Briefly outline the history of the European Union to date?
The European Union’s (EU) baby steps can be traced back in 1945 after the Second
World War with the creation of the European Coal and Steel Community (ECSC). ECSC’s main
aim was to integrate coal and steel industries in Germany, France, Italy, Holland, Belgium, and
Luxembourg. (European Union, 2014)
Each country had a different agenda separate from the other. On its part, France wanted
an upper hand over Germany and to rebuild its crumbled industries, while Germany wanted
equal partnership and to restore its shattered image. The years that followed, not only did the
ECSC accomplish important milestones, but its mandate scope became more prominent and had
to be split into two.
In 1957, member countries signed two new treaties both known as the treaty of Rome that
gave birth to the European Economic Community (EEC), and the European Atomic Energy
Community (Euratom). Each body had a designated role. Whereas EEC allowed the free flow of
goods and service, Euratom pooled knowledge of atomic energy among member countries.
Towards the 1970s and 1980s, the typical market was doing so well that trade had increased five
times, attracting new countries who wanted to join. Notable new entrants included the United
Kingdom, (UK), Denmark, Ireland, Greece, Portugal and Spain.
However, it was not until November 1st, 1993 when the Maastricht Treaty officially
established the EU. The EU brought together European countries pursuing the same economic
and political agenda. Since then, the union has been creating policies that govern members’ laws,
economies, and security amid protestation of some member states. Member states enjoy a
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common customs union, common currency, a standard trade policy, and standard agricultural
policy. On June 23rd, 2016 and what surprised many, the UK voted to exit the EU, becoming
the first member to do so.
Today, twenty-seven countries continue to fly the EU flag high.
Describe the governance structure of the European Union and the authorities of its
key institutions?
Seven EU institutions are governed by their structures and members. Top of the list is the
European Council and is headed by a president who guides the union in all political decisions.
Despite its high office, Council does not pass laws. Depending on matters at hand, the Council
meets once every three months (European Union, 2014).
The next three institutions are mandated to come up with EU legislation: they are the
European Parliament, the Council of the European Union and the European Commission. The
European Parliament represents citizens of the EU while the Council of the European Union
represents member state governments. The European Commission represents EU’s interests in
general. The Commission comes up with new laws to be adopted by the Parliament and Council.
In addition, the Commission ensures the laws passed Parliament are duly implemented.
The last two institutions namely: the Court of Justice of the EU and the Court of Auditors
play the watchdog role in the EU. On the one hand, the Court of Justice endorses the rule of
European law, and on the other hand, the Court of Auditors makes sure EU’s activities are
financed according to the books. The powers and responsibilities of these institutions stem from
the Treaties agreed upon by heads of state of member countries. Member country’s parliaments
must also ratify these treaties.
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Finally, the European Central Bank (ECB) manages the euro, the EU single currency. It
does not only, outline and execute EU economic and monetary policy, but also stabilizes prices
which in return stirs up economic growth and create more jobs.
All the above institutions are supported by two advisory bodies, that is, the Economic and
Social Committee (ESC) and the Committee of the Regions (CoR). The ESC safeguards interests
of economic and social entities in the civil society, including farmers, workers, employers, and
professionals in various fields. The CoR on its part represents the interests of the regional and
local authorities of member countries.
What have been the recent political issues facing the European Union in the last five to ten
years?
The new millennium saw the EU continue to enjoy stability and prosperity and above all
goodwill from its citizenry. The good run persisted for almost a decade then matters started
going south, especially in the last five or ten years. Currently, the EU is treading on shaky
grounds. In actual fact, the Great Britain a key player left the union after the 23 June 2016
referendum. Mounting political pressure from within and outside the union has created fissures
in the EU structures that can no longer be overlooked.
Some of the challenges include the steady rise of European populist political parties
hostile to the EU, flooding of migrants and refugees, mainly from war-torn Syria, a more vibrant
and resurgent Russia, and the unpredictable US presidency of Donald Trump. Others are the
2016 departure from the UK from the EU, the Greek debt crisis, political turmoil in Turkey, the
Middle East crisis and of course an upsurge in terrorism (The Economist, 2014). The above
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challenges point to the fact that it is not business as usual for the EU, member states must come
up with a concerted effort and provide solutions to confront these challenges.
What have been the recent economic issues facing the European Union of the last
five to ten years?
No doubt, the combination of the global recession of the 2008-2009 periods and the
eurozone debt crisis dealt a devastating blow to the EU economies, culminating in declining
growth and a spike in unemployment levels. This happened when massive capital took flight
across the EU, in essence triggering private borrowing in some EU member countries including
Portugal, Ireland, Italy, Greece and Spain (P.I.I.G.S). The situation was made worse by the
global financial crisis that reversed these flows. The development plunged banks and private
borrowers into further debts. The eventual outcome was unprecedented economic downturns and
commercial banks collapsing, leading to an exponential rise in sovereign debt burdens.
As if that was not enough, some EU member states came up with stringent measures to
curb runaway budget deficits and public debt. To check the eurozone crisis, they sought
financial bailout from the international financial institutions, including the International
Monetary Fund and the World Bank. So far, most EU member states continue to experience slow
economic growth and high levels of unemployment, severely curtailing their full recovery.
Briefly describe the kind and degree of cultural challenges facing the unique
experiment of the European Union?
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Culture encompasses customs, traditions, inspirations and the social behavior of
individuals in a society. Culture has conspicuously been missing in virtually all EU top agendas
and politic – it is rarely mentioned in the union’s budget. The clash of different civilizations is
one of the major headaches gnawing the EU member states. Yes, language is a significant
problem as different languages and dialects are used to communicate with various EU member.
With its diverse religious grouping, religion becomes another obstacle to a homogenous EU.
Take the example of the Protestants that are found in the north of Europe (Germany, Britain, and
the Netherlands) and Catholics primarily found in the Mediterranean south. In the north, the
people are considered to have the same cultural, social and political principles. The contrary is
true down south.
No wonder there is a hot debate going on as to whether the Islamic state of Turkey should
join the EU and if it were to join whether it would cope with the EU norms and rules. Religion
should be regarded as social institution that defines how citizens approach work, how they
answer to their respective governments, and how they interact with each another.
When compared with the citizens of the in the north or Nordic countries, there exists
disparities with the citizens of the south that boarder the Mediterranean. The people of the north
are orderly and enjoy consistency in their systems. They also abhor official corruption and
dutifully pay taxes as matter of national pride. Perhaps that is why it is difficult to imagine these
two cultures mixing and working together.
The European Monetary Union (EMU) and the European Bank IECB)
• What is the EMU
• What are the benefits and costs of EMU for the EU member states?
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• What is the ECB
The Economic and Monetary Union (EMU) was established in 1992 to strengthen further
the integration economies of EU member states. EMU’s main agenda is to coordinate economic
and fiscal policies, a standard monetary policy, and a common currency also known as the euro.
Though all the twenty-seven EU member countries are involved in the economic union, only a
handful member states have given severe integration thought and had embraced the EU currency
– the euro. These are the countries making up the euro zone. It is undisputable that the economic
integration has brought home the benefits of the economies of scale, in-house efficiency and
more vigor to the EU economy in general. Economies of individual member countries have also
been boosted. Consequently, the turn of events has improved economic growth and increased
job opportunities and eventually stabilizing economies of member states.
Another mandate of the EMU is to work with the member states central banks to
influence interest rates and exchange rates by controlling the supply of money in these
economies. This not only benefits individual member economies but the EU economy in general.
Unlike when member states are left with their monetary policy operations, the single market
would not be realized as this would seriously undermine regional trade.
Certainly, the euro – a flagship of the EMU, helps realize the benefits of economic
stability, thus benefiting people and businesses. A single market not only encourages free
movement of goods and services but capital and labor as well. When economies in the eurozone
operate a single banking system, it gives more confidence in the safety of bank deposits. It also
tackles bank’s sovereign negative feedback loops that characterized recent global economic
crisis.
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On its part, the European Central Bank (ECB) manages the euro, draws up and supervises
EU economic and monetary policy. Over and above, the bank stabilizes prices, thus boosting
economic growth and employment opportunities. It does so by setting interest rates that it will
pass on to the commercial banks within the eurozone. This eventually mops up the money supply
and controls inflation. ECB also controls and manages foreign currency reserves (buying or
selling) with the aim of stabilizing exchange rates.Besides supervising financial markets and
institutions, the ECB also makes sure that payment systems work correctly. In general, the bank
ensures the safety and soundness of the whole European banking system.
The ECB is headed by a president who represents the institution at top EU and
international level conferences. The bank consists of three administrative bodies namely:
Governing Council, the Executive Board, and the Governing Council. The Governing Council is
the main decision-making organ and is made up of the Executive Board and member state central
bank governors in the eurozone. On its part, the Executive Board runs the daily activities of the
ECB while the General Council's central role is to advise and coordinate ECB activities.
Cohesion and Convergence
• The effects of enlargement
• Socio-economic supports
• Economic effects of a single market and single currency
• Political and cultural tensions to be overcome
Without a doubt, the integration and enlargement process has had profound economic
ramification in the region and Europe in general, not to mention EU’s structural and cohesion
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policies. Primarily, these policies recognize the Gross Domestic Product (GDP) per capita and
unemployment rates. Consequently, an enlarged EU has had a great effect on economic and
social cohesion (The Economist, 2011). Additionally, not all member countries benefit from
equally because of different location and specialization.
Compared to other EU member countries, member states found in Central Eastern Europe
don’t enjoy the same benefits of economic convergence. In reality, unemployment in these
countries has shot up, income levels dropped, and poverty became widespread. Also, GDP per
capita in these countries is significantly less compared the EU average.
On the trade front, there has been a spike in Foreign Direct Investment flows from the EU
to applicant countries. The contrary is true; FDI flows from the applicant countries to the EU
have been insignificant.
Though migratory trends are a major factor once trading blocs become enlarged, in the
EU case there has been no notable flooding of migrants that have been recorded. There have also
been minimal effects on wage and employment in within the EU.
Ideally, the EU single market envisaged the free movement of people, goods, services,
and capital. Opinion is divided as to whether these expectations have been met according to an
article appearing in the Economist in 2011. Though after more than 20 years the single market is
yet to meet its set objectives, considerable positive growth effects have been recorded. Evidence
indicates that the single market has helped increase EU GDP levels by between 2-3 percent.
Similarly, exports and FDI have also shot up. In essence, abolishing trade barriers has brought
vibrancy in the market and enterprises have become more competitive. In some cases where
trade barriers have been reduced have brought more investors into the EU as the region has
become an attractive investment destination.
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Among the beneficiaries of the single market are the smaller countries in the EU who
have benefitted a great from trade liberalization. For these countries, it has meant an additional
market for the products and service.
But the same cannot be said of the launching of the euro – expected growth rate,
employment, and budget of member states are yet to be realized. Critic blames the EMU for this
misfortune – they cannot understand why the euro is doing better in fringe EU economies such as
Spain but is doing dismally in core economies like Germany.
Some political factors continue to plague the EU, giving credence to the current doubt
about the future of the EU. Current tensions among member states and political undertones
among its key players are undermining the existence of the EU. This new development has seen
some member states opt out of certain EU initiatives and projects key among them the eurozone
and the Schengen area.
More so the EU spread of its wings to the east is heightening tensions among “old”
members who now feel isolated. It is not lost that just the other day, Russia controlled the new
entrants with an iron fist, thus Russians ties cannot be wished away. EU critics are also worried
that most decision making in the EU are not only complex but also lack transparency. Some
European leaders and their citizens are skeptical about the EU expansion, especially its bid to
woe Turkey. They allege the EU is losing its overall identity because Turkey’s culture and
religion are wide apart as compared to the majority of the current EU membership.
The future of Europe
• What are the political and economic forces affecting the future of Europe?
• What are some likely scenarios for the evolution of the European Union?
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For stability and prosperity, the EU must come up with measures to confront key
challenges including new technologies, emerging economies, the migrant crisis, terrorism and
suspicion of EU driven projects and initiatives according to the authoritative economic
magazine, The Economist, (2017). If left unchecked, the new markets will continue to undermine
the EU’s economic prowess while the new technological advancement will impact negatively on
the job markets. Mistrust towards EU initiatives has seen rise populist and Eurosceptic groups
that do not trust the EU anymore. It is worrying that some groups are urging radical reforms at
the EU, while others are calling for the disbandment of the EU altogether.
Today, skeptics accuse the EU of lacking strong leadership, clear vision, and goals.
Indeed, the EU greatness has been propelled by some strong member states that held sway in the
agendas they were pushing. For instance, it was during the strong leadership of German and
French leadership that saw the establishment of the euro, EU’s single currency.
Recent years have also seen Europe grapple with rising migration refugee running from
war-torn countries, especially Syria and Iraq. The United Nations estimates that over a million
refugees and migrants entered Europe by sea with Italy and Greece as the main entry points. The
EU has been castigated for lack of tact in handling the situation. Apparently, migrations and
asylum policies have been working to EU’s disadvantage, creating deep divisions and mistrust
among member states. On the one hand, Greece and Italy accuse other member states of leaving
them to tackle the vice all by themselves. On the other hand, Germany and Sweden have been
blamed making a bad situation worse by their open door policy.
Today, more than before the EU seems to be standing on very shaky ground and how it
forestalls the above mention challenges will determine its future. Even EU die-hard supporters
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are skeptical of how the EU leadership handled the 2016 Brexit. Indeed, EU leadership has
acknowledged that business would not be normal with the Brexit. Already, an announcement
has been made to the effect that the remaining members would be launching a ‘political
reflection’ that will address further EU reforms.
Some possible scenarios for the evolution of the EU in future will include persevering the
bad currents by sticking to the original agenda that gave rise to the union. At the same time come
up with home-grown solutions to the challenges such as migratory pressures. Also, the EU must
stay on track and tackle integration and come up with policies that address some of the
challenges. Also, EU leadership need to set up two-speed entity, that will bring together member
states that wholly support the EU and those that support the union half-heartedly.
Experts also urge the EU to go slow on integration and in some cases reverse others, but
the sovereignty of member countries upheld. Such a move would go a long way to address
reform-minded euro-skeptic movements which could assume power in the near future concludes
The Economist (2017).
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