European Union

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Flag of the European Union.

Organization of European countries, formed in 1993 to oversee their economic and political integration. It was created by the Maastricht Treaty and ratified by all members of the European Community (EC), out of which the EU developed. The successful EC had made its members more receptive to greater integration and provided a framework for unified action by member countries in security and foreign policy and for cooperation in police and justice matters. In pursuit of its major goal to create a common monetary system, the EU established the euro, which replaced the national currencies of 12 of the 15 EU members in 2002. Originally confined to western Europe, the EU enlarged to include several central and eastern European countries in the early 21st century. The EU's principal institutions are the European Community, the Council of Ministers (a forum for individual ministries), the European Commission (an administrative bureaucracy), the European Parliament, the European Court of Justice, and the European Central Bank.

For more information on European Union, visit Britannica.com.

A group of European countries that participates in the world economy as one economic unit and operates under one official currency, the euro. The EU's goal is to create a barrier-free trade zone and to enhance economic wealth by creating more efficiency within its marketplace.

Investopedia Says:
The current formalized incarnation of the European Union was created in 1993 with 12 inital members. Since then, many additional countries have since joined. The EU has become one of the largest producers in the world, in terms of GDP, and the euro has maintained a competitive value against the U.S. dollar.

EU and non-EU members must agree to many legal requirements in order to trade with the EU member states.

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Group established in 1992 by the European Union Treaty (also known as the Maastricht Treaty) and amended by various treaties thereafter. Initially, the EU consisted of six countries: Belgium, Germany, France, Italy, Luxembourg, and the Netherlands. Denmark, Ireland, and the United Kingdom joined in 1973, Greece in 1981, Spain and Portugal in 1986, Austria, Finland, and Sweden in 1995. The largest expansion occurred in 2004 with 10 new countries joining. They are: Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia, and Slovenia. Others are expected to join as well. At its core the EU is a group of democratic countries working together on economic, judicial, and security issues. It has taken several steps toward a more unified Europe. For example, in 1992, the EU made the decision to move toward a single European currency, known as the Euro. The EU is governed by a five-part institutional system, including the European Commission, the EU Council of Ministers, the European Parliament, and the European Court of Justice, and the Court of Auditors, which monitors EU budget spending. europa.eu.int/index_en.htm.

Group of countries taking part in the economic unification of Europe. (There were 25 countries in the European Union in 2004). The term also refers to the pan-European governmental and social agencies involved in inter-governmental cooperation: the European Commission (based in Brussels, Belgium), which oversees Europe's economic and monetary unification; the European Parliament, directly elected by citizens of member countries; the Council of Ministers, consisting of the foreign ministers of EU member governments; the European Court of Justice, the court of last resort for interpreting EU treaties; and the Court of Auditors, which monitors government budgets of EU countries. The 1993 Maastricht treaty gave the European Parliament equal decision-making powers with the Council and Commission.

The European Union is an ever-evolving alliance of fifteen European countries designed to foster economic cooperation among its members. With its roots stretching back to just after World War II, this alliance has the ultimate goal of unifying the economic interests of these countries in order to reduce the chance of widespread armed conflict returning to the European continent.

History

In the early 1950s, Germany and France spear headed the establishment of the European Coal and Steel Community. At this time, West Ger many was in the process of rebuilding its war ravaged steel industry under the direction of the United States and Great Britain. This was an understandable source of concern for France, as German industrial might had been used against the French in the two world wars earlier in the century. Consequently, a federation that would govern these important economic resources won the approval of both the French and Germans. They were also joined by Italy, Belgium, Luxembourg, and the Netherlands as the original six founding nations of what would eventually be come the European Union.

The European Coal and Steel Community was later followed by the establishment of the European Economic Community under the Treaty of Rome, which was signed by the same six countries in 1957. This treaty established the framework for the six member countries to pursue an economic and monetary union by creating a single market to further their economic development. The European Economic Community established a customs union for re moving trade barriers, such as tariffs and quotas, between member countries over a period of several years. Also, common external tariffs were phased in for goods entering the union.

The single market established by the European Economic Community also opened the door for the free movement of workers, businesses, and capital throughout the community. Border stops and customs checks were eliminated, companies expanded across national borders, and financial institutions expanded with them.

The Euro

To further facilitate trade within this single market, European leaders felt a single currency should be created to eliminate foreign-exchange hurdles encountered by companies doing business across European borders. After several intervening rounds of negotiations and agreements, the Treaty on European Union was signed in Maastricht in December 1991. The European Union was formally established as the successor to the European Economic Community, and the treaty laid the groundwork for the completion of the economic and monetary union by calling for a new European currency.

The European Union introduced this new currency on January 1, 1999, christening it the "euro." Like many other changes implemented by the European Union, the euro was not launched without difficulties. By the time the euro was introduced in 1999, nine more countries had joined the original six members. The European Union had added Denmark, Ireland, and the United Kingdom to its ranks in 1973; Greece in 1981; Portugal and Spain in 1986; and Austria, Finland, and Sweden ratified membership in 1995. During the launch of the euro, the United Kingdom, Sweden, and Denmark all chose to "opt out" of participation due to political pressures in each country. One other member, Greece, failed to satisfy the economic criteria for convergence, which required members of the "euro zone" to meet targets for price stability, long-term interest rates, government budget deficits, and government debt. Consequently, the conversion to the euro was initiated in only eleven of the fifteen member states in 1999.

Transactions in member states beginning in 1999 could be denominated in euros. The actual euro currency and coins will begin circulation in 2002. In the "interim period," transactions can be carried out in either euros or the former national currencies of the member states.

Governance

The governance of the European Union is quite complex. The European Commission, based in Brussels, introduces legislation and negotiates all trade agreements between the European Union and other countries. The five largest countries in the union appoint two members and other countries one member to the European Commission. The European Parliament, which is the only elected body, also has legislative and veto authority in some specific areas. The Council of Ministers, comprised of civil servants from each country, acts on the legislation proposed by the European Commission. Most decisions are by a majority vote, but some require unanimity.

Monetary policy in the countries adopting the euro is governed by the European Central Bank. The primary mission of this independent institution is to maintain stable prices. It is also responsible for foreign-exchange operations and managing foreign reserves in the euro zone. Although it is a relatively new currency, the euro has joined the U.S. dollar and Japanese yen as a reserve currency held by central banks.

International Trade

The fifteen members of the European Union in 1999 have a combined population 40 percent larger than that of the United States, creating an attractive business marketplace without internal trade barriers. Many American companies—from Ford, which sells 15 million vehicles a year in Europe, to Coca-Cola, Inc., which serves 209 million of its beverages to European customers every day—have a long-established presence in Europe. Other companies, such as software giant Microsoft, have entered the European market in recent years and been successful in the European Union's single market. If the European Union continues to add new members, it may be only a matter of time before the European marketplace begins to challenge the United States as the premier business market in the world.

European companies, with their enhanced size due to expansion across Europe, have also set their sights across the Atlantic. The purchases of Chrysler by Daimler-Benz and Amoco by British Petroleum in the late 1990s were but two of the many examples of large European companies strengthening their positions in the American marketplace. With the majority of foreign investment in the United States coming from members of the European Union, economic interests have continued to become more intertwined as multi-national companies now operate on both sides of the Atlantic.

Future Expansion

In the future, the size of the European Union will likely expand because numerous other countries, primarily in Central and Eastern Europe, have expressed an interest in joining the union. Many of these countries are in the process of making the structural changes needed to meet the criteria for membership in the European Union. Admitting these countries would add to the European Union's stature in global trade negotiations, further the cause of social stability in the region, and add yet another chapter to the story of this dynamic union.

Bibliography

Dinan, Desmond, ed. (1998). Encyclopedia of the European Union. (1998). Boulder, CO: Lynne Rienner.

How Does the European Union Work?, 2d ed. (1998). Luxembourg: Office for Official Publications of the European Communities.

Leonard, R. L. (1998). The Economist Guide to the European Union. London: The Economist in association with Profile.

Redmond, John, and Rosenthal, Glenda G., eds. (1998). The Expanding European Union: Past, Present, Future. Boulder, CO: Lynne Rienner.

[Article by: DAVID MCGRADY]

A free trade area comprising Austria, Belgium, Cyprus, the Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Poland, Portugal, Slovakia, Slovenia, Spain, Sweden, and the UK. Designed initially as an economic unit, the European Union is now attempting uniformity in social as well as economic policies. see common agricultural policy.

In November 1993 the official title of the European Community (EC) was changed to European Union (EU) as a result of ratification of the Maastricht treaty by member states' parliaments. The EC was properly known as the European Communities, in the plural. It began as three legally distinct but related organizations: the European Coal and Steel Community (ECSC), the European Atomic Energy Community (Euratom), and the European Economic Community (EEC, sometimes referred to as the ‘Common Market’). In practice the institutions and politics of the three have become increasingly indistinct, a trend formalized at Maastricht.

The EU is the most thoroughgoing example of regional economic and political integration. As an international organization it goes beyond traditional intergovernmentalism and has substantial elements of supranationality, with policy processes often referred to as multi-level governance. The various Union/Community treaties contain fairly open-ended if imprecise commitments to ‘ever closer union’ among the (currently) twenty-five member states.

At the end of the Second World War, European economic and political unity was seen as an important element of post-war reconstruction, and was therefore supported by the United States. As a wholesale abrogation of national sovereignty seemed a distant reality, efforts focused on the functionalist approach to integration as expressed in Jean Monnet's Schumann Plan. Monnet's guiding idea was that war between France and Germany must never again disrupt the politics and prosperity of the continent. Italy and the three Benelux states joined the ensuing negotiations.

The result was the ECSC (Treaty of Paris, signed 18 April 1951, implemented July 1952) among the six, which sought to integrate the coal and steel sectors in such a way that the parties could no longer maintain an independent capacity to make war on each other. Its economic success provided impetus for further and broader integration, despite the failure of the European Defence Community in 1954. Plans for integration across all economic sectors culminated in the Treaty of Rome establishing the EEC and Euratom, signed on 25 March 1957 by the six ECSC members with effect from 1 January 1958. The treaty established a common assembly and Court for all three, and a Commission and Council of Ministers for the two new communities. The United Kingdom had declined involvement, opting to establish a rival organization, the European Free Trade Area (EFTA).

The EEC quickly became the focal point of efforts at European integration. Where the six states could agree, a concrete timetable for policy integration was specified. This led to the fairly rapid establishment of a customs union, a common external tariff, and a nascent common trade policy. Where agreement had been difficult, the Treaty was vague about further steps towards integration. In this way the Treaty has ensured that the integration process has never progressed unless it was in line with member states' national interests.

The Treaty also put forward a long series of policy questions for negotiation among the members. It was hoped that the tangible economic benefits of common policies would provide ongoing impetus for the integration process. It was the responsibility of the Commission to develop legislative proposals aimed at common EC policies, integrating or replacing the policies of individual member states. Agriculture had been of great concern to the French government, being specifically mentioned in the Treaty as a priority, and 1962 Regulation 25 was adopted establishing a Common Agricultural Policy (CAP). The EU also developed its role in external relations through its assistance agreements with former French colonies, the Yaoundé Accords of 1963, succeeded 1975 by the first Lomé Convention.

The Commission proposed legislation and sought approval from the Council of Ministers which represented the member states. The European Court had ruled that EU laws would take precedence over national laws. From this provision stems many of the Union's supranational characteristics. Policy decisions therefore may pose great difficulties for the negotiating states as fundamental national interests are frequently at stake.

The three Communities came to be increasingly indistinguishable over time. The Merger Treaty of 1965 gave all three a common Commission and Council. The EU has also undergone a considerable expansion of membership from six to twenty five, with the accession of the United Kingdom, Ireland, and Denmark in 1973, Greece in 1981, Spain and Portugal in 1986, Sweden, Austria, and Finland in 1995, and Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia and Slovenia in 2004.

If membership has widened, the policy jurisdiction of the EU has ‘deepened’ dramatically. The monumental Single Market Programme was contained in the Single European Act (SEA) and has led to the rapid transborder integration of markets and corporate structures in member economies. Regional and social policy dimensions have been developed (if hesitantly, largely due to UK resistance), and important elements of foreign and defence policy cooperation are enshrined in the Common Foreign and Security Policy (CFSP) process. The most radical step so far, the successful adoption of the Euro as single EU currency (process completed 1 January 2002, though initially excluding Denmark, Sweden, and the UK), and a single monetary policy run by a European Central Bank, has removed core elements of macroeconomic policy-making from national jurisdiction (see Economic and Monetary Union). The introduction of the Euro has also accelerated the process of market integration, building on the single market programme. This process of policy deepening has been aided by institutional reforms contained in amendments to the Treaties as with the SEA of 1986 and the Treaty of Maastricht. The more recent treaties of Amsterdam (1997) and Nice (2000) modestly extended this process of institutional reform, and currently there is a ‘Constitutional Convention’ beginning work on institutional innovations perceived as necessary in the face of both deepening and especially the imminent widening of the membership.

By keeping the end goal indeterminate, ‘Euroenthusiasts’ and ardent supporters of national autonomy alike have usually been able to strike compromises which are understood to be in the common interest of all. This propels the process of integration, despite frequent turmoil and disagreement, and has seen the EU emerge as an increasingly ‘state-like’ entity in the international system. As such the EU is poised to alter traditional conceptions of sovereignty and international organizations. However, the EU finds itself post-Euro at a crucial juncture. It has taken on many state-like attributes in a context of institutional underdevelopment. This fuels dilemmas for EU authorities and member states alike. A single currency, CFSP, and continued enlargement have serious implications for traditional notions of national policy-making and sovereignty, while the EU clearly lacks a strong sense of collective identity at the level of civil society, often portrayed as democratic deficit. Economic adjustment processes resulting from integration are often difficult and the costs are unequally distributed across members and regions. These challenges come in the context of challenges to state capacity in the form of new security dilemmas and global economic integration, which EU-level policy is at least partially meant to address. Institutional underdevelopment awards EU authorities few of the policy mechanisms which have been eroded at the national level. The EU will need collectively to lend more substance to the notion of ‘ever closer union’.

— Geoffrey R. D. Underhill

European Union (European Community). On 1 November 1993 the European Community (EC), a political and economic confederation of European countries, officially became the European Union (EU). The EU consists of three institutions: the European Coal and Steel Community (ECSC), the European Atomic Energy Community (EURATOM), and the European Economic Community (EEC). Its fifteen members are France, Germany, Italy, Belgium, the Netherlands, and Luxembourg (the original "Six" from the 1950s); Great Britain, Denmark, and Ireland (joined 1973); Greece (1981); Portugal and Spain (1986); and Austria, Finland, and Sweden (1995).

The EU's total area is about one-third the size of the United States, but its population in 2000 was 377.6 million, compared to 284.2 million for the United States. Their economies are of roughly comparable size. In 2000 the EU accounted for 18.2 percent of world imports and 17.2 percent of world exports, while its GDP totaled $7.8 trillion. The American figures were 23.9 percent and 15.7 percent with a GDP of $9.9 trillion. Both are also important economic partners. In 2000 the EU's trade with the United States was valued at $394.8 billion and made up 19.2 percent of its total imports and 24.7 percent of its total exports, while American trade with the EU was worth $385.2 billion and accounted for 18.1 and 21.1 percent, respectively. During the same year the EU also made $802.7 billion in direct investments in the United States and received $573.4 billion in return.

Institutions

The EU has four major governing organs. The European Commission, located in Brussels, proposes policies and legislation, is responsible for administration, and enforces both decisions made by European institutions and the provisions of European treaties. Including the commission president, twenty commissioners with individual portfolios serve five-year terms. They are appointed by the national governments but act independently of them. The Council of the European Union, consisting of ministers from each member state, coordinates intergovernmental policies and enacts binding legislation. Depending on the agenda, different types of national minister will attend each council meeting. Most decisions within it take place as a result of a majority vote (normally weighted to reflect the size and importance of the member state), although some issues, such as foreign policy, taxation, and the environment, still require unanimity. The council has a rotating presidency with a six-month term that ends with a meeting of all fifteen heads of state or government. It holds most of its meetings in the country that has the EU presidency. The European Parliament, which meets in Strasbourg, currently consists of 626 members elected for five-year terms. Members are seated by party group (such as Socialist, Christian Democrat, and Green) and since 1979 have been chosen in direct elections. The Parliament's key powers include approving or amending the EU budget submitted by the commission and publicly debating the work of the other governing organs. It may also censure the commission. The Court of Justice, which is located in Luxembourg and has fifteen judges, determines whether treaties in the European Union are being implemented and are in accordance with Union law. Both its judgments and EU law as a whole are binding on all member states.

European and American Perspectives on Integration

Although proposals for European integration go back as far as the Middle Ages, the origins of the present EU date from World War II. Many Europeans believed that for their continent to experience a political and economic revival, the national rivalries that characterized the past had to give way to greater international cooperation. However, ever since the 1940s there has been disagreement on what methods to utilize. "Federalists" like the Italian politician Altiero Spinelli advocated creating a unified European state as soon as possible. The Frenchman Jean Monnet and other "(neo)functionalists" believed that the consolidation of important industrial sectors across national lines would promote integration in all fields. Still another perspective, traditionally strong in Great Britain and Scandinavia but universally evident, advocated greater intergovernmental cooperation but remained wary about supranational organizations that would limit sovereignty. These divergent opinions have ensured that a mélange of approaches has characterized the road to the EU.

Since 1945 American policymakers have consistently supported European integration both publicly and privately, even if their active interest in promoting it waned dramatically starting in the 1960s. According to Geir Lundestad, several considerations informed their thinking. These include the belief that the new European institutions represented a healthy attempt to emulate the "American model" based around federalism, democracy, and free markets and also the idea that integration would promote a modernized Europe that was more efficient economically and less troubled by nationalist rivalries. More concretely, integration would reduce the burden of American military and economic commitments to Europe. Above all, a unified (Western) Europe could play an important role in containing both the Soviet Union and Germany. The United States also has promoted European integration for so long now that to some extent this policy has become traditional, irrespective of other considerations. Furthermore, the desire of Europeans themselves to work toward unity has been a tremendous influence on American policy as well.

American Support for European Integration During the 1940s and 1950s

During World War II, the Roosevelt administration feared that any moves toward European integration would contribute to a division of the world into political and economic blocs. However, the onset of the Cold War dramatically changed the official American attitude. Fear that communists might come to power in Western European countries due to postwar economic hardship led the Truman administration to propose the Marshall Plan in 1947. This initiative led to some modest steps toward European integration, especially the establishment of the Organization for European Economic Cooperation (OEEC) to administer Marshall aid and work for the reduction of tariffs. The Marshall Plan also helped to determine the geographic limits of integration until the 1990s since the negative Soviet reaction cemented the division of the continent. To the Truman administration's frustration, little further progress came until 1950, despite the intensification of the Cold War. The major reason was that Great Britain, at the time the most important state in Western Europe politically and economically, opposed all plans for supranational organizations.

The creation of the Federal Republic of Germany in 1949 made integration seem more urgent than ever. Under pressure from Washington but also motivated by its own interests, the French government and its unofficial advisor Monnet now assumed a leading role. The "Schuman Plan" for a European Coal and Steel Community (ECSC), developed by Monnet and announced by Foreign Minister Robert Schuman on 9 May 1950, ensured that German heavy industry would be used only for peaceful purposes, significantly upgraded the international status of the Federal Republic, and marked the start of postwar Franco-German cooperation. The Truman administration greeted it with enthusiasm. The ECSC, which came into existence in 1952, also set the pattern for further initiatives. It brought together for the first time the "Six" and created the four basic governing organs that characterized later integration. After initial hesitations, the Truman administration also gave its support to Monnet's plan for a "European Defense Community" (EDC) that would prevent the creation of an independent West German army. Although in December 1953 Secretary of State John Foster Dulles even threatened an "agonizing reappraisal" of the American security commitment to Western Europe if the EDC Treaty were not ratified, the French National Assembly rejected it on 30 August 1954, largely because of misgivings about surrendering the national army. The Eisenhower administration later gave its support to the creation of the European Economic Community (EEC) and the European Atomic Energy Community (EURATOM) in 1958. These two institutions and the ECSC, at first collectively called the "European Economic Community," were officially fused into the EC in 1967. They went a long way toward fulfilling Washington's desire for integrated Western European structures that would help contain the Soviet Union and safely incorporate the Federal Republic.

Troubled Relations Between the United States and the European Economic Community

Nonetheless, doubts soon arose about whether European integration was compatible with American leadership in Western Europe. Starting in 1958 French President Charles de Gaulle challenged United States political predominance by demanding a coequal role for France with it and Britain within the North Atlantic Treaty Organization (NATO). He also pursued an increasingly independent policy on issues like Berlin, the Vietnam War, relations with communist states, nuclear weapons, and British membership in the European Economic Community (which to the chagrin of American policymakers he vetoed in 1963). American leaders tried to accommodate de Gaulle while rejecting his aspirations to leadership, but already during the Kennedy administration they began to stress the Atlantic character of European-American relations. Moreover, starting in the late 1950s negative American payment balances (at first due to high levels of American foreign investment and military aid but by the late 1960s also involving trade deficits) led to increasing worries about economic competition from the "Six." Washington responded by intensifying the process of reducing tariffs between industrialized states within the General Agreement on Tariffs and Trade and in 1961 helped create an Organization for Economic Cooperation and Development with American and Canadian membership to replace the OEEC. Since the mid-1960s, the United States and the EU have been involved periodically in trade disputes involving a variety of agricultural and industrial products.

Even though National Security Advisor Henry Kissinger proclaimed 1973 the "Year of Europe," the Nixon administration reevaluated the traditional policy of American support for European integration in light of these political and economic challenges. Henceforth the United States would no longer actively promote new initiatives for supranational integration, although it would not oppose further efforts by the Europeans themselves. Although Jimmy Carter criticized the Nixon and Ford administrations' neglect of the European allies and in January 1978 became the first president to visit the European Commission in Brussels, in practice the United States' main priority had become protecting its own national interests. This became quite clear during the 1980s, when the process of European integration revived after the relative stagnation of the previous decade. The negotiations on the "Single European Act" in 1985–1986, which aimed at the creation of a fully integrated European market by 1992, led to worried speculation in the United States about a "Fortress Europe." In addition, the Reagan administration became involved in a series of disputes over commercial policy with the EC, with which the United States had run a trade deficit starting in 1984.

Relations Since 1989

By 1989 an improvement in relations was in sight, however. The end of the Cold War and the reunification of Germany made expanded European structures seem the best way of providing stability for the entire continent. In addition, by 1990 the United States had a positive trade balance with the EC again but was becoming worried about economic relations with both Japan and China. President George H. W. Bush gave increased attention to the American relationship with the EC. The 1990 Transatlantic Declaration set up a mechanism for regular consultations and reaffirmed the desire of both sides to strengthen their partnership. The Bush administration reached compromises on many of the economic disputes that had arisen as a result of the Single European Act. Moreover, it strongly supported the 1992 Maastricht Treaty that created the EU in 1993 with both an Economic and Monetary Union (EMU) and a Common Foreign and Security Policy (CFSP) among its future goals. In 1995 the United States and the EU agreed on a "New Transatlantic Agenda" that committed them to active cooperation in roughly a hundred policy areas. The EMU was realized with the introduction of a common currency, the euro, on 1 January 1999, at first on an accounting basis only. Although Denmark, Great Britain, and Sweden chose not to participate for the time being, the other twelve EU states replaced their national currencies with euro bank-notes and coins on 1 January 2002. The euro has the potential to rival the dollar as an international reserve currency. The United States remains sensitive to any developments toward a CFSP that might call NATO's preeminence into question, but the EU for some time will not have any capacity to conduct significant military operations outside of that alliance and also has signaled its continued desire to work within it. Moreover, the EU's attention during the first part of the twenty-first century will be devoted to its expansion into eastern Europe. In 1998 it began negotiations with six new candidates for admission (the Czech Republic, Cyprus, Estonia, Hungary, Poland, and Slovenia), with enlargement from this group not expected before the end of 2002. On 15 January 2000 it also initiated talks with six further applicants (Bulgaria, Latvia, Lithuania, Malta, Romania, and Slovakia). Ten of the twelve candidates should join around mid-decade, with Bulgarian and Romanian accession by 2009.

Bibliography

Lundestad, Geir. "Empire" by Integration: The United States and European Integration, 1945–1997. Oxford: Oxford University Press, 1998. The standard work; also provocative with its thesis of an American "empire."

Nugent, Neill. The Government and Politics of the European Union. 4th ed. Durham, N.C.: Duke University Press, 1999. The standard work on how the EU functions and its policies.

Pond, Elizabeth. The Rebirth of Europe. Rev. ed. Washington, D.C.: Brookings Institution Press, 1999. An excellent overview of European integration and its prospects and problems since 1989.

Stirk, Peter M. R. A History of European Integration since 1914. London: Continuum, 1996.

Urwin, Derek W. The Community of Europe: A History of European Integration since 1945. 2d ed. London: Longman, 1995. Both Stirk and Urwin are good general histories, with the former paying more attention to both the Atlantic framework and the Cold War as influences on the integration process.

—Thomas Maulucci

The European Union (EU) is a long-standing political and economic federation of autonomous European nations. With the consent of member states, the EU legislates a variety of issues by treaty, including trade, customs, travel, currency, and defense. Members choose to participate in various EU institutions, delegating sovereignty in order to achieve common goals.

The organization embraces democracy and the rule of law, requiring member states to possess some form of representative government, elected by universal adult suffrage of the adult citizenry. The mission of the EU is to promote economic growth in Europe, create a strong international market, lobby for European interests in the international community, raise standards of living, and promote peace.

History. European integration, the process that eventually yielded the EU, began on May 9, 1950, when France proposed to create a European trade organization. Two years later, France and Germany established the European Coal and Steel Community. Both nations sought to solve disputes over coal mining territories and industry competition unresolved since the end of the Second World War. Belgium later joined France and Germany, uniting most of Western Europe's continental coal and steel industry.

Continued success of the European Coal and Steel Community prompted its president to lobby European governments for the establishment of a large-scale economic and trade union. In 1957, six nations (France, Germany, Belgium, the Netherlands, Luxembourg, and Italy) signed the Treaty of Rome, establishing the European Economic Community (EEC). The EEC standardized some tariffs, opened borders to free trade, promoted industry cooperation, regulated industry standards, and synchronized export practices.

In 1967, the member nations brought the European Coal and Steel Community and the European Atomic Energy Community (Euratom) into the fold of the EEC. The new unified organization was officially named the European Community (EC), though many continued to use to older designation, EEC, to refer to the new union.

Several nations in Europe chose not to join the original EEC, the most prominent of which was Great Britain. In January 1960, Britain formed a more loosely regulated economic union to rival the EC. The European Free Trade Association (EFTA), known colloquially as the "Seven," included Britain, Austria, Denmark, Norway, Portugal, Sweden, and Switzerland. A year later, Britain applied for membership in the EC, but France rejected their proposal to join the organization. The French government subsequently vetoed Britain's second application for membership in 1964.

Britain, along with Ireland, Denmark, and Norway, became members of the EC in 1973. In a series of accessions, six more nations joined the EC before 1995. The organization adopted a more ambitious mandate in the 1990s, establishing government and judiciary organizations in an attempt to closely unite European interests. Adoption of the new mandate by member states established the European Union.

Organization. Today's EU mission encompasses more than economic goals. The principal objectives of the EU are to establish European citizenship, ensure civil rights of European citizens, promote social progress, protect European security, and ensure justice. To these ends, the European Union maintains its own government and supporting agencies. These institutions are granted sovereignty by the member states to legislate European affairs and create international law. Final adoption of EU policy, however, is left to the individual member states.

Five primary institutions comprise the government of the EU. Its overall structure embraces the three-branch democratic model of government, with executive, legislative, and judicial bodies. The European Commission is the primary institution of the executive branch. Members are elected or appointed by the European Parliament. The Council of the Union is composed of representatives from the governments of the member states. The Council governs the EU as a collective, requiring majority support to set or endorse policy.

The European Parliament, the legislative body, is elected by the people of the member states. Committees within the European Parliament address specific concerns, such as health care, preservation of the environment, and trade regulation. The Court of Auditors, the committee responsible for overseeing and managing the EU budget, remains separate from every branch of the EU government, but works closely with the Parliament to appropriately allocate funds and resources.

The EU judiciary is the Court of Justice. The jurisdiction of the European court is somewhat dubious, and member states recognize its authority to varying degrees. The court is similar in structure and function to those of the United Nations, but is permitted to pursue only cases that affect member states.

A myriad of committees and support institutions comprise the rest of the EU government. The EU maintains its own central finance system, including the European Central Bank and the European Investment Bank. These contain funds used by the EU or granted to individual member states for various joint projects. In 1999, nine nations adopted a standard European currency, the Euro.

Membership. Fifteen member states currently comprise the European Union: Austria, Belgium, Denmark, Germany, Greece, Finland, France, Ireland, Italy, Luxembourg, the Netherlands, Portugal, Spain, Sweden, and the United Kingdom of Great Britain and Northern Ireland. These member nations participate in the EU to varying degrees. For example, Britain participates in EU economic and trade associations, but uses its national currency, the pound, instead of the euro.

In 1998, the EU began negotiations with several eastern and southern European nations regarding EU expansion. Still recovering from decades of Soviet Communist domination, many of these nations possess fledgling free market economies. Introduction of former Eastern Block nations into the EU holds the potential for economic growth and expanded investment opportunities for European industry. However, expansion also poses liabilities to more economically robust EU nations.

The EU granted admission to the following candidate nations in 2002: Czech Republic, Cyprus, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovenia, and Slovakia. These nations officially join the EU on May 1, 2004, assuming that they ratify membership in a national, public referendum. Bulgaria and Romania are scheduled join the EU in 2007. Some negotiations on expansion proved contentious. The EU denied Turkey's application to join the organization, despite the nation's numerous economic and trade associations with Europe. The EU will review Turkey's application again in 2004, if the nation furnishes evidence that it has met EU demands to improve human rights and maintain a stable democratic government. The nation of Cyprus, divided between Grecian southern Cyprus and nationalist Turkish Cypriots, failed to reunify before the EU accepted the national proposal to join the EU. Therefore, only the independent half of the nation will join the EU in 2004.

Some nations in Western Europe have chosen to remain outside of the European Union. Switzerland, and EFTA members, did not join the union on the grounds that membership in the EU threatened its national policy of declared neutrality. Norway also chose to exclude itself from EU membership.

Common defense and security: the future of the EU. A series of treaties in the 1980s and 1990s expanded the political, defense, and military role of the European Union. Formerly an instrument of economic and social policy, the EU adopted the Common Foreign and Security Policy (CFSP) in response to global instability and the rise or terrorism. The creation of the European Security and Defense Policy (ESDP) followed, outlining the EU's international responsibilities to defend European territory and interests while cooperating with organizations such as the North Atlantic Treaty Organization (NATO) and the United Nations.

Defense and security strategy remains one of the most contentious aspects of European Union policy. Some member states prefer to rely on their connections to NATO, or their own defenses, for protection. Others are wary of creating an EU military force under international command.

The EU established several crisis management tasks, known as the Petersberg Tasks, a foreign policy priority. For the purpose of humanitarian aid and rescue, peacekeeping, and crisis management, the EU created a military task force of 60,000 reserve troops. Member states can choose to contribute and deploy national military troops to EU operations on a case-by-case basis.

The EDSP launched its first operation, a police mission in Bosnia and Herzegovina, in January 2003. The first EU military operation commenced in Macedonia two months later.

With the aid of ESDP liaisons in 2002, the EU candidate nations signed a declaration warning Iraqi leader Saddam Hussein that military action was justified if United Nations weapons inspections were not permitted to freely proceed. The statement angered several EU members, causing a rift in EU foreign policy. Although the EU did not formally support the subsequent United States led action in Iraq, several member and candidate nations supported the Coalition military action. Some of the most influential EU nations, such as France and Germany, voiced strong opposition to the 2003 war in Iraq.

Further Reading

Electronic

European Union. <http://www.europa.eu.int> (May 9, 2003).

A federation of European nations set up after the World War II. The original European Union members were Belgium, Germany, France, Italy, Luxembourg, and the Netherlands. These countries were later joined by Austria, Denmark, Finland, Greece, Ireland, Portugal, Spain, Sweden, and the United Kingdom. Other countries preparing to join the current group of fifteen are Bulgaria, Czech Republic, Estonia, Cyprus, Latvia, Lithuania, Hungary, Malta, Poland, Romania, Slovenia, Slovakia, and Turkey. As it relates to the world of wine, the EU has established a standard set of regulations for wines entering EU countries from the United States; some member countries might also have additional individual requirements. Essentially, U.S. Exporters must follow the tax and trade bureau (previously batf) production regulations described in Circular 86-2-Certification and Analysis of U.S. Wine for Export to the European Economic Community (EEC). In addition to a host of required information that must appear on the labels, it's interesting to note what is not allowed. Items that cannot appear on labels include European appellation names, such as "Champagne" and "Beaujolais." In fact, the label can't show the use of generic or semigeneric wine class or type designations having European significance. For instance, "méthode champenoise" cannot be used and must be replaced by any of the following: "bottle-fermented by the traditional method," "traditional method," "classical method," or "classical traditional method." Labels are not allowed to have quality terms that have no tax and trade bureau (previously batf) standard, such as "reserve" and "select." Furthermore, a geographic indication of "American" is too broad-the label must indicate a smaller area, such as "California" or "New York," or one of the american viticultural areas. Interestingly, items required on U.S. Labels, like the government warning statement and the sulfites declaration, are not allowed either.

A political union, often called the EU, to which the member states of the EEC are evolving. Based on the Maastrict Treaty, it envisions the eventual establishment of common economic, foreign, security, and justice policies. The extent to which this goal will be achieved is still in doubt and occasions deep divisions in some member states, especially Great Britain. The members of the EU are Austria, Belgium, Denmark, Finland, France, Germany, Great Britain, Greece, Ireland, Italy, Luxembourg, The Netherlands, Portugal, Spain, and Sweden. Several nations, including the Czech Republic, Hungary, Poland, and Turkey, are seeking membership.