EUROPEAN UNION

European Union

Presented by
Atodaria Viraj(02)
Kathiriya Alpesh(34)
Doctor Parthav(21)
Kapadia Hussain(30)
Jethva Ketan(28)
Mavani Hardik(39)

1
 In a Nutshell
• History & Evolution of European Union
European Union

• Objectives of EU
• Legislation of EU
• EU Trade Policy
• Euro
• Euro Currency Market
• EU-India Trade Relations
• EU-Microsoft Antitrust Case Study

2
 European Union
• Intergovernmental and supernational union of 27
European Union

European countries
• Established under that name in 1992 by the Treaty on
European Union (the Maastricht Treaty)
• With almost 500 million citizens, the EU generates an
estimated 31% share of the world's nominal GDP
(US$16.6 trillion) in 2007.
• European Union's activities cover:
– public policy
– health
– economic policy
– foreign affairs
– defence

3
 History & Evolution Of
European Union
• 9th May 1950 France proposed a
European Union

`European Federation’
• 1952: The basis of the EU began with the signing of the
Treaty of Paris, establishing the European Coal and Steel
Community (ECSC), to regulate European industry &
improve commerce, post WWII.

• The six founding states were Belgium, France, Germany,

Italy, Luxembourg, and The Netherlands.

• 1957: the Treaties of Rome were signed by the six member

states, forming:
-The European Economic Community (EEC)
-The European Atomic Energy Community (Euro atom)

• These units worked concurrently with the ECSC.

4
 Contd.
• 1967: ECSC, EEC, and EuroAtom merged to form
European Union

the basis of the EC.

• 1973: the United Kingdom, Denmark and Ireland
joined the EC.

• 1981: Greece joined.

• 1986: Spain and Portugal joined.

• 1995: Finland, Sweden, and Austria joined.

• 2004: Cyprus, Czech Republic, Estonia, Hungary,
Latvia, Lithuania, Malta, Poland, Slovakia,
Slovenia
5
 European Union

6
 European Union

The Present

7
 Goals of the EC
• To continue to improve Europe’s
European Union

economy by regulating trade and

commerce.

• To form a single market for Europe's

economic resources.

• As these goals were accomplished, other

goals were developed:
• Environmental movements
• Regulatory acts
• Human rights concerns.
8
 Principal Objectives of the EU
European Union

• Establish European Citizenship

• Ensure freedom, security, and justice
• Promote economic and social progress
• Assert Europe’s role in the world

9
 The EU is run by five
institutions
1. European Parliament -elected by the
European Union

peoples of the Member States

2. Council of the Union -composed of the
governments of the Member States
3. European Commission -driving force
and executive body
4. Court of Justice -compliance with the
law
5. Court of Auditors -sound and lawful
management of the EU budget
10
 European Parliament
• Members elected every 5 years
European Union

• 732 members, 750 max.

• Three essential functions:
1. Legislate laws along w/ Council
2. Budget authority along w/ Council
3. Supervision of Commission

11
 Council of the EU

• Composed of the head of each member country

European Union

(Prime Minster/President, etc) & the President of

the EU Commission (27 members)
• 1 Minister acts as President, rotating twice yearly
• 2 meetings a year, in President’s country
• Main decision making body of the EU
• Responsibilities
• Legislation & budgetary policies along with
Parliament
• Economic policies
• International agreements

12
 European Commission

• Embodies and upholds the general interest of the

European Union

Union.
• 27 members: 1 President, 2 vice-Presidents & 22
Commissioners
• Elected every 5 years by the Member States after
they have been approved by the European
Parliament.
• As the EU’s executive body, it:
• Drafts legislation for Parliament & Council;
Implements legislation
• Guardian of treaties, along with Court of Justice
• Represents EU internationally
• Manages the 15 EU agencies 13
 Court of Justice

• 25 judges and 8 advocate generals

European Union

appointed
by member states for 6 year terms. 
• The Court of Justice ensures that
Community
• law is uniformly interpreted and
effectively applied.
• It has jurisdiction in disputes involving
Member States, EU institutions,
businesses and individuals
14
European Union European Court of Auditors

• 25 members
• located in Luxembourg
• checks how EU money is spent
• help European taxpayers to get
better value for the money

15
 Financial Bodies
European Central Bank –
European Union

– Frames & implements monetary policy

– Conducts foreign exchange operations
– Ensures smooth operation of payment system

European Investment Bank –

‘owned’ by member states. Raise finance
through financial markets,
Invest in projects to promote aims of EU – large
scale projects

16
 What does the EU do?
• Euro - a single currency for Europeans
European Union

• Free to move
• Keeping the peace
• An area of freedom, security and
justice
• Fewer frontiers: more jobs!
• An information society for everybody
• Caring about our environment
17
European Union

CURRENT EU ISSUES

18
 CURRENT EU ISSUES

1 Enlargement: Ten countries joined the EU in 2004,

European Union

making 25 countries total & 2 countries joining

later making 27 countries.
2. Single Market : free movement of goods,
services, labour and capital between member
states
3. The Euro: The Common Currency for the EU
Countries.
4. Openness, Access and Transparency:
How to get the documents to the people?
5. Safety & security of Europe:Against terrorism.

19
 27 EU COUNTRIES in 2007
• Austria
• Belgium
• Bulgaria
• Czech Republic
• Cyprus
• Denmark
European Union

• Estonia
• Finland
• France
• Germany
• Greece
• Hungary
• Ireland
• Italy
• Latvia
• Lithuania
• Luxembourg
• Malta
• The Netherlands
• Poland
• Portugal
• Romania
• Slovakia
• Slovenia
• Spain
• Sweden
20
• United Kingdom
 Applicant Countries whose
requests for EU membership are
still pending
country - date of EU application
European Union

• Turkey - 14 April 1987

• Croatia - 2003

21
 Enlargement
• Advantages
European Union

– Economic growth
– Stability
– Global Presence
– Business Confidence
– Foreign Direct Investment (FDI)
– Structural Funds

• Disadvantages
– Migration
– Common Agricultural Policy
– Regional Aid
– EU Standards and Systems
– The Legacy of the Soviet Economy

22
 What is the Single Market?
• building one internal market was
European Union

intended to launch Europe as an

economic superpower
• as member states got rid of
obstacles to trade, companies would
start to enjoy new economies of
scale
• more cross-border competition
would wipe out inefficient firms
23
 How was it Created?
• Removal of barriers to the four freedoms
European Union

of movement (people, goods, services,

capital) within the EU
• Barriers were: regulatory, technical,
legal, bureaucratic, cultural and
protectionist
• EU Directives telling member states,
governments to put changes into effect.

24
 Who Benefits?
• Consumers: lower prices, greater
European Union

choice of goods and services, work

within EU

• Businesses: fair competition,

economies of scale, expand to global
markets

25
 By How Much?
• European Commission estimates the
European Union

Single Market has produced:

• 2.5 m new jobs since 1993
• 800 billion euro extra wealth
• over 15 m people now go to another
EU state either to work or retire

26
 Issues dealt till now
• Recognition of • Border controls
European Union

Professional • Market access for

qualifications and products
diplomas • Market access for
• Access to education services
• Residence permits • Establishment as
• Voting rights self-employed
• Social security • Public procurement
• Employment rights • Taxation
• Driving licences • Free movement of
• Motor vehicle capital or payments
registration
27
European Union

European Union
Trade Policy

28
 Facts About World Trade
Evolution of World Trade: 1999-2004
European Union

Million Euro
12,000,000

10,000,000

8,000,000

1999
6,000,000
2004
4,000,000

2,000,000

0
World EU 29
 EU in World Trade
20% of world trade: 19%
world trade in goods,
European Union

24% world trade in

services

First Exporter A Major Second Largest

Trading Power Importer

Foreign direct investment (FDI):

EU-25 source of 46% of the
world’s FDI (€235 billion) and
hosts 20% of the world’s FDI
(€119 billion)
30
 EU in World Trade
Share in World trade in Goods

Japan,
European Union

7.60% US,
19.70%
Others,
53.60% EU,
A 19.10%
Major
Share in World trade in Services
Trading
Power Japan,
7.70% US,
Others, 20.20%
47.80%
EU,
24.30%
31
 EU in World Trade
EU-27 Trade in goods- Export by Region
(2004 Million Euro)
European Union

32
 EU in World Trade
EU-27 Trade in goods- Import by Region
(2004 Million Euro)
European Union

33
European Union EU in World Trade

34
 EU in World Trade
Degree of Insertion in world economy
RATIO Total Trade = ( Imports + Exports)/GDP - 2004
European Union

EU
19.9
US
16.6

Japan
17.1

China
47.5

35
 EU in World Trade

Imports from
European Union

Developing
Countries
(mn Euro)

Others

Imports
from Least
developing
Countries
(mn Euro)
36
 EU Trade policy-Basic Features

Bilateral/
European Union

Multilateral
Regional

3
Dim e n s io n s

Unilateral

37
 EU Trade policy-Basic Features
Multilateral
European Union

Mostly implemented in the framework of the WTO with the aim

of promoting market access with rules, in the context of
effective global governance.

For example -
• for trade in goods: policies such as “tariff reduction” and technical
barriers to trade.

But not forgetting the promotion of EU values, including:

• environmental concerns
• food safety
• cultural diversity
• … and how to promote core labour standards ?

38
 EU Trade policy-Basic Features
Bilateral/
Regional
In addition to the WTO's multilateral negotiations, the EU concludes
European Union

bilateral agreements and devises specific trading policies with third

countries and regional areas. 121 countries are potentially linked to
the EU by regional trade agreements, many negotiated in the 1990s.

EU policy rationale for Key EU bilateral agreements

bilateral agreements
• Trade expansion and
rules-making (WTO+)
• Fostering
development and promoting
regional development
• New ideas for
“Neighborhood”
policy/ “Wider Europe”
include:
• Economic Partnership Agreements
in negotiation with ACP countries
(Cotonou)
• Free Trade Agreements with
EFTA, EEA, Euromed, Mercosur (in
negotiation), Mexico, South Africa...
• Customs Unions with Turkey,
Andorra and San Marino
• Partnership and Cooperation
Agreements with Russia &Ukraine 39
 EU Trade policy-Basic Features
Unilateral
The EU also implements unilateral measures as an additional trade
European Union

policy instrument in the interests of development and/or political

stability in line with the Union’s key political priorities:

General System of “Everything But Arms” initiative

Preferences (GSP)
classical instrument for fostering
development is by granting
tariff preferences. The EU's GSP
grants products imported from
GSP beneficiary countries either
duty-free access or a tariff
reduction depending on the
sensitivity of the product and the
GSP arrangement enjoyed by the
Country concerned.
(EBA) - EBA is a special GSP
arrangement for the least
developed countries. EBA
grants duty-free access to imports
of all products from LDCs without
any quantitative restrictions,
except to arms and munitions.
Asymmetrical preferences e.g.
for the Balkans and Moldova,
with the aim of ensuring peace,
stability, freedom and economic
prosperity in the region
40
(cf. “Wider Europe”).
 EU Trade policy
A comparison between the EU and the US

EU Efficiency Transparency Legitimacy

European Union

• Exclusive EU • Legal texts quite • Community

competence complicated following mandate from
• Council acts on the the adoption of the Council
basis of QMV Treaty of Nice • EUParliament only
• Member States plays a limited role
usually stick to
common line

US
• Congressional • Political debate over • Congress retains
constitutional Trade Promotion
final say thanks to
responsibility, “leased Authority (adopted in
2001) heightened constitutional
back” to Administration
• Congressional ‘fast public awareness, responsibility
track’ procedure time allowed debate on
ltd, politicized trade policy priorities

41
 The impact of the EU
decisions
• All areas of public policy:
European Union

market regulation, social policy, environment,

agriculture, regional policy, research and
development, policing and law and order, citizenship,
human rights, international trade, foreign policy,
defence, consumer affairs, transport, public health,
education and culture

• EU sets Over 80% of rules governing the production,

distribution, exchange of goods, services and capital

• About 300 of pieces of legislation pass through the EU

institutions every year, more than in any other single
set of policy institutions in the democratic world

42
 The impact of the EU
decisions
• Primary and secondary acts of the EU are
European Union

supreme over national law. Most of the

acts have direct effects and create rights
for individuals. Powerful indirect effect on
the distribution of resources between
individuals, groups and nations in Europe

• Several Member states receive around

5% of their gross domestic product from
the EU budget
43
 European Union Euro

44
 Introduction of Euro

• The euro was established by the

European Union

provisions in the 1992 Maastricht Treaty

on European Union

• The introduction of the euro took place

principally on 31 December 1998

• Physically launched as Banknotes &

Coins on 1 January, 2002.
45
 Introduction of Euro
• The rates were determined by the Council
of the European Union, based on a
European Union

recommendation from the European

Commission based on the market rates
on 31 December 1998
• one ECU (European Currency Unit) would
equal one euro
• The European Currency Unit was an
accounting unit used by the EU, based on
the currencies of the member states; it
was not a currency in its own right
46
 Criteria for Participating

• to participate in the new currency,

European Union

member states had to meet strict

criteria
 a budget deficit of less than 3% of their
GDP
 a debt ratio of less than 60% of GDP
 low inflation and
interest rates close to the EU average.

47
 Euro
• currency sign: €
European Union

• banking code: EUR

• Official currency of the European Union
(EU)
• Currently consists of 15 states
Austria Belgium Cyprus
France Germany Greece Ireland
Malta Luxembourg Slovenia
Portugal the Netherlands Spain Italy
Finland

48
 Cont..
• It is the single currency for more than 320
European Union

million Europeans
• the euro directly affects close to 500
million people worldwide
• more than €610 billion in circulation as of
December 2006 (equivalent to US$802 billion
at the exchange rates at the time)
• the currency with the highest combined
value of cash in circulation in the world,
having surpassed the U.S. dollar
49
 Cont..
• It is managed and administered by the
European Union

Frankfurt-based European Central Bank

(ECB) and the Eurosystem
• Eurosystem participates in the printing,
minting and distribution of notes and
coins in all member states, and the
operation of the Eurozone payment
systems

50
 Characteristics
1.Coins & Bank Notes
• Notes are issued in
European Union

€500, €200, €100,

€50, €20, €10, €5

• The euro coins are

€2, €1, €0.50,
€0.20, €0.10,
€0.05, €0.02, and
€0.01
51
 2. Payments clearing, electronic funds
transfer

• intra-Eurozone transfers shall cost the

European Union

same as a domestic one

• Credit/debit card charging and ATM
withdrawals within the Eurozone are also
charged as if they were domestic
• The ECB has set up a clearing system,
TARGET(Trans-European Automated
Real-time Gross Settlement Express
Transfer System) for large euro
transactions.
52
 3.Currency Sign
• The glyph is according to
European Union

the European
Commission "a
combination of the Greek
epsilon, as a sign of the
weight of European
civilization; an E for
Europe; and the parallel
lines crossing through
standing for the stability
of the euro"
53
 Economic & Monetary Union
• A single currency for the EU has been an official
objective since 1969 and work began in 1990 on
Economic and Monetary Union
European Union

Yielded currencies of the Eurozone

Currency Abbr. Rate Fixed on EMU III
Austrian schilling ATS 13.7603 1998-12-31 1999
Belgian franc BEF 40.3399 1998-12-31 1999
Dutch gulden NLG 2.20371 1998-12-31 1999
Finnish markka FIM 5.94573 1998-12-31 1999
French franc FRF 6.55957 1998-12-31 1999
German mark DEM 1.95583 1998-12-31 1999
Irish pound IEP 0.787564 1998-12-31 1999
Italian lira ITL 1936.27 1998-12-31 1999
Luxembourg franc LUF 40.3399 1998-12-31 1999
Portuguese escudo PTE 200.482 1998-12-31 1999
Spanish peseta ESP 166.386 1998-12-31 1999
Greek drachma GRD 340.750 2000-06-19 2001
Slovenian tolar SIT 239.640 2006-07-11 2007
Cypriot pound CYP 0.585274 2007-07-10 2008
54
Maltese lira MTL 0.429300 2007-07-10 2008
 Euro zone
• euro is the sole currency in
European Union

Austria, Belgium, Cyprus,

Finland, France, Germany,
Greece, Ireland, Italy,
Luxembourg, Malta, the
Netherlands, Portugal,
Slovenia and Spain
• 15 countries together are
frequently referred as the
Eurozone or the euro area, or
more informally "euroland" or
the "eurogroup"
55
 Euro zone
• Andorra, Montenegro,
European Union

Kosovo, and Akrotiri

and Dhekelia adopted
the foreign euro as
their legal currency for
movement of capital
and payments without
participation in the
ESCB(European
System of Central
Bank)

56
European Union Euro to Indian Rupee

57
 Euro to Other Currencies
 1 EUR   in EUR 
European Union

  American Dollar    1.4505   0.689417 

  Australian Dollar    1.62157   0.616685 
  Brazilian Real    2.56086   0.390494 
  British Pound    0.744879   1.3425 
  Canadian Dollar    1.44963   0.689831 
  Chinese Yuan    10.4189   0.095979 
  Danish Krone    7.4534   0.134167 
  Hong Kong Dollar    11.3145   0.0883823 
  Indian Rupee    57.4543   0.0174051 
  Japanese Yen    155.697   0.00642274 
  Malaysian Ringgit    4.68512   0.213442 
  Mexican Peso    15.6045   0.0640841 
  New Zealand Dollar    1.8405   0.543331 
  Norwegian Kroner    8.0278   0.124567 
  Singapore Dollar    2.05594   0.486396 
  South African Rand    11.3067   0.0884435 
  South Korean Won    1370.14   0.000729851 
  Sri Lanka Rupee    156.393   0.00639415 
  Swedish Krona    9.41419   0.106223 
  Swiss Franc    1.60106   0.624585 
  Taiwan Dollar    46.416   0.0215443 
  Thai Baht    45.4007   0.0220261 

58
using values from Friday, February 08, 2008
 Euro-Currency Markets
Introduction
European Union

• Euro-currency Markets are also

called Euro-dollar market.
• Euro- currency market is a market
principally located in Europe for
lending and borrowing the world’s
most important convertible
currencies, namely dollar, sterling,
DM, French franc, yen, etc.
 Euro-Currency Markets
Introduction
European Union

• Currency Market & Exchange

Market:
The international currency markets
are a subordinate of the foreign
exchange markets. In FEM
currencies are exchanged one for
the other & in the currency markets
the currencies are borrowed and
lent for varying maturities.
 Euro-Currency Markets
Origins of the Euro-Currency Markets:
European Union

• US & European banks took deposits

outside US, after 2nd world war.
• US dollars were used widely.
• The momentum gathered & so these
banks were encouraged to depend on
dollars.
• No restrictions on these banks were
laid as that on domestic banks.
• Lower costs as per domestic banks.
 Euro-Currency Markets
• Impact on Exchange Markets:
European Union

Impact of Euro-currency markets on

the foreign exchange markets is
multi -dimensional. Not only the
demand and supply of various
currencies are influenced through
pressures from the Euro-currency
markets but the exchange rates are
altered by speculation in currencies.
 Euro-Currency Markets
• Segments of the Market:
European Union

Two segments:
3.Inter-Bank
4.Non-Bank Public
Purpose of banks’ involvement in the
ECM is to satisfy the genuine demand
for currency in the commercial
operations of the borrowers which is
the market for non-bank public.
 Euro-Currency Markets
• Sources:
European Union

The main sources of funds for the

market came from varied groups-
individuals, corporations,
commercial banks, international
institutions, multinationals, the
central banks, the governments.
 Euro-Currency Markets
• Uses:
European Union

2.Balance of payments requirements

of governments.
3.Monetary authorities for commercial
short or long-term investments in the
private sector.
 Euro-Currency Markets
• Importance of the Market:
European Union

2. Financing deficits in BOP.

3. Investments & working capital requirements.
4. Channel for profitable investment for excess funds of
governments, central banks and business
corporations.
5. Lightening the pressures on the international monetary
system

• Dealers in the market:

• Lawyers and Auditors:
 Euro-Currency Markets
• Euro-bond market:
European Union

This is an international market for

borrowing capital by any country’s
government, corporate and
institutions.
• Instruments Issued and Traded
(1) Fixed Rate Bonds:
(2) Convertibles:
(3) Swaps:
 Euro-Currency Markets
• Magnitude of Trade:
European Union

The magnitude of trade in this

market runs into trillions of dollars,
particularly in the inter bank deal. In
1987 the amount of Euro-bonds was
$150 billion, while the same in 1964
was $500 million.
European Union EU-India Trade Relations

69
 Origins
• EU-India relations go back to the early 1960s:
European Union

India was amongst the first countries to set

up diplomatic relations with EEC
• Bilateral agreements signed in 1973, 1981,
The 1994 co-operation agreement (signed 20
Dec 1993) is a wide-ranging 3rd generation
agreement, well beyond trade and economic
co-operation.

70
 EU-India Relations- Milestones

1963 India establishes diplomatic relations with EEC

1973 Commercial cooperation agreement
European Union

1983 EC sets up a Delegation in New Delhi

1988 EC-India, first Joint Commission meeting
1993 Joint Political Statement
1994 Cooperation agreement on partnership and
development
1996 Enhanced EU-India partnership
2000 First Summit, in Lisbon
2004 5th Summit in Hague: launch of Strategic
Partnership
2005 6th Summit in New Delhi: Joint Action Plan
2006 7th Summit in Helsinki
 INDIA-EU ECONOMIC
RELATIONSHIP
• EU is India’s largest trading partner.
European Union

• The bilateral relationship is reviewed

annually by India –EU Summit at the
level of our PM and the Presidency of the
EU.
• Announcement of Strategic Partnership
was made at 5th India-EU Summit held in
Hague in November 2004.
 EU—India Trade
• EU remains India’s largest trading partner, accounting for
21.77% of India’s exports and 18.33 per cent of total
European Union

Indian imports in the year 2004-05

• total trade between EU and India increased from €28.4

billion in 2003 to €33.2 billion in 2004-05 registering a
growth of 16.9%.

• EU exports to India show an impressive growth of 17.2%

in 2004-05

• EU imports on the other hand increased from €13.9 billion

in 2003 to €16.2 billion in 2004-05

• India-EU trade has potential to touch $572b by 2015: Ficci

73
 Bilateral Trade
India’s exports India’s imports
European Union

• During 2005-06 - US$ • During 2005-06 -

23.23 billion as US$ 26 billion as
against US$ 18.25 against US$ 19.3
billion in 2004-05 billion in 2004-05
• This was 22.5% of • This was 17.4% of
India’s total global India’s total global
exports. imports.
• Export growth to EU - • Import growth from
27.29% as against EU – 34.7% as
23.41% of its global against 33.7% of its
export growth. global import
growth.
 Major items traded (in US$ Billion)
• Major items exported • Major items imported

 Apparel & Clothing - 4.7  Machinery or Mechanical

European Union

 Mineral fuel etc. - 2.47 appliances -4.81

 Pearls, precious or semi-
 Pearls, precious & semi-
precious stones, metals,
precious metal etc. -
etc. -5.6
2.04
 Electrical Machinery etc. -
 Organic Chemical - 1.09
2.9
 Machinery or
 Aircrafts - 2.7
Mechanical appliances
-1.0  Iron & Steel products – 2.0
 Electrical machinery  Organic Chemicals - 1.0
and equipment – 0.7
 Footwear and other
products – 0.8
 What happened after October 2006
• The decision at the Summit was considered by
European Union

the Council of the EU and the European

Commission was authorized to enter into
negotiations with India in April 2007.
• The First Round of negotiations took place in
June 2007 in Brussels, Belgium. The
delegation was led by Commerce Secretary,
Government of India.
• Broader objectives for negotiations were
agreed.
• Working Groups established for negotiating
various issues.
 Present Status
Trade in Goods:
• Text of Agreement exchanged.
European Union

• India to identify:
 Items that are sensitive - No tariff liberalization
to be offered. (approximately 520 items
covering an import value of not more than
US$2.6 billion).
 Items of export interest which we need to ask
EU not to be kept in their Exclusion List.
 Non-Tariff Measures which are increasing our
exports to EU.
 Key areas of co-operation are:

 Political relations
European Union

 Trade and investment

 Economic and Development Co-operation

 Cultural exchanges
 An EU-India Strategic Partnership
– Development Cooperation
• EU working with India to tackle poverty.
• Integrating three pillars of sustainable development:
European Union

social, economic and environmental development.

• India is now a receiver and provider of development aid
• The Indian context: human development indicators show
good progress but poverty still widespread. Unemployment
is high. Vast income disparities between and within states
• New approaches: 2002-2006 Country Strategy Paper for
India forecasts € 225 million in grants for India, focusing on
Rajasthan and Chhattisgarh. Sectoral reform support in
elementary education and health.
• EU Cooperation in India: India has number of donors to 6
i.e (US, Russia, Japan, UK, Germany, EC).
Better coordination needed among donors.
 EC Development and Economic Cooperation in
India:
The total of European Commission’s assistance to India, all in
European Union

the form of grants, is reaching the landmark of

Euro 2 billion,
billion over Rs 8000 crores.
crores

The EC is the largest donor of grant funds to India.

 The Development Cooperation Strategy:

• EU-India cooperation agreement focuses on:

European Union

Poverty reduction projects

These promote an efficient and sustainable use of
resources and sector programmes aimed at
improving basic social services

Public Health and Primary Education

These are the largest sector programme at the
moment
 1.Primary Education

2.Sarva Shiksha Abhiyan

European Union

Programme

3. Health:
Support to Health and Family
Welfare Sector Development

4.Development
4.
 State Partnership Programme
• A multi sector policy support Programme aims at
European Union

Poverty Alleviation in Chhattisgarh and

Rajasthan
• Targeted Sectors
– Chhattisgarh- Education, Health and Forest
– Rajasthan –Water Sector
• Budget Support Programme
• Grant of € 160 Million total, € 80 M to each State
• Scheduled to be launched in 2006
• Implementation Period – 6-7 Years
 State Partnership Programme
• Both partnerships focus on policy and reforms
European Union

with high Poverty Alleviation effects

• Chhattisgarh and Rajasthan chosen as states with
poor Human Development indicators, but ‘Reform
Minded’
• Additionality of resources to Centre and State
• Complementary to reforms through centrally
sponsored schemes
• Institutional reforms to promote Accountability
• Decentralization and community Participation
 Non Governmental Organizations
Essential partners in the development process

 With more than 300 NGO projects in several fields,

European Union

India is the largest recipient of the EC’s NGO funds

in Asia.

 The current portfolio consists of more than 130 NGO Co-

financing projects accounting for about 125 million euros
(Rs 500 crores)

 The current allocation is 40 million euros (Rs 160

crores).
 Emergency Aid/Humanitarian Aid

 Since 1998 the EC has increased its humanitarian

European Union

operations in India contributing 300 million Euros

(Rs 130 crores).

 Emergency and humanitarian aid managed by the

EC Humanitarian Office (ECHO) provides
emergency aid of humanitarian/relief nature,
financing assistance, protection and emergency food
aid after disasters.

 ECHO also provides assistance for pre-emptive

action for disaster prevention.
 Economic cooperation

 The EC has horizontal programmes and bilateral

European Union

programmes for its economic cooperation.

 Horizontal programmes aim at establishing new links

and reinforcing existing ones between EU and India.
They also promote European environment practices
and facilitate business cooperation between EU and
Asia in general.

 Bilateral programmes include in addition to the

scientific cooperation, the cooperation between EU
and India on product standards, maritime transport
and civil aviation.
 Future prospective
• India’s trade with the European Union has the potential
to reach a whopping $572 billion by 2015 once the FTA
with the 27-nation bloc is implemented, Ficci says.
European Union

• The India-EU FTA is likely to be fully implemented by

2015 by when India’s trade in goods with the bloc could
be around $251 billion and trade in services $321 billion,
according to a study by the chamber on ‘India-EU Trade
& Investment: Current Status and Issues’.

• Going by the study, India-EU trade would account for

more than 25% of the country’s GDP which may grow up
to over two trillion dollars if 10% economic growth is
achieved and maintained. At present, bilateral trade
accounts for less than 10% of India’s GDP.

• According to the study, in 2008 India’s merchandise trade

with EU would be about $79 billion and in services it
would be $32 billion.
 • However, the study said trade deficit in goods
between India and EU has grown six-fold to $3
billion in 2006-07 from $492 million in 2001-02.
• The chamber further said a number of issues
need to be resolved under the FTA negotiations
European Union

to increase the share of India’s exports of goods

and services to the EU market, which is currently
only around 3%.
• EU-India trade has grown impressively over
the years, from €4.4 billion in 1980 to over €46
billion in 2006. Trade with the EU represents
almost 20% of India's exports and imports and
the EU thus as a bloc is India's largest trading
partner. The EU is also India's largest source of
foreign direct investment. However, India
accounts for just 1.8% of total EU trade. India
attracts only 1.3% of the EU's world-wide
investments.
 Summary of Case Study.
Microsoft & European Union
European Union

We think that the facts will show that there is strong competition and
consumer choice. The impact of this case goes far beyond Microsoft.
The ability to innovate is important for the success of any company
and for the economic success of any country."

-Brad Smith, Microsoft's General Counsel, in April 2006.

"The commission is not asking Microsoft to be nice to its competitors.

It is asking it to compete on the merits."

- Per Hellstrom, European Commission's Lawyer, in April 2006.

 The Case…..
• Introduction
European Union

• EC Issues 'Statement of Objections’

• The Investigations
• EC Slaps Fine
• Appeal to Higher Court
• Microsoft Complies But…
 Problems with the Case:-
1) Information not provided by
European Union

Microsoft.
2) Non – Compliance with the Law.
3) Issue with the Windows Media
Player.
4) Abusing Market Leader status.
 Real Solution:-
• Removing the media player led to
European Union

the loss of several functions in the

trimmed O/S and deprived
customers of the ability to play
music provided by Yahoo! and
Napster.
• The hearing on antitrust case ended
on April 28, 2006
 Bibliography
• International Business Environment
European Union

- Francis Cherunilam
- Himalaya Publishing House
• International Finance
- V.A. Avadhani
- Himalaya Publishing House

94
 Wibliography
• http://en.wikipedia.org/wiki/European_Exchange_Rate_Me
European Union

chanism
• http://en.wikipedia.org/wiki/Introduction_of_the_euro
• http://www.caxtonfx.com/converter/converterpro.html
• http://en.wikipedia.org/wiki/Euro
• http://en.wikipedia.org/wiki/European_union
• http://www.icmrindia.org/casestudies/catalogue/Business
%20Environment/BENV005.htm(Link for Case study)
• http://en.wikipedia.org/wiki/Maastricht_Treaty
• http://en.wikipedia.org/wiki/European_Currency_Unit
• http://finance.yahoo.com
• http://answers.com/eu

95
European Union Thank You

• Questions &
Suggestions
are Welcome

96