LECT.

Laura Elena MARINAS, PhD

Dept. for International Business and Economics
laura.marinas@rei.ase.ro

I. European Communities
European Steal and Coal Community (19512002), European Economic Community and
Euratom (1957)

 Treaty of Rome , March 25, 1957

Core constitutional document
Created the European Economic
Community (EEC) and of a common
market to harmonize their economic
policies

ECONOMIC OBJECTIVES
1.

2.

Harmonious
development of
economic activities
Continuous and
equilibrated
expansion

3.

Increase in stability

4.

Accelerated growth
of the living standard

MEANS

KEY PRINCIPLES

Loyalty to the
Community
Non-discrimination
related to
citizenship
Enlargement of
competencies, only
related to the
functioning of the
common market

INSTITUTIONAL
FRAMEWORK

Common institutions

Supreme judiciary control

The Commission: the guardian

of the Treaty
EU Budget

COMMON MARKET

Customs union

HARMONIZATION OF ECONOMIC
POLICIES
Commom commercial policy

Common competition policy

Commom agricultural policy

Common transportation policy

Free movement of goods

Free movement of persons
Free movement of services

Rules concerning decision

making

Harmonization of economic
and fiscal regulations

Other instruments (weak)

Free movement of capitals

Fig. 3.1 The Economic Structure of the Treaty of

Rome, Pelkmans J, 2008

 1965: Merger Treaty (European Communities

1979: European Monetary Systems

(EMS), purpose to limit the EC country

currencies that have disrupted the
functioning of the internal market
1987: Single European Act the review of
the Treaties. Launch of the single market

ECONOMIC OBJECTIVES

MEANS

The previous ones

KEY PRINCIPLES

The previous ones

INSTITUTIONAL
FRAMEWORK

The previous
ones

Plus

European Council

COMMON MARKET

The previous
ones

Plus

Definition of
common market:
space without
frontiers, the
guarantee of
liberties

HARMONIZATION OF ECONOMIC
POLICIES

The previous
ones

Plus

Plus

Qualified majority vote

for measures concerning
the internal market
Plus
More important role for
the European Parliament

Mutual recognition
as regular principle

Research &
technical
development
environment

Economic &
social cohesion
Structural funds

SME

Fig. 3.2 Addition of the Single European Act to the Treaty

of Rome, Pelkmans J, 2008

Health & safety

at the workplace
7

II. European Union

The

Maastricht Treaty 1992

Created the European Union

1. A detailed blueprint for the establishment of Economic and
Monetary Union (EMU) by the end of the decade
2. Established the political union through a complicated structure that
differentiated between economic matters on the one hand and foreign
policy and internal security matters on the other
3. Included other innovations, such as the Social Charter, EU
citizenship, strengthening of the Parliament, subsidiary (concept that
attempts to define what decisions are to be taken at which levels),
and other reforms
*The combination with EMU and political union increased the overall
significance of the Maastricht achievement

ECONOMIC OBJECTIVES
1.

2.

3.

4.

5.

6.

MEANS

KEY PRINCIPLES

Harmonious,
equilibrated and
lasting development
of economic activities
Lasting and noninflationary growth,
while preserving the
environment
High level of
convergence of
economic
performances
High level of
employment and
social protection
Increase in the living
standards and in the
quality of life
Economic and social
cohesion and
solidarity among
member states

COMMON MARKET

INSTITUTIONAL
FRAMEWORK

The previous
ones

Rules concerning the decision

making:
-More VCM

Subsidiarity

Community acquis

Open market with free

competition

Stable prices

Healthy public finances

and monetary conditions

-More power for the European

Parliament

New EC institutions

One currency

Sustainable balance of
trade

HARMONIZATION OF
ECONOMIC POLICIES

Price stability

EMU

European Central Bank

No excessive deficits
The interdiction of
restrictions on capital

The previous
ones

The previous
ones

New or reformulated
instruments; all the new
ones are weak

Fig. 3.3 The Economic Structure of the Treaty of Maastricht,

Pelkmans J., 2008

Admission conditions

The Pillars
1. European Community
2. Defense and Security
3. Home Affairs, Justice, Immigration, and
Control of external borders, and combating
drug addiction and international crime
*The three-pillar structure established by Maastricht was valid for the EU
until the Lisbon Treaty (December 2009), although some elements of it
were modified by the 1997 Treaty of Amsterdam

10

The European Union

The European
Communities

EEC
Customs union and
single market
Agricultural policy
Structural policy
+

EMU
New or amended
provisions on:
EU citizenship
Education and
culture
Trans-European
networks
Consumer
protection
Health
Research and
environment
Social policy
Asylum policy
External borders
Immigration policy

Euratom
ECSC (coal &

Common Foreign
and Security
Policy

Foreign Policy

Cooperation,
common positions
and measures
Peacekeeping
Human rights
Democracy
Aid to non-member
countries

Security policy

Disarmament
Financial aspects of
defence
Long-term: Europes
security framework

Cooperation in
Justice and Home
Affairs

Cooperation
between judicial
authorities in civil
and criminal law
Police cooperation
Combating racism
and xenophobia
Fighting drugs and
the arms trade
Fighting organised
crime
Fighting terrorism
Criminal acts
against children,
trafficking in human
beings

3 Pillars The Maastricht and Amsterdam

Structure

11

Problem: The prospect of adding ten or more members lent

new urgency to calls for reform of EU institutions. The
Union was already too large to function with essentially the
same set of institutions that had been devised in the 1950s
The Treaty of Amsterdam amended the Maastricht Treaty and
the Treaty of Rome.

The aim of the negotiations was clear: to create the political and
institutional conditions to enable the European Union to meet the
challenges of the future such as the rapid evolution of the international
situation, the globalization of the economy and its impact on jobs, the
fight against terrorism, international crime and drug trafficking,
ecological problems and threats to public health

Accomplishments?
Freedom, security and justice
to protect fundamental rights within the European Union, such as equality between men and
women, non-discrimination and data privacy
The Union and the citizen
Improvements areas directly affecting the rights,
interests, and well-being of individual citizens
Effective and coherent external policy
the challenges and practicalities of extending the scope of the common commercial policy to
include international agreements on services and intellectual property rights

12

ECONOMIC OBJECTIVES
1.

2.

3.
4.
5.

6.

7.

8.

MEANS

Harmonious, equilibrated
and lasting development
of economic activities
High level of
employment and social
protection
Equality between men
and women
Lasting and noninflationary growth
High level of
competitiveness and the
convergence of
economic performances
High level of protection
and improvement of the
quality of the
environment
Increase in the living
standards and in the
quality of life
Economic and social
cohesion among member
states

KEY PRINCIPLES

INSTITUTIONAL
FRAMEWORK

The previous
ones

Special protocol
regarding the
subsidiarity and
proportionality

The previous
one
Rules concerning the decision
making:
-More VCM
-More power for the European
Parliament
Tighter cooperation or
flexibility, under very strict
conditions in the EC Pillar;
fewer conditions in other
Pillars
The stability and growth pact

COMMON MARKET
Gradual transition to
(entirely) free movement
of persons complex
relationship to Schengen
and conditionings

The
previous
ones

HARMONIZATION OF
ECONOMIC POLICIES
The social
protocol
inserted in the
EC Treaty

The
previous
ones

EMU

The previous
ones

Coordinated
strategy for
employment

Fig. 3.4 The Economic Structure of the Treaty of

Amsterdam, Pelkmans 2008

Voluntary ERM-2

13

Agreement on the text of a new Treaty

changing the EU's decision-making system
so that the Union will be ready for
enlargement.

14

III. The Lisbon Treaty (2009)

Legal personality of the EU

Three pillars MERGED
Charta of the Fundamental Rights:
Clearer separation and definition of
competences of the EU and Member States

15

EU OBJECTIVES

MEANS

The Union's aim is to promote peace, its values and

the well-being of its peoples.
The Union shall offer its citizens an area of
freedom, security and justice without internal
frontiers, in which the free movement of persons is
ensured ..
The Union shall establish an internal market,

It shall respect its rich cultural and linguistic

diversity, and shall ensure that Europe's cultural
heritage is safeguarded and enhanced.
The Union shall establish an economic and
monetary union whose currency is the euro.
In its relations with the wider world, the Union shall
uphold and promote its values and interests and
contribute to the protection of its citizens
Values: respect for human dignity, freedom,
democracy, equality, the rule of law and respect for
human rights, including the rights of persons
belonging to minorities. These values are common
to the MemberStates in a society in which
pluralism, non-discrimination, tolerance, justice,
solidarity and equality between women and

KEY PRINCIPLES

INSTITUTIONAL
FRAMEWORK

The previous
ones

Definition and
formalization of
principle of conferral,
subsidiarity,
proportionality,
supremacy of EU law
Clearer separation of
c0mpetences

The previous
one
-More QMV and double majority
-More power for the European
Parliament
-Codecision extended
-New roles for national parliaments
+
External representation of EU:
President of EU, High
representative
+
Citizenship and citizens
participation to democratic life and
decision making

men prevail

COMMON MARKET
Gradual transition to
(entirely) free movement
of persons complex
relationship to Schengen
and conditionings

The
previous
ones

HARMONIZATION OF
ECONOMIC POLICIES
The
previous
ones

Provisions for countries

whose currency is Euro
The previous ones
(Amsterdam)

EMU

Specific provisions for

countries with derogation

Fig. 3.5 The Economic Structure of the Lisbon Treaty

16

EU single legal personality, distinctive of

the legal personalities of the member states
Areas of competences covered: economic,
citizenships, external actions (includding
foreign policy), security and defence issued,
justice, home affairs

17

Principles of EU functioning

The limits of Union competences are governed by the principle of

conferral. The use of Union competences is governed by the principles of
subsidiarity and proportionality.
Under the principle of conferral, the Union shall act only within the limits
of the competences conferred upon it by the Member States in the
Treaties to attain the objectives set out therein. Competences not
conferred upon the Union in the Treaties remain with the Member
States.
Under the principle of subsidiarity, in areas which do not fall within its
exclusive competence, the Union shall act only if and in so far as the
objectives of the proposed action cannot be sufficiently achieved by the
Member States, either at central level or at regional and local level, but can
rather, by reason of the scale or effects of the proposed action, be better
achieved at Union level. The institutions of the Union shall apply the
principle of subsidiarity as laid down in the Protocol on the application of the
principles of subsidiarity and proportionality. National Parliaments ensure
compliance with the principle of subsidiarity in accordance with the
procedure set out in that Protocol.
Under the principle of proportionality, the content and form of Union
action shall not exceed what is necessary to achieve the objectives of the
Treaties.

The institutions of the Union shall apply the principle of

proportionality as laid down in the Protocol on the application of the
principles of subsidiarity and proportionality.
18

Democratic principles and European citizenship: In

all its activities, the Union shall observe the
principle of the equality of its citizens, who shall
receive equal attention from its institutions,
bodies, offices and agencies. Every national of a
Member State shall be a citizen of the Union.
Citizenship of the Union shall be additional to
national citizenship and shall not replace it.

The functioning of the Union shall be founded on

representative democracy.
Citizens are directly represented at Union level in the
European Parliament.
Member States are represented in the European Council by
their Heads of State or Government and in the Council by
their governments, themselves democratically accountable
either to their national Parliaments, or to their citizens.

19

EU institutions:

the
the
the
the
the
the
the

European Council
European Parliament,
Council of the European Union (the Council)
European Commission,
Court of Justice of the European Union,
European Central Bank,
Court of Auditors.

Each institution shall act within the limits of the

powers conferred on it in the Treaties, and in
conformity with the procedures, conditions and
objectives set out in them. The institutions shall
practice mutual sincere cooperation.
20

EU competences:

Exclusive competences
Shared competences
Competence to carry out actions to support,
coordinate or supplement the actions of the
Member States, without thereby superseding their
competence in these areas
Coordination of economic and employment
policies
Competences related to common foreign policy
and common security and defence policy.

Decision making and adoption of

legislation depending on the of EU
competences.

21

EU competences:exclusive competences:
Art. 2 When the Treaties confer on the Union exclusive
competence in a specific area, only the Union may
legislate and adopt legally binding acts, the Member
States being able to do so themselves only if so
empowered by the Union or for the implementation of
Union acts
Areas: (a) customs union;(b) the establishing of the
competition rules necessary for the functioning of the
internal market; (c) onetary policy for the Member
States whose currency is the euro; (d) the conservation
of marine biological resources under the common
fisheries policy; (e) common commercial policy.
The Union shall also have exclusive competence for the
conclusion of an international agreement when its
conclusion is provided for in a legislative act of the
Union or is necessary to enable the Union to exercise
its internal competence, or in so far as its conclusion
may affect common rules or alter their scope.

22

EU competences:shared competences
The Union shall share competence with the Member States
where the Treaties confer on it a competence which does
not relate to the areas for exclusive competence and
coordinated actions
Areas: (a) internal market; (b) social policy, for the aspects
defined in this Treaty; (c) economic, social and territorial
cohesion; (d) agriculture and fisheries, excluding the
conservation of marine biological resources; (e)
environment; (f) consumer protection; (g) transport; (h)
trans-European networks; (i) energy; (j) area of freedom,
security and justice; (k) common safety concerns in public
health matters, for the aspects defined in this Treaty.
In the areas of research, technological development and space, the Union
shall have competence to carry out activities, in particular to define and
implement programmes. In the areas of development cooperation and
humanitarian aid, the Union shall have competence to carry out activities
and conduct a common policy. However, the exercise of that competence
shall not result in Member States being prevented from exercising theirs.
23

EU competences:coordination of economic
policy
The Member States shall coordinate their
economic policies within the Union. To this end,
the Council shall adopt measures, in particular
broad guidelines for these policies. Specific
provisions shall apply to those Member States
whose currency is the euro.
The Union shall take measures to ensure
coordination of the employment policies of
the Member States, in particular by defining
guidelines for these policies. The Union
may take initiatives to ensure coordination
of Member States' social policies.

24

EU competences:coordinated actions
The Union shall have competence to carry
out actions to support, coordinate or
supplement the actions of the Member
States.
Areas: (a) protection and improvement of
human health; (b) industry; c) culture; (d)
tourism; (e) education, vocational training,
youth and sport; (f) civil protection; (g)
administrative cooperation.

25

First, what it is not:

It is not a nation-state nor a federal state
It is not a traditional international
organization
What is it then?
It is a political system that combines
elements of both
legal person
most advanced form/stage of regional
integration (EMU targeting political union)
Intergovernmental treaty (see also principle
of conferral)

26