Policy of European Community - Essay Example

Economic Integration and the Political Objectives With In the EU Table of Contents Introduction 3 The Past 4 Present Situation 5 Future Trends 8 Conclusion 10 References 11 Bibliography 13 Introduction In the World War II, Europe had seen enough of destruction and bloodbath. It was high time for the European nations to think of a better and bloodshed - free future. It was in the year of 1951, when six European nations namely Germany, France, Italy, Netherlands, Belgium and Luxembourg joined hands to form a formidable union which would create a more economical and political friendly environment. These six countries signed a treaty to run their heavy industries – steel and coal - under a single management, so as to prevent them from making weapons of destruction and using it against each other. The success of Coal and Steel Treaty led to the Treaty of Rome where the European Economic Community (EEC) or ‘common market’ as it was commonly known, created a freeway through which people, goods and services could freely move across the international borders (Europa, n.d.). It was a landmark decision as now people within EEC countries could move without passport and custom duties will not be levied on goods and services, even farmers were paid the same across the Community, giving a joint control over the production of agricultural products. The only drawback was the surplus production. The problem arose with different currencies prevailing in different countries, and for an economic stability the requirement for a single currency was increasingly felt. In the year 1973 Denmark, Ireland and the United Kingdom also joined European Community (EC). In 1992, The Treaty on European Union is signed in Maastricht, which has been a major EU milestone as it set clear rules for the future regarding single currency, foreign and security policy as well as closer cooperation in justice and home affairs. Under the treaty, the name ‘European Union’ (EU) officially replaced that of ‘European Community’. The Past In the year 1999, the Euro (the common currency) was officially introduced in 12 countries namely Belgium, Germany, Greece, Spain, France, Ireland, Italy, Luxembourg, the Netherlands, Austria, Portugal and Finland adopted Euro as their currency while Denmark, Sweden and the United Kingdom decided not to take it up as of, for then. As their foreign and security policy, the EU takes on peace-keeping operations by replacing NATO units in the Balkans, Yugoslav Republic of Macedonia, and then in Bosnia and Herzegovina. It was a strategic victory of their combined military power. Slowly and gradually EU was becoming a formidable force to reckon with. On December 2007 the Treaty of Lisbon was signed to amend all previous treaties and it was aimed to make the EU act more efficiently in security matters. Present Situation Today, sixteen member states of European Union use Euro as their currency, which together comprises of Euro area. A single currency is very useful to the single market which makes it more efficient and transparent due to stable currency with low inflation and low interest rates and also it eliminates exchange rate fluctuations and facilitates international trade. Most importantly, single currency of Euro provides the EU with a more powerful voice in the world. Euro is the second most traded currency after the US Dollar in the international market of today. A single currency over a wide area helps in attracting foreign investments. Market integration is also politically supported because it would open the gates of opportunities and would tend to minimise any sort of political corruptions due to integrated vigilance. Free movement of people, goods and services under single currency makes it an attractive destination for investments, and as a strong and prudent currency which is economically well managed makes the Euro a viable reserve currency for third world countries, and it also gives the Euro area a confident voice in the global economy which ultimately adds to artillery of EU on a more political frontier. A single currency makes it resilient to external shocks as the burden is shared among different economically stable countries (Dyson, 2000). One of the burning questions in the international arena has been the abstaining of the United Kingdom to adopt Euro as their currency even after being a member of European Union. But the fact is, it adds to the competitiveness in the region which is very necessary for economic growth of any region. If United Kingdom accepts Euro as their currency then probably Euro would reign over the entire Europe, which in long can be detrimental to both the currencies as well as the economy as it would tend towards polarisation of power. People on the hot seat of power in the European Parliament would tend to use their supremacy to put pressure on so-called independent European Central Bank (ECB), which is solely responsible for all the fiscal and monetary decisions of the European Union (Schwartz, 2004). Hanna Simon has rightly observed that, European Commission is the spokesperson of European Union, which voices its point to the outer world. There are number of other bodies that plays key role in the working of EU. The economic and social workings of the civil society are looked after by the European Economic and Social Committee. The Committee of the Regions is the representative for the regional and local authorities. It is the European Investment Bank that takes the leading initiative to finance investment for economic development projects inside and outside the EU, and thus helps small and upcoming businesses through the European Investment Fund. The role of the European Central Bank (ECB) is to maintain price stability, and also to define and implement monetary policy for the Euro-zone. The foreign exchange operations are also conducted by ECB and also the official foreign reserves of its member states are held and managed by it. The complaints that relates to wrong distribution by the institutions and bodies of EU are looked in to by European Ombudsman. It is the duty of the European Data Protection Supervisor to preserve the confidentiality of personal data. Bodies such as Europol, the European Police Office, and Euro just deal with organized crime and terrorism (Simon, n.d.). The European Union is characteristically that of Christianity, a major issue for not accepting Turkey as a member state, because of its Islamic orientation which would probably dilute the identity of the Union (Lemke, n.d.). This “identity” of euro-zone of pro-Christianity can tend to form blocs and might influence international trade in the long run especially in the trying times of today. European Union is the first integrated commercial power and second economic super power claiming one-fourth of world’s GDP. It is arguably the richest economic bloc of the world. Over past years, Euro has strengthened its position vis-à-vis United States Dollar. This economic strength also adds to the political weight of the zone. The major reason behind formation of European Union, as discussed earlier, was to form a formidable force to challenge the threats of then USSR, but even though the threat from USSR or Russia has significantly reduced, the military might of European Union has been put to shame in Gulf War, Yugoslavian crisis and second Iraq war. Therefore, they have joined hands to develop military strength in the region, and have come up with euro-fighters (supersonic fighter jets), euro-copters (attack helicopter) etc to add to their arsenal which are also sold to different parts of the world helping them to earn revenue and pose a competition to Americans and Russians in respect of export of military equipments. When it comes to unity, there still exists huge amount of ambiguity and distrust among the member states, especially with in the smaller ones. This situation often leads to active presence of the United States as these small nations put more faith in the United States than in European Union. Few major states also advocates presence of United States, because if NATO is dropped and if America leaves Europe without enough defense this could instigate France, who had been advocating security independence and to form an autonomous body of European defense, to become the most powerful nation in European mainland. Therefore, instead of formation of European Union and in spite of having a common currency the ghost of Second World War still haunts the member nations. The scenario suggest that though the European Union has been the recognised platform for the member nations but the honest analysis puts forward the fact that it is only the strong nations like that of United Kingdom, France and Germany have the firm voice in Europe that can be heard from far. Future Trends It can be well understood that the future of Euro largely depends on the independent working of European Central Bank (ECB) and full - fledged co-operation within the member states of EU. The recent recession in United States has held up Euro as a lucrative and dependable reserve currency against the United States Dollar. Many European countries which have previously rejected to accept Euro as their currency are now eager to take it up, Hungry and Poland are to name a few. But this prospective future of Euro is greatly dependent on the co-ordination within European Union, as still distrust reigns among the leading European nations like Germany, France and United Kingdom because of the bitter past. This internal power play has to stop for the dominance of Euro, things of past should be buried and these countries should take a step forward for a more economically dominant future and to stand against the might of the US Dollar (Knowledge @ Wharton, 2002). Union’s international efforts and diplomacies have always been overshadowed by the uni-polarity displayed by the United States. United States have been able to present itself as a super power because of vast land, huge reserve of natural resources and capital and of course due to its military might and also because America is not an economic zone of integrated states came together for economic benefits, but it is a country which is ruled democratically and can decide its fiscals independently without having to consult any “member”. US is the leader in consumption and world spending, therefore for so many years Dollar has ruled the roost, but if European Union with its combined strength put together can easily give United States a run for its money. The entire Euro-zone is as equally competent as the United States as it has natural resources, technology, capital, consumption and put together the military power is second to none and with two of its member states already in the having a permanent seat in the Security Council, the diplomatic and international political strength is capable enough to move any international political issue or agenda in its favor. Conclusion The European Union should work towards creation and construction of a pole which would counter the American dominance in the international arena. For this to achieve EU should become powerful and united enough to gradually reduce and eliminate the presence of NATO in the European mainland and strive to assure its own defense. Internally EU should be careful to handle ethical, cultural, regional and religious issues, primarily the Muslims and immigrants from Africa and Asia. The zone must become more tolerant towards new developments in the face of globalization. The zone must become more liberal and should compromise on the issues such as characteristically being Christian, so that immigrants feels it to be a safe heaven and can bring along investments and technical know-how, all of which was provided by the United States and helped in making it a genuine country for all. If Europe can overcome its medieval thinking regarding safeguarding its culture which actually rest in the teachings provided and cannot be diluted by mere conglomeration of cultures, it can definitely become a destination of choice. This political and military strength can only be achieved within a genuinely united Europe. Therefore, it can be said without little doubt that the economy and the political supremacy go hand in hand and higher the economic sovereignty achieved, more is the political superiority bestowed. References Dyson, K. H. F., 2000. The politics of the Euro-zone: stability or breakdown? Oxford University Press. Europa, No Date. A peaceful Europe – the beginnings of cooperation. The History of the European Union. [Online] Available at: http://europa.eu/abc/history/index_en.htm [Accessed 17 November, 2009]. Knowledge @ Wharton, 2002. The Future of the Euro-Dollar Relationship Depends a Lot on the U.S. Finance and Investment. [Online] Available at: http://knowledge.wharton.upenn.edu/article.cfm?articleid=503 [Accessed 17 November, 2009]. Lemke, C., No Date. Politics of EU Enlargement. University of North Carolina. [Pdf] Available at: http://www.unc.edu/depts/tam/tam_coursepages/0506/lemke_c.pdf [Accesses 17 November, 2009]. Schwartz, P., 2004. Institutional competition is important – harmonisation I fear. The Euro as Politics - Presentation of a book by Prof. Pedro Schwartz. [Online] Available at: http://74.125.153.132/search?q=cache:E3_xDPgPod4J:www.ceps.be/content/euro-politics-presentation-book-prof-pedro-schwartz+http://www.ceps.be/content/euro-politics-presentation-book-prof-pedro-schwartz&cd=1&hl=en&ct=clnk [Accessed 17 November, 2009]. Simon, H., No Date. The European Union: More an Economic than a Political Power. Diplomatic Monitor. [Pdf] Available at: http://www.diplomaticmonitor.org/papers/EU_economicpower_Hanna.pdf [Accessed 17 November, 2009]. Bibliography European Commission, 2008. The Cotonou agreement. Overview of ACP-EC-Partnership Agreement. [Available at: http://ec.europa.eu/development/geographical/cotonouintro_en.cfm [Accessed 17 November, 2009]. Taylor, P., 1996. The European Union in the 1990s. Oxford University Press, London. University of Illinois, 2007. Introduction. Issues [Online] Available at: http://outreach.lib.uic.edu/www/issues/issue2_12/keery/index.html [Accesses 17 November, 2009]. Vachudova, M., 2005. Europe Undivided. Democracy, Leverage and Integration after Communism. Oxford University Press. Read More