Briefly after the Second World War a unanimous decision between six European countries namely France, Germany, Italy, Belgium, Luxembourg and the Netherlands, Arrived upon establishment of the European Coal and Steel Community (ECSC) on 18th of April 1951. The basic ideals behind ECSC was to create a diplomatic and economic stability between the countries. In 1st of July 1967, The Brussels Treaty was established this was the coalition of ECSC, European Economic Community (EEC) and the European Atomic Energy Community (Euratom) to form European Communities.
Countries such as the UK, Ireland, Denmark, Greece, Spain and Portugal became members of the European Union Joined afterward in a process called Enlargements which the EU Carried out when a new country is chosen to be member of the EU. On the 7th of February 1992 the members of the European Community signed the important Maastricht Treaty this created the official European Union which also resulted of the formation of the unified currency The e uro (sign: €) which was the commercial currency throughout the European Union, The sole purpose of creating the euro was to bring forth an economic and monetary union and also an intergovernmental trade pact.
The Maastricht Treaty also introduced the Three pillars of the European Union, The first is the European Communities pillar handled economic, social and environmental policies. It comprised the European Community (EC), the European Coal and Steel Community (ECSC, until its expiry in 2002), and the European Atomic Energy Community (EURATOM). The second is the Common Foreign and Security Policy (CFSP) pillar took care of foreign policy and military matters, The third pillar is the establish the Police and Judicial.
Co-operation in Criminal Matters (PJCC) brought together co-operation in the fight against crime, It was formerly called as The European Economic Area (EEA) which is also the internal market was formed after propositions for the free movement of properties, individuals, services and wealth which is also known as the “four freedoms” , Three of four member states of the European Free Trade Association (EFTA) Which is Iceland, Liechtenstein and Norway forming European Free Trade Association and 27 of 28 affiliate states of the European Union (EU) with the exception of Croatia provisionally applying the agreement pending its ratification by all EEA countries, It was established on 1st of January 1994 ensuing an contract between the associate states and the European Community, which later became the EU.
It allows European Free Trade Association states which join to participate in the EU’s internal market without being members of the EU. They adopt almost all EU legislation related to the single market, except laws on agriculture and fisheries. Nevertheless, they also contribute to and influence the formation of new EEA relevant policies and regulation at an early stage as part of a formal decision-shaping process this is with one exception of an EFTA member, Switzerland that has not joined the European Economic Area buthas mutual agreements and a free trade agreement with the EU.
The Treaty of Amsterdam established in May 1st 1999 emphasized on European Union law which meant a greater emphasis on citizenship and the rights of individuals in the EU and an effort to achieve more democracy in the form of bigger powers for the European Parliament, a meaning on occupation, which meant if a citizen resided in a country which is a member of the EU, The citizen would be regarded as a citizen of all the other countries belonging to the EU thus an EU Citizen , a Public area of sovereignty, security and justice it is also the initial stages of a large common foreign and security policy (CFSP) and the reform of the institutions in the approach to enlargement which is usually the addition of another country to the EU.
The most demanding apprehensions of the European citizens are of their legitimate and personal security, immigration and fraud prevention, were all dealt with in other sectors of the new Treaty of Amsterdam. The European Union will now be capable to legislate on immigration, civil law or civil procedures in the individual members of the EU, until now this is essential for the free movement of persons within the EU and at the same time, intergovernmental cooperation was strengthened in the police and criminal justice field so that Member States will be able to direct their activities more efficiently. The Union aims to establish an expanse of freedom, security and justice for its citizens.
The Schengen Agreements , Which is to have basic friendly borders between two adjoining European Union countries is now been incorporated into the legal system of the EU (exception of Ireland and the UK remained outside the Schengen agreement). The European Council will also lay aside common strategies due to the new treaty, which will then be put into effect by the Council acting by a eligible majority, themed to certain conditions, The treaty also introduced a High Representative for EU Foreign Policy who collaborates with the Presidents of the Council and the European Commission, puts forth a announce a EU policy to the outside world.
While the Amsterdam Treaty did not provide for a common defense, it did however increase the EU’s tasks for peacekeeping and humanitarian work between the members of the EU and especially by building closer associations with Western European Union. The Establishment of Eurozone which is an economic and monetary union (EMU) of 18 members of the EU Consisting Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greec e, Ireland,Italy, Latvia, Luxembourg, Malta, the Netherlands, Portugal, Slovakia, Slovenia, and Spain. Other EU states (exception of the United Kingdom and Denmark) are accommodated to join the Eurozone once they meet the standards to do so.
These 18 (EU) members states that have adopted the euro (€) as their commercial and national currency and solitary legal tender disregarding any other currency than the euro, None of any EU countries which participated in the Eurozone has abandoned and there are no requirements to do so or to be ejected out of the Eurozone. An exception to countries like Monaco, San Marino, Andorra and the Vatican City which are countries encapsulated totally by the surrounding Eurozone countries have formal agreements with the EU to use the euro as their official currency and issue their own coins. Other states, like Montenegro and Kosovo, have adopted the euro separately, but these countries do not officially form part of the Eurozone and do not have representation in the ECB or the Eurozone.
A monetary policy of the zone is the responsibility of the European Central Bank (ECB) which is governed by a president and a board of the heads of national central banks.
The principal task of the European Central Bank is to keep inflation under control which they do with HICP (Harmonized Index of Consumer Prices). even though there is no mutual representation, authority or tax policy for the currency union, some co-operation does take place through the Eurogroup, The Eurogroup is composed of the finance ministers of the Eurozone states, but in predicaments state leaders also form the Eurogroup which makes political decisions regarding the members of the Eurozone and the authority over the euro, the above statements are the advantages and perks of being in a European Union and also the perks of using euro as the common currency, but the euro also has it’s disadvantage that is further analyzed below one of the main is the Eurozone crisis.
In 2007 the fifth enlargement was accomplished with the addition of the countries Romania and Bulgaria later in 2007 Slovenia adopted the euro as its currency followed by Malta and Cyprus in 2008 and Slovakia in 2009. Beneath this all, trouble developed with existing members as the Eurozone entered its first recession in 2008.
The EU Members cooperated and the ECB intervened to help restore economic growth and the euro was seen as a refuge, particularly by those freestanding nations that wanted it, such as Iceland. The financial crisis of 2007 to 2008 known as the Eurozone crisis also known as sovereign debt crisis, the Eurozone has recognized and used provisions for permitting emergency loans to member states in return for the representation of economic reforms.
The Eurozone has also endorsed some limited fiscal incorporation, for example they peer review of each other’s national budgets to improve each other through a debate about it. This issue is mainly political and in a state of instability in terms of what further supplies will be agreed for Eurozone reform, Greece is the worst obviously, but if it weren’t for Greece the financial markets would be aggressive up on another European country. Germany now seems to believe that they may be able to get Greece safely out of the Eurozone without the whole thing collapsing and then just wait it out possibly for the economy to magically kick start. But that’s not going to possibly work out.
The economies are too interconnected to allow for bigger countries than Greece to fall. Now another perspective that is important to point out that all the five countries to enter the crisis Portugal, Ireland, Italy, Greece and Spain countries are all different from each other and all have different reasons for why their economies are involved with the Eurozone Crisis. Spain for example ran budget surpluses until 2008, unlike Germany that did not even manage to stay under -3% for 4 years as mandated by the Eurozone regulation which they bargained for themselves and Germany did not have to pay the corresponding fines.
(source: http://www. sekmestechnologija. lt/tag/meritokratinis-ekstremizmas) “Cartoon depicting the economic pillars of the counties mainly affected by the eurozone crisis collapsing like dominoes and the imminent danger that could befall on American economy recovery that was also undergoing that time. “ The economic crisis started after the collapse of Lehman Brothers the powers that be did not want that to happen again and started bailing out the banks, liquidate the accounts that started collapsing.
European governments were pressured (also by the EC and other external powers) to bail out their over-leveraged banks (that took too high risks, allowed for by regulation pressured by the EC). Suddenly European countries spend trillions saving their banks. A government debt crisis ensued. Borrowing rates are higher than the growth forecasts, leading to a debt trap. Financial markets started speculating against the apparently weaker peripheral European countries, so they could no longer borrow money from the private markets at reasonable rates, and borrowing from the core European countries at scarcely better rates included conditions for neoliberal austerity – worsening the peripheral countries’ growth perspectives even more.
Then the structural problems inherent in the European Monetary Union (which plenty of people saw and warned for in ’99 but were ignored) became apparent. Only the ECB can print money. The ECB follows neoliberal monetary policy under which it is independent of government and is just there to maintain a low inflation rate. What we have is Eurozone with one common monetary policy, while other socio-economic policy is on a national basis.
It’s very good for capital and businesses that can freely move across borders looking for a profit to make. Big multinationals (often from the core countries) have benefited a lot from the Eurozone. Nations however end up competing with each other in order to attract this capital. A race-to-the-bottom in order to improve competitiveness ensues. Usually there are 2 ways for a country to become more competitive. Normally individual countries run their own currency, so they can print money, devaluate their currency, and thereby become more competitive. This is ruled out in the Eurozone, as only the ECB can print money [this is also why the UK outside the Eurozone can run its current budget deficits without consequence]. The only other way to become more competitive is to lower labor costs.
Germany in the last 20 years has been quite busily doing just that, with the social-democrats there (forgetting their old ideals and becoming neoliberals) increasing precarious employment with so-called “mini-jobs” and striking a union-employers agreement that agreed on lower wages in return of low unemployment. Now the rest of Europe has to compete against that by lowering their own labor costs.
The EU and Germany and France demanded wage-freezes, lower minimum wages, removal of pensions, cuts in public spending. Leading to levels of social collapse and misery not seen since the 1930’s, A wave of poverty swept throughout Eurozone, with suicides going up 20% a year, young people becoming drug addicts, with people underemployed not even having the money to pay the rent for their apartments. Looking at the mass levels of unemployment and increasingly lower economic forecasts, it’s was not positively working So on the 9th of May 2010, the 27 EU member states decided to form the European Financial Stability Facility, directing at conserving the financial stability in Europe by providing any financial assistance to eurozone states in struggling in their economy.
The EFSF can dispute bonds or other debt instruments on the market with the support of the German Debt Management Office to raise the capitals needed to afford loans to eurozone countries that was in the Eurozone debt crisis, recapitalizing banks or buying Bonds issued by a national government in a foreign currency, in order to finance the issuing country’s growth. Sovereign debt is generally a riskier investment when it comes from a developing country, and a safer investment when it comes from a developed country.
The stability of the issuing government is an important factor to consider, when assessing the risk of investing in sovereign debt, and sovereign credit ratings help investors weigh this risk. As you, the reader could discern there are two side to this coin, the euro and the responsibilities and some shortcomings faced by the European Union such as the Eurozone crisis, but also advantages such as a the EU is a powerful voice in the international stage of politics and every one of its members has the support of its other members even in such crisis. This duality could weigh on the perceptivity of the observer.
Sources and citations •http://en. wikipedia. org/wiki/European_Commission •http://en. wikipedia. org/wiki/Merger_Treaty •http://europa. eu/eu-law/decision-making/treaties/index_en. htm •http://www. eu-oplysningen. dk/euo_en/spsv/all/1/ •http://www. theguardian. com/business/debt-crisis •http://en. wikipedia. org/wiki/Euro •http://www. shutterstock. com/pic-115002976/stock-photo-europe-m ap-european-union-flag. html •http://www. sekmestechnologija. lt/tag/meritokratinis-ekstremiz mas.