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A Briefing on the European Union - the past, present and future -. Mattias Hamberg. The starting point. Why do I (you) need to know anything about the European Union?. Top 10 States for EU Foreign Direct Investment.

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A briefing on the european union the past present and future

A Briefing on the European Union- the past, present and future -

Mattias Hamberg

The starting point
The starting point

Why do I (you) need to know anything about the European Union?

Top 10 states for eu foreign direct investment
Top 10 States for EU Foreign Direct Investment

Source: U.S. Department of Commerce, Bureau of Economic Analysis, 2002. Foreign Direct Investment in the United States. Operations of U.S. Affiliates of Foreign Companies. Preliminary 2000 Estimates. Investment figures are for 2000.

Top 10 states with jobs supported by eu i nvestments
Top 10 States with jobs supported by EU investments

Top 10 states exporting to european union 2001
Top 10 States Exporting to European Union, 2001

Source: U.S. Census Bureau, Foreign Trade Division/ MISER 2002. Figures are for 2001.


  • Data on EU

  • EU in the past versus EU of the future

  • Political agenda

  • Economic agenda

  • Major challenges lying ahead

The past
The past

  • Founded in 1950

  • Originally six countries

  • International politics has certainly shaped the Union’s development in the past and present

  • Some important steps:

    • European Coal and Steel Community (1950)

    • European Economic Community (1956)

    • Euratom (1956)

    • Common Agricultural Policy (1962)

    • European Monetary System (1979)

    • Maastricht treaty (1992)

    • Schengen agreement (1995)

    • European Central Bank (1999)

    • The Euro (2002)

Developments of the last decade
Developments of the last decade

  • The European Union is currently undergoing dramatic changes...

Political motives

Economic motives

-Creating stability between nations by

integrating them

-Free movement of goods,services,

capital and people

Member states
Member states

Union membership is open to any European country with a stable democratic government, a good human rights record, a properly functioning market economy, and sound macroeconomic policies. Candidates must also have the capacity to fulfill and to implement existing EU laws and policies (known as the acquis communautaire).

  • France

  • Germany

  • Italy

  • Belgium

  • The Netherlands

  • Luxemburg

  • UK (1973)

  • Denmark (1973)

  • Ireland (1973)

  • Greece (1981)

  • Spain (1986)

  • Portugal (1986)

  • Austria (1995)

  • Finland (1995)

  • Sweden (1995)

  • Estonia

  • Lithuania

  • Latvia

  • Poland

  • Chech republic

  • Slovakia

  • Slovenia

  • Hungary

  • Malta

  • Cyprus

  • (Bulgaria)

  • (Romania)

  • (Turkey)

Eu s political agenda
EU’s political agenda

  • European Parliament

    • Legislative power

    • Budgetary control

  • Council of the European Union

    • Highest legislative power

    • Coordinates economic policies

  • European Commission

    • Initiates and drafts legislation

    • Handles international trade agreements

  • Court of Justice

    • Ensures that community law is uniformly interpreted

    • A court of first instance

  • European Central Bank

  • How many leaders does europe need
    How many leaders does Europe need?

    • Pat Cox, President of the European Parliament

    • Romano Prodi, President of the European Commission

    • Constantin Simitis, President of the Council and Prime minister of Greece

    • Wim Duisenberg, President of the European Central Bank

    Eu and bureaucracy
    EU and Bureaucracy

    • Do we need so many (expensive) institutions to govern Europe?

    • Do people care about the union?

      • Low interest in the parlament elections

      • Little knowledge about the functioning of the union

  • Who likes and who dislikes the Union?

    • The further north from Brussels you get the more skeptical people get...

  • The budget
    The budget

    • Financing the budget

      • ”Traditional own resources” (levies and tariffs on agricultural products from non-members), ~14%

      • ”VAT resources” (consumption determined contributions), ~35%

      • ”GNP resources” (wealth determined contributions from member states), ~48%

  • Budget spending

    • Agricultural subsidies, 43%

    • Structural measures (regional support), 30%

    • Other internal policies, 6%

    • External actions, 5%

    • Administration, 5%

    • Pre-accession aid

    • Total around €101 Billion in 2003 ($112 Billion)

  • Common european markets
    Common European markets

    • Started with free trade of coal and steel

    • Free trade then extended to other areas

    • Free movement of capital

    • Free movement of labour

    • 1993 Single European Market

    • 1995 The Schengen agreement is entered

    • 1999 True single economic market

    Are the common markets only for Europeans?

    Eu s economic agenda
    EU’s economic agenda

    • 1979 Agreement on having common financial goals

    • 1990 Basically all capital restrictions between member countries are removed

    • 1992 The Maastricht treaty is signed

    • 1994 European Monetary Institute is created

    • 1994 Economic and Monetary Union (EMU) created

    • 1994-98 Local currencies pegged to the ECU

    • 1999 Final (irrevocable) pegging of national currencies

    • 2002 All national currencies of participating states are substituted for the Euro

    Convergence criteria
    Convergence criteria

    • Stable prices: the rate of inflation may not be more than 1.5 percentage points higher than in the three member states with the lowest inflation.

    • Stable exchange rate: the exchange rate must have been stable for the two years prior to entry into the third stage of EMU.

    • Healthy public finances: the national debt may not exceed 60 per cent of gross domestic product (GDP) and the deficit in public finances may not exceed 3 per cent of GDP.

    • Long-term interest rates: the long-term interest rate may not be more than 2 percentage points higher than in the three member states with the lowest inflation.

    The role of the central bank
    The role of the central bank

    • Frames and implements a common economic policy

    • Conducts foreign exchange operations

    • Management of the European payment system

    • Economic policy is focused on economic stability.

    • Does stability inhibit growth, and does stability inhibit equality among member countries?

    The euro
    The Euro

    • As of January 1st 2002, twelve countries have abandoned their past currency and choosen the Euro.

    • The abandonment is (supposed to be) irrevocable.


    • Why have a single currency?

      • Pro: -Shows uniformity (political ambition)

        -Gives EUROPE a stronger position

        -Reduced costs of changing money

        -No speculation

        Con: -European economies are not uniform

        -Mobility is not good enough

        -Single currency blocks a geographical expansion of the union

    The future looks bigger
    The Future looks bigger

    • The political agenda

      • New members are entering the union

      • Harmonisation means long-term security

    • The economic agenda

      • Harmonisation might influence short-term survival of the union

    Europe is spreading its wings. In freedom. In prosperity. And in peace. It is a truly proud moment for the European Union. It is a triumph for liberty and democracy. To our new members I say: “Warmly welcome to our family”. Our new Europe is born.

    Eu in year 2004
    EU in year 2004

    Enlargement of:

    Countries: 67%

    Area: 23%

    Population: 20%

    Main question for the future: Will all countries benefit from the same economic policy?


    • Short-term challenges

      • Integrating cultures

      • Removing subsidies

      • Increased bureaucracy

      • Stagnated economies

  • Long-term challenges

    • Ageing society

    • Integrating cultures / handling social differences

    • International agenda?

  • Us eu relations
    US - EU relations

    Source: www.eurunion.org/partner/usstates/eustates.htm

    Internet resources
    Internet resources