11.3.1 EU Aims: Four Freedoms, Union Goals & Achievements

The Aims of the European Union (EU)

Historical Background:

• The European Union traces its origins to the aftermath of World War II, with the aim of preventing future conflicts in Europe.

Foundational Treaties and Integration:

• The European Coal and Steel Community (ECSC), established in 1951, was the first step towards deeper European integration. This initiative laid the groundwork for the European Economic Community (EEC), which was formally created by the Treaty of Rome in 1957. The Treaty of Rome's preamble declared the EEC's goal to be "an ever closer union among the peoples of Europe," setting the stage for continuous integration among member states.

Expansion and Deepening of the EU:

• Over the decades, the EU has expanded its membership significantly—from the original six founding countries in 1957 to 28 by 2013. This expansion has gone hand-in-hand with deeper integration, as member states have increasingly pooled their sovereignty to achieve greater collective political and economic influence. The overarching aims of this integration have been to promote peace, prosperity, and liberal democracy across Europe, reducing the likelihood of conflict by diminishing national rivalries and fostering cooperation.

Progressive Treaties and Institutional Developments:

• The EU's journey towards greater unity and influence has been marked by several key treaties and agreements:
  • Single European Act (1986): Laid the foundation for the internal market, which aims to remove barriers to trade and ensure the free movement of goods, services, capital, and people.
  • Maastricht Treaty (1992): Created the European Union, introduced EU citizenship, and set the stage for a common foreign and security policy.
  • Amsterdam Treaty (1997): Incorporated the Schengen Agreement (excluding the UK and Ireland) and the Social Chapter into EU law.
  • Nice Treaty (2001): Reduced the occasions when member states could use their national veto, enhancing the EU's decision-making process through qualified majority voting.
  • Lisbon Treaty (2007): Enhanced the EU's global role by establishing the positions of a full-time EU President and a High Representative for Foreign Affairs and Security Policy, and provided the EU with its own diplomatic corps.

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The Four Freedoms

• Central to the EU's economic integration is the concept of the "four freedoms," established by the Treaty of Rome and further solidified by subsequent treaties like the Single European Act and the Lisbon Treaty.
• These four freedoms form the backbone of the EU's single market, aiming to remove internal barriers and promote economic unity across member states.

Free Movement of Goods:

• This freedom ensures that goods can move freely across EU member states without tariffs, creating a customs union.
• By eliminating customs duties and quotas, it facilitates seamless trade within the EU, boosting economic cooperation and growth.

Free Movement of Services:

• Businesses within the EU have the right to establish and provide services in any member state.
• This principle allows companies to operate across borders with the same rights as domestic businesses, fostering a competitive and diverse market environment.

Free Movement of Capital:

• Capital should be able to flow freely between member states, enabling investments and financial services to be accessible across the EU. This freedom underpins the EU's financial market integration, allowing for efficient allocation of resources and economic stability.

Free Movement of People:

• Citizens of EU member states have the right to live, work, and claim social benefits in any other member state without facing discrimination or unnecessary barriers.
• This freedom is a cornerstone of EU citizenship, promoting cultural exchange and social integration across Europe.

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Monetary Union in the European Union (EU)

• The Monetary Union, formalized by the Maastricht Treaty in 1992, introduced the euro as a single currency to foster closer economic integration among EU member states. The aim was to eliminate exchange rate risks and enhance economic stability across the region.

The Eurozone

• The Eurozone consists of 19 EU member states that have adopted the euro. The European Central Bank (ECB), based in Frankfurt, Germany, manages the euro and sets monetary policy for these countries, ensuring price stability and controlling inflation.

Criteria for Joining

• To join the Eurozone, countries must meet the Convergence Criteria, including:
  • Price Stability: Low and stable inflation rates.
  • Public Finances: Deficits below 3% of GDP and debt below 60% of GDP.
  • Exchange Rate Stability: Stable currency within the ERM II for two years.
  • Interest Rates: Long-term rates close to those of low-inflation countries.

Benefits

• Economic Integration: The euro simplifies cross-border trade and investment by removing exchange rate risks.
• Price Transparency: A single currency allows easy price comparison across member states, boosting competition.
• Stability: The ECB's control over monetary policy helps maintain low inflation and stable economic conditions.

Challenges

• Loss of Control: Member states in the Eurozone cannot independently manage their monetary policy, which can be a disadvantage during national economic downturns.
• Economic Disparities: The diverse economies within the Eurozone can lead to imbalances, as seen in the sovereign debt crisis where weaker economies struggled with debt and required bailouts.

Future Prospects

• The success of the Monetary Union relies on addressing economic imbalances and possibly moving toward greater fiscal integration to strengthen economic cohesion among Eurozone members.

Summary

The EU's Monetary Union, through the adoption of the euro, has brought significant benefits in economic integration and stability but also poses challenges, particularly in managing diverse economies within a unified monetary framework.

Overall Aim of the Four Freedoms

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The Extent to Which the EU Has Achieved Its Aims

Assessment of Achievement

Objective	Achieved	Not Achieved
Expansion of Membership	• The EU expanded from 6 members in 1957 to 28 by 2013, incorporating many former Communist states, thereby promoting democracy.	• Expansion has sometimes diluted the EU's focus, complicating unified responses to global crises like the annexation of Crimea or the Syrian war. Additionally, the UK's departure (Brexit) represents a significant setback, reducing the EU's overall membership.
Promotion of Democracy	• The expansion into Eastern Europe has encouraged the adoption of democratic principles in former Communist states.	• The democratic commitment of some member states, like Hungary and Poland, has been questioned, undermining the EU's unity. The Brexit vote also reflected a significant portion of the UK electorate's dissatisfaction with EU governance.
Economic Integration (Four Freedoms)	• The implementation of the four freedoms has created the world's largest single market, allowing citizens to live, work, and study across the EU.	• The free movement of workers has fueled populist movements across Europe, with parties opposing 'foreign' competition gaining ground. Brexit itself was largely driven by concerns over immigration and economic sovereignty, challenging the EU's model of integration.
Economic Strength and Stability	• By 2018, the EU's GDP was $19.7 trillion, making it the second-largest economy globally, and the euro became the second-most important reserve currency.	• Austerity measures in response to the euro crisis have led to discontent in southern European countries, weakening support for the EU. Brexit has also led to economic uncertainty both in the UK and across the EU, impacting the stability of the region.
Environmental Leadership	• The EU has led globally on environmental issues, introducing some of the most progressive and eco-friendly legislation in the world.	• Not applicable.
Cultural and Political Integration	• The EU has aimed to foster a sense of European identity and closer political cooperation among member states.	• A strong European identity has not been fully established, with national identities often reinforced by crises such as austerity and migration. The Brexit referendum highlighted the limitations of European integration, as a major member state chose to leave.
Handling of the Migrant Crisis	• The EU has made efforts to manage the migrant crisis, with some countries taking in significant numbers of refugees.	• The crisis has highlighted deep divisions among member states, with countries like Hungary and Italy resisting EU policies, threatening unity. Brexit also underscored these tensions, as concerns over migration were a significant factor in the UK's decision to leave the EU.

Summary

The European Union has achieved several of its key aims, particularly in terms of expanding its membership, promoting democracy, and establishing a significant single market. It has also shown leadership in global environmental policy. However, these achievements have been tempered by significant challenges, such as economic disparities, rising populism, and divisions over migration policy. The UK's departure from the EU (Brexit) represents a major challenge to the EU's cohesion and has raised questions about the future of European integration. While the EU has made considerable progress towards its goals, the ongoing challenges and the impact of Brexit suggest that the balance of success is mixed, with some objectives still needing more work to be fully realized.