Impact of European integration in its member
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FACULTY OF ECONOMICS AND ADMINISTRATIVE SCIENES
BUSINESS DEPARTMENT
COURSE; EUROPEAN AND ECONOMIC INTEGRATION
ASSIGNMENT
Submitted to; ERHAN ERCIN
You can contact me to: maradona@rambler.ru
Name: Makhsut
Surname: Zulufov
Number: 21-4295
Date: 10.06.2006
FACULTY OF ADMINISTRATIVE AND ECONOMIC SCIENCES
BUSINESS DEPARTMENT
IMPACT OF EUROPEAN INTEGRATION IN ITS MEMBER STATES
Prepared By:
MAKHSUT ZULUFOV
June 2006
HOME IS WHERE THE HEART IS
BUSINESS IS WHERE THE BRAIN IS
OFFICE IS WHERE THE USER IS
VALUE IS WHERE THE INFORMATION IS
SYNOPSIS
This project
does cover the topic of European Union by including the starting up of EU with
its original three countries and bringing a concept of
The map of the world has changed as European Nations decided to come together and found a common ground while they were in process. EU bloc has became one of the leading bloc and it says the role of those nations changed and nations eliminated barriers and established one concept of Single Market and Euro region which is region of transnational change on its continent.
Also this project covers main advantages and disadvantages of such union by giving a chance to European countries to have access to this entity. The aim is to achieve unanimity in all terms. However, they have not achieved last and further stage.
CONTENTS
Synopsis…………………………………………………………………… …...4
Introduction………………………………………………………………………………………… …..6
EU and its impact on its member state……………………………………………………. …..7
Brief information of history…………………………………………………….9
Rationality on eastward
enlargement and candidacy of
Single Market…………………………………………………………………………….12
Stages of Economic Integration……………………………………………......13
Single European Act 1986…………………………………………………......15
Relation of
Disadvantages of European Union…………………………………………….17
Advantages of European Union……………………………………………….18
Demographic problem…………………………………………………………21
Conclusion……………………………………………………………………..23
Bibliography…………………………………………………………………...24
INTRODUCTION
After World War II, showed the need to
unify the people of
In recent years the European Community has initiated structural changes such as the Single Market, which proceeded by Free Trade Area and Custom Union. However, world has witnessed more rapid and dramatic changes in Euro zone.
To bring out one more international currency of € (Euro), European countries have put too much of efforts which was really hard job. European countries have signed main several Treaties for establishment of Economic Integration.
First Treaty of
EEC was Treaty of Paris, which set up the European Coal and Steel Community
(ECSC), this Treaty was signed by six countries (
The same six countries signed the Treaty
of Rome, establishing the European Economic Community (EEC), better known as
the Common Market. And later, these countries signed Single European Act (SEA).
And last stage is Economic and Monetary
Union (EMU) which is the Maastricht Treaty. These Treaties have contributed to
make such transnational change on the continent of
EU and its impact on its member states
The European Union (EU) is a unique
endeavor involving economic and political integration in the world today.
The main focus is on the Common Market and Monetary Union aspects of the European story. The Common Market has of course evolved and is evolving both in terms of membership and scope. The key developments were the Single European Act of 1986, the Maastricht Treaty on European Union of 1992 and the Treaty of Amsterdam of 1997. The Single Act set the community the basic task of completing the creation of Single European Market. The Maastricht Treaty transformed the relationship in a variety of ways.
First, the
Economic Integration is a term used to describe how different aspects between economies are integrated. The basics of this theory were written by the Hungarian Economist Bela Balassa in the 1960s. As economic integration increases, the barriers of trade between markets diminish. The most integrated economy today, between independent nations, is the European Union and its Euro zone.
European Integration is the process of political and economic (and in some cases social and cultural) integration of European (and some peripheral) states into a tighter bloc. The main and most powerful body of European Integration is European Union, (European Union is an intergovernmental and supranational union of 25 democratic member states from the European Continent. *
A basic tension exists within the European Union between intergovernmentalism and supranationalism. Intergovernmentalism is a method of decision-making in international organizations where power is possessed by the member states and decisions are made by unanimity. Independent appointees of the governments or elected representatives have solely advisory or implementation functions. Intergovernmentalism is used by most international organizations today. An alternative method of decision-making in international organizations is supranationalism. In supranationalism power is held by independent appointed officials or by representatives elected by the legislatures or people of the member states. Member state governments still have power, but they must share this power with other actors. Furthermore, decisions are made by majority votes; hence it is possible for a member-state to be forced by the other member-states to implement a decision against its will.
Some forces in European Union politics favor the
intergovernmental approach, while others favor the supranational path.
Supporters of supranationalism argue that it allows integration to proceed at a
faster pace than would otherwise be possible. Where decisions must be made by
governments acting unanimously, decisions can take years to make, if they are
ever made. Supporters of intergovernmentalism argue that supra-nationalism is a
threat to national sovereignty, and to democracy, claiming that only national
governments can possess the necessary democratic legitimacy.
Intergovernmentalism is being favoured by more Eurosceptic nations such as the
The
EU was established under that name in 1992 by the Treaty on EU (Maastricht
Treaty)). Through other institutions like Council of Europe also integrate
their members states. The regions of
Euro regions
usually do not correspond to any legislative or governmental institution, do
not have political power and their wok is limited to the competences of the
local and regional authorities which constitute them. They are usually arranged
to promote common interests across the border and cooperate for the common good
of the border and cooperate for the common good of the border populations. Even
though the Council of Europe sponsored term “euro region” means a similar
thing, it should not be confused with the European Union sponsored term
“regions in
The European
Union created regions of
Regions of
Reasons for this include;
- Reflecting the historic and cultural claims for autonomy in many regions all over the EU
- Strengthening the political and economic situation in those regions.
*
BRIEF INFORMATION OF HISTORY
In fact the first countries
started unions are
Benelux is an economic union in Western Europe
comprising three neighboring monarchies,
On 25March 1957 the governments of
After that EU
was going on the way of enlarging in zone, population, economy and rest of all
aspects, by giving access to other countries to apply for access to become a
member of EU. On 1st January 2001 European Union become more in number after
ten new states joined to EU entity, and in present time EU includes 25 states
with new ten members; (
*
Dating back the
initial steps of union or inegration is clear in above statements how EU entity
is being built up. It started by three countries and has no last point that can
cover enlargement of Euro Zone. European Union tries to get new character of
Federation. However, by analyzing each and single country of EU then we can see
that are not so significant by own, but by unitting into one single entity they
have cooperation, strong solidarity in front of rest of the world. GDP per
capita of new accessed members are not so great but under one entity total
possession of each member makes a great number that let EU to compete almost in
all aspects as a bloc and in such way it is easier to compete and to combat in
world market arena. European
Union has a large economy, probably slightly larger than that of the United
States of America with a 2005 GDP of 12,865,602 million vs. 11,734,300 million
(USD figures) (using nominal US Dollar GDP) according to the International
Monetary Fund.Using the purchasing
power parity method of computing GDP, the preferred comparative measure of
economic output, the EU and the
If considered a
single unit, the European Union has the largest economy in the world with a 2004
GDP of 11,723,816 million USD using PPP equivalence. The EU economy is expected
to grow further over the next decade as more countries join the union —
especially considering that the new states are usually poorer than the EU average,
and have the capacity to grow at a high rate. The European Council published
estimations on 17 November 2005 that the economy of the European Union will
have grown approximately 1.5% in 2005 (1.3% in the eurozone),and 2.3% 2006
(2.1% in the eurozone) comparing favorably to earlier low growth predictions.
In the year of 2006 the eurozone made 4-5 milion new jobs. The European Council
is hopeful that the European Union will grow further in 2006 and in 2018 (2.1%
2006 2.4% 2018).
EU member states have agreed a program called Agenda 2010 which aims at making "the EU the world's most dynamic and competitive economy" by 2010.
I think that European integration has a great impact to its members almost in all aspects. Some information above explains the beginning of EU and its economic integration condition, which is one of the leading and most successful economies on the planet. Today 25 countries of EU became together to be stronger and to have competitive advantage in market place and in the world arena. Member states joined to be in union and to be in unison almost in each and every act. As we analyze past time we can see that they had conflict and war between each other. However, situation that we see today is phenomenon and it fascinated whole world as those countries created Single Market and new currency of EURO appeared in half of international transactions in the world. Mostly all states have adopted EURO currency as an official currency of European Union. Such achievement took a long time and much efforts put with particular stages that used by states to improve relationship and membership. European Union has achieved four stages and last and further stage is Political Union which is not achieved yet. This is last and most advanced stage in process. Stages of Economic Integration are explained below after explanation of Single Market.
Single market (Treaty of Rome 1957)
Many of the policies of the EU relate in one way or another to the development
anmaintenanceof an effective single market. Significant efforts have been made to create harmonized standards – which are designed to bring economic benefits through creating larger, more efficient markets.
The power of the single market reaches beyond the EU borders, because to sell within the EU, it is beneficial to conform to its standards. Once a non-member country's factories, farmers and merchants conform to EU standards, much of the cost of joining the union has already been sunk. At that point, harmonizing domestic laws in order to become a full member is relatively painless, and may create more wealth through eliminating the customs costs. The single market has both internal and external aspects:
The original Rome of Treaty quite clearly provided for the creation of a common market.
· Called for the elimination o internal trade barriers
· Provided for the creation of a common external tariff
· Required the member states to abolish obstacles to the free movement of factors. In order to facilitate this free movement of goods, services and factors of production
· Provided for any necessary harmonization of member state laws
The Treaty of Rome is one of the treaties that forms the Community of European Member Sates known today as the EU. The main objective of the original Treaty was to achieve a single integrated market possessing the following features:
· Free movement between Member States of goods, unimpeded by customs duties and quantitative restrictions;
· Free movement of labor;
· Free movement of services;
· Free movement of capital;
· Trade protection where appropriate against non-Member countries by way of a common external tariff, ie a customs barrier, so that the same duty would be levied on goods coming into the Community regardless of which Member State imported the.
In 1957 the governments of
STAGES OF ECONOMIC INTEGRATION
· There are stages which brought impact to the development of EEC. These stages came to existence after Treaty of Rome.
Economic integration can take various forms and these can be ranged in a spectrum in which the degree of involvement of the participating economies, one with another, becomes greater and greater.
RELATION OF
Firstly, I want to say that EU has some other
official candidates which is
·
The
huge economical gap existing between
·
Also
because of
According to the Article 24 of the
GATT,
Turkey-EU association relations that guided
An important feature of the Turkey-EU Customs
Union is that
As well as, there are some
cases where there are advantages and disadvantages of joining to European
Union. EU is international entity where many states united and became as
Items that I mentioned above and according to it disadvantages follow as:
Disadvantages
1. The instability of the system.
Throughout most of the 1980s the
mechanism). It argued that it would be impossible to maintain exchange
rate stability within the ERM, especially in the early 1980s when the
pound was a petro-currency and when the
above that of
three years of relative currency stability in
though the system had become relatively robust.
2. Loss of Sovereignty.
On the political side, it is argued that an independent central bank is
undemocratic. Governments must be able to control the actions of the
central banks because Governments have been democratically elected by the
people, whereas an independent central bank would be controlled by a non
elected body. Moreover, there would be a considerable loss of sovereignty.
Power would be transferred from
Undesirable because national governments would lose the ability to control
policy.
4. Deflationary tendencies.
Perhaps the most important economic argument relates to the deflationary
tendencies within the system. In the 1980s and 90's
reducing her inflation rates to German levels, but at the cost of higher
unemployment, for the
between 1990 and 1992 prolonged unnecessarily the recessional period. This
is because the adjustment mechanism acts rather like that of the gold
standard. Higher inflation in one ERM country means that it is likely to
generate current account deficits and put downward pressure on its
currency. To reduce the deficit and reduce inflation, the country has to
deflate its economy. In the
bring down inflation had been won by the time the
1990. However, the
because the
exchange rate of around 3 Dm to the pound. The
the next two years defending the value of the pound in the ERM with
interest rates which were too high to allow the economy to recover. Many
forecasts predicted that, had the
inflation in the
fallen).The economic cost of this would have been continued unemployment
at 3million and a stagnant economy. When the
rapidly cut interest rates from 10% to five and a half %, there was strong
economic growth and the current account position improved, but there was
an inflation cost.
EU is not only economic and political union but traditional and cultural aspects includes as well. But today situation is changing and EU entity is going to influence it and gradually Political Union might be achieved by EU, then all values beliefs, cultures, traditions will be the same because might be presented as a one nation. According to my outlook these values and beliefs of each nation is important because, it what does motivates them as a nation (country), however the union drains them. From economy point of view is good to stabilize the economy but they ignore subjective matters as I have mention in previous statements but objectives matters have been achieved but have not finalized the union because Political Union not achieved, which is the hardest stage and further one.
However, if take into consideration other points, which are advantages then we can see also some advantages that EU benefits in fact. As follows:
Advantages
- Transaction costs will be eliminated.
For instance,
and selling foreign currencies to do business in the EU.
With the EMU this is eliminated, so increasing profitability of EU firms.
Advice to young people: You can go on holiday and not have to worry about
getting your money changed, therefore avoiding high conversion charges.
- *
Beside of aging of population
Kids may think binge drinking is cool, but the hangover-in terms of health problems, crime and accidents causing death or disability-is huge. Spanish Health Minister Elena Salgado says that the number of hospitalizations from alcohol abuse has doubled in a decade. Martin Plant, an alcohol researcher at the University of the West of England, says that “people in their 20s are now dying of alcohol-related liver disease, and even teenagers are developing it”. British accidents and 47% of violent crimes, in
Average age Europeans start drinking
E.U; 14.6
U.K; 14.8
In
This information is the fact about Europe before stating it I have said about the generation and to make my statement more reliable or authentic I mention about young people of EU and trend of youth is-wrong, plus administration of EU doest not take effective action according to it even if they do but is not really significant. Today EU’s young descendants do not take such progress between European nations.
So much consumption of alcohol causing not only death or disability, but it leads to unplanned sex, it spreads either sexual harassment or leads to many HIV (human immunodeficiency virus) that reducing population and healthy people.
CONCLUSION
BIBLIOGRAPHY
BOOKS:
EC/EU FACT BOOK, Sixth Edition Alex Roney (2000)
INTERNET:
MAGAZINES:
TIME,
TIME,
OPPONENTS:
The End of
[*] The Information Wave, by Peter Cochrane, taken from Information Superhighways, Academic Press
**
**
* Sixth edition of EC/EU fact book by Alex Roney p.3
* The Treaty of
** The Treaty of
*http://en.wikipedia.org/wiki/European_Union
* The End of
** Source: BBC online; British Crime Survey, published by Time,
*** Source: Euro barometer, health, food and alcohol and safety, published by TIME,