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CAPACITY BUILDING IN HIGHER EDUCATION

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Unit 12: Europe’s intercultural HQ: report from Brussels

Part 1
Prof. Eszter Szilagyi

TRANSCRIPT

Hello. This is Unit 12, and the lecture will be given by my colleague, Professor Eszter Szilagyi,
who is a professor of economics. In the first segment we will learn about the history, that is
the most important dates and the most important events in terms of the building of the
European Union as it is now in 2020. So we look at the history, how it came into being, and
how it became what it is today. In this section we are going to talk about the European Union
as a body. What is that? We are talking about its institutions and it goals. Again let's start
with a little bit of historical background. As you might remember after the Second World
War, when it was over, there was a very high need for peace and also a need for unity. A unity
between the large and very strong and powerful USA, and the Soviet Union.
Let's see, step by step, what were the most important acts, the most important steps to be
made to create this unity. Our first year, our first day is 1951: that was the year when the
Treaty of Paris was made. The Treaty of Paris created the European Coal and Steel
community that was the only body to regulate the industrial production of the Member
States under a centralized Authority. So we can say it was clearly for economic type of
practical type of reasons but anyway it was the first step of making a United body for
European countries. The next date is very important: 1957, the Treaty of Rome. It was when
the European Economic Community was formed. The European Economic Community
absolutely can be taken, of course, as a predecessor to the European Union. The very first
purpose to create the EEC was to create an economic integration among its member states.
A couple of slides after, I'm going to tell you the most important parts or facts or principles
by which they created this economic integration. The Treaty of Rome was made by six
founding States in 1957: it was West Germany France Italy the Netherlands Belgium and
Luxembourg in 1973 three other states joined it was Denmark, Ireland and the United

This project has been funded with support from the European Commission. This publication reflects the views
only of the author, and the Commission cannot be held responsible for any use which may be made of the
information contained therein. 1
Kingdom. In 1981 Greece joined, and then in 1986 Spain and Portugal. 1989, you remember,
it's a very important date not only in European history but also in global history because that
was the year and the Iron Curtain fell down. That was the year for the European Union--at
that time only EEC European Economic Community--when East Germany also joined as a
part of West Germany because that's was the happy year for them when they were reunited,
West and East Germany became the United Germany. So East Germany became a member,
too.
1992 can be taken as the birthday of the European Union under the name of European
community it was formed through the Maastricht Treaty. 1995 and now the three states
joined: Austria Finland and Sweden. 2002 was a very remarkable of a year in European
history because the currency of euro notes and coins were introduced. As you might know,
the Eurozone is not the same as all member states of the European Union. There are still
member states which are members of the European Union but do not join the euro, and
another part of that uses the euro as their own instead of their national currency. 2004: it's
absolutely the largest addition. The highest number of countries states that were joining to
the European Union actually can: Cyprus, the Czech Republic, Estonia, Hungary, Latvia,
Lithuania, Malta, Poland Slovakia and Slovenia. In 2007 Bulgaria and Romania also joined
and in 2009, it was the Lisbon Treaty. After the Lisbon Treaty, the European committee
community is called European Union Lisbon Treaty reformed many aspects of the European
Union this was the time when the European Union got single legal entity, a legal personality.
There was a last joiner, Croatia, who joined in 2013. And as you might know, in 2020, the
U.K. left the European Union. The whole process when the United Kingdom, through a slow
process left the Union, called the Brexit started in 2016. At that time, the British people
voted—it was actually quite a 50/50 type of voting -- but actually they finally decided to
leave the Union and the whole process took four years. So the final day, the last day when the
United Kingdom was a part of the European Union, was 2020, January the 31st.
So here we are. You know that now European Union has 27 member states, but let us see
let's talk a little bit about what is this really as I have already told you it's a political and
economic Union first I would like to tell you about what really economic union means. The
economic union as the first step means an integrated single market. It means that among all
the Member States there are no customs duties. You can see in my beautiful definition that
European Union policies aim to ensure „the free movement of people, goods, services and
capital within the internal market”: the integral single market. Let's start with the market of
goods and services. This is what I mean that there are no customs duties, not any customs
duties between the countries. Is it good for the Member States or is it bad for the Member
States? Well, on the long run and it's definitely good. You might already know, that the higher
the customs are, the higher price it is for the actual customers of the citizens in the state.

This project has been funded with support from the European Commission. This publication reflects the views
only of the author, and the Commission cannot be held responsible for any use which may be made of the
information contained therein. 2
Because customs duty for any company is a cost, so the higher the customs duties that I as a
company have to pay at the border to be able to get into your country, and to be able to sell
goods and services to you, the higher price I should give it to you. So normally customs duties
are bad for the citizens, so it's a very fair thing and it's very good thing for all the citizens in
the Member States there are no customs duties, because in itself this kind of legislation, this
rule, decreases the price level.
But let me just tell you some other thoughts about this. If there are two countries, and one
country has a stronger economy than the other, and the given industry type is stronger, more
highly developed compared to the other country, that means that their customs duties
abolishment, not using a customs duties means that it's good for the stronger economy and
it's not as good for the weaker economy. What does it mean? If in my country and in your
country we have both for instance textile factories but this industry is stronger in your
country it means that the textile factories makes higher quality goods at a lower price and
my weaker industry mixes the opposite way lower quality at a higher price. At that time we
say that there are no customs duties among us then of course that all my citizens will buy
your products, the products of your country, which is for my country an imported good--an
imported product. It also means that from this point of view, from this moment—ok, with a
little bit of drama—my textile industry is dead. Because who will buy my products if I can
offer it only at a higher price but in lower quality? So it is a question. So any time if you hear
debates among states in the world or among states in Europe, the debate is about this. How
to make the national differences to be not as strong, not as serious, as they used to be? As
you could see from my list of the countries: those countries are on very different levels from
the point of view of industrial development. That's why European Union makes a fund and
tries to promote those countries which have now worse conditions to develop their own
industries. So you can see that on one hand for small country with a weaker economy, it can
be dangerous to join to a customs union-- not using any kind of customs with the big
members. But on the other hand, the European Union also tries to support the smaller and
weaker member states, so that also their industry can be developed in the fair way. So you
see, it seems to be it's a little bit more complex question than we thought before. Let's go on.
It was free movement of goods and services.
Let's go on: free movement of people. What does it mean? It doesn't only mean that me as a
citizen of our member states can freely travel to other countries, but it also means that if I
decide here in my country to move away and to be an employee in another country, I can do
that because the other member state will definitely open the doors for me. So it's quite an
issue. It's quite an opportunity for citizens of member states of the European Union. Any
citizens can be employees anywhere within the Union. Now what about free movement of
capital? It means that if a company from one member state wishes to make a capital

This project has been funded with support from the European Commission. This publication reflects the views
only of the author, and the Commission cannot be held responsible for any use which may be made of the
information contained therein. 3
investment in another Member State, then it can do it freely, making LTDs, shareholders,
companies. As you can see it's quite a high opportunity not for only the richest States but
also for the poorer states. If there is a state when the wages are lower than in other states
then of course you can understand that the big companies will be very enthusiastic to make
capital industry investments for the country. And these investments mean also great
opportunity for development of the smaller country they take the capital, there they make
the investments there, and they offer opportunities for the workforce to be employed at
companies where they can get good salaries. So mostly you can see it at this point of making
an internal, single market: it is mostly high opportunities for all the member states, even
though, as I told you, thre can be debates. But mostly it's a very, very positive way of
development.
Let's go on: the standardized system of laws to be applied by member states. Well, in those
matters, members have to agree to act as one. The question about it is „why?” And the other
question is: is it good for everybody or not? Well, if we would like to make unity, either an
economic or a political unity, it means that there is a question that in the global world
sometimes the members they represent themselves. But as a European Union we have to
represent ourselves as a whole. Of course it needs a very high legislation system: we call it
law harmonization. You can see how important it is. So that's why mostly again I see it's very
useful. Still: many cases from the news, you can hear that there are high debates about it,
about the Member States. Why? because it's always a question: is it more important for me
in this type of law, that I am a part of the higher unity or would I rather like to act as one
national economy or as one independent state? So it is just again an area when there can be
different opinions. So in this way we can see the road is quite long. But it's quite good because
as you can see the purpose itself it's so obvious. It's quite the same thing: maintaining
common policies. Again, if you see, it's again a legislative type of work. What are the most
important areas where we can say they try to make common policies? This policies on trade:
on agriculture and fishing, and the regional development. Remember at the very beginning
when I was talking about differences-- regional differences-- that there are really high levels
of differences in industrial development between the Member States -- that is what I meant.
So the regional development policies most important purpose is that even though currently
there are high differences among the level of development between industries of the Member
States the weaker ones should be helped the weaker ones should be developed. So again as
you can see it's again a very positive goal.

This project has been funded with support from the European Commission. This publication reflects the views
only of the author, and the Commission cannot be held responsible for any use which may be made of the
information contained therein. 4