In the spring of 1950, Europe was on the edge of purgatory. (Sharma and Bhawna). Five years after the second world war, the old enemies were still a long way from reconciliation: the longing for a sense of stability became overbearing. Thus, the European Union was born (Briney).
Building a community in which a homologous destiny was shared, this new union had become the institutional framework of a united Europe. Securing a lasting peace that would reside in future growth and prosperity, this union has continued the mission of maintaining freedom, communication, and an ease of travel and commerce for its citizens (Barbour). Making their own policies concerning the members’ economies, societies, laws-and to some extent, security-the trade union has also provided aid in the challenges most small nations may endure, such as economic growth or negotiation with improved nations (Wood). The European Union (EU) is a remarkable achievement. It is the result of voluntary economic and political integration between the nation-states of Europe. The EU began with six states, grew to 15 in the 1990s, enlarged to include a further 10 in 2004, and may eventually encompass another five or 10 (Denian). The EU started out as a coal and steel community and has evolved into an economic, social and political union.
European integration has also produced a set of governing institutions at the European level with significant authority over many areas of public policy (Hix). The movement for European integration reemerged in the aftermath of World War II and reached its apogee in 1949 at the Congress of Europe, a gathering of over 600 influential Europeans from sixteen countries, held in The Hague in May 1949 (Denian). Yet the Schuman Declaration of 1950, which gave rise to the European Coal and Steel Community (ECSC), originated not in the ferment of the European movement but in the narrow confines of the French economic planning office, headed by Jean Monnet. It was an imaginative response to the challenge of rapid German economic recovery at a time of worsening East-West conflict, satisfying differing US, French, and German needs and objectives (Hix). For leading French and German politicians at the time, the coalescence of European and national interests made sharing sovereignty irresistible and set in train a lengthy, unpredictable, and intriguing process of economic and political integration (Wilde).
The organization known today as the European Union began in an effort to revitalize a war-torn Europe post World War II. The most immediate need was to repair the nation’ broken economies, hence the initial goals were almost completely economic intent (Wood). In the nearly half-century since it was formed, the EU has gradually triumphed in becoming the dominant world power of Europe, influencing every aspect of business within the member-states (Reference for Business). Establishing a single market trading system with low, or no, taxes and tariffs, the EU has encouraged economic development (Reference for Business).
The most important economic changes in the union have occurred in the last few decades. In 1979, the European Monetary System (EMS) was established to create greater price stability between the currencies of all union members (Reference for Business). Furthermore, the ratification of the Maastricht Treaty in 1992 promoted the union’s current economic policy by creating a enacting a three-stage plan for implementing a single market economy across Europe.
Stage 1 of the plan took effect when the treaty was signed (Reference for Business). It officially recognized that the goal of the European Union was to create an Economic and Monetary Union (EMU) of all member states in which members would strive to cooperate more closely than in the past in managing their economies (Reference for Business).Stage 2 of the Maastricht plan was launched in 1994 with the creation of the European Monetary Institute in Frankfurt, Germany (Reference for Business). This was the central banking institution before the established European Central Bank (ECB). The ECB controls currencies throughout the union. One year after stage 2 was completed, union members agreed that stage 3 would begin on January 1, 1999.
On that day, the union officially began the move towards a single European currency unit, called the euro (Reference for Business). Currency conversion rates in participating member-states were fixed, and a single monetary policy and foreign exchange rate were implemented. A “eurozone” was created that included the following participating countries: Belgium, Germany, Spain, France, Ireland, Italy, Luxembourg, the Netherlands, Austria, Portugal, and Finland; Greece agreed to participate, but did not become an active member until 2001 (Reference for Business). Noticeably absent were the United Kingdom, Denmark, and Sweden. As of 2001, those countries still had not joined the eurozone. Between January 1, 1999 and 2001, countries in the eurozone began the conversion to the single currency (Reference for Business).
The euro was still a non-cash currency during that transition period, but it was used for almost all non-cash transactions, such as bank transfers, credit card payments, and check or money order payments. Dual pricing systems were set up, establishing prices in national currencies and in euro dollars. Changes were made in software, automatic teller machines, vending machines, and other components to prepare for the euro, and consumers were allowed to open euro bank accounts (Reference for Business). By converting to a single currency, union leaders achieved countless benefits: price stability, greater confidence among investors, a simpler single market economy, a reduction in transaction costs due to the absence of currency exchanges, and an integrated banking system. International business and currency transactions also became simpler and more efficient under the euro, with the ultimate goal being a strong and stable Europe that features open markets (Reference for Business). Reflecting a trend towards migration, the EU promised to redefine the meaning of sovereignty in Europe. And by the year 1991, the goals of the EU expanded beyond economic concerns. The Maastricht Treaty created the modern organization, and gave it authority in monetary policy, foreign affairs, national security, transportation, the environment, justice, and tourism (Sharma and Bhawna).
The treaty established the three pillars, or spheres of authority that includes trade and the conversion of the economic and monetary union into a single currency; justice and home affairs, including policy governing asylum, border crossing, immigration, and judicial cooperation on crime and terrorism;common foreign and security policy. The treaty established a EU, with EU citizenship granted to every person who was a citizen of a member-state (Sharma and Bhawna). EU citizenship enabled people to vote and run for office in local and European Parliament elections in the country in which they lived, regardless of their nationality. The treaty also created a central banking system and a common currency (the euro), committed members to implementing common foreign and security policies, and called for greater cooperation on various issues, including the environment, policing, and social policy (EU Business). Bearing in mind the content that has been discussed above, one can see the vast changes the Maastricht Treaty has brought into the scene of European affairs: it further developed on a wide range of internal and external policies (Hix).The union is comprised of several governing bodies that control various parts of the union’s operations.
In addition, each country in the union takes turn acting as chairman, with the position changing hands every six months (The European Union Explained). The European Commission (EC) is perhaps the most important of the governing bodies, for it proposes policies for legislation, besides the national governments of each state. Also, it checks the day-to-day management of the union and ensures that treaties are being carried out respectively(Reference for Business). Once legislation is passed, it is administered by the European Council, which enforces legislation throughout the union and seeks to improve cooperation between governments (Hix). The council is made up of ministers who represent the national governments of all members within the union, with power based on the size of each member nations. Germany, France, Italy, and the UK have 10 votes each on the council; Spain has 8 votes; Belgium, Greece, the Netherlands, and Portugal have 5 each; Austria and Sweden have 4 each; Ireland, Denmark, and Finland have 2 each; and Luxembourg has 1 vote (Reference for Business). Members of the European Parliament are directly elected by the people of each nation, and serve for five-year. While the parliament did gain some legislative power from the Maastricht Treaty, it mainly holds open debates on important issues and oversees the activities of the council (Reference for Business).
Finally, the Court of Justice oversees EU laws, regulations and issues rulings when conflicts arise. All decisions issued by the court, which includes 15 judges and 9 advocates, are binding on member states (Reference for Business). European Union cultural policies aim to address and promote the cultural dimension of European integration through relevant legislation and government funding. These policies support the development of cultural activity, education or research conducted by private companies, and work in the fields of cinema, music and crafts (EU Business). Various programs-such as the European Commission and the Creative Europe Programme-have provided aid in addressing common challenges, such as the impact of the digital shift, changing models of cultural governance, and the need to support the innovation potential of the cultural and creative sectors. However, none of the cultural aid would have existed without the Cohesion Policy, implemented in 2007 (EU Business). This protocol stood behind the hundreds of thousands of projects all over Europe that receive funding from the European Regional Development Fund, the European Social Fund and the Cohesion Fund. EU tourist policy aims to maintain Europe’s standing as a leading destination while maximising the industry’s contribution to growth, employment and promoting cooperation between EU countries, particularly through the exchange of good practice (EU Business).
And since 2007, investments in culture through the Structural Funds-that stem from the Cohesion Policy-have been largely linked with the protection and promotion of cultural heritage, the creation of infrastructure, and boosting tourism (Wilde). The EU has made remarkable strides in its ability to set European monetary policy. Nevertheless, there have been two important issues that have threatened the stability of the EU in recent years: the Brexit crisis and migration from war-torn areas in the Middle East and Africa (Wood). The latest debates over the EU have encompassed the possible removal of England from the union, which would cause potential economic problems: a deep recession, plummeting stock prices and increased unemployment. The proposed Article 50-a clause for exiting-is the attempt London and Brussels will use to divorce the EU without going through Parliament (EU). However, negotiations will be determined by Parliament and 27 members of the EU, not to mention that the House of Lords within British Parliament largely opposed to Brexit. A “Hard” Brexit would allow England to have a complete withdraw from the single market, but keep free-trade deal offering access (EU). German Chancellor Angela Merkel opposes this, warning Britain that they can not pick and choose the best features of the EU, for other nations may be encouraged to leave, all together resulting in more political and economic turmoil (EU).
Migration has long been an issue for the EU as well, with the rising number of refugees seeking asylum in Europe reaching a crisis level in 2015. Most were fleeing war states, especially Syria, Afghanistan, and Eritrea (Wood). The crisis drew attention in April 2015, when five boats carrying almost two thousand migrants to Europe sank in the Mediterranean Sea. The EU has struggled to cope with the crisis, with member-states receiving about 395,000 new asylum applicants during the first half of the year (Wood). In September of 2015, EU interior ministers approved a plan to relocate 120,000 asylum seekers. These migrant quotas quickly became controversial, as the Czech Republic, Hungary, Romania, and Slovakia voted against them (Wood).
In conclusion, the European Union was an effective trade power, able to shape the international economic environment and at the same time possessing the capabilities to successfully argue with its major trade rivals, such as China and the United States (Briney). Moreover, the European Union was able to bring unity over massive regions of the world. Covering all areas of public policy, the EU’s activities covered the economy to foreign affairs and defense (Barbour).