Signed on December 2007, and entered into force on December the first of 2009.

52. The Lisbon treaty - taking Europe into the 21st century The Treaty would make the European Union: More efficient Simpler processes, full-time president for the Council, etc. More democratic Stronger role for the European Parliament and national parliaments, "Citizens Initiative", Charter of Fundamental Rights, etc. More transparent Clarifies who does what, greater public access to documents and meetings, etc. More united o n High Representative for Foreign Policy, etc. the world stage More secure New possibilities to fight climate change and terrorism, secure energy supplies, etc. Treaty of Lisbon

53. 1952 The European Steel and Coal Community 1958 The treaties of Rome: The European Economic Community The European Atomic Energy Community (EURATOM) 1987 The European Single Act: the Single Market 1993 Treaty of European Union – Maastricht 1999 Treaty of Amsterdam 2003 Treaty of Nice

54. Isis Quinones 2009535001 What is the EU? What is the Structure?

55. European Union Structure: The European Parliament - Voice of the People Jerzy Buzek, President of of the European Parliament The council of Ministers - Voice of the Member States Herman Van Rompuy, President of the European Council The European Commission - Promoting the Common Interest José Manuel Barroso, President of the European Commission

58. “ Schengen”:  No police or customs checks at borders between most EU countries  Controls strengthened at EU external borders  More cooperation between police from different EU countries  You can buy and bring back any goods for personal use when you travel between EU countries Free to move © Corbis Free to move

59. European Parliament Court of Justice Court of Auditors Economic and Social Committee Committee of the Regions Council of Ministers (Council of the EU) European Commission European Investment Bank European Central Bank Agencies European Council (summit) EU Institutions

60. Citizens, Interest Groups, Experts: Discuss, Consult Commission: Makes Formal Proposal Parliament and Council of Ministers: Decide Jointly Commission and Court of Justice: Monitor Implementation National or Local Authorities: Implement How the EU works?

63. Policy Areas Agriculture Audiovisual and media Budget Research and innovation Competition Consumers Culture Transport Taxation Customs Development and Cooperation Economic and monetary affairs Education, training, youth Employment and social affairs Energy Enlargement Enterprise Environment External relations External trade Fight against fraud Food safety Foreign and security policy Humanitarian aid Human rights Information society Institutional affairs Internal market Justice, freedom and security Maritime affairs and fisheries Public health Regional policy

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68. How rich is the EU compared to the rest of the world? EU China Japan Russia United States EU China Japan Russia United States 12 508 1 326 3 329 468 9819 25 100 4 400 27 800 12 200 38 700 Size of economy: 2008 gross domestic product in billion of euros Wealth per person: 2008 gross domestic product per person How rich is the EU compared to the rest of the world?

70. The budget: Expenditure Cohesion Spending refers to Regions in Disadvantages, small economies.

71. The European flag The European anthem Europe Day, 9 May The motto: United in diversity

72. Isis Quinones 2009535001 The Crisis of the Welfare State and the Challenge of Modernization in 1980s Europe: Country -Cases

73. Shift toward “less state” but also a shift toward a different kind of state . Feeling of different degree of forces. Member states roles : Agent – Excuse (both) introduce hard to impose change. Relationship between the EC and member state vary country to country so they must be study case by case basis. The Crisis of the Welfare State and the Challenge of Modernization in 1980s Europe: Country -Cases

75. Valuable Lessons applicable to Europe could be learned from New Zealand experience: -Imposing open financial markets, formidable disclosure requirements, and formal contractual relations with respect to monetary and fiscal policy, the reforms set constraints that future governments could not easily lift. -Privatization, particularly of telecommunications yielded immediate and unsuspected payoffs. -Fiscal Consolidation took rapid place 9% deficit turned into 10% surplus within 10 years. -Intangibles as: “Credible Commitments” and “transparency” can produce immediate, demonstrable and widely recognize benefits.

76. Denmark Conserves : Two different governments: Social Democratic which gave up and then came the Bourgeois government of Poul Schlulter. -1980s took a no accommodating policy, liberalizing only partially. - Inflation rates to high - Wage bargaining system - Decentralization of government services. -“Austerity” policy winning credibility in the Capital Markets bringing interest down. - Confronted labor directly. - Wages went down, unemployment remained high but declined, and growth resumed. - Deregulation of a Wage bargaining system - Employment raise.

77. Valuable Lessons applicable to Europe could be learned from Denmark experience: -Cut spending as a percentage of GNP. -Directed state enterprises to make profitability their goal, just privatized some of them. -Lifted all restrictions on the movement of capital, including restraints on foreign direct investment. -Centralized Wage Bargaining. -Swedish productivity problem was the extensive tax and benefit wedge, or spread between employer costs and employee wages.

79. Isis Quinones 2009535001 Microeconomics Behind the EU

80. How does the EU affect Economic Well Being? Who Gains? Who Loses? And how do the gains compare to the losses?

81. Price Before Trade Price After Trade A B C D Domestic Quantity Demanded Domestic Quantity Supplied International Trade in France Exporting Quantity of Wines Price of Wines EXPORTS Before Trade After Trade Change Consumer Surplus A+B A - B Producer Surplus C B+C+D +(B+D) Total Surplus A+B+C A+B+C+D + D

82. Price Before Trade Price After Trade A B C D Domestic Quantity Demanded Domestic Quantity Supplied International Trade in France Importing Quantity of Wines Price of Wines IMPORTS Before Trade After Trade Change Consumer Surplus A A+B+D +( B+D) Producer Surplus C+B C -B Total Surplus A+B+C A+B+C+D +D

83. Price without tariff Price with Tariff A C D B Q1S The effects of a Tariff Quantity of Wines Price of Wines Q2S Q2D Q1D F E G tariff Equilibrium without trade Before Tariff After Tariff Change Consumer Surplus A+B+C+D+E+F A+B -(C+DE+F) Producer Surplus G C+G +C Government Revenue 0 E +E Total Surplus A+B+C+D+E+F+G A+B+C+D+E+G -(D+F)

84. Isis Quinones 2009535001 CONCLUSIONS

87. ¿ !Lessons learnt from the European Union !