The European Union is a collection of 27 European countries who have come together to form a common economic as well as political union. The Second World War left a great destruction of the infrastructures as well as the economies of the European countries. These countries decided to come together, live peacefully and jointly revive their economies through mutual support. The first countries to integrate were from the west of the European continent. In 1952, they formed the European Coal and Steel Community in an attempt to resolve the conflicts that engulfed the industry. The member countries were Italy, Luxembourg, Belgium, West Germany, Netherlands and France. With the success of the community, the member countries decided to further the integration to cover trade. This was done in 1957 at Rome, Italy (Raymond, & Mikesell, 1958. pp. 421-448).
European Economic Community
The member countries entered into a second treaty and the community name was changed to European Economic Community (EEC). In 1967, they created other two communities; these were the European Atomic Energy Community and the customs union. The three communities were regarded as the European Communities. With continued success of the European Community, more countries became interested in joining the community. In 1973, three other countries, the United Kingdom, Denmark and Ireland joined the community. In 1979, the European parliament was formed. The first democratic elections were held directly to the parliament.
In 1981, Greece signed in as a member followed by Portugal and Spain in 1986. In 1985, the member states through the Schengen Agreement decided to abolish boulder regulations such that people from member states were allowed to move freely across borders without passport controls. To strengthen the community, the member countries signed the Single European Act (SEA) in 1986 and a common European flag was developed and hoisted. The Single European Act was signed to correct the anomalies and incorporate more views in the 1957 Rome treaty. The act was aimed at establishing and developing a common market for the European community by end of December 1992.
For this to be established, a strong political cooperation by the member countries was required. Through the act, a common foreign and security policy was instituted and signed on February 1986 at Luxembourg. Through the steer ship of Delor, his commission speeded up the formation of European community. The commission through Lord Cockfield initiated the process of integrating European Community member countries into an internal market and formulated the idea of a single currency unit to be adopted by the member countries. The Delors commission laid the groundwork to the present single market and development and use of the Euro currency in the European Union in 1986. This was achieved through political persuasion and economic advice to member states on the importance of free trade in economic development.
The Delor commission is hitherto regarded as the brain child of the modern single market situation in European Union. Through the Single European Act, a committee of the regions was proposed. The committee was to be composed of the member countries regional representatives who were to articulate the views and aspirations of their country in the Economic Union parliament. The committee of the regions came to effect in 1994. The Single European Act facilitated for more countries joining the European Economy. Finland, Austria and Sweden joined the union in 1995 (Smith, 1999. pp 113-116).
Single European Act
Through its corporation efforts and success, the commission provided a probable ground for the eastern countries to join the community and this was achieved in 2004. In 1986, some European Community members were not satisfied by the extent to which the aspect of free trade among them was being extended. The business community backed by political leaders agitated for common laws among member countries that would address the issues of trade discrepancies. The Delors commission set up a committee to establish the possibility of having a common market in the region and the steps that were required towards achieving the proposed goal. This led to the signing of the Single European Act. The proposal was based on the political agreement that was passed and signed by the European Council in December 1985 in Luxembourg.
The agreement was aimed at creating a single market for the European Union countries by 1992. The proponents of the single market argued that by year 1992, the necessary legal reforms would be in place and hence a free market would be attained. For this to be achieved, The Single European Act had to propose changes in laws by introducing the cooperation legislation and incorporating majority voting to all communities. The intended objective was to shorten ease the bureaucratic procedures of the legislature and remove hindrances to the process while increasing cooperation and promoting innovativeness within the member states.
The Single European Act was ratified through two referenda. The first was conducted in Denmark after the Danish parliament resolved that the treaty was not in the interest of its country. The second was a rejection of the draft treaty by the Ireland Supreme Court on the basis that the country’s constitution could not permit the ratification of the treaty and hence amendments were needed if the treaty was to be ratified (Paul, 1971, pp. 89-93).
Single Market Initiative
Lord Cockfield’s efforts and contribution towards achievement of a true single market in the European Community cannot be over emphasized. In 1985, he came up with the single market initiative. The initiative provided a good base on which future policies in the European Community were formed. He was able to recruit other countries into joining the membership through persuasion.
He was instrumental in the process of steering the community. He advised the member government into adopting a number of options if the spirit of cooperation was to prosper. He advocated for institutional reforms, increased cooperation between member states, use of single currency and economic development through development of internal market. Due to his immense efforts in reviving the almost stalled European Union, he was chosen one of the commissioners into the commission headed by Delors. He was appointed to head a number of portfolios which included the internal market, financial institutions and company taxation, the custom union and the indirect taxation docket. Through the internal market portfolio, he was able to formulate the idea of the single- market. He was on the view that European Community was to be achieved through the single-market initiative and that the process towards achieving this objective was to be a speedy on.
Based on this idea, he influenced Delor to act fast and set a deadline by which the market would be in place by 31 December 1992. He advised Delor on the need to take a high- risk initiative in formulating an overhaul common market program in advance instead of part development. He was on the view that for them to succeed and convince the Economic Community parliament, they had to develop an all round well designed program that covered all aspects of importance for the formation of the internal market.
He observed that earlier commissions failed to deliver as they were addressing the issue peace meal and were only concerned with those areas that attracted the attention of some member countries. By June 1985, Delors and Cockfield had prepared a detailed well structured program which they presented to the European Council on how a free market could be achieved and the time frame on which a particular proposal would be completed (Hoskyns, & Newman, 2000. pp. 369-371).
The White Paper
The white paper sought to all physical, mechanical, technological and custom hurdles to allow free movement across member states. This was to take seven year period. The purpose of these reforms was to encourage commercial expansion as well as industrial growth within the European Economic Community with a view of expanding the American market.
They also articulated the formation of the single market, through the Single European Act. Through the Act, they sought to enlarge the powers of the European Community through research, social and political policies that favored the growth and expansion of the community. They also advocated for the provision of the development of the single market which was to be achieved by end of 1992 through implementation of a couple of directives and legislations. They also advocated for constant use of majority voting in passing of decisions by the council of ministers (Craig, 2006. p. 15).
Cockfield had prepared the White Paper two weeks prior to the European council so as to give the European Community presidents’ ample time to read, understand and conceptualize the contents of the document so as to grasp the importance of the concepts discussed therein and realize the benefits that are associated with single- market situation. Cockfield effort to speedy and accurate timing on the preparation and offer of the White Paper to the presidents and the European Council managed to change the policy of the committee and challenged the governments of the member countries on the need for structural as well as political reforms that were necessary to attain a free market.
The Single European Act proposal for majority voting on all disciplines was successfully adopted in the European legislation. The member countries of the European Community signed a treaty in 1992 allowing the member countries to open their bonders to community members’ citizens to allow free movement and abolish trade barriers in an effort to promote single market initiative. This brought about the change of the name from European community to European Union. Under the Treaty of Maastricht, the member countries agreed to work together as a united nation. They have harmonized political, economic, legal and human affairs dockets which allow these countries to have a common front. The Schengen agreement provided the member countries to allow free movement of people, trade and live in any part of the member countries.
The European Union single market became fully operation in 1994. This has been enabled by use of common laws which govern the conduct of the member countries. These laws provide for efficient free transfer of resources such as human resources, services, capital and goods between member countries. The concerned countries have developed common trade policies, and common agendas on areas that are paramount to the growth of the economy such as agriculture, regional development and industry. Through this integration products made or produced by any country which is a member of the European Union can be sold anywhere in the member countries without requirements of any permission or charges.
The citizens of member countries are usually issued with a European Passport which enables one to live and work in any of the member countries without discrimination or harassment. This is made possible through few administrative requirements and universal crediting of professional qualification from any institution in the member state. This makes the European Union region a single market. Some of the countries, sixteen of them have adopted the use of a common currency. These countries have accepted the use of the euro as the medium of exchange. These countries form the Eurozone (Steiner, & Woods, 2006. pp. 115-118).
The European Union is usually represented as a block in the United Nations and the World Trade Organizations. The European Union operates in a two way system. The first way is the intergovernmentalism where joint decisions are made. In this case decisions that affect the operations of the European Union in general are made and decided through the negotiation process.
The member countries have representatives in the European Union parliament. It is from this parliament that common decisions are made through their representatives. On matters concerning individual country without the interference of the operations of the European Union, the particular country resolves the concerned issue or makes the decisions on its own based on the laws of that country. This system is regarded to as supranationalism. To effectively operate, the European Union is divided into various institutions.
These institutions enhance the performance of the Union. They operate precisely upon the powers conferred to them through treaties that have been agreed to unanimously and signed by the member countries. They include the European Commission, The European Parliament, the Council of the European Union, the Court of Justice of the European Union, the European Central Bank and the European council. The European Parliament is situated in Strasbourg. It lasts for five years upon which new elections are conducted and new parliament is constituted. The members of the Parliament are usually elected directly by the nationals of the European Union.
Every member country has a number of seats. The members do not seat according to nationality, rather they seat depending on political parties affiliations. The Parliament in conjunction with the council of ministers is responsible for passing legislation as well as the European Union budget. The Parliament regulates the operations of the council and must approve the council to take office. The council of Ministers is also accountable to the parliament (Peterson, 2006. pp. 78-81).
The European Council
The European Council provides the political leadership to the European Union. This council sits four times a year. It constitutes one representative from each member country who must be either head of government or its president who are assisted by the foreign ministers of their countries. The main role of the council is to solve disputes and disagreements either social or political between institutions or member states. The council of the European Union is made up of government ministers each from a member country. It’s not composed of specific ministers but its composition depends on the agenda to be attended to.
It carries out legislative work as well as dealing with executive duties pertaining to the foreign and securities policies. The European Commission on the other hand is the European Union’s executive arm. It is the supreme body that is in charge of opening legislation and controlling the overall running of the European Union. The commission should be free of bias and work towards the benefit of the European Union.
The commission is the institution that is responsible in binding the Union together. It is composed of 27 commissioners, each drawn from a member country. The European council is responsible for nominating the commissioners and the parliament is responsible for confirming them. The Court of Justice of the European Union is composed of three courts. These are the Court of Justice, the European Union Civil Service Tribunal and the General Court. The court of justice concerns itself with cases concerning member countries, institutions within the unions and referred cases by courts from member countries (Stark, 2002. p. 46).
The major objectives that led to the development of the European Economic Community were the establishment of a single market and the custom union among the member states. The European Union developed a trading block which is a free trading area within the union and imposed a common external tariff. The European Union countries jointly set up external trade policy that guided the entrance of goods and services from non member countries. The European Union established the custom unions with an aim of fostering economic efficiency as well as fostering political, social and cultural attachment among the member states.
This ensured that international integration was instrumental to the overall growth of these economies. The union ensures no custom is charged on products crossing the borders of member countries. Citizens from these countries move freely as if they are in one country. They enjoy a variety of products from different countries as if produced from their country. Goods entering the union are subjected to a common tariff and once inside the Economic Union, they are not subjected to restrictive measures such as discriminatory taxes, import quotas or any other extra duty. The market assumes the status of a single market.
The European Union also allows the free movement of capital between member states. This free movement of capital allows investors and investments to act freely within the region. Buying of capital goods and investments in money markets between countries are promoted. Members of different countries are free to buy shares in any member country. The free establishment and movement of services has made it possible for individual entrepreneurs to establish trade and to practice entrepreneurship any where in the European Union countries.
This allows self- employed individuals in the service sector to provide services either on permanent or temporary foundation in any of the member country. In an effort to attain the single market goal the European Union advocated for the development of a single currency to be used by the member countries in the European community. This was enacted in the Maastricht treaty in 1993 which bound the member countries to establish a monetary union by January 1999. The euro was adopted by eleven member countries out of the fifteen countries that comprised the member states. On January 2002, the member countries passed a resolution to use euro notes and coins and individual countries national currencies were phased out of the eurozone. The use of the euro was intended to facilitate quick establishment of a single market.
This was facilitated by easy movement of people and goods, solving exchange rate complications, standardization of prices, ensuring stability of prices, establishing a common financial market and reducing the cost of money. The notion was to create a currency that was internationally recognized and that could withstand shocks resulting from large trade volumes within the European Union. The euro was expected to foster the speedy process if integration and a stimulus of encouraging the non-member European countries to join the union as well as acting as a symbol of economic integration in the region. The monitory policies guiding the use of euro are regulated by the European Central Bank (Mercado & Prescott, 2001. pp. 146-151).
Common Agricultural Policy
The European states aspiring to join the European Union are permitted to use the euro although not formal by the European Central bank. To ensure that production and economic activities in general do not come to a stand still, competition among all sectors of the economy is encouraged. A competition policy has been introduced to ensure that competition between production units within the European Union single market is maintained. The competition commissioner for the single regulates the environment such that competition is fair and conducted in an ethical manner. He or she is responsible for solving mistrust issues, advising on mergers, prohibiting formation of cartels, regulating state interference with businesses especially international and multinational companies as well as working towards market liberalization.
The European Union established a Common Agricultural Policy that is aimed at boosting agricultural production, providing self sufficient in food provision and increasing the quality of life of the citizens of counties under the single market situation as well as providing good prices to consumers.
The price control policies resulted to overproduction. To maintain minimum price levels the European Union do buy excess products in an effort to stabilize the price and keep them in intervention stores. To dispose of the surplus the integrated economy does sell the products outside the economy at a price lower than the single market price. The policy has resulted to destruction of the environment through use of intensive farming methods resulting to overproduction (Jeffery, 2007. pp. 263-267).
The dream toward a single market has almost come to be a reality albeit some hindrances. The physical barriers have been removed; border controls on people and custom controls on goods have successively been removed. In order to check criminal activities, random police checks on the member states internal borders are carried out although not to prevent people from crossing borders.
The Schengen Agreement of 1985 ruled on police universal protection and immigration policy in an effort to put an end to checks on persons at internal borders. A lot of efforts are in place to enhance free worker mobility and ensuring that those with technical skills are universally recognized. The creation of a single has been effectively achieved concerning commodity movement and recognition. The European Union member states have embraced the attitude of joint relationship as far as respect of collective union rules. All the products developed and sold in one member country is acceptable in any other member country.
Single market initiative has brought about establishment of the European Union a service market which has significantly reduced the cost of making national calls. The reduction is as a result of the member countries enjoying the use of new and enhanced technology, and through easy access to internet services from service providers in the union. The healthy competition by service proving companies in the region has resulted to significant drop in the cost of services in the region. The European Union has significantly reduced tax barriers by enacting laws that provide partial configuration of the value added tax rates.
The member states unanimously agreed to remove tax on investment income by July 2005. The single market initiative allowed free awarding of public contracts without regard of where the contractor comes from. The contracts whether national, regional or local were to be open to potential bidders from any country within the European Union and awarded to the bidder who offers the best terms. This is in line with the orders passed to guide supplies in all sectors of the economy. The financial services integrated market on the other hand has contributed greatly in the realization of the free market.
The cost of borrowing by business entities and individuals has been reduced. This has opened up wide choices of investment options available in the European Union. Although the achievement of a single market is almost complete, some of the member countries to the European Union are still reluctant to endorse each other’s custom and values or accept professional qualifications or the level of skills by citizens of member countries. Some countries tax systems to a certain degree do not conform to the set standards and this hampers the full integration of the market. To successfully maintain the single market situation, strong laws and regulations are required to be put in place to check piracy and prevent imitation of the European Union products.
These malpractices are responsible for the increased unemployment in the region. This problem can be best solved by instituting patent rights and intellectual property laws. It is now evident that the attainment of a single market is the best achievement of the European Union (Johnson, & Turner, 2007. pp. 257-259).
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