European Union And Rationale Behind Its Formation - European Union Essay Example

The origin of the European Union (EU) may be traced to establishment of European Coal and Steel Community (ECSC) on 18 April, 1951 through the treaty of Paris - European Union And Rationale Behind Its Formation introduction. The main aim of the treaty was to deter the risk of future anomalies between Germany and France by creating a longstanding cooperation in the production of Coal and the manufacture of steel. The difference between Germany and France earlier had resulted in European war in 1870 and later during the First World War between 1914 and 1918.

To avoid such catastrophic war in future, a solution was offered so as to link their economies which would not allow them to confront again. As the result of economic linkage between fifteen countries ,which is known as European Union now ,which obviously includes France and Germany, it is inconceivable now that a war should ever break out due to their economical interlinks. This is one the main advantage of creation of European Union.

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After signing ECSC in 1951, both Germany and France invited other Western European countries such as Italy, Belgium, Luxembourg and the Netherlands. Thus the creation of ECSC was considered by these countries, an opportunity to link their own economies to those of Western Europe’s two giant nations while at the same time helping to avoid war between them. Jean Monnet, an economist, political thinker and a business man who devoted all his time after the second war for the creation of solidarity economic of European countries which he termed it as “United States of Europe”.

During 1958, European Economic Community was established to help the individual countries to hand over the important aspects of their management in accordance with the directives issued by their “High Authority” and it consisted nine member countries , which will hold office for six years. This authority had the privilege to decide on price and levels of production on common matters like Coal. BIRTH OF EUROPEAN UNION:

With the signing of “Maastricht Treaty” in February1992, the concept “European Union” came into existence and Union then consisted of twelve members – Denmark,Belgium,Portugal, France, Italy, Ireland , Netherlands Luxembourg, Spain, Germany , Luxembourg and United Kingdom. Finland, Austria and Sweden joined the EU in 1995. As of now , EU consists of twenty five members with the following new members joined during 2004- Malta, Cyprus, Estonia ,Czech Republic , Hungary , Lithuania , Latvia, Slovakia,Polland and Slovenia.

Further, during 2007, Bulgaria and Romania are likely to join the EU. During January 2002, EU’s common currency namely “EURO” which will be managed by European Central bank was introduced which substituted national currencies of twelve member states of EU . EU is distinct from other entities like NATO or UN as it is a body to which member states have ceded some of their sovereign, traditional rights. EU is a body which is distinct from that of its member states and has the extensive power to take initiatives and promulgate legislation on behalf the Union itself.

One major advantage is the removal of customs tariffs among member states which will facilitate the member states to enjoy competitive rates for any product. Thus, the private individuals may now buy goods in any European Union country for their personal use and bring them home without paying any customs duties. Further, all the members irrespective of their time of accreditation to EU will have the same rights and interest and also will enjoy competitive interest rates. Thus, lower and competitive interest rates will augment economic growth and reduce the unemployment rates.

One of the disadvantages to be posed by the member states is that it may bring economic gap between Western European states and Eastern European states as the free movement of its subject may result in concentration of skilled labour in affluent part of the EU. Though it is a separate entity from that of its member states, it does not have its own army, police, foreign policy and no common language. Further, it can not levy or collect income taxes either on its subjects or from corporations.

Further, it has no responsibility like town planning, upkeep of roads or the security for the borders or coastal areas etc. For instance, about 2. 9% of the Gross Domestic Product is spent on research and development in the U. S. A and Japan spends about 3% Whereas the EU is spending only 2% combining all twenty five member states and one of the long term goals of the Single Market, established by the Single European Act of 1986, was the establishment of a unified economic area which will facilitate it to compete at par with the U. S. A and Japan. Further the creation of single market by the formation of EU, customs posts between these 25 member states have been virtually abolished and as the result now goods within the EU freely travel from Germany to Ireland, Denmark to Portugal, as it moves freely from Texas to North Dakota or from California to Massachusetts in U. S. A. Likewise, creation of EU will also facilitate people’s of member states to travel and work with in the EU without passport or visas.

But this process of free entry within the member states of EU is being opposed by UK and Denmark and these countries are arguing that it may violate their rights to maintain control of persons who crossed their borders. Further, member states is having the right to a 12-mile exclusion zone around its coasts and their fisherman is being allowed to enjoy their fishing rights . The Spaniards managed to register their vessels in British ports and to encroach the UK sea territories for fishing purpose.

British government undertook measures to prevent the misuse through its 1988 UK Merchant Shipping Act. Aggrieved by the UK government action, Spanish fishermen appealed in 1991 to the Court of Justice of the European Communities on the principle of non-discrimination on the grounds of nationality enshrined in the article 7 of the Treaty of Rome . The appeal was known as ‘Factortame case ‘ and the court ruling was against the action of UK government .

The Spanish boat owners appealed for compensation of their revenue loss and it was referred by the European Court to the High Court in London and in the end, UK government was ordered to pay compensation ? 30 million . As the result of Uruguay round of talks on possible reduction of tariff barriers and export subsidies, EU reduced its customs duties from 6. 8 to 4. 1% whereas U. S. A reduced it from 6. 6 to 3. 4% as compared to customs duty that prevailed around the globe in 1950’s was around 40% and more and this is considerable accomplishment because of EU structure in Europe.

The formation of EU has achieved a striking progress by introducing legislation designed to safeguard the consumer, insisting standards for safety in areas as different from one another as cosmetics, Children toys, contracts, medicines, the labeling of goods and hygiene standards in the serving of food. EU has been established on the notion that it operates in most competent economic system where market forces function in open and free competition, with the intervention of the state at a bare minimum level thereby guaranteeing that the rules of the game are equally adhered by all parties.

Thus, by establishing European Central bank with full autonomy as this will be administered by a committee of 12 bankers, the EU central bank will have similar powers like that of Federal Reserve Bank of U. S. A as far as its administration is concerned and it can run the affairs with full autonomy and without interference of member states. However, some critics argue that financial cost of being a member of the EU is too high and the maintenance of sing European Currency will increase it further.

How the success of a club is measured by the strength of its members, the success of EU also lies in annexing all the unions in the Europe together. The Member State can grant certain rights to EU under its law like ownership of property. Further the EU is subject to the contract law and tort law of individual Member States. Thus basic decision making of the EU is consists of the following process- European Commission proposes, the Council approves, the Parliament advises and the Court of Justice interprets.

Further, the present EU has a total electorate of over 250 million voters implies that each constituencies is having a half a million potential electors. EU laws have the precedence over the national laws of the member state and they have to amend their laws in corroboration with the EU laws so as deter any contravention. In the European Union, every person and every organisation, including the European Commission itself, is answerable to its actions if challenged by an appeal to the European Court.

As the ruling made by the European Union Court of Justice can not be appealed and is binding on the member states and if there is a conflict between legal systems of two or more member states, the decision of Court of Justice can not be appealed to any higher authority and this loophole has to be plugged. Lord Cockfield, in his book “The European Union: Creating the Single Market alleges that EU is the replica of French political philosophy as it resembles Montesquieu Theory of the Separation of Powers.

CONCLUSION: The one question that arises is whether the creation of European Union is going to dominate its Creators. One has to remember that EU is a striking force not only in Europe but also in the rest of the world. As such, the Member States need not slide into stupor or inappropriateness. Thus EU Constitution will make the EU as an amalgam system. Most of the central features allocated to the Union under the Constitution will be carryover from the treaties. The EU Constitution has the following striking characteristics.

EU citizenship will afford the nationals of EU the freedom to reside, vote, work anywhere in the EU. The EU levies its own taxes and collects thereby revenues and meets its budget requirement on its own and is not depend on any contribution to from its member states. The EU has its own currency managed by its own central bank. It has its own Parliament, Council of ministers, commissions. The Union legislation is to be adopted by majority voting in the Council and European Parliament.

Further EU law is having supremacy over the laws of its all Member States. EU has to act only within the restrictions of the power conferred on it by the Member States. Competences are still remaining with the Member States. Certain policy decisions have to be taken only on unanimous voting by all the Member States. Further without the consensus, the Council can not proceed in certain key decisions. Thus a single member has the ability to block any resolution and has the bargaining power and can demand concessions as the price for its voting.

Another striking factor of EU is that foreign policy and defense are untouched and left with the respective Member States. EU constitution stipulates that it has to respect the integrity of the Member State as sovereign nation. EU has the right to suspension of rights of Member States and offers the Member States withdrawal rights from the EU. EU constitution can not be amended with out approval of each Member of the State.

Last but not the least, as the world is facing constant shifting winds of international affairs, it is arduous to foresee whether the EU Constitution after its ratification will take the EU to success path? The balance of power as suggested by the EU Constitution is workable or not? Whether its political concession can be sustained? Is the tremendous pressure among the Member States to transfer power to Brussels is going to succeed or not? Are some core group of states is going to be unwind for an enhanced co-operation between themselves? Only time has to answer all these questions

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