European Union Essay
The European Union, which was previously known as the European Community is an institutional framework that began in 1951 between six countries with the intention of constructing a unified Europe. The European Union was created after World War II to economically and politically unite Europe so that another war among the European nations would not occur. The enlargement of the European Union is a historic opportunity to foster peace after generations of division and conflict. After fifty plus years and four waves of accessions there are now fifteen member countries. As a result, three hundred and seventy million people share common institutions and policies that have brought an unprecedented era of stability and prosperity to Western Europe.
The objective of the European Union is to promote economic and social progress; assert the European identity internationally; introduce European citizenship; develop an area of freedom, security and justice; and with continual emphasis on community that will add to the Union’s strength, cohesion and influence in the world.
There are five institutions involved that manage the European Union: the European Parliament, elected by the people of the member states; the Council representing the governments of the member states; the Commission made up of the executive and the body who has the right to initiate legislation; the Court of Justice and the Court of Auditors who is responsible for auditing the accounts.
At the Luxembourg summit in 1997, the European Union announced a two-tier proposal for the enlargement of the European Union where it could potentially allow thirteen new eastern European countries to enter the European Union. The enlargement of the “European Union is an excellent opportunity to extend stability and prosperity to new members through peaceful measures” (http://europa.eu.int/comm/enlargement/). This growth is advantageous to its members given the number of potential candidates, the geographical area, the population and the wealth of different histories and cultures. This expansion to include new members will put the European Union in an excellent position to embrace globalization, and to strengthen and defend the European social model.
All applicants must meet specific economic and political criteria to become members of the European Union. “This criteria was developed in Copenhagen to solidify stability of institutions guaranteeing democracy, the rule of law, human rights and respect for and protection of minorities; the existence of a functioning market economy as well as the capacity to cope with competitive pressure and market forces within the Union”(Baldwin 23).
In this essay I will determine the benefits and conditions for success of the enlargement of the European Union. I will also determine if the current members will benefit from the enlargement and illustrate all the potential costs of eliminating or postponing another expansion. Additionally, I will address the potential consequences of
the enlargement of the European Union including the potentially huge mass migration of low skilled eastern European workers to the European Union. Finally, I will discuss the issue of agriculture in the applicant countries and outline their many deficiencies that require substantial restructuring and modernization.
Enlargement presents a historic opportunity to unite a continent that has been divided for many years. The success of the enlargement is a historic challenge. It stimulates bonds between east and west and lays the foundation for financial prosperity, peace and democracy in Europe.
The applicants to the European Union include: Bulgaria, Cyprus, Estonia, Poland, Turkey, Hungary, Latvia, Czech Republic, Malta, Romania, Slovenia, Slovak Republic, Lithuania. The expansion of the European Union will increase the scope for peace, stability and prosperity in Europe and will enhance the security of its entire people. The addition of more than one hundred million people into the European Union’s market of 370 million will boost economic growth and create jobs in both current and new member states.
There will be a better quality of life for citizens throughout Europe as the new members adopt European Union policies for protection of the environment, the fight against crime, drugs and illegal immigration. “The arrival of new members will enrich the EU through increased cultural diversity, interchange of ideas, and better understanding of other ways of life” (http://www.eurunion.org/legislat/extrel/enlarge.htm). The enlargement will strengthen the Union’s role in world affairs, foreign and security policy, trade policy, and other areas of global governance. This enlargement will create the largest single market for trade and investment in the world; at five hundred million consumers, the enlarged European Union will be bigger than the American and Japanese economies combined.
The conditions for success for the enlargement of the European Union rests upon the fact that potential applicants must fulfill all the criteria required for membership.
The European Union needs to prepare itself adequately to receive them. The European Council in Nice in December 2000 reached agreement on a new Treaty that paves the way for enlargement. With the ratification of the Treaty, the European Union will be ready to welcome new members. “The Treaty includes important changes to streamline decision-making in an enlarged Union; extension of majority voting to more policy areas in the Council of Ministers, in place of decision-making by unanimity; new weighting of votes of member states in the Council, to take account of the arrival of new members; new allocation of seats in the European Parliament; increased authority for the President of the European Commission, in relation to Commissioners and their portfolios”
(http://www.eurunion.org/legislat/extrel/enlarge.htm). The applicants will also benefit from access to a single market. “The Centre for Economic Policy Research study estimates that enlargement will boost their GDP between ECU23 and ECU50 billion”
(http://www.eurunion.org/legislat/extrel/enlarge.htm).”Findings published by the European Round Table for Industrialists last month estimates that enlargement will create around 2 million extra jobs in the candidates”
Numerous economic analyses have concluded that the benefits of enlargement outweigh the costs. Although the benefits are relatively larger for the potential members because they start from a lower economic base, there are gains for both sides. Moreover,
the future members, already exposed to the challenge of globalization, will help the European Union to surmount it. “A key academic study in 1997 by the Centre for Economic Policy Research estimated that accession of countries of Central and Eastern Europe would even in a conservative scenario bring an economic gain for the EU-15 of 10 billion, and for the new members of 23 billion” (Pinden 24). “A recent study of the Commission estimates that enlargement could increase the growth of GDP of the acceding countries by between 1.3 and 2.1 percentage points annually, and for the existing members it could increase the level of GDP by 0.7 percentage point on a cumulative basis” (Pinden 37).
There have been several studies of the impact of enlargement on the labour market and migratory flows. “An extensive study made for the Commission suggested that only about 335,000 people would move to the EU-15 countries from Central and Eastern Europe even if there were free movement of workers immediately on accession” (Pinden 38). The European Union has now agreed on a flexible transition period of up to seven years for limiting the inflow of workers from new member states. Countries will significantly benefit from an enlarged Union — a single set of trade rules, a single tariff, and a single set of administrative procedures will apply not only to the current countries but also to the new European Union. This will simplify dealings for third-country operators within Europe and improve conditions for investment and trade.
The cost or elimination of expansion will have derogatory effects for both its current members and for the applicant countries. The delay in enlarging the single market and lower economic growth in the applicant countries would deprive member states of economic benefits. For the applicant countries, the failure to join or the inability to meet the European Union’s strict guidelines would potentially weaken the incentive for economic reform, discourage foreign investment and reduce economic growth. It could thus create political instability in Europe and even undermine democracy, with potential repercussions for the Union and applicant countries. Without enlargement, the Union would be less able to combat organized crime, illegal immigration and terrorism. As a result, disillusion with the Union in the applicant countries would feed European skepticism in the member states.
The push and pull factors of migration explicitly states that if the economic situation is not improving in the applicant countries, then low skilled workers will have ample reasons to migrate immediately due to negative expectations about their native economic situation. When income distribution is more unequal in the native country than in the host country and with the introduction of a minimum wage in the European Union will contribute to a huge influx of migration. The higher the minimum wage, the stronger the incentive to migrate from Eastern Europe to the European Union. The macro economic gains from migration poses a distribution conflict; you can compensate this distribution conflict by introducing a tax on capital gains, however, due to globalization there is a risk of flight capital.
To help offset the push factor the European Union can implement two models — a market-clearing model which expects immigrants to obtain jobs in the short term and results in a net gain of migration which increases the population, increases output and increases income for capital owners; and a suspension period model for movement of labour which has a time span of up to seven years for some applicant countries. Germany and Austria, neighbors to many applicant countries and well-integrated in trade with these countries, fear that this suspension period is not long enough. Germany and Austria are emphasizing that applicant countries increase their minimum wage and have incentives for not leaving their home country.
In terms of agriculture, the enlargement is expected to double the agricultural labour force as well as the arable area of the European Union, and to add over 100 million food consumers to the European Union. The European Union is already the most important trade partner in agricultural products for many of the applicant countries.
Membership in the European Union will offer considerable opportunities to the candidate countries and help them to use their potential for agriculture production efficiently.
Applicant countries have to undertake much improvement before reaching this point. “The EU has intensified activity to support the restructuring process in the candidate countries in Central and Eastern Europe and has introduced pre-accession instruments” (http://www.eurunion.org/legislat/extrel/enlarge.htm). “The agricultural instrument for pre-accession aid is SAPARD (Special Accession Programme for Agriculture and Rural Development), developed in the framework of Agenda 2000. SAPARD, which is designed to assist the candidate CEECs with agricultural development, will have an annual budget of 520 million euros for the period 2000-06”
The objectives of this Programe are: “to establish a Community framework for supporting sustainable agricultural and rural development in the applicant countries during the pre-accession period; to solve problems affecting the long-term adjustment of the agricultural sector and rural areas; to help implement the acquis communautaire in matters of the agricultural policy and related policies” (Baldwin 45). The adjustment of agricultural policies in applicant countries is a complex undertaking but the ongoing reform of the CAP, within the framework of Agenda 2000, facilitates this process.
In conclusion accession will take place as soon as an applicant country is able to assume the obligations of membership by satisfying the economic and political criteria.
The Commission makes regular assessments of the progress of the applicant countries. None are yet fully ready, but all have made remarkable progress in the last decade.
In Central and Eastern Europe, stable democracies have emerged, with democratic institutions and increased respect for minorities. The economic reforms in these countries have led to high rates of economic growth and better employment prospects. This process has been helped and encouraged by the prospect of European Union membership, and by its financial assistance. As a result the European Union enjoys growing trade with these countries. Finally, a consensus must be reached in the accession negotiations on conditions which safeguard the basic rules and policies of the European Union and provide adequate flexibility for transitional periods in areas where the application of the rules could pose economic or social problems for both current and new members.