1) What is European Union? How has it evolved over the past 50 years?

Discuss the
broadening and deepening of the EU. What is the importance today?
European Union (EU) is a group of European countries that participate in the world economy
as one economic unit and operate under one official currency, the euro. EU is the product of
more than 50 years of political and economic activity aimed at creating a prosperous and
cooperative environment for Europe. In addition, EU is the largest and richest unified market in
the world. Under this writings, we will discuss the evolution of EU over the past 50 years and the
broadening of EU. At the end of this writings, we will examine what the importance of EU is in
nowadays.
First of all, we will discuss about the evolution of EU. The first step of European regionalism
was implemented by French Foreign Minister, Robert Schuman when he proposes placing
French and German coal and steel production under a common authority. This proposal finally
brings to the establishment of European Coal and Steel Community (ECSC) in 1952. In 1957,
The Treaty of Rome establishing European Economic Community (EEC), a custom union that
brought together the markets of Italy, France, Belgium, Luxembourg, Netherlands and West
Germany. In the negotiations for the Treaty of Rome, Great Britain was participated but decided
to stand apart from EEC. This is because, Britain worry for the loss of political and economic
autonomy in the economic integration. Apart from that, Britain is unwilling to give up its
preferential trading relations with the Commonwealth Nation and special relationship with
United States. In 1967, the EEC, ECSC and EURATOM (an organization for European
cooperation in the use of nuclear energy) merged and became the European Community (EC). In
1992, the European Council signs the Treaty on European Union in Maastricht, establishing the
European Union.
Now, we will discuss about the broadening and deepening of the EU. The process of
aggressive broadening started when EEC, ECSC and EURATOM merged to form EC. The EC
broadened its geographic region in several stages. Great Britain entered EC on 1 January 1973
with Ireland and Denmark. Greece joined EC in 1981, followed by Spain and Portugal in 1986.
All these three countries joined EC membership to strengthen the democratic institution and
eliminate the influence of authoritarian government by communism. So, free trade and close
economic bonding in EC could solidify democracy and protect them from potential communist

influences. As more countries join the EC membership, the markets of EC become broader but
this not promising a better market. The participation of poor countries such as Ireland, Greece,
Portugal and Spain increased the tension in EC. For example, the lower living standard in poor
countries limited the extent of their trade with richer member states. Apart from that, lower wage
structures threatened some jobs in EC industries. In long run, the broader market of course can
benefit EC, but in short run it put great tension on cooperative relationship.
In the mid-1980, the economic and political tension reached at peak when the higher and
higher EC program costs imposing a disproportionate burden on member states almost bring the
split in EC. In addressing this issue, Jacque Delors, president of EC on that time seeking ways to
reunite the governments and people of EC in some common objectives. Finally, he concludes
that international trade is the best tools to reunite Europe. So, in 1985 he proposed the creation of
single integrated market in 1992 and then the Single European Act (SEA) was established.
In 1992, the goals of Europe were focused on four aspects; free movement of goods, service,
people and capital. Honestly, these freedoms were very hard to achieve compare to theoretically.
Free movement of goods, for example requires more elimination of tariff and quota barriers. The
existence of many trade barriers will discourage imports from other countries in EC and
encourage the purchase of domestic goods. In EC, these standards must be harmonized to allow,
to the maximum possible extent, a good that can be sold anywhere in the group to be sold
anywhere. Achieving free movement of services is quite difficult as each nation has complex
system of financial regulation. Free movement of capital requires the dismantling of capital
controls and investment regulations which affect flows of funds into and out of nation. Finally,
free movement of people requires agreements on many points, especially the adoption of a
common immigration policy. Once a person has entered one EU nation, he or she is free to enter
any other.
The process of broadening and deepening of EC, not only focus on economic aspect but also
on political integration. The SEA introduced a qualified majority rule to replace the unanimity
vote on European legislation. This is because decision was very difficult to make by using
unanimity vote as every single member of the Council of the EC was given the veto power. This
majority vote give advantage with respect to single market legislation because it was possible to
take decision against the will of some opposing member. In addition to qualified majority vote,

the SEA gave more power to European institutions: European Commission, European Parliament
and European Justice Court. In the single market integration, each nations required to sacrifice its
interests on hundreds of small issues, especially on domestic political effects, before the four
freedoms could be achieved. The issues of national sovereignty and economic growth often in
conflict. For example, Germany wants its environmental standards applied to all EC members.
However, these environment standards are high cost and of course it was opposed by poor
countries such as Greece and Portugal. So, we can see that the four freedoms for the EC as a
whole required sacrifice for some domestic freedoms such as right to self-determination of
environmental standard.
In 1989, the communist regime in central and eastern Europe was collapsed and in 1990, the
Berlin Wall was fallen which brings to the German reunification. The fallen of communist
regime cause many countries from central and eastern Europe applied to join EC. The unification
of Germany was not accepted by Britain and France because the fears that Germany will
dominate the whole Europe as before. In this situation, France and Germany proposed two plans.
The first plan is established a monetary union means that using a single currency within EC. By
using single currency, domination of Germany will not to be worry because it would be chained
to the EU by strong link money and need to give up its own currency which is Deutsche Mark.
Second plan is promoting political integration to gain more control over Germany. Germany on
the other hand was agreed and ready to give up its national sovereignty to get the trust for its
reunification.
In order to realize these plans, the Treaty of Maastricht was established in December 1991. In
that conference, all twelve member states agree to establish a monetary union which
implemented on 1st of January 1999 to replace national currency to the Euro currency. Two
decisions were made to strengthen Euro currency. First, the European Central Bank must
independent in its monetary policies from any countries or institution and its objective only to
control the price stability. Second, only countries that has low inflation rate, low interest rate and
low government debt were deserved to join Eurozone. Apart from that, the establishment of
Stability and Growth Pact forces the members of Eurozone to respect a certain discipline in
government spending unless they will be penalized. The second plan was realized in Maastricht
was the formation of European Union (EU).

The union brings together three pillars of

corporation into one institution which is cooperation of Single Market, Justice and Home Affairs,
and Foreign and Security Policy. In single market, EU Commission works as a government while
Council of EU and European parliament works as legislative bodies that cooperate in legislative
process. In Foreign Policy and Justice and Home Affairs, the Council of EU is the main political
institution and decisions must be unanimous.
In 2002, EU established European Convention to draft a constitution for Europe. The
discussion for the institutional future for Europe participated by 105 deputies of EU member
states and took about 18 months. Unfortunately, the draft was failed in referenda in France and
Netherlands. In June 2007, a new treaty was drafted and the Treaty of Lisbon came into effect in
December 2009. In that treaty, EU will have a president elected for two and half years to bring
more efficiency in EU politics. Secondly, High Representative of Union for Foreign Affairs and
Security Policy was created to resolve frequent disagreement among Europeans on foreign
policy. Thirdly, the European parliament will have the equal standing with Council of EU to
establish bicameral system in European legislation.
The importance of EU as discussed previously can be seen on four freedoms; free movement
of goods, capital, services and people. Free movement goods means that trade barriers of goods
within EU countries was diminished such as custom tax. As the impact, the price of goods is low.
Apart from that, free movement of people make citizens are able to move freely from one
member country to another citizens can freely travel, study, work, or live in any European
country of their choice. Apart from that, free movements of labor and capital have helped create
a more flexible economy. For example, UK and Ireland have benefited from the immigration of
Eastern European workers to fill labor market shortages in certain areas, such as plumbing,
nursing and cleaning.

Since the creation of EU, it becomes one of strongest economic areas in the world. With 500
million people, it has 7.3% of the world's population, but accounts for 23% of nominal global
GDP. Removal of customs barriers mean 60 million customs clearance documents per year no
longer need to be completed, cutting bureaucracy and reducing costs and delivery times.
Countries in the EU are also become amongst the highest positions in the Human Development
Index (HDI). Poorer counties, such as Ireland, Portugal and Spain have made significant degrees

of economic development since they joined the European Union. A report suggests that over the
period of the 1980s and 2004 enlargement, there are substantial positive pay-offs of EU
membership, with a gain in per capita GDP of approximately 12% for poorer countries.

The importance of EU also can be seen in aspects of environment aspect. Like crime,
pollution crosses boundaries and the sea is shared by all coastal nations. It isnt possible to
tackle climate change at national level alone. The EU has been involved in environmental work
almost from the outset; not least because of the economic benefits of environmental
improvement. EU measures have raised the quality of beaches by tackling bathing water
pollution, to deal with river pollution on the continent and to protect natural habitats. Tourism
has benefited from the cleanup of beaches at home and abroad (of the 596 UK beaches tested in
2010, 96.8% met the EUs mandatory water quality standards). The EU has taken a leading role
in measures to combat climate change. Its members have agreed to binding targets of a 20 per
cent reduction in greenhouse-gas emissions, a 20 per cent increase in the use of renewable
energy over the same period and a 20 per cent improvement in energy efficiency all by 2020.

Even though European Union becomes bigger and stronger whether in politics and economy,
but there are countries still refuse to join EU like Switzerland. The reason why Switzerland is not
a member of the EU is that the Swiss have still economic dilemmas towards the membership
because the Swiss economy is one of the prosperous economies in the world unlike many other
member states of the EU. The stable currency (Franc), strong monetary discipline, the strong
banking system, low rate of unemployment and position of no internal and external debt are
typical examples of how the Swiss economy is strong.

First point is Euro as the common currency of the Eurozone, is a good achievement in the
European integration process until the last economic crisis which has shown that it is not
completely perfect at all. In other hand, the Swiss currency Franc not faces any strong crisis

for many years. Although Euro is accepted in some parts of Switzerland, having this common
currency forever and everywhere within the country, would mean a more difficult situation for
Switzerland.

Second point, Switzerland has a well-established taxation system. Obviously, it applies a

very good example of taxation system in practice. Although it has changed some parts of its
taxation policy regarding the EU rules, if it becomes a full member, it will have to change this
policy more and more. This possibility causes an anxiety among the Swiss economists.
Third point, the main contributors of the Swiss economy are banking system, chemicalmedical industry, tourism and the manufacture of precision instruments. Especially, the secrecy
of Swiss banking system is very crucial for its reputation among other states in the world. This
makes Switzerland to be proud of its independent financial policy from the EU. So, if
Switzerland becomes a member of the EU, it can lose this secrecy and reputation. And as a
leading financial center, the highly developed financial sector provides a wide range of financing
instruments for foreign and domestic investors. In that situation, Switzerland is not interested in
losing this position and becoming an EU member.

As a fourth point, the unemployment rate of Switzerland is very low compared to many EU
member states. The estimated rate is around 3 %, so the Swiss economists guess that if
Switzerland becomes a member of the EU, this low rate might rise.
As known, Switzerland has strong neutrality to all other states in the world. Due to the
absolute neutrality, most of the international institutions including International Olympic
Committee, FIFA, the International Rowing Federation, the International Committee of the Red
Cross, the Nuclear Research Centre CERN and many others have chosen the neutral and secure
ground of Switzerland for their headquarters, as well as some 1.6 million foreigners living
happily and peacefully here. Also, the Swiss politicians are not interested in current political
events happening in the world. They just watch the situations and respect the domestic policies

of other states. Because of this incuriosity and strong neutrality, it became a member of the
United Nations a very short time ago in 2002. Unlike Switzerland, the EU is an uprising global
actor and tries to have a louder voice on current global issues. The EUs member states have a
common foreign policy, so they try to act with a single voice. From this point of view, it does not
seem very rational for Switzerland to become interested in applying the common policies of the
EU, especially the foreign policy.

Moreover, related to applying common policies, in 2004 Switzerland signed The Agreement
on the Free Movement of Persons with the EU about immigration. At the beginning, it was
estimated that it would not be too problematic for Switzerland. It is a fact that a net of 66.200 EU
citizens emigrated to Switzerland last year, the highest number since a free movement of people
pact came into force in 2002 according to SECO annual report. Because of this, in the
referendum on immigration on 9 February 2014, the Swiss voted to introduce a quota system to
cap immigration from the EU countries. Thus, Switzerland tries to go back to isolation again.
Basically, the total of European Countries approximately is 50 countries. However, not all
of them are joined European Union. Only 28 countries from 50 countries were joined EU. This is
because some countries cannot apply for EU membership because it cannot fulfill the criteria on
membership. However, there are some countries that still in negotiation process and put as
candidate to join EU such as Albania, Kosovo and Turkey.
The Treaty on the European Union states that any European country may apply for
membership if it respects the democratic values of the EU and is committed to promoting them.
First criteria to join EU is the country must have stable institutions guaranteeing democracy, the
rule of law, human rights and respect for and protection of minorities. Secondly, it must have a
functioning market economy and the capacity to cope with competition and market forces in the
EU. Thirdly, it must have the ability to take on and implement effectively the obligations of
membership, including adherence to the aims of political, economic and monetary union.
Fourthly, it must have low employment, low interest rate, low inflation and low government
debt. For example, Belarus is not in the EU because it did not apply for membership. Belarus is

a dictatorship country and it does not have a functioning market economy. The requirements of
the EU membership are democracy, market economy and the adoption of EU rules and standards.
Belarus against market economy and Alexander Lukashenko, who is Belaruss Dictator did not
facing free elections. The European Union imposed various sanctions on its authoritarian
neighbor, including travel restriction on the leaders of the regime.

Apart from that, there is question why Britain occasionally has to depart from European
Union. First of all, Britain worries about the loss of political and economy that necessarily
accompanies economic integration. British politicians and probably most citizens were hesitant
to cede decision making power to others or to share it with the French and Germans. Britain was
forced to weight trade-off among self- determination, domestic democracy, and economic growth
which presented a constant tension in economic integration. Britain was also unwilling to give up
its preferential trading relations with the Commonwealth countries and special relationship with
the United States that is so highly valued.
In my opinion, by withdrawing from the EU, Britain would make it possible to organize
its economic and social affairs without subject to the European Union rules. Instead of common
financial service rules, Britain might instead allow competing exchanges to offer different
approaches and see which one works. Rather than a Common Agricultural Policy for millions of
farmers will allow millions of farmers to each have their own farm policy for their farm.
Basically, UK fishing and agriculture policy is determined by the political imperative of
European integration. The objective is to create an EU fishing fleet catching EU fish in EU
waters under an EU permit system controlled from Brussels. If leave EU, British can impose its
own policies on Agriculture and Fisheries. In terms of sovereignty, membership of the European
Union is undemocratic because the European Commission, which is unelected, has the monopoly
of proposing all EU legislation which it does in secret. It also has the power to issue regulations
which are automatically binding in all member states. By withdrawing from EU, Britain can
conduct its own legislation and get back its sovereignty.

During joined EU, UK pays direct membership costs of 17.4 billion to EU to support
the Common Agriculture Policy and other economic program in EU. By withdrawing from EU,
Britain doesnt need to pay the membership to EU because it is a burden for Britain.
In process of enlargement and broadening to strengthen the integration in European
Union, there are several problems or challenges that face by European Union. First of all, the
problems in financial and economic crisis associated with Greece. In late 2009, Greece was fall
into a severe crisis, as investors feared that country will default on its huge public debt. Eurozone
members, especially Germany and France were forced to consider bailing Greece out while the
country made huge spending cut. Some economists suggested that Greece and other financial
problematic countries such as Ireland, Spain, Portugal and Italy should drop out from Eurozone.
In addition to stimulus package, EU participates in G20 to reform global financial markets
regulations.
Secondly, the problems face by EU is energy policy which associated with Ukraine and
Russia. EU is mainly dependent on fossil fuels. Most of gas used in EU comes from Russia and
Russia has shown in recent years that it will not hesitate to use its gas exports for political
pressure. Most Russian gas is transported to Europe through pipelines that pass through Ukraine.
However, a big problem arises when Russia accused Ukraine of stealing gas and not paying
debts from gas imports. To pressure Ukraine, Russia stopped its gas exports and cause fallout not
only in Ukraine but also in other European Countries.
Thirdly, the problem of relationship between EU and Islam has been at the core of the
debate over Turkeys potential membership in EU since 1999. In 2005, accession negotiations
between Turkey and EU started. Proponent of an accession of Turkey argues that its membership
would help to build a bridge between European and Islamic Countries. Critics warn that Turkish
population will surpass Germanys population in the next ten years, so by that time, Turkey will
would be the largest member states. They also stress that, despite a number of political reforms
in Turkey, its political and judicial system is still far from meeting European Standards for rule
of law and religious freedom, particularly in regard to discrimination against members of
Christian Churches.