The journey towards the European Union (EU) integration has experienced several turnings. This section of the essay will detail some of the core turning points in the EU integration. Establishment of a Common Agricultural Policy (CAP) was a major turning point in EU integration. The Treaty of Rome defined the specific objectives of the CAP. The CAP was introduced in 1962 (Folmern.p). The establishment of the CAP was enshrined to the state of food shortages after World War II. The aim of the CAP was to build a common European Community market and to cut off tariffs on agricultural products. The CAP was firmly adopted by six member states who were the co-founders of the policy. It is through this CAP that the six member states were able to form a cohesive bond, which later on catalyzed EU integration.
Ankara Agreement also constitutes a key turning point in EU integration. The agreement created a strong association between the European Economic Community and the Republic of Turkey. The treaty facilitated a process that would result in the creation of customs unions. The process was a three step process. The process was also a means to aid in securing Turkey’s full membership in the European Economic Community.
The signing of a merger treaty was also a major turning point in EU integration. The merger treaty, which became operational on 1st July 1965 was to provide single council and a separate committeeof the then three European communities (Laursen 78). The communities included the European Atomic Energy Community (EURATOM), The European Coal and Steel Community (ECSC), and the European Economic Community. The agreement stated that the commission and the council of the EEC should relief the council and commission of both EURATOM and ECSC. This merger arrangement strengthens the EEC, which later on was renamed to be the European Union. The merger treaty was repealed by the Amsterdam treaty. The Amsterdam treaty was signed in 1997, but it came into operational in 1999.
The accession of United Kingdom, Denmark, and Ireland in 1973 was also a key turning point in EU integration. The Treaty of Accession 1972 provided the provisions that facilitated the entry of Denmark, Ireland, and the UK into the Union. In 1981, Greece also joined the ECC. To boost the member states, Spain and Portugal joined the union in 1986. These individual years were significant success turning points of the EU integration. In 1995, Austria, Sweden and Finland also joined the union. In 2007, Bulgaria and Romania acceded to the union and finally, in 2013, Croatia joins the union. The member grew and therefore the union’s power, and bonding grew significantly. To more advanced steps towards EU integration was realized Jacques Delors was named as a commission’s president. Delors was keen and promoted economic and monetary union: these two elements were fundamental in the integration process. He also attempted to stabilize ventures of free trade that would bestow direct benefits to the managers.
Single European Act of 1986 was a core turning point towards EU integration. The acts form one of the first and significant amendments to the foundational treaties governing the European Communities (Laursenn.p). The treaty of Paris 1951 and Agreement of Rome 1957 were the foundational treaties. The Single Act laid down fundamental objectives such as the implementation of a great market free of frontiers, an advanced social and economic cohesion, and strengthening European Monetary Policy. The Single European Act also provided an essential forward step in the European Community integration. As a matter of fact, the single act spearheaded the journey towards the European Union treaty (1986 - 1992).
The communism collapse in Eastern Europe in 1989 was also a key turning point towards EU integration. Prior the fall of the Iron Curtain, the Soviet Union, and its satellite states limited their contact with the non-Soviet-controlled areas and the west. Therefore, the fall of the iron curtain spearheaded to the integration of the Eastern Europe to the European community. This was a significant step towards EU integration.
Maastricht Treaty 1992 is also an important turning point in the history of EU integration. The treaty fostered the European Union. The treaty also led the formulation of a single common currency, the Euro (Stein 2). The treaty was formulation with a core objective of keeping sound fiscal policies. The Maastricht treaty also founded the three pillars of the European Union: supranational pillar, Justice and Home Affairs pillar, and the Common Foreign and Security pillar (Stein n.p). The Maastricht was later amended to the Treaty of Nice (2003) and Treaty of Lisbon (2007). The Lisbon treaty was signed in on 2007. Lisbon treaty is a reform agreement that amended the Maastricht treaty and the treaty of Rome. The treaty introduced the Qualified Majority Voting (QMV) system. The agreement created an office for the EU president. The treaty also presented the union’s bill of rights. Unfortunately, in 2016 the EU has a negative turning point whereby the Britain has voted for seceding the union: this turning point has a negative effect in the battle of EU integration. British withdrawal (Brexit) from the EU was entrenched on political goals. The exit was pursued by advocacy groups and political parties within the United Kingdom Political Spectrum (Dagnis, Mads, & Snaith 3). During the referendum on June 2016, citizens of the United Kingdom voted in favor of exiting the European Union. Article 50 of the Treaty on the European Union grants each member a right to withdraw from the Union.
Crises are turning points. A number of crises have shown to be the key driver and a relevant turning point in the European integration history (Kuhnhard 8). A good example is the European Defense Community (EDC) crisis. In 1954, the French National Assembly had refused to ratify the EDC and as a result, a crisis emerged. To repatriate the crisis, the European Economic Community (EEC) was established in 1957. Secondly, the failed proposals for political integration were also a major driving force in the EU integration. The governments of the six-member state declined a proposal that was expressed in Fouchet Plan of 1961 as well as that of 1962. To overcome the failures in political integration, the European set out a set of treaty revision in the 1980s and 1990s. The ultimate result was the establishment of a pre-constitution for the EU. Moreover, the empty chair crisis catalyzed the European integration process. The ultimate solution to this crisis was the signing of Luxembourg Compromise Accord in 1966.
The currency crisis in the 1980s and 1990s forms a relevant turning point in EU integration. The crisis emanated from the fact that, the EEC had failed to implement the Werner Plan of 1970 (Wójcik 2741). The plan had a full outline of the path through which the union should take to devise a standard monetary policy. To overcome the crises EURO was introduced as the single currency for the Europe nations. Also, constitutional making crisis was a core driver in the journey of EU integration. The crisis was brought about by the European Union head of states when they failed to reach a consensus on the draft European Constitutional Treaty. The ultimate result was the formation of European Constitutional Treaty in 2004. Finally, the ratification crisis of the Constitutional Treaty in 2005 spearheaded the signing of a Reform Treaty in 2007.
Reasons of European Union Voting Systems: Referendum
The adoption of a referendum system as a means to pass or reject European Union issues has several significant advantages. The use of referendum provides an avenue whereby the citizens of the respective member state can voice their individual voice (Marczewska-Rytko 105). Most of the issues in the EU treaties have a direct impact on an individual member. By holding a traditional voting, these individuals will be able to make a solid decision based on what they deem right to them. A National Parliament vote does not necessarily mean that the representative will vote by the will of the majority of whom they represent.
Secondly, holding a referendum on EU issues bridges the gap between the individual people and the Brussels. It is arguable that only a few of the Europeans knows what goes on in the Brussels EU Parliament. Moreover, even some of the Europeans do not have a solid understanding of the role and objectives of the EU. Referendum campaigns can rejuvenate public understanding on the EU policies and mandate as well as respective issues being passed. For instance, it is a little doubt that most of the Irish know more about the European Union because they have participated in 8 EU referendums. Also, referendum aids in fostering better policies. By exercising actual bureaucrats’ democratic checks, referendums can produce policies that reflect interests of the ordinary people.
Advantages of European Union Voting Systems: Parliament Vote
There are also some reasons as to why EU member states can use parliament-voting system to pass EU issues. A vote in parliament provides an easier, cheaper, and faster to pass an agreement. Holding a referendum is an expensive and a time-consuming process. A significant amount of financial resources is needed to conduct sensitization and campaign. Secondly, Parliament vote tends to produce a rational outcome that is good for the country. Referendum campaign can be used as an avenue for politics thus misleading the voters. For instance, in the recent referendum for Britain to exit the EU was dominated by political struggle. British citizens are already regretting their decision to exit the union. The parliamentary vote also tends to limit anti-democratic procedure attributed to national referendums on EU issues. For instance, 109,964 Irish voters prevented the 502 million Europeans from getting a more democratically EU.
I can opinion that, parliament voting is better than popular vote as it can produce more rational and democratic decisions. The issue of Parliament vote links to the argument on “EU democratic deficit” in that, despite the fact that national parliament has a democratic legitimacy, this legitimacy has not been transferred onto the EU stage to improve on its democratic legitimacy.
Qualified Majority Voting
Qualified Majority Voting (QMV) is a principal method used by the Council of Ministers to conclude decisions. QMV details a procedure to be followed when allocating votes to member states. The Qualified Majority Voting allocates votes to each member state in accordance with the population. The system favors smaller states (Smart, Blum &Wesseler, n.p). For instance, a highly populated country will have a bigger ratio of the single vote to the total inhabitants. Whereby, Luxembourg has one vote for every 200’00 inhabitants whereas Germany has one vote for every eight million residents. To find the majority, the system works under two criteria. The first criteria are the number of individual member states, whereby, 55% or more of the member states must support the decision. The second criteria find majority of the population of the countries, whereby, 65% of the total European Nation population must support a decision for it to pass.
Maastricht Convergence Criteria
Maastricht convergence criteria set out five main criteria that must be met by every European country that wishes to enter the euro zone. The criteria have control over inflation, exchange rate stability, public debt, convergence of interest rate, and the exchange rate stability (Gnjatovicet al. 289). The first criteria dictate that the inflation rate of any member state must not exceed by more than 1.5% of the average of the three best members regarding price stability. Secondly, the annual national budget deficit must not exceed 3% of gross domestic product (GDP). Third, the government debt must not exceed 60% of GDP (Jiang n.p). Moreover, the long-term interest rate of any member state must not exceed by more than 2% of the average of the three best members in terms of price stability(Jiang n.p). Finally, the government currency must enter the European Monetary System exchange rate two years before entry. The criteria that are still in place for Eurozone members by Fiscal Compact include the following two criteria (Mortensen n.p). First, the annual national budget deficit must not exceed 3% of gross domestic product (GDP). Secondly, the government debt must not exceed 60% of its GDP (Government finance statistics n.p).
The following countries are members of the Eurozone and the European Union: Spain, Cyprus, Ireland, Belgium, Greece, Austria, Finland, Germany, France, Malta, Portugal, Luxembourg, Netherlands, Lithuania, Slovakia, Estonia, Latvia, Italy, and Slovenia.
United Kingdom, Bulgaria, Czech Republic, Sweden, Croatia, Denmark, Poland, Romania, and Hungary are not members of the Eurozone, but they are members of EU, except the United Kingdom, which has voted to exit the European Union. The United Kingdom and Denmark have not joined the Eurozone due to a fact that they are legally exempted. This two countries obtained special arrangements to opt-out in the Maastricht Treaty.
Sweden has not joined the Eurozone as it has not met three of the five stipulated criteria. Sweden inflation rate was 0.2% way above the benchmark as of 30th April 2016. Also, it has not listed its currency with the ERM II. Finally, it has failed in the directive for compatibility of legislation. Hungary is also yet to join the Eurozone. The country has not met a criterion that requires the debt not to exceed 60% of the country’s GDP. Hungary debt-to-GDP is still higher than 60%. Also, the country has fulfilled a technical criterion of listing its currency with ERM II 2 years prior its entry.
Czech Republic has not joined the Eurozone since they have not met the convergence criteria that require it to list its currency with European Exchange Rate Mechanism II (ERM II) (Hodson 573). Romania also has not joined the Eurozone since its experiencing macroeconomic imbalances; they also underperform in the business field when compared to other euro members. Romania inflation rate is about 1% above the benchmark. Bulgaria has also not a member of the euro area. The country has not yet listed its local currency, the lev with the European Exchange Rate Mechanism II. Poland also has not the criteria of price stability: the stability price rate is 1.1% above the benchmark. Finally, Croatia has not joined the euro area, as it has not fulfilled the criterion of being an ERM-II member for at least two years.
Eurozone crisis has a direct impact on to whether the non-Eurozone countries will join the euro area. Some of the non-member countries have noted that they will adhere to the zone once the crisis has stabilized. For instance, in 2011, the Bulgaria minister of finance cited that they will join the zone once the Eurozone crisis has stabilized. This same sentiment may be subscribed by some other non-Eurozone countries.
Changes to the Main Institutions of the EU on Account of the Lisbon Treaty
The European Union has distinctive features of vesting on institutions. The Treaty of Lisbon has brought significant changes in the EU institutions. In fact, the degree of institutional reforms introduced by the Lisbon Treaty is more extensive than the previous changes in the treaty of Nice. The changes were majorly in relations to the shifts in powers bestowed by Lisbon treaty between the instituted EU institution that exercises executive and legislative powers. The core institutions include the European Commission, the European Parliament, the European Council, and the council.
The Lisbon treaty strengthens the EU parliament in several ways. First, the treaty extended the parliament powers on treaty revisions procedure. The parliament has a legal right to submit a proposal in regards to the amendment of the treaties to the Council (Lewisn.p). Secondly, the parliament’s powers in the process of appointing the commissioners were enhanced. Moreover, the treaty widens the parliament’s role in decision making to include the fields of legal immigration and judicial cooperation in criminal matters(Schout&Wolff 21). The treaty also extended the budgetary powers of the parliament. The Lisbon treaty scrapped off the distinction between compulsory and non-compulsory expenditure thus giving the parliament equal powers as the Council in regards to the EU’s budget.
The European Council was also constitutionally strengthened with the adoption of Lisbon treaty. The treaty gave the European Council a formal legal status as a European Union institution. The treaty also transformed this institution from an essentially deliberative body into an institution capable of taking binding legal decisions of constitutional importance (Hosli et al. 1124). Treaty of Lisbon further strengthens the European Council’s supreme political orientation functions. Moreover, the treaty gave the European Council the power to appoint and dismiss the High Representative of the Union for the foreign affair and security policy and the Vice President of the European Council (HR/VP)(Hosli et al. 1124). HR/VP is one of the most important novel positions that was created within the ambit of the treaties.
The council position was not altered in any major way with the adoption of the Lisbon treaty. The council lost its final blueprint voice on necessary budgetary expenditure. This emanated from the fact that the treaty abolished expenditure category distinction. Nevertheless, the budget cannot be adopted against the Council’s will. The council gained the power of constitutional change in regards to the extension of the union’s competences. The competencies are in the domain of criminal justice as well as the enactment of the European Public Prosecutor’s office.
The Lisbon treaty declined the powers of the commission institution. The commission’s legislative field was relatively declined as a result of the directives of co-decision making across the European institution. Also, the commission’s external relations were declined whereby the control of High Representative of the Union for the foreign affair and security policy and the Vice President of the European Council (HR/VP) were inclined more to the Council than to the commission (Hosli et al. 1122). The commission faced a stronger European Council and European Parliament, and it appears to be squeezed between this two institutions. For sure, the Lisbon treaty provided an ideal categorization of institutional power balance.
Significances of States Bailouts
A bailout is a financial assistance granted to a business or an economy to save it from collapse. As a result of increased debt crisis among various member in the Eurozone, there is an immense need to bailout this country. The European Union and the International Monetary Fund (IMF) are the key drivers of the bailouts (Pyken.p). Some of the countries within the Eurozone that are in dire need for bailouts include Greece, Ireland, Spain, Portugal, and Cyprus. The bailouts are important to these countries in some ways as noted below.
The bailouts are essential for the countries, as it will prevent economic collapse. If this country is unable to service or repay their debts, it indeed that they will not be granted further debts from other leaders (Neri, Stefano &Tiziano). The result is that the country will lack enough money to finance their yearly budget thus halting the overall economy. Moreover, investors will not be willing to invest in a country that is unable to repay its creditors. Investors usually fear to invest or erect long-term business in highly indebted nations. Investors are key drivers in the overall economic growth, and therefore if a country cannot attract a huge base of investors, its economy will not attain a sufficient growth.
The country also needs the bailouts to protect their banking systems. In the case of increased national debts, the banks will lack sufficient capital to give out loans to local investors thus exuberating the country’s credit crunch. There is also a likely occurrence whereby savers and investors will withdraw their money from the bank in the vulnerable economy and bank them to those banks in safer economies (Ahmad and Sanjay 213). Such an occurrence would lead to the collapse of the highly indebted country banking system.
Moreover, the bailouts protect the country from the pressure attributed with cutting the overall government spending. Drastic reduction of public expenditure forms one avenue through which the government can be able to raise some money to repay their loans. In some cases, drastic cuts in the government spending do raise some unrest and protest from the citizens. Such protest has been experienced in Greece. Through the financial aids, the country can be able to institute good curricula to gradually cut-off government spending.
Current Eurozone Crisis/Bailouts Linkage to a Possible Break up of Eurozone
The current Eurozone crisis/ballots can directly cause a partial or a complete breakup of the Eurozone. The crisis is still on a slope rice with Italy on a brink of a bailout. Italy is in a state of a spike in bond yields coupled with a collapse in investors’ confidence. Considering that Italy has a relatively high economy, it would need a bailout of a larger scale. If the Eurozone crisis persists to peak, there is likelihood that in the near future there will be a smaller Eurozone. The two leading country (Germany and France) with arguably stable economies will soon be fed-up with frustrations from their weaker neighbors and therefore opt to leave the Eurozone. Alternatively, the weaker members such as Greece, Italy, Spain, and Portugal may be ejected from the Eurozone. The two scenarios mentioned above would lead to a reduction in the Eurozone member numbers. Moreover, should Germany and France opt to leave the Zone there is a likelihood that the Eurozone will implode forcing the members to revert to their local currencies.
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