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Early Post War Period (1945-1950)

• Europe was in ruins after WWII, experiencing horrific wars
• Millions of people died and infrastructure and economies were devastated
• Three schools of thought emerged about how to avoid another war:
  • One blamed Germany and wanted to neuter it to prevent future aggression
  • Another blamed capitalism and wanted to adopt communism
  • The third blamed nationalism and wanted to pursue European integration
• European integration ultimately prevailed to avoid another war
• Wartime alliances between the US, UK, and USSR unraveled
• Germany was divided into US, UK, French, and Soviet zones in 1945
• Communism spread in Eastern Europe:
  • Estonia, Latvia, Lithuania (during the war)
  • Albania, East Germany, Romania (1945)
  • Bulgaria (1946)
  • Poland (1947)
  • Hungary, Czechoslovakia (1948)
• The US and Britain rejected the Soviet vision, leading to the Cold War, which influenced European realities for 50 years
• The US proposed the Marshall Plan for economic Recovery
• In 1948, the US, UK, and France merged their zones to form West Germany
• Moscow blocked land traffic to Berlin in June 1948, prompting the Berlin Airlift
• The Federal Republic of Germany and the German Democratic Republic were established in 1949
• The USA offered financial aid to countries agreeing to a joint program for economic reconstruction
• The Marshall Plan aid totaled $12 billion, with half going to the UK, France, and West Germany
• The Organisation for European Economic Cooperation (OEEC) was established to administer the aid and promote trade liberalization
  • The OEEC, later the OECD in 1961, was founded in 1948 with 13 Western members of today's EU plus Norway, Iceland, Switzerland, and Turkey = The OEEC advanced European integration by removing quotas on intra-OEEC trade and establishing he European Payments Union.

ECSC, EEC, and EFTA (1951-1960)

• The formation of West Germany was intended to assist Europe's post-war economic revival
• . It also was meant to embed Germany in a European supranational structure
• In 1951, Belgium, France, Germany, Italy, the Netherlands, and Luxembourg created the European Coal and Steel Community (ECSC), thereby placing their coal and steel sectors under the control of a supranational authority (Schuman Plan)
• Failed attempts were made to create the European Defense Community (EDC) and the European Political Community (EPC)
• In 1957 the European Economic Community (EEC) built upon the success of ECSC. It promised a customs union, free labor mobility, capital market integration, free trade in services, and common policies
• EEC discriminated against non-EEC Europeans, such as OEEC members including Britain
• The European Free Trade Association (EFTA, 1960) provided tariff reduction without external tariff harmonization: a free trade area (FTA) rather than a customs union (CU) like the EEC
• By the late 1960s, Europe was divided into two non-overlapping economic circles

The Federalism vs Intergovernmentalism Schism

• EEC vs. EFTA offered differing approaches to European integration depths
• Intergovernmentalism: countries retain total sovereignty, limiting economic cooperation to necessary and agreed-upon areas.
  • Examples include OEEC, EFTA, Council of Europe (1949), and the Court of Human Rights (1950)
• Federalism embedded nations in a supranational structure like the EEC, EDC, and EPC, sharing power traditionally held by the nations
• Pro-industrialization, European integration gained economic motivations
• Liberalization of trade was seen as pro-growth
• Manufacturing, exports, and wealth experienced impressive growth beginning in the 1950's ("Wirtschaftswunder", "Les Trente Glorieuses")

Evolution to Concentric Circles

• Initial European Integration focused on post-WWII geostrategic thinking - later shifting with EEC and EFTA formation.
• Trade barriers inside EEC and EFTA, caused discrimination between the different groups
• EEC GDP and potential market was larger than EFTA and growing twice as fast
• EEC membership drew exporters, which led to the push from EFTA nations to join the EEC
• In 1961, the UK requested membership, then Denmark, Ireland and Norway also followed
• Charles De Gaulle blocked UK membership twice before Ireland, Denmark and UK only joining in 1973 while Norway declined membership via referendum
• Firms located in EFTA areas would suffer a disadvantage
• EFTA industries would push governments to address the issue
• Bilateral free trade agreements (FTAs) were made between each EFTA nation and the EEC

Integration Slowdown & Monetary Integration of the 1970s

• Euro-pessimism 1.0 and political and economic shocks occurred
• The ‘Luxembourg Compromise’ + enlargement caused decision-making jam
  • Typical EEC decision-making procedures mandated unanimity - radically reduced their ability to decide effectively
• Economic shocks caused:
  • Bretton Woods fell apart (1971-1973) leading to EEC failure to launch monetary union (Werner Plan was shelved)
  • Oil price shocks (1973 and 1979) with stagflation occurring
  • New trade frictions would develop: 'technical barriers to trade'
• Some bright spots were:
  • Democracies in Spain, Portugal and Greece led to their accession
  • EMS established in 1978 and worked well with a special role for the Bundesbank
  • Budget Treaties (1970 and 1975) occurred alongside direct election of EU Parliament (1979).

Single Market Program

• The Single European Market (SMP) greatly assisted European integration:
  • Jacques Delors begins competition of the internal market
  • The Single European Act (SEA, 1987) sought to create free movement in goods, persons, service, and capital (four freedoms already written in the Treaty of Rome)
  • Key institutional reforms including: renamed the European Community (EC) to the European Union (EU) after agreeing to monetary union in the 1990s
  • Majority voting replaced unanimity on single European Market issues
  • This voting procedure change unleashed a new wave of TBT liberalization and further boosted trade integration

Domino Effect Part II & the Single Market Program

• Basic elements of the Single Market Program (SMP):
  • Goods trade liberalization such as streamlining or eliminating border formalities, harmonizing VAT rates, government procurement liberalization, and technical standards harmonization
  • Factor trade liberalization like removing of capital controls and cross-border market-entry policies
• Expansion occurred again alongside dominos and the EEA, and the fourth enlargement
• 'Investment diversion' effect happened (on top of 'trade diversion' already by customs union)
• Non-EU governments felt pressure to react
• Austria, Sweden, Findland were added to the EC15 via The fourth enlargement (1995)
• Norway, Switzerland, and Liechtenstein formed the European Economic Area (EEA, 1989): Accepting single market regulations to have market access but keeping sovereignty over non-Single Market concerns which were considered the „Norway Option“
• The Swiss used a complicated set of bilateral EEA-like treaties with the EU

Reuniting East and West Europe

• Communism experienced a failure and collapse
• The 1961 Berlin Wall cemented the division
• By the 1980s, Western market systems provided a far better way of life/ standard of living
• Up to the 1980s, Soviet obstruction of reform efforts forced changes in USSR: pro-market reforms (perestroika) and openness (glasnost).
• Pro-Democracy forces in central/eastern Europe suppressed by military force began to find little resistance from Moscow in the later 1980s
• June 1989: Polish labor movement ‘Solidarity’ forced free parliamentary elections so communists lost and Moscow began accepting the new government.
• Moscow's hands-off approach to the Polish election resulted in a variety of events:
  • Hungary opened the border with Austria to move East Germans to West Germany
  • Mass protests in East Germany - Berlin Walls fall on 9th November 1989
  • By the end of 1989 - Democracy began emerging in Poland, Hungary and Czechoslovakia
  • The end of 1990 - German re-unification alongside independence of Estonia, Latvia and Lithuania
• At/after the end of 1991- USSR itself breaks up and former soviet republics became independent or started merging with Russia
• The Cold War ended peacefully and so Europe was no longer militarily divided

Steps of Europe Agreements

• CEEC announce joining is the goal
• No promise of membership was given
• Europe Agreements free trade agreements introduced
• EU sets the Copenhagen criteria for accession of CEECs:
  • Political stability of institutions that guaranteed democracy, the rule of law, human rights etc
  • Functioning market economy for competition and market forces inside the Union
  • Acceptance of the Community ‘acquis’ and ability to take membership obligations
• CEEC nations plus Cyprus and Malta joined in 2004 for the 5th enlargement
• The vision of enlargement required the EU to reform institutions as they were initially designed for six members
• There would be new CEEC-members: which were agrarian but totaled 300 million people
• Existing EU membership experienced politically painful changes so there appeared a basic dilemma on a shared agreement
• Four attempts came to reform over a 16 year time period
  • Amsterdam Treaty, 1997
  • Nice treaty, 2000
  • Constitutional Treaty, 2004 (rejected)
  • Lisbon Treaty, 2007

Monetary Union

• Renew pushing and integrating the German Unification
  • Political consensus: increasing European integration to accompany German unification
  • Delors would propose a second radical increase in the economic integration: monetary union
• The 1992 Maastricht Treaty was signed to impose monetary union by 1999 and a single currency to circulate by 2002
  • Other elements: the EU Citizenship and cooperation in other non-economic areas and power of the European Parliament and introduce a Social Chapter

Ratifying the introduction of the Euro

• Ratification would experience difficulties for common currency to be accepted
  • Britain opted out
  • Denmark rejected once before reversing the choice
• The Maastricht convergence as entry conditions to the Monetary Union January 1999 - The exchange rate was be freezed for 11 countries
  • The European System of Central Banks (ESCB) and European Central Bank (ECB) would be established January 2002 - There was be release euro banknotes and coins

Europe's Integration and Crisis

• In financial markets, the great moderation experienced low stable inflation during 1990s and 2000s

  • Lehman Brothers went bankrupt after The 15th September 2009 and the US decided against bailing it

• Risk was reconsidered of lending leading the interest rates to diverge between nations like Greece and Germany.

  • The Eurozone unfold - The 2009 Ireland bailed out of Anglo Irish Bank and also debt on Greece as well

• Financial markets showed fears of solvency on how long will the euro survive

  • Emergency loans and rescue came from European Union or IMF

• Some institutions reformed as well

Euroscepticism & Brexit

• Eurocepticism 2.0 - Populist EU opposition increase and support to national sovereignty among countries like France, Italy and Netherlands

• In National and EU elections a vote share occurred between 1992 and 2020

• Many EU citizens showed an elevated high image

• Some Probable arguments were harsh economy and migration surges

  • 48 % Wanted to remain with the EU with a large 52% Wanting to leave with no clear plan

• After the Brexit vote:

  • Political campaign by PM David Cameron resulted in not delivering from a brexit referendum

• PM David Cameron's successor Thersea May started brexit and triggered exit clock and conservative party began losing

• To consider and solve and hard borders between the EU and Northern Ireland

Protocol

• A no negotiation for the EU

• The 3 options for the Northern Ireland Protocol are:

  • 1
    • The Northern Island leaves and the UK and joins a new economy
  • 2
    • The United Kingdom and the Northern Ireland remaining in a single market
  • 3
    • The Northern Ireland would would staying in a union

• 4th options after the 2019 election of PM Borris Johnson The UK exited Single Market and the Customs Union

Global Pandemic & Green Deal

• Enormous lives we sacrificed with economy
  • Measures such as restriction
  • Led in recession, but more importantly a cooperation as borrowing occurred via EU

Treaty of Rome Elements

• The Treaty of Rome wanted a equal opportunities a key component was 4 freedoms.

• There was far outreach from Europe

• In free trade with goods - quotas.

• A standard trade was implemented to avoid certain factors that harm

• To ensure that there was Competition happening aids were there certain laws to go with it.

• And make up the budget

  • But because they had competitiveness.
  • One of the main issues that 200 farm of the EU is agriculture

Treaty of Rome omitted

• Respect of policy, tax and social issues difficult, but the national compromise makes it harder.

European Union (EU) Architechture

• Undergone changes
  • More economical policies under pillar.
  • Where states are output and implore it
    • Security issues.
      • Each member must agree in state the action to occur via integration.
      • The commission propose is in this that the member states agree on
      • Rule can be in by the European Justice
    • TEU and TFEU

EU Laws

• A legal way disputes are inevitable

  • Extremely supranational mainly the main rule of Justice on concerning the law

    • About the supremacy of the law in which Brexiteers had problems against that

• Has no Constitution

  • Has to be taken and based on court and EU laws

    • The 3 main EU legal points.

      • In effect

      • Is the community

      • It is independent and how it works

Biggest Insitututions

• The big:five institutions
  • They use the current treaty of Lisbon.
  • • Economic social, justice, and peace.

European Council European Union European commission European parliament EU Court

The European Council

- The highest party of Europe

Political guidance at the highest level

The Lisbon treaty created

President could chair council for 2 and a half years by boating

The Council

• The EU main decision is is legislation
• authorized to meet all the decisions that can happen here are
  • minister responsible for the area
  • eco finance budget the agriculture. General council.
  • States where government assert direct influence The council

Councill powers

• Certain supranational areas in follow powers European loss coordinate economic pass judgement

• And prove the budgets

• This takes decisions about economics in security.

Council Main Roles Rules

. Unanimity which has multi year budget

Qualified majority for council Decisions The new post Rep. For foreign Security to support roles. European external action. service is all

Assisit The Hign the new

is the European commission

The Commission

• EU branch
  • Treaties is and enforcement
• Can provide legislation enforcement
  • At negotiations -one commissioner is member not representive

Main Roles of Commission & Commissioners

• Main commissioner
• • To propose laws, To administer Commissioners their and parliament They are in general area The commission takes views in areas where they may different

The Commission Pt 2

Is the Executive? And most power is competitive -manage Budget. -Basis on single and double check a has to give approval/reject in amendment

• Is also an answerable Body for Paraliament can remove, but has like 32 thousand peeps

3 EU Decision-Making

-The EU has monopoly one creating laws

• That give power to which legislative is consider once developed parliament is requires

-There are procedures Like legislative Consider procedures Procedure

A closer look

The ordinary legislative procedure:

has commission council, council and nations

In legislative National Parliaments

• national under the so-called 'subsidiarity principle', policy should be made at the level that is as close as practical to the people affected.
• yellow card: national parliaments have the right to express concerns on subsidiarity directly to the institution that initiated the proposed legislation. Orange: if a majority of national parliaments vote against a proposed law, the Commission must review it.
• Enhanced cooperation: under strict conditions, subgroups of EU numbers are allowed to cooperate on specific areas while still keeping the cooperation under the general framework of the EU.

Economies Pt

• The EU is most uneven of size distribution
• The Big 5 - Germany, France, Italy, Spain and- U.K. - Netherlands which is 75% of all wealth tiny

Q: Which country has big and small economy The budget

• This shifts from Farmers

  • And also transition
    • to help climate transition that is more resilient to shocks
  • From the 2021 to 2027 budget

EU BUDGET

• The EU spending: plan is under 2027
  • For the commission.
    • Environment, natural agriculture and other like
    • Regional Reslience
    • Total euro

What countries are for 2020

• By Smart investment

EUs REVENUE

• • By law and balanced the span has to be a balance by Members

  • Also source tariffs are a component

EU decision-making

• Two main questions:

1. Who should be in charge of what? That is, which decisions should be taken at the EU level and which should be taken at:

• he national or sub-national levels?
• What about.

constant. issue since the late 1940s. Brexit

In principle, this problem also exists within nations..

• the EU-level decision-making procedure efficient and legitimate?

Tasks and Principles

• a task allacation is in EU.

• Also exclusive ones in

  Shared

  • Support
  • In member law

Flexibility.

• principle of conferral, that is, the default option is competence remain.

Making decisions

• What is economic well and it could be used after the war in 2

• It also lead trade

• So thinking to do with geo