33.4.1 Formation, role, objectives and development of the European Union (EU).

European Union (EU)

Formation and Evolution

• Foundation: The EU was established by the Treaty of Rome in 1957, initially as the European Economic Community (EEC). This was part of a broader effort to foster economic integration in post-war Europe and prevent further conflicts. It was later rebranded as the European Union by the Maastricht Treaty in 1992, and its membership has expanded from the original six countries to 27 member states as of 2024.
• Evolution: Over the decades, the EU has both deepened and widened. Deepening involves increasing integration in various policy areas, while widening refers to the expansion of its membership to include more countries. This evolution reflects the EU's adaptation to changing political, economic, and social contexts.

Institutional Structure

Executive Branch:

• European Commission: Composed of commissioners appointed by member states, the European Commission is responsible for proposing new legislation, implementing EU policies, and overseeing the day-to-day running of the EU.

• Council of the European Union: This body represents the governments of member states. It plays a crucial role in negotiating and adopting EU laws and policies. Judicial Branch:

• European Court of Justice (ECJ): The ECJ interprets EU law and ensures it is applied uniformly across all member states. It resolves legal disputes between EU institutions, member states, and individuals. Legislative Branch:

• European Parliament: Elected directly by EU citizens, the European Parliament debates and passes legislation, and represents the interests of the public.

• Council of Ministers: Consists of national ministers from each member state. It works with the European Parliament to pass laws and coordinate policies.

Objectives and Roles

Peace and Security

• Conflict Prevention: The EU has been successful in preventing violent conflicts between its member states. The initial economic focus of the EU evolved into a broader goal of ensuring political stability and cooperation.

• Nobel Peace Prize: In 2012, the EU was awarded the Nobel Peace Prize for its role in fostering peace and stability in Europe over the past decades.

• ECSC Formation: The European Coal and Steel Community (ECSC) established in 1951 was a key step in preventing conflicts over critical resources such as coal and steel by pooling them under a common authority. Economic Union

• Introduction of the Euro: The Euro was introduced in 2002 to facilitate economic integration and reduce transaction costs across the Eurozone countries.

• Single Market: The EU has created a single market allowing for the free movement of goods, services, capital, and people. This includes: Ensures that members of the eurozone all tax and spend responsibly (SGP - the stability and growth pact which is a set of fiscal rules to prevent member states from spending beyond their means - budget deficit cannot exceed 3% of GDP and debt cannot surpass 60% The SGP's are not binding but states can be fined 0.5% GDP if they fail to abide by the rules).

• People: The Schengen Agreement (1985) allows for visa-free travel across 26 member states, eliminating internal border checks.

• Goods: The single market system removes tariff and non-tariff barriers to trade between member states.

• Capital: Free movement of capital allows for investments and financial transactions across borders without restrictions.

• Services: Companies can operate and establish themselves freely across the EU, enhancing business opportunities and competition. Challenges:

• European Central Bank (ECB): Responsible for monetary policy within the Eurozone, including setting interest rates and managing inflation.

• Stability and Growth Pact (SGP): Aims to ensure fiscal discipline among member states by limiting budget deficits to 3% of GDP and national debt to 60% of GDP. Non-compliance can result in fines.

• European Fiscal Compact (EFC): A treaty that requires member states to maintain balanced or surplus national budgets, reinforcing fiscal discipline and stability. Political and Social Union

• Legislative Development: The EU has harmonized laws across member states through directives, covering a range of issues including trade, environment, and industrial emissions. Directives ensure that national laws are consistent with EU regulations.

• European Social Fund: Approximately 10% of the EU budget is allocated to social projects aimed at reducing unemployment and promoting social inclusion.

• Lawmaking Process: The European Commission proposes legislation, which is then debated and approved by the Council of Ministers and the European Parliament. The ECJ ensures that these laws are applied fairly and uniformly.

• Harmonization: The EU harmonizes social policies on issues such as working hours, employment rights, and consumer protection through its legislative framework. Judicial and Policing Cooperation

• Justice Coordination: The EU has developed frameworks for judicial cooperation, focusing on combating terrorism and organized crime across member states.

• European Arrest Warrant: Allows for the arrest and extradition of suspects between member states without the need for extradition treaties, enhancing cross-border law enforcement. Human Rights

• Fundamental Rights: The EU has established its own charter of fundamental rights, outlining the rights of EU citizens in economic, social, and political contexts.

• European Convention on Human Rights (ECHR): Created in 1953, this convention predates the EU and includes more members, providing a broader human rights framework.

• Criticisms: The EU has faced criticism for its inability to intervene effectively in some humanitarian crises, such as the Srebrenica genocide during the Bosnian War, due to limited military capabilities and political constraints.

The 'Factortame' Case

The 'Factortame' case is a landmark example demonstrating the primacy of EU law over domestic law, significantly impacting national sovereignty. In 1988, the UK government passed the Merchant Shipping Act, but it was later challenged by a Spanish company, Factortame, which argued that the Act contravened EU law. The UK Law Lords (now the Supreme Court) ruled that the Merchant Shipping Act could not stand as it violated EU law. This case established the principle that EU law takes precedence over national legislation, which has profound implications for the sovereignty of member states and their ability to operate independently within the EU framework.

The Eurozone Crisis

The Eurozone crisis highlighted significant constraints on the EU's economic influence and exposed the vulnerabilities of economic integration. The crisis demonstrated that Eurozone states no longer have full control over their economic policies. Several states, including France, Spain, Ireland, and Greece, had not met the criteria for joining the Euro and ran budget deficits that were too high. The global financial crisis of 2007-2009 exacerbated these issues, pushing government debt to unsustainable levels, particularly in Greece. To prevent defaults, the EU, along with the International Monetary Fund (IMF) and the European Central Bank (ECB), provided bailouts to several states, including Greece, Ireland, Portugal, and Spain.

These bailouts were contingent on implementing austerity measures, which involved difficult choices such as cuts to public sector pensions. These measures often clashed with the policies of democratically elected anti-austerity governments, like Syriza in Greece. The crisis revealed that states within the Eurozone are unable to take individual actions to resolve their economic difficulties, such as devaluing their currency or lowering interest rates, leading to tighter fiscal rules under the 2012 fiscal compact with Stability and Growth Pact (SGP) guidelines.

Increased Internal Migration

The increase in internal migration within the EU, particularly during the 2015 migration crisis, further constrained the political influence of the Eurozone states by demonstrating their limited control over immigration policy. The crisis saw a rapid increase in migratory flows into Europe from beyond its borders, leading to significant political and social challenges. This situation highlighted the difficulties the EU faces in coordinating a unified response to immigration and managing the divergent interests of its member states.

Brexit

Brexit represents a significant challenge to the EU's political and economic influence. The departure of the United Kingdom, a major global power, from the EU in 2021 was a historic event that raised questions about the strength and unity of the European project. The UK was the first state to leave the bloc, and its departure sparked concerns that other states might follow, especially if the UK secured a favourable deal. However, the EU remained united throughout the Brexit negotiations, led by the European Commission, and managed to maintain the integrity of the single market.

Brexit also highlighted the EU's structural resilience, as it managed to retain full access to the wider EU market while imposing increased border checks on UK exports, such as meat and fish, which raised the costs of trade. Despite losing the EU's second-largest economy from the single market, the EU maintained its core principles, including the four freedoms (movement of goods, services, people, and capital). The UK's exit demonstrated both the EU's ability to handle internal challenges and the potential risks of fragmentation within the union.

Conclusion