The Institutional Framework of the European Union

○ The Institutional Framework includes the following

organizations:
o European Council
o European Commission
o European Parliament
o European Court
o European Central Bank

European Council - suvet

- The European Council is the highest political institution of the European

Union.
- It defines the general political guidelines of the European Union
- It meets around four times a year in Brussels.
- It includes the heads of governments of the 27 member states and the
President of the European Commission.
- The Council has no formal executive or law making powers.

The European Commission - komisiq

 Executive branch of the European Union

 Responsibilities
 Cabinet government
 Commission President (5 year term)

○ European Commission is the executive branch of the European Union

- It is responsible for proposing laws, implementing decisions, upholding
the Union's treaties and the general day-to-day running of the Union.

○ The Commission operates in the method of cabinet government, with 27

Commissioners. There is one Commissioner per member state; however
Commissioners represent the interests of the EU as a whole rather than
their home state.

○ One of the 27 is the Commission President appointed by the European

Council with the approval of the European Parliament for five a year
term. The current Commission President – José Manuel Barroso (elected
 2004)

European Parliament

 Together with the European Council it forms the

legislative branch of the European Union

 The only directly elected parliamentary institution

of the European Union

 The most powerful legislature organ in the world

 The Parliament and Council form the highest

legislative body within the Union.

 Composed of 785 MEPs

- The European Parliament is the only directly elected institution of the

European Union. EU citizens elect the Parliament members every five
years.
- The Parliament is composed of 785 members.
- Has been described as one of the most powerful legislatures in the world
- Together with the European Council it forms the bi-cameral legislative
branch of the European Union.
European Court

 Highest court in the European Union

 It has the ultimate say on matters of EU law in
order to ensure equal application across the
various European Union member states

 Established in 1952

 Based in Luxembourg City

 The court is composed: one judge per member

 state; only 13 of them hear a case at any one time in
the 'Grand Chamber'

- The European Court of Justice is the highest court in the European

Union.
- The court has the final word on EU law issues.
- The Court was established in 1952 and is based in Luxembourg City —
unlike most other Union institutions which are based in Brussels.
- The court is composed of one judge per member state, although only 13
of them are hearing a case at the same time.
- The court is led by a president, since 2003 this has been Vassilios
Skouris.

European Central Bank

o Responsible for the monetary policy of the countries

in the Eurozone
o One of the most important central banks
o Established by the European Union in 1998
o Headquartered in Frankfurt, Germany
o The predecessor to the ECB was the European Monetary
Institute (EMI).
o The ECB has the exclusive right to set interest rates
for the Eurozone

- The European Central Bank (ECB) is one of the most important banks in
the world.
- It is responsible for the monetary policy of the 15 member countries of
the Euro zone.
- It was established by the European Union in 1998, headquarters in
Frankfurt, Germany.
- The ECB sets interest rates for the Euro zone and authorizes issuance of
banknotes for each member of the Union.
- The primary objective of the ECB is "maintaining price stability" within
the Euro zone and keeping inflation low. The present target is to keep
 inflation below, but close to, 2%.

The Euro zone

 The Members of the Euro zone - Austria, Belgium, Cyprus,

Finland, France, Germany, Greece, Ireland, Italy,
Luxembourg, Malta, Netherlands, Portugal, Slovenia, Spain
 Countries from EU, which are not members of the
Euro zone - Denmark, Sweden, the United
Kingdom, Bulgaria, the Czech Republic, Estonia,
Hungary, Latvia, Lithuania, Poland, Romania and
Slovakia

 Maastricht Treaty gave Denmark and UK the right

to not adopt the Euro as their currency – they can
join the Euro zone when their governments decide

 The next enlargement of the Euro zone is expected

to be Slovakia in 2009

- The Euro zone refers to the European Union member states

that have adopted the Euro currency union.

- The Euro zone includes the members who have already adopted the Euro
as their national currency.
- The European Central Bank is responsible for the monetary policy within
the Euro zone.
- In 1998 eleven European countries had met the criteria for entering the
Euro zone. The next year those countries adopted the Euro as their
national currency.
- Later physical coins and banknotes were introduced on 1 January 2002.
- Currently there are 15 member states with over 320 million people in the
Euro zone: Austria, Belgium, Cyprus, Finland, France, Germany, Greece,
Ireland, Italy, Luxembourg, Malta, Netherlands, Portugal, Slovenia,
Spain
− Countries from EU, which are not members of the Euro zone.

The twelve countries of the European Union that do not use the Euro
are: Denmark, Sweden, the United Kingdom, Bulgaria, the Czech Republic,
Estonia, Hungary, Latvia, Lithuania, Poland, Romania and Slovakia. The next
enlargement is expected to be Slovakia in 2009.

- Denmark and the United Kingdom obtained special rights in the original
Maastricht Treaty of the European Union. Both countries are not legally
required to join the Euro zone unless their governments decide
otherwise.
- The current Danish government has announced plans to hold a
referendum on the issue following the adoption of the Euro and joining
the Euro zone.

Criteria for accepting the country in the Euro zone

= limited budget deficit of up to 3% of GDP

= limited public debt of up to 60% of GDP
= inflation rates within 1.5% of the three EU countries with the
lowest rate
= stability of long-term interest rates
= ability to maintain the currency’s value during a given period.

- The criteria require

o 1) limited budget deficit of up to 3% of GDP (Gross Domestic
Product),
o 2) limited public debt of up to 60% of GDP,
o 3) inflation rates within 1.5% of the three EU countries with the
lowest rate,
o 4) the stability of long-term interest rates

o 5) ability to maintain the currency’s value during a given period.

This means a maximum of ± 15% fluctuation in the value of the
currency, maintained for at least two years.