Eu 2 Essay, Research Paper
European Union and its Meaning to the World Trade
ABSTRACT Today, more and more is heard about the subject of European Union and Europe itself. Many things are happening there. Expansion of NATO, war in Bosnia, broken USSR. Basically we can say that economically world is divided into big pieces and those are America, Europe and Asia. Even one would say that question of Europe is not that important in America, this is not true. The world becomes smaller place because of growing technology and communication. If in the past to communicate information from America to Europe took a few weeks now it takes a few seconds. Is extremely important to understand world as a one body with its parts and every continent is one of them. Any political changes in Russia cause movement in the stock market in America. Whole world is waiting for a date when Hong-Kong will become a part of China, and nobody can predict what this is going to cause. Not long time ago everybody though that as soon as this term will come all money will leave Hong-Kong and it actually happened but now somehow money is going back despite all forecasts. This article tells us about European Union and history of Europe itself, since, if one wants to understand the situation he has to look for the roots and historical background. The article shows the meaning of European Union for the world trade. Table of Contest ABSTRACT………………………………………………………………………………… ……..2 I. AN INTRODACTON TO EUROPEAN UNION …………….4 II. HISTORY OF EUROPE……………………………………………………………… …….10 Old Times…………………………………………………………………………. ……..11 Eastern Europe and West…………………………………………………… ………12 The advent of Hitler and its meaning to the Europe……………………………14 Czech and Germany…………………………………………………………….15 III. EUROPEAN COMMUNITY AND BEGINNINGS OF UNION……………………16 The six in 1957……………………………………………………………………………..16 British Problem………………………………………………………… ……..16 European Community in the Mid-1970s………………………………. ……….17 European Union in the 1990s……………………………………………… ………17 IV. CONCLUSION …………18 REFERENCE……………………………………………………………………………………21-23 AN INTRODACTON TO EUROPEAN UNION “What we don’t want to build is a European fortress with closed frontiers. We are supporters of a free world trade” -Helmut Kohl, German chancellor, in a speech during his visit to Mexico City in September of 1996. While the American politicians are still debating about NAFTA, Europeans are steadily moving towards more integration and cooperation with each other. The European countries’ projects of European Political Union (EPU), as well as European Monetary Union (EMU) have been specially designed for that purpose. The main idea of this huge macroeconomics and political move is to obliterate some trade barriers, such as exchange rates and all the fluctuations of the currencies connected with it. In addition to that, it should increase the free flow of labor, goods investments and services into the European market. As a possible outcome of all this super integration “350 million people and a total gross domestic product of more than $ 6 trillion could eventually be brought together,” and thus combined in a powerful alliance ( Bernard, 1993) The history of European Union does not go too far in the past. “The European Union was established on November 1, 1993, when the Treaty on European Union, or Maastricht Treaty, was ratified by the 12 members of the European Community (EC)-Belgium, Denmark, France, Germany, Great Britain, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal, and Spain. Upon ratification of the treaty, the countries of the EC became members of the EU, and the EC became the policy-making body of the EU.”(Encarpa Encyclopedia, 1997) Prior to November 1993, the European Union was called the European Community. “The EC was composed of three originally separate organizations: the European Coal and Steel Community (ECSC), created in 1951; and the European Economic Community (EEC, often referred to as the Common Market) and the European Atomic Energy Community (Euratom), both set up in 1957. The three institutions merged in 1967, creating the EC and establishing headquarters in Brussels, Belgium”( Encarpa Encyclopedia, 1994). During the 1960s, British participation was opposed by French president Charles De Gaulle and others who felt that Britain’s ties to the Commonwealth and its close relationship with the United States would conflict with membership in the community. After de Gaulle’s departure from the scene, Britain did join the EC along with Ireland and Denmark in 1973, increasing the membership to nine nations. Greece became the tenth member in 1981, and the entrance of Spain and Portugal in 1986 raised the total to twelve. On Mar. 29, 1994, agreements were finalized to admit four new members: Austria, Finland, Norway, and Sweden. The target date for formal membership for the four is Jan. 1, 1995, but each is subject to approval by national referendums. Russia signed an agreement with the EU summit meeting in June 1994 to facilitate the flow of trade between that nation and the EU. (Glorier Encyclopedia, 1995) Somewhere at this point an American reader would say: “Why would I want to know anything about it ?” The completion of the European Union can, and most likely will have a far-reaching consequences for the United States. For instance, creation of a strong single currency market could give an advantage to Europe’s trade, and a good bargaining position with the U.S. Besides that the union that produces more than 6 trillion gross domestic product (GDP) is superior to that of any other continent, which makes Europe a very aggressive competitor of the States. Still, “even among the intellectual elite, EMU is more associated with the big bird roaming the Australian outback than with monetary union.” Moreover, the question of world’s peace and security is also at the stake here. “Americans military commitment to Europe is now wobbling. Europe’s military commitment to Europe still barely exist”, and many Europeans leaders are addressing the issue of the strong defense policy in Europe. Some of the EU planners already express clear opinions about restricting NATO (read American) involvement in European defense. The French are especially fond of this idea of having a European army free of American influence, which is exactly why the British and the Americans detest it. However the French may be right, at least to a certain extent. The recent conflict in former Yugoslavia has clearly shown that NATO does not properly serve the function of preserving European community from possible wars within the continent. By the time, when the American troops landed in Bosnia, after prolonged fights among politicians at home about it, many negative things had happened. Turkey and Iran were already sending arms and ammunition to Bosnian Muslims. France and Russia were backing up the Serbs, their traditional allies. Germany actively and openly supported Croats, and their interest in the conflict. Even the Greeks were building up their military presence at the Macedonian border. However the process of integration is not an easy one, and involves a lot of debate between Euro-centrists and Euro-sceptics. And the issues that are being discussed vary from restriction on British beef industry to the problems of European identity card. The Times writes: “The Royal Crest is likely to appear alongside the European Union flag on the government proposed national identity card when its design was recently unveiled.” “Sir Patrick Mayhew, Northern Ireland secretary, opposed moves by Michael Howard, home secretary, to place the Union Jack alongside the EU flag. He told Howard that flags were a “sensitive” issue in Northern Ireland, and his officials warned that Irish Republican Army punishment gangs might beat people who applied for a card bearing the British flag”( Carter, 1996). Sweden was also recently hit by a wave of new Eurosceptisism, especially about Brussels-the capital of European Union. Many Swedish officials see Brussels’s role as a sort of bureaucratic bogey-man. Certain rulings and restrictions about the curative of cucumbers and the size of strawberries have provoked anger, derision and pessimism among the Swedish public. The Netherlands has been under an intensive cross-fire about their drug policy, which is viewed as unacceptable for many European countries. The menu of many coffee shops in Amsterdam offer a great variety of the Dutch pastries and… Dutch cannabis as well. More than half a million people in Holland make use of the ultra liberal policy on soft drugs. Furthermore, the accepted public opinion in the country suggests that this policy has been quite effective. “We have broken the automatic passage from soft drugs to hard drugs”, claims Ton Craner, a drug specialist at the Royal Dutch Health Ministry. But while in the Netherlands drug abuse has declined, in other European countries it has significantly increased. “Paul Masson, the French deputy labels the Netherlands a “narco-state”- that sets a bad example for EU, Jacques Myard, another French National Assembly deputy has even called for severe sanctions against the Dutch.” The German police is not taking any chances, and stops any incoming vehicles from The Netherlands that look suspicious for them. Especially if the travelers from Holland are in the target group-18 to 30 years old, the chances are very high that the police will stop the car and body-search the traveling group” (Craner, 1996). Obviously, this practice does not quite fit into the image and spirit of a New Free Europe, thus the Dutch are afraid that they are being used as a scapegoat by the European Union member countries which are rather reluctant to abolish national border controls. Of course, the European administration in Brussels gets most of the critique about their complicated bureaucratic structure and policies. In fact they even got nicknamed as Eurocrats. Their apparent money squandering regulations and standards are being criticized right and left in Europe. Here is what the respectful-The Sunday Times of London put in their newspapers lately; “Eurocrats get exited over condom tests! Thanks to the bureaucrats of Brussels, the art of blowing up condoms until they burst is being standardized”, writes Richard Woods. The European Union has decided that for the purpose of testing, condoms will be inflated, filled with water, have rulers inserted in them-all for the sake of regulations and standards. And this is only one of the stunning examples of Brussels red tape mentality. “It is disgraceful that taxpayers’ money is used in this way. We could reach a position where the manufacturers of condoms get prosecuted because their users get overexcited,” said Teresa Gorman Euro-sceptic, Tory member of the British parliament. The standard, for instance, explains all the crazy procedures of testing, “…the condom must be inflated until it bursts and the volume and of air at bursting must be recorded. The test must be carried out in conditions of 25C( about 76F ) and 55% humidity.” T. Gorman further added, “This strikes me as jobs for the boys. There is little control over what is going on over in Brussels.” The English version of this regulation runs about 50 pages, and includes-graphs, tables, diagrams, appendices, everything but wisdom and a clear mind of the one who composed it.This standard, which by the way came into force in August of 1996, is one of the toughest in the world. “So hopefully the citizens of The United States of Europe, knowing their condoms have passed such rigorous testing, may sleep easier-or not, depending on how much they use them” (Gorman, 1996). But despite of all the negativism and critique, European Economic Union promises a great future for the European community. The present day prosperity and stability of Western Europe owes something to an advance and rapid integration of its divisions of banking, labor, free trade and competition. Moreover, it is becoming more and more difficult for the Old World to compete with extremely aggressive emerging markets of the world, especially Asian markets. But the situation would be even worse without the European Union. Thus the day of January 1st 1999, which is the official date for introducing the Euro currency and other agreements, is anxiously awaited. Therefore the preparations for one of the greatest days in European history are being pushed forward energetically and optimistically. It is expected that six to ten countries will become the first member states in the year of 1999 HISTORY OF EUROPE The history of Europe is probably as old as the history of the world. If one wants to talk about the history of Europe he would have to go to the Roman Empire and before that time. But those times are not so important for economic Europe and our subject. Before the Roman Empire east used to be the most important part of the world, old Greeks, Egyptians and other old countries. At that time Europe was not a center of the world. Old Times In 753 BC Rome was founded at the Tiber River and it starts the period of the Great Roman Empire. After a period of civil wars and strife, Rome was transformed from a republic to an empire under Emperor Augustus around the beginning of the Christian era. During the following 200 years the level of prosperity in the Mediterranean reached a high point that in many ways was not equaled again for a millennium and a half. Then comes Christian Era followed by Great Migrations. By AD 150 migrations and consequent dislocations of peoples again intensified, threatening the imperial borders. Emperor Marcus Aureoles successfully battled the Marcomanni and Quadi, as well as the non-Germanic Iazyges, and it is indicative of the period that he spent most of his reign fighting invading tribes. By the beginning of the 3rd century AD the Alamanni had penetrated to the northern Roman frontier, and in the east the Goths began their infiltration of the Balkan Peninsula. After their defeat by imperial troops, the Goths were made mercenaries of Rome. (Encarta, 1994) At this point appears the restructure of future different European countries. Europe has long been a center of great cultural and economic achievement. The ancient Greeks and Romans produced major civilizations, famous for their contributions to philosophy, literature, fine art, and government. The Renaissance, which began in the 14th century, was a period of great accomplishment for European artists and architects, and the age of exploration, beginning in the 15th century, included voyages to the far corners of the world by European navigators. European nations, particularly Spain, Portugal, France, and Great Britain, built large colonial empires, with vast holdings in Africa, the Americas, and Asia. In the 18th century modern forms of industry began to be developed. In the 20th century much of Europe was ravaged by the two world wars. After World War II ended in 1945, the continent was divided into two major political and economic blocs-Communist nations in Eastern Europe and non-Communist countries in Western Europe. Between 1989 and 1991, however, the Eastern bloc broke up. Communist regimes surrendered power in most Eastern European countries. East and West Germany were unified. The Soviet Communist party collapsed, multilateral military and economic ties between Eastern Europe and the Union of Soviet Socialist Republics (USSR) were severed, and the USSR itself ceased to exist. (Encarta, 1997). Eastern Europe and West Europe has always been separated by East and West. Ever since the beginning of the industrial revolution in the late eighteenth century, Eastern Europe failed to follow western models of political and economical development. Between 1789 and 1871, Britain, France, and Germany all grew into unified, industrialized nation states, and, despite the failure of parliamentary democracy completely to overcome the authoritarian political structure in Germany, their poetical development seemed to be following an essentially common course as well. The emergence of Balkan nationalism in the late nineteenth and early twenties centuries threatened to disrupt Europe by eliminating the Dual Monarchy as a great power.(Kaiser, 1980) East always lagged behind economically as well. Industrialization took place only in the Austrian provinces until the late nineteenth century, when the Russian government began a frantic attempt to catch up with the west. ” Agriculture remained backward; in many areas, techniques had progressed little since the Middle Ages. Europe remained a diplomatic and strategic entity; economically and politically, however, it was increasingly divided into more and less developed regions” (Ranki, 1974). Despite the economic backwardness of Easter Europe, the German government showed an interest in the regions of The Eastern Europe. ” Although the German government did not commit itself to territorial expansion in Eastern Europe before1914, interest groups and publicist had their own reasons for encouraging eastward expansion, just as the Junker ruling class, for its own reasons, fostered the climate of aggressive international competition that helped to lead to the catastrophe of 1914-1918″ (Boehme, 1975). The advent of Hitler and its meaning to the Europe In 1933 Adolf Hitler came to power and this man made big changes in the history of the world. His plan was to build the Third Reich and conquer the world. The Eastern Europe played a central rule in his program. He did not bring his plans to existence immediately but from 1933 through 1939 his long-range goals increasingly determined German policy toward the successor states. “Recent research has shown that Hitler’s ideas on foreign policy varied somewhat during the early 1920s but crystallized by the time he wrote Mein Kampf in 1925 and did not significantly alter for the rest of his life” (Trevor-Roper, 1970). Hitler believed that Germany has to have more territory in order to survive as a great power. “He chose the solution of expansion to the east. What did this mean for the successor states of Eastern Europe? In first place, Hitler proposed to carry out the annexation of territory to the east and northeast that had been proposed during the First World War “(Jackel, 1972). During those years German trade with Southeastern Europe dramatically increased. “Although the Wilheimstrasse retained most of the responsibility for commercial negotiations with the successor states, the course of German trade with Eastern Europe depended increasingly on National Social economic policy as a whole. This, in turn, tended to follow the dictates of Hitler’s expansion plans” (Kaiser, 1980). Czech and Germany Although the Second World War is in the past but still there are many not resolved problems. For example, not a long time ago the United States backed the Czech Republic in a dispute with Germany that dates back to World War II. ” The issue involves the expulsion after the war of 3 million Germans from the Sudetenland, which Nazi Germany took from Czechoslovakia in 1938. The German Foreign Ministry argues the 1945 Potsdam Conference, which authorized the transfer of the Sudeten Germans, was not legally binding on Germany since it was signed only by the Allies. “(Barten, 1996). Germany has asked the Prague government to apologize for the exclusions and Czechs have refused to give it. And now a politically influential group in Munich has demanded direct talks with the Czech government to discuss compensation claims. Some Czech intellectuals made an offer in 1980 to apologize for the transfer and put the past behind them. Mr.Weigl says: “But instead of having Germany reciprocate with an apology for its own action during the war…the Germans took our apology and said it was what they had been saying for decades “(Barder, 1996). It seems to be that many problems will never be resolved and unfortunately some of them just have no answer. Especially now after the USSR does not exist any more and a lot of countries finally have freedom after many years of dictatorship. EUROPEAN COMMUNITY AND BEGINNINGS OF UNION The European Community is emerging as something more than the organization of regional economic integration that was called the European Community. According to the Maastricht treaty, the EU is becoming an Economic and Monetary Union (EMU) and also a Political Union. The six in 1957 In 1957 the commitment to the original agenda was shared by political leaders and ruling political parties in all six of the original EEC countries. “For the most part, the leaders were centrists in the party politics of their countries. Most were mostly Christian Democrats of the center-right. In France and Italy, these political parties of the broad center coexist between strong Communist parties of the extreme left and nationalist parties on the far right” (Wood, 1996). British Problem Although the established centrists of the six gave support to the EEC and its original agenda, there was not clear Euro-center in the British political party system in the 1950s. “Britain was invited in 1955 to the Messina conference, where plans were laid that were to result in the Rome treaty. But they arrived as skeptical observes, assuming in view of the EDC debacle that little would come out of the talks. The British were set against anything that resembled European federalism, even in the distanct future. Britain took the free trade area concept to smaller countries outside the six- Denmark, Sweden, Norway, Austria, Switzerland, and Portugal-and the European Free Trade Are (EFTA) was formed in 1960 (George, 1990). European Community in the Mid-1970s The principal innovations in the EC during the first half of the 1960s were set in motion in December 1969 by the Hague Summit and were rounded off by the Paris and Dublin summits 5 years later. “They confirmed the significance of the empty chair crisis and the Luxembourg compromise of the mid-1960s. It was now clear that edditions to and alterations of the original Rome treaty agenda could be undertaken only on the initiative of the heads of government ” (Weasels, 1992). By the end of 1975 much of the primary work which the six original EEC members had agreed had been accomplished the arrival of EMU, heralded in 1969. European Union in the 1990s Ortwin Hegin, a delegate to the Organization of Security and Co-operation in Vienna says: “What Europe needs right now is preventive diplomacy to deal with national and cultural differences and reach common ground before tensions create open conflicts” (Smucker, 1996). The Washington Times says that,” The European Union is a tremendous success story that now threatens to grow too big for its own good” (Sieff, 1996). In today’s world the issue of EU is becoming more and more important. As we can see, there is a long way to go before Union will exist. ” Some Europeans dream of a bigger future for their Union. But unemployment, economic uncertainty and a feeble foreign policy make the dream look ever further from reality. And even Germany’s vision of Europe is becoming more modest (Rifcind 1996). CONCLUSION Not Long ago people referred to Europe as the Old Continent. Today Europe looks big. In terms of population, the United States is 76 percent as large as the European Community, 69 percent as large as Western Europe and 50 percent as large as Europe itself (excluding the former USSR). In term of GDP, the United States is 18 percent larger than the EC, but Western Europe as a whole is its equal. Europe also looks increasingly rich. Although the United States continues to best all European countries in income per capita, its margin of leadership has dwindled considerably. In 1955, after the cement had set on postwar “reconstruction”, real income per capita in the United States was triple than in Italy, double than in France, 87 percent larger than in Germany, and 68 percent larger than in United Kingdom. A mere quarter-century later, income per capita in the United States was 85 percent larger than in Italy, 50 percent than in the United Kingdom, 20 percent larger than in France, and 14 percent larger than in Germany. (Adams, 1992) Today we see a lot of changes in Europe. The Federal Republic of Germany absorbed the German Democratic Republic; Czechoslovakia, Hungary, and Poland dispatched communism rule; Yugoslavia and Soviet Union lost their glue. Despite traditions of neutrality, Sweden and Switzerland came to contemplate membership in EC. If Europe is still old in the chronological sense, it is experience the vitality of a second childhood. Central to an understanding of Europe as a whole is an understanding of EC. At the certain point in 1980s the question of monetary Union was brought to the community agenda. Now Europe wants to have a Monetary Union (EMU). All European countries need it for a single market. Of course market is possible and without it, but from the microeconomics standpoint, exchange rate stability is the condition for reaping all the benefits of the single market. Even when national currencies are fully convertible, uncertainly concerning rates of exchange imposes a cost of operations between residents of different countries and reduces the mobility of factors. The question does the EU need a Single Currency is very important. Mr. Jacques Santer, president of the European Commission explains the importance of single currency on the example of America. At the beginning as a federation, there were also many currencies available in the United States. It lasted, I must say, 70 years before the United States had a single currency, the dollar. In Europe, we have created a very big single market with 370 million inhabitants but with 14 different currencies. These markets cannot function in such a way that companies are able to exploit all the potentialities of the single market if there is not a single currency. And that is the aim of the euro, to unite in the monetary field this single currency, united on the economic level. That is our target, of course. That could create many problems ahead, but since the issue of the European Council of Dublin, I can say that all the preparative work has been done so that the euro can enter into force on the first of January 1999. From now on it is on track, and best signal for this confidence is that the markets are also reacting positively in this respect. ( Santer, 1996) At this point the European Commission is examination all the different countries that are applying to the European Union on their economic and political performances during their transition period to the market economy. Today there are 11 candidates countries to entry Union but at the beginning of the next century, there could be several new members in the Europe Union without staying any date. But there are a lot of difficulties in Europe and is really hard to predict what is going to happen. The unemployment in many countries is higher than 10 percent and this is unacceptable. Also there are a lot of misunderstanding between the members of European Union. Plans are ready but it is not that easy to make them work. And today everybody is waiting for the future of Europe.
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