1. European
Union
Submitted By:-
Avishek Singh
113
Pratik Akerkar
2. Agenda
Brief Introduction
History
Member States
Political and Judicial structure
Economy
Shortfalls
MNE Implications
EU and India
3. Introduction
The EU is an unique economic and political partnership between 27 European
countries that has delivered half a century of peace, stability, and prosperity,
helped raise living standards, and is progressively building a single Europe-
wide market in which people, goods, services, and capital move among
Member States as freely as within one country.
EU was initially created to foster economic cooperation and thus avoid conflict.
But over the years it has evolved into an organisation spanning all areas,
from development aid to environmental policy.
EU has its own flag, currency i.e. EURO and anthem ―Ode to joy‖.
Motto: United in diversity
The EU is larger in area than all but six countries with an area of 4,423,147
sq.kms.
The EU has the world's second-longest coastline, after Canada, which is
65,993 km.
No of official languages in EU – 23 ; German the most widely spoken mother
tongue in EU.
4. History
1950s- Beginning of cooperation
9th May 1950 - Robert Schuman, French minister of
Foreign Affairs, proposed that France and Federal
Republic of Germany pool their coal and steel
resources.
18th April 1951- Paris treaty signed between the six
countries Belgium, France, Federal Republic of
Germany, Italy, Luxembourg & Netherlands
establishing the European Coal and Steel
Community(ECSC) which came into force on 23rd July
1952.
25th March 1957- Rome treaties were signed between
the six countries forming the European Economic
Community (EEC) and the European Atomic Energy
community(Euratom) which comes into force on 1st
January 1958.
5. History
1960s- Period of economic growth
4th January 1960- The Stockholm Convention
establishes the European Free Trade Association
(EFTA), comprising of Austria, Denmark, Norway,
Portugal, Sweden, Switzerland, and UK.
8th April 1965- Merger treaty is formed merging the
executive bodies of the ECSC, EEC and Euratom and
thus creating a single Council and a single
Commission which comes into force on 1st July 1967.
1st July 1968 - Customs duties between the member
states on industrial goods are completely abolished
and a common external tariff is introduced.
6. History
1970s- Growing community
1st January 1973- Denmark, Ireland and the
United Kingdom join the European Communities,
bringing their membership to nine.
10th December 1974- At the Paris Summit, the
political leaders of the nine member states decide
to meet three times a year as the European
Council. They also give the go-ahead for direct
elections to the European Parliament.
7th-10th June 1979 - The first direct elections to
the 410-seat European Parliament.
7. History
1980s- The changing face of Europe - Fall of
Berlin wall
1st January 1981- Greece joins the European
Communities, bringing the number of members to 10.
14th June 1985 - The Schengen Agreement is signed
with the aim of abolishing checks at the borders
between member countries of the European
Communities.
1st January 1986 - Spain and Portugal join the
European Communities, bringing their membership to
12.
28th February 1986 - The Single European Act is
signed in Luxembourg and The Hague. It comes into
force on 1 July 1987.
9th November 1989 – Fall of Berlin wall.
8. History
1990s- Europe without frontiers
7th February 1992- The Maastricht European Council
signed a Treaty on European Union, laying the foundation
for a common foreign and security policy, closer
cooperation on justice and home affairs and the creation of
an economic and monetary union, including a single
currency. It comes into force on 1st November 1993.
1st January 1993 – Single European Market comes into
force.
1st January 1995 - Austria, Finland and Sweden join the
EU, bringing its membership to 15.
1st January 1999 – 11 EU countries adopt the euro. The
European Central Bank takes on responsibility for
monetary policy. The 11 countries are joined by Greece in
2001.
9. History
2000s- Decade of further expansion
26th February 2001- Signing of the Treaty of Nice. It comes
into force on 1 February 2003.
1st January 2002 – Euro notes and coins are introduced in
the 12 euro-area countries.
1st May 2004 - Cyprus, the Czech Republic, Estonia,
Hungary, Latvia, Lithuania, Malta, Poland, Slovakia and
Slovenia join the European Union, bringing its membership
to 25.
1st January 2007 – Bulgaria and Romania join the
European Union, bringing its membership to 27. Slovenia
adopts the euro.
13th December 2007 - The 27 EU countries sign the Treaty
of Lisbon, which amends the previous Treaties.
1st January 2008 - Cyprus and Malta adopt the euro.
1st January 2011 - Estonia adopts the euro as its currency,
becoming the 17th member of the euro area.
11. Member States
The European Union is composed of 27 sovereign
Member States: Austria, Belgium, Bulgaria,
Cyprus, the Czech Republic, Denmark, Estonia,
Finland, France, Germany, Greece, Hungary,
Ireland, Italy, Latvia, Lithuania, Luxembourg,
Malta, the Netherlands, Poland, Portugal,
Romania, Slovakia, Slovenia, Spain, Sweden, and
the United Kingdom.
Croatia is an acceding country and may become
the member on 1st July,2013.
There are four candidate countries: Iceland,
Macedonia, Montenegro and Turkey
The ‗Copenhagen criteria‘ for EU membership
stability of institutions guaranteeing
democracy, the rule of law, human rights and
respect for and protection of minorities;
the existence of a functioning market
economy as well as the capacity to cope with
competitive pressure and market forces
within the Union;
the ability to take on the obligations of
membership including adherence to the aims
of political, economic & monetary union.
12. Benefits of Joining EU
Political
United Europe– minimizes the risk of war
Economical
Free transfer of goods, services, people & capital
Gives smaller economies the ability to negotiate with
much bigger economies like US & China on an equal
footing
Social
Higher quality of life w.r.t. safety of citizens, job,
health, education, & information.
Environmental
Transfer of eco-friendly technologies
13. Political Structure
The Principle of subsidiarity
EU Law divided into primary & secondary
legislation
The treaties (primary legislation) are the basis or
ground rules for all EU action
Secondary legislation – which includes regulations,
directives and decisions – are derived from the
principles and objectives set out in the treaties
Laws passed in two forms:
Laws which do not require national implementation
measures
Laws which specifically require national
implementation measures
14. Bicameral legislative branch
of the European Union
Ordinary Legislative Procedure (previously called ‗Co-
decision procedure‘)
European Parliament ( abbreviated as Europarl or EP)
736(soon to be 751)
directly elected every five years by universal suffrage since
1979
shares equal legislative and budgetary powers with the
Council
The Council of European Union (also called the
"Council" and sometimes referred to as the "Council of
Ministers")
Composed of twenty-seven national ministers (one per state)
Exact membership depends upon the topic
Has legislative initiative in limited sensitive areas
holds, jointly with the Parliament, the budgetary power of the
Union
15. Executive Branch
European Council
mentioned by the Lisbon Treaty as a body which "shall provide the Union with
the necessary impetus for its development"
comprises the heads of state or government of the EU member states, along
with the President of the European Commission and the President of the
European Council
Meetings are chaired by its President and take place at least twice every six
months
Has no formal powers; it gathers the executive power of the member states
European Commission
body is responsible for proposing legislation, implementing decisions, upholding
the Union's treaties and the general day-to-day running of the Union
operates as a cabinet government, with 27 members of the Commission (one
from each member state)
Members proposed by the member states, however they are bound to act
independently
develop medium-term strategies; draft legislation and arbitrate in the legislative
process; represent the EU in trade negotiations; make rules and regulations;
16.
17. Judiciary
Court of Justice of the European Union
The Court of Justice
primarily deals with cases taken by member states, the
institutions, and cases referred to it by the courts of
member states
The General Court
mainly deals with cases taken by individuals and
companies directly before the EU's courts
. Decisions from the General Court can be appealed to the
Court of Justice but only on a point of law
The European Union Civil Service Tribunal
adjudicates in disputes between the European Union and
its civil service
18. Economy– Overview
GDP (figures for 2010)
in PPP – $14.82 trillion
real growth rate – 1.8%
per capita – $ 32,000
Sector wise composition
Agriculture – 1.8 %
Industry – 25 %
Services – 73.2 %
GINI Index for 2009 – 30.4
HDI (2010) – 0.835
External Debt – $16.08 trillion (as on June 30, 2011)
19. Economy
26% share of the global GDP in 2010
161 corporations out of the Fortune Global 500
in 2010 headquartered in EU
Two of the original core objectives of the EEC
Development of single market and a customs
union between its member states
Ensure undistorted competition within the single
market
20. EU27 Foreign Direct
Investment
Net Outflows– Decreased from 281to107
billion euro in 2010
Net Inflows– Decreased from 216 to 54 billion
euro in 2010
USA & Switzerland two largest investors into
EU27
EU is the single largest investor in US
accounting for almost 75% of the total FDI
flowing into the US
Belgium largest net investor
United Kingdom largest net recipient
21. Monetary Union
Maastricht Treaty in 1993 made the member
states legally bound to start the monetary
union by 1999
Euro duly launched on Jan 1, 1999 by 11 of
the 15 member states – remained an
accounting currency
Jan 1, 2002– Euro notes & coins issued;
phasing out of national currencies
Euro is the sole currency of 17 EU member
states today
22. Benefits of Euro
Remove the cost of exchanging currency
Differences in prices – in particular in price
levels – should decrease because of the 'law
of one price‗
Many national and corporate bonds
denominated in euro are significantly more
liquid and have lower interest rates than was
historically the case when denominated in
national currencies
Strong effect on European financial integration
23.
24. Shortfalls
The globalization of finance
Rising government debt levels
Trade imbalances
Monetary policy inflexibility
Loss of confidence
27. Effect of a possible currency
conversion on MNEs
Trigger contractually agreed mechanisms for termination or
adaptation of the contract
Exchange Rate risk for international MNEs (EURIBOR or EONIA)
Dependency on a single contractual partner
Following items to be considered in new contracts:
Terms of the contract
Liquidity and insolvency
Temporary government regulations
Specifics in the case of company purchases
Restrictions of the free movement of goods and capital
28. EU Cultural Initiatives
European Capitals of Culture, 2011 - Turku and Tallinn
EU‘s Culture programme (2007-2013)
Budget of €400
3 objectives:
Promoting cross border mobility
Encouraging transnational circulation of cultural & artistic output
Fostering intercultural cultural dialogue
3 stands:
Cultural actions
European level cultural bodies
Analysis and dissemination of activities
European Cultural Month event, Media Plus programme,
Orchestras such as the European Union Youth Orchestra
European Capital of Culture programme
The Treaty of Lisbon, International Olympic Committee and FIFA
EU Football 4 Peace project - Israeli, Jordanian, Irish and British football
32. Rankings of the
EU27 in the
Global
Competitiveness
Index 2010–11
- The European Union has
proposed a new strategy—
Europe 2020—for smart,
sustainable, and inclusive growth
- Consists of consolidating public
finances while promoting
economic integration, investing in
pan-European energy and
transport infrastructure, and
developing further information and
communication technologies
-Emphasis on upgrading skills
and promoting innovation
33. Rankings of the EU27 in the
Global
Competitiveness Index 2010–
Basic requirement
11 Institutions
Infrastructure
Macroeconomic Environment
Health and Primary Education
Efficiency enhancer
Higher education and Training
Goods Market Efficiency
Labor market Efficiency
Financial market Efficiency
Technological Readiness
Market Size
Innovation and sophistication factor
Business sophistication
Innovation
34. EU and India
India – one of the fastest growing economies in the
world, with a market potential of more than 1 million
people
Trade in goods
EU goods exports to India 2010 : €34.7
billion
EU goods imports from India 2010 : €33.2 billion
Trade in services
EU services exports to India 2010 : €9.8 billion
EU services imports from India 2010 : €8.1
billion
Foreign Direct Investment
35. EU and India
2004 – EU Strategic Partner
2005 – EU-India Joint Action Plan
2006 – negotiations for FTA as part of Global
Europe Strategy
2008 – Revised Joint Action Plan
Annual EU-India Summit
10th Dec, 2010 in Brussels
€13.4million allocated through the Trade and
Investment Development Programme (TIDP)
funded from the Country Strategy Paper (CSP)
2002-2006
€470 million allocated for actions on health,
education and the implementation of the Joint
Action Plan through the Country Strategy Paper
