Europe in 12 Lessons PDF

Europe in 12 lessons Protection Together Growth Development European Union Digital Single market Jobs Values economy Peace Solidarity Citizens The views set out in this publication are those of the author and do not necessarily reflect the official opinion of the European Commission. This publication is available in PDF and HTML format at: europa.eu/teachers-corner/home_en Europe in 12 lessons European Commission Directorate-General for Communication Citizens’ Information 1049 Brussels BELGIUM Manuscript updated in August 2017. Luxembourg: Publications Office of the European Union, 2018 Print ISBN 978-92-79-71557-0 doi:10.2775/69291 NA-04-17-736-EN-C PDF ISBN 978-92-79-71562-4 doi:10.2775/206900 NA-04-17-736-EN-N HTML ISBN 978-92-79-71605-8 doi:10.2775/2023 NA-04-17-736-EN-Q © European Union, 2017 Reuse is authorised provided the source is acknowledged. The reuse policy of European Commission documents is regulated by Decision 2011/833/EU (OJ L 330, 14.12.2011, p. 39). 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EUROPE IN 12 LESSONS Contents 1 Why the European Union?..................................................................................................................2 2 Twelve historic steps.............................................................................................................................10 3 Enlarging the EU and getting on with the neighbours.........................................................16 4 How does the EU work?.......................................................................................................................24 5 What does the EU do?..........................................................................................................................34 6 The single market...................................................................................................................................46 7 The euro.......................................................................................................................................................54 8 Creating investment and growth in the digital economy...................................................62 9 What does it mean to be a European citizen?.........................................................................68 10 A Europe of freedom, security and justice.................................................................................76 11 The EU on the world stage................................................................................................................84 12 What future for Europe?......................................................................................................................92 Key dates in the history of European integration...................................................................98 1 1 Why CHAPTER the European Union? Cooperation Security Freedom Solidarity PeaceValues Citizens Justice Democracy Identity Shared Together EUROPE IN 12 LESSONS WHY THE EUROPEAN UNION? THE AIM OF THE EU IS TO: qq maintain and build on the peace established between its Member States and its neighbours; qq bring European countries together in practical cooperation; qq ensure that European citizens can live in security; qq promote economic and social solidarity; qq preserve European identity and diversity in a globalised world; qq promote the values that Europeans share. 3 EUROPE IN 12 LESSONS WHY THE EUROPEAN UNION? I. PEACE Before becoming a real political objective, the idea of a united Europe was just a dream shared by philosophers and visionaries. Victor Hugo, for example, imagined a peaceful ‘United States of Europe’ inspired by humanistic ideals. The dream was shattered by the terrible wars that ravaged the continent during the first half of the 20th century. However, a new kind of hope emerged from the rubble of the Second World War. People who had resisted totalitarianism during the war were determined to put an end to international hatred and rivalry in Europe and create the conditions for lasting peace. Between 1945 and 1950, a handful of brave statesmen including Robert Schuman, Konrad Adenauer, Alcide De Gasperi and Winston Churchill set about persuading their peoples to usher in a new era. New structures would be created in western Europe, based on shared interests and founded upon treaties guaranteeing the rule of law and equality between all countries. Robert Schuman, then French Foreign Minister, took up an idea originally conceived by Jean Monnet and, on 9 May 1950, proposed establishing a European Coal and Steel Community. In countries which had once fought each other, the production of coal and steel would be pooled under a common High Authority. In a practical but also richly symbolic way, the raw materials of war were now being turned into instruments of reconciliation and peace. Today, there is peace in the countries of the European Union, where people live in democracy with respect for the rule of law and for fundamental rights. Furthermore, the countries of the former Yugoslavia, which were at war with each other as recently as the 1990s, have today either joined the EU or are preparing to do so. Nevertheless, peace should never be taken for granted. During the recent economic and social crisis, Europe has seen the rise of populist, extremist and nationalistic tendencies that threaten democracy and the process of European integration. Many movements are sceptical of existing institutions, both at national and European levels. It remains to be seen whether new economic growth based on common solutions can ease these tensions. II. BRINGING EUROPE TOGETHER The European Union encouraged German unification after the fall of the Berlin Wall in 1989. When the Soviet empire crumbled in 1991, the countries of central and eastern Europe, which had for decades endured life behind the ‘iron curtain’, were once again free to choose their own destiny. Many decided that their future lay within the family of democratic European nations. Eight of them joined the EU in 2004, two more followed in 2007 and Croatia joined in 2013. The Mediterranean countries of Cyprus and Malta have also been members since 2004. 4 EUROPE IN 12 LESSONS WHY THE EUROPEAN UNION? The process of EU enlargement is still going on. Seven countries are at different stages of prepar- ing for possible membership. However, the difficult economic situation in Europe makes it unlikely that any new countries will join the EU in the foreseeable future. At the same time, the United Kingdom held a referendum in June 2016, where a majority of voters expressed their wish to leave the European Union. On 29 March 2017, the United Kingdom notified the European Council of its intention to leave the European Union, in accordance with Article 50 of the Treaty of the European Union. The Article 50 negotiations between the EU and the United Kingdom began on 19 June 2017. III. SECURITY Europe in the 21st century still faces considerable security issues. To the south, religious fanaticism is on the rise, often leading to terrorism. Terrorist attacks in Europe by the so-called Islamic State or ‘Daech’, have led EU countries to intensify their exchanges of information and intelligence. To the east, under the leadership of Vladimir Putin, Russia is pursuing a strategy to increase its power. The Russian annexation of Crimea in 2014 and wars in eastern Ukraine are dramas being played out on the EU’s doorstep. In particular, those EU countries with experience of repression in the Soviet Union expect solidarity from the EU with Ukraine. Citizens expect the EU to take effective action to ensure the security of its Member States. It has to work constructively with the regions beyond its borders: the Balkans, North Africa, the Caucasus and the Middle East. It must also protect its military and strategic interests by working with its allies, especially within NATO, and by developing a genuine common European security and defence policy. Internal and external security are two sides of the same coin. The fight against terrorism and organ- ised crime requires the police forces of all EU countries to work closely together. The search for joint European solutions in the areas of asylum and immigration have been high on the EU’s agenda since 2015, as Europe faces unprecedented waves of refugees fleeing wars, dictatorships and hunger. Making the EU an ‘area of freedom, security and justice’ where everyone has equal access to justice and is equally protected by the law is a new challenge that requires close cooperation between governments. Bodies like Europol (the European Union Agency for Law Enforcement Cooperation) and Eurojust (which promotes cooperation between prosecutors, judges and police officers in different EU countries) can also play an active role. 5 EUROPE IN 12 LESSONS WHY THE EUROPEAN UNION? IV. ECONOMIC AND SOCIAL SOLIDARITY The European Union was created to achieve political goals, and it set about achieving them through economic cooperation. European countries account for an ever smaller percentage of the world’s population. They must therefore continue pulling together if they are to ensure economic growth and be able to compete on the world stage with other major economies. No individual EU country is strong enough to influence political decisions on the world economy. To achieve economies of scale and find new customers, European companies need a broader base than just their national home market, and the European single market provides it. To ensure that as many people as possible benefit from this Europe-wide market of over 510 million consumers, the EU is endeavouring to remove obs tacles to trade and is working to free businesses from unnecessary red tape. But Europe-wide free competition must be counterbalanced by Europe-wide solidarity. This has clear tangible benefits for European citizens: when, for example, they fall victim to floods and other natural disasters, they receive assistance from the EU budget. The ‘Structural Funds’, managed by the European Commission, encourage and supplement the efforts of the EU’s national and regional authorities to reduce inequalities between different parts of Europe. Money from the EU budget and loans from the European Investment Bank are used to improve Europe’s transport infrastructure (by, for example, extending the network of motorways and high-speed railways), thus providing better access to outlying regions and boosting trans-European trade. The global financial crisis in 2008 triggered the sharpest economic downturn in the EU’s history. Governments and EU institutions had to act swiftly to rescue banks, and the EU provided financial assistance to the hardest-hit countries. The assistance programmes for Ireland, Portugal, Spain and Cyprus worked well and, following often difficult national reforms, these countries were able to conclude their programmes, most of them in 2014. Greece experienced greater difficulties in implementing the required structural reforms of its public sector and complicated negotiations on the Greek public debt led in the summer of 2015 to new agreements on reforms in Greece. In spite of the singular situation in Greece, sharing a single currency helped protect the euro area against speculation and devaluation during the crisis. The EU and its Member States made a concerted effort to reduce their public debt. The big challenge for European countries in the years ahead is to move out of the recession in a way that creates new, sustainable jobs, particularly in the areas of digital and green technologies. 6 EUROPE IN 12 LESSONS WHY THE EUROPEAN UNION? © European Union Economic and social solidarity is one of the fundamental aims of the European Union and the Commission, headed by Jean-Claude Juncker. V. EUROPEAN IDENTITY AND DIVERSITY IN A GLOBALISED WORLD Europe’s post-industrial societies are becoming increasingly complex. Standards of living have risen steadily, but there are still significant gaps between rich and poor. These gaps may be widened by factors such as economic recession, industrial relocation, the ageing of the population and prob- lems related to public finances. It is important for EU countries to work together to tackle these challenges. But working together does not mean erasing the distinct cultural and linguistic identity of individual countries. On the contrary, many EU activities foster economic growth based on unique regional elements and the rich diversity of Europe’s traditions and cultures — from regional gastronomy to tourism and the arts. Digital technologies will make cultural diversity an even stronger factor, as it is technically easier to distribute locally based cultural products. 7 EUROPE IN 12 LESSONS © highwaystarz/Adobe Stock WHY THE EUROPEAN UNION? United in diversity: working together achieves better results. Sixty-five years of European integration has shown that the EU as a whole is greater than the sum of its parts. It has far greater economic, social, technological, commercial and political clout than if its Member States had to act individually. There is added value in acting together and speaking with a single voice. Other powers in the world, such as China and the United States, seek to influence global economic rules. It is therefore more vital than ever for the Member States of the EU to come together and achieve a ‘critical mass’, thus maintaining their influence on the world stage. Examples of how this is happening in practice include the EU’s role in worldwide negotiations on trade rules. EU countries have agreed on many principles and technical rules related to daily lives, which serve as a model for many other parts of the world. Examples include health and safety standards, promotion of renewable energy resources, the ‘precautionary principle’ in food safety, ethical aspects of new technology and much more. The EU also remains at the forefront of global efforts to tackle global warming. European values are also visible around the globe in the form of the development cooperation and humanitarian aid managed by the EU. The old saying ‘unity is strength’ is thus as relevant as ever to today’s Europeans. 8 EUROPE IN 12 LESSONS WHY THE EUROPEAN UNION? VI. VALUES The EU promotes humanitarian and progressive values, and ensures that humankind is the bene- ficiary, rather than the victim, of the great global changes that are taking place. People’s needs cannot be met simply by market forces, or by individual countries taking unilateral action. So the EU stands for a view of humanity and a model of society that the great majority of its citizens support. Europeans cherish their rich heritage of values, which includes a belief in human rights, social solidarity, free enterprise, a fair distribution of wealth, the right to a protected envir onment, respect for cultural, linguistic and religious diversity and a harmonious blend of tradition and progress. The legally binding Charter of Fundamental Rights of the European Union was proclaimed in Nice in December 2000. It sets out all the rights recognised today by all of the EU’s Member States and their citizens. Shared rights and values create a feeling of kinship between Europeans. To take just one example, all EU countries have abolished the death penalty. 9 Goals 2 CHAPTER Twelve historic steps Challenges Expansion Stability Progress History Integration Development Union Achievements Closer Community EUROPE IN 12 LESSONS T W E LV E H I S T O R I C S T E P S qq 1951 The European Coal and Steel Community (ECSC) is set up by the six founding members qq 1957 The same six countries sign the Treaties of Rome, setting up the European Economic Community (EEC) and the European Atomic Energy Community (Euratom) qq 1973 The Communities expand to nine Member States and introduce more common policies qq 1979 The first direct elections to the European Parliament qq 1981 The first Mediterranean enlargement qq 1992 The European single market becomes a reality qq 1993 The Treaty of Maastricht establishes the European Union (EU) qq 2002 The euro comes into circulation qq 2004 The EU has 25 Member States, increasing to 28 by 2013 qq 2009 The Treaty of Lisbon comes into force, changing the way the EU works qq 2014 European elections take place with several candidates competing for the post of President of the European Commission qq 2015 There is a gradual return to moderate economic growth after 7 years of global crisis and consolidation of the euro area 11 EUROPE IN 12 LESSONS T W E LV E H I S T O R I C S T E P S 1. On 9 May 1950, the Schuman Declaration proposed the establishment of a European Coal and Steel Community, which became reality with the Treaty of Paris of 18 April 1951. This put in place a common market in coal and steel between the six founding countries (Belgium, the Federal Republic of Germany, France, Italy, Luxembourg and the Netherlands). The aim, in the aftermath of the Second World War, was to secure peace between Europe’s victorious and vanquished nations and bring them together as equals, cooperating within shared insti- tutions. 2. The ‘Six’ then decided, with the Treaties of Rome on 25 March 1957, to set up a European Atomic Energy Community and a European Economic Community. The latter would involve building a wider common market covering a whole range of goods and services. Customs duties between the six countries were abolished on 1 July 1968 and common policies, not ably on trade and agriculture, were also put in place during the 1960s. 3. So successful was this venture that Denmark, Ireland and the United Kingdom decided to join. This first enlargement, from six to nine members, took place in 1973. At the same time, new social and environmental policies were introduced, and the European Regional Develop- ment Fund was set up in 1975. © European Union On 9 May 1950, French Foreign Minister Robert Schuman first publicly proposed the ideas that led to the European Union. So 9 May is celebrated as the EU’s birthday. 12 EUROPE IN 12 LESSONS T W E LV E H I S T O R I C S T E P S 4. June 1979 saw a decisive step forward, with the first elections to the European Parliament by direct universal suffrage. These elections are held every 5 years. 5. In 1981, Greece joined the Communities, followed by Spain and Portugal in 1986. This came after the fall of dictatorships in all these countries. This expansion of the Communities into southern Europe made it all the more necessary to implement regional aid programmes. 6. The worldwide economic recession in the early 1980s brought with it a wave of ‘euro-pes- simism’. However, hope sprang anew in 1985 when the European Commission, under its President Jacques Delors, published a White Paper setting out a timetable for completing the European single market by 1 January 1993. This ambitious goal was enshrined in the Single European Act, which was signed in February 1986 and came into force on 1 July 1987. 7. The political shape of Europe was dramatically changed when the Berlin Wall fell in 1989. This led to the reunification of Germany in October 1990 and the coming of democracy to the countries of central and eastern Europe as they broke away from Soviet control. The Soviet Union itself ceased to exist in December 1991. At the same time, the Member States were negotiating a new treaty, which was adopted by Heads of State or Government in Maastricht in December 1991. By adding intergovernmen- tal cooperation (in areas such as foreign policy, justice and internal affairs) to the existing Community system, the Maastricht Treaty created the European Union (EU). It came into force on 1 November 1993. 8. Three more countries — Austria, Finland and Sweden — joined the EU in 1995, bringing its membership to 15. By then, Europe was facing the growing challenges of globalisation. New technologies and the ever-increasing use of the internet were modernising economies but also creating social and cultural tensions. Meanwhile, the EU was working on its most ambitious project to date — creating a single currency to make life easier for businesses, consumers and travellers. On 1 January 2002, the euro replaced the old currencies of 12 EU countries, which together now made up the ‘euro area’. The euro has since been a major world currency. 9. In the mid-1990s, preparations began for the biggest-ever EU enlargement. Membership applications were received from six former Soviet bloc countries (Bulgaria, the Czech Repub- lic, Hungary, Poland, Romania and Slovakia), the three Baltic states that had been part of the Soviet Union (Estonia, Latvia and Lithuania), one of the republics of former Yugoslavia (Slovenia) and two Mediterranean countries (Cyprus and Malta). 13 EUROPE IN 12 LESSONS T W E LV E H I S T O R I C S T E P S The EU welcomed this chance to help stabilise the European continent and to extend the benefits of European integration to these young democracies. Negotiations opened in December 1997 and 10 of the candidate countries joined the EU on 1 May 2004. Bulgaria and Romania followed in 2007. Croatia joined in 2013, bringing the EU’s membership to 28. 10. To enable it to face the complex challenges of the 21st century, the enlarged EU needed a simpler and more efficient decision-making method. New rules had been proposed in a draft EU Constitution, signed in October 2004, which would have replaced all the existing treaties. But this text was rejected by two national referendums in 2005 in France and the Netherlands. The Constitution was therefore replaced by the Treaty of Lisbon, which was signed on 13 December 2007 and came into force on 1 December 2009. It amends but does not replace the previous treaties, and it introduces most of the changes that featured in the Constitution. For example, it gives the European Council a permanent President and creates the post of High Representative of the Union for Foreign Affairs and Security Policy. © Robert Maass/Corbis The fall of the Berlin Wall in 1989 led to a gradual breaking down of old divisions across the continent of Europe. 14 EUROPE IN 12 LESSONS T W E LV E H I S T O R I C S T E P S 11. The European elections in May 2014 marked a change in the institutional practices of the EU in that the political parties proposed candidates for the post of President of the European Commission. The European Council then nominated the candidate from the party obtaining the most seats, as foreseen by the Treaty of Lisbon. This was Jean-Claude Juncker, a Luxem- bourger, of the European People’s Party. He was approved by a large pro-European coalition in the European Parliament, which included the socialist and liberal groups. The 2014 elections also showed gains for Eurosceptic parties which won around 100 of the 751 seats. They often vote in clear opposition to the majority political line dominating EU institutions and are usually sceptical on EU integration and vociferous on immigration. 12. A worldwide financial and economic crisis developed in 2008. This led to the establishment of new EU mechanisms to ensure the stability of banks, reduce public debt and coordinate Member States’ economic policies, particularly those using the euro. Years down the line, efforts made towards structural reforms and improvements in public accounts are beginning to bear fruit in the form of new economic growth. Economic policies in the euro area are being strengthened under the leadership of the Commission and the Council, who now have new legal instruments to implement the agree- ments reached by the Member States with a view to securing sound public finances. The European Central Bank is increasing liquidity and maintaining very low interest rates. The EU is also promoting new investments through its Strategic Investment Fund, particularly in public–private partnerships. 15 Enlarging 3 CHAPTER the EU and getting on with the neighbours Cooperation Family Six Growing Integration Membership Support Uniting Neighbours Accession Democracy Obligations EUROPE IN 12 LESSONS ENL ARGING THE EU AND GET TING ON WITH THE NEIGHBOURS qq The European Union is open to any European country that fulfils the democratic, political and economic criteria for membership. qq Successive enlargements have increased the EU’s membership from six to 28 countries. As of 2017, six Balkan countries and Turkey are either negotiating membership or are at different stages of preparation for possible membership. qq Each treaty admitting a new member requires the unanimous approval of all existing Member States. In addition, before each new enlargement, the EU must assess its capacity to absorb the new member(s) and the ability of its institutions to continue to function properly. qq There will be no new countries joining the EU during the legislative period 2014-2019 as the EU continues to focus on economic growth. qq The neighbourhood policy of the EU faces challenges unprecedented since the Cold War: Russian policy culminating in the illegal annexation of Crimea in 2014 has stirred up diplomatic and military tensions. In the Middle East, acts of terror by extremists in Syria and Iraq are a direct attack on European fundamental values and interests. A massive exodus of more than 1 million refugees from this region poses immense long-term political and humanitarian challenges for Europe. 17 EUROPE IN 12 LESSONS ENL ARGING THE EU AND GET TING ON WITH THE NEIGHBOURS I. MEMBERSHIP CONDITIONS A. Legal requirements European integration has always been a political and economic process, open to all European countries that are prepared to sign up to the treaties and take on board the full body of EU law. According to the Treaty of Lisbon (Article 49), any European state may apply to become a member of the EU provided it respects the principles of liberty, democracy, respect for human rights and fundamental freedoms, and the rule of law. B. The ‘Copenhagen criteria’ In 1993, following requests from the former communist countries to join the Union, the European Council laid down three criteria that each country should fulfil in order to become a member. By the time they join, new members must have: stable institutions guaranteeing democracy, the rule of law, human rights and respect for and protection of minorities; a functioning market economy and the capacity to cope with competitive pressure and market forces within the Union; the ability to take on the obligations of membership, including support for the aims of the Union — they must have a public administration capable of applying and managing EU laws in practice. C. The process of becoming an EU Member State Membership talks (‘accession negotiations’) take place between the candidate country and the European Commission, which represents the EU. Once these are concluded, the decision to allow this country to join the EU must be taken unanimously by the existing Member States meeting in the Council. The European Parliament must also approve with an absolute majority vote. The accession treaty must then be ratified by the Member States and the candidate country, each in accordance with its own constitutional procedure. During the negotiation period, candidate countries normally receive ‘pre-accession’ financial aid from the EU to help them catch up economically. They also usually have ‘stabilisation and associ ation agreements’ with the EU. Under these agreements, the EU directly monitors the economic and administrative reforms the candidate countries have to carry out in order to meet the condi- tions for EU membership. 18 EUROPE IN 12 LESSONS ENL ARGING THE EU AND GET TING ON WITH THE NEIGHBOURS II. UNITING A CONTINENT A. A union of 28 When it met in Copenhagen in December 2002, the European Council took one of the most momentous steps in the history of European integration. By inviting 12 more countries to join it, the EU was not simply increasing its geographical size and population; it was putting an end to the division which had split the continent in two since 1945. European countries which, for decades, had not enjoyed democratic freedom were finally able to rejoin the family of democratic European nations. Thus the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia and Slo venia became EU members in 2004, together with the Mediterranean islands of Cyprus and Malta. Bulgaria and Romania followed in 2007. Croatia joined the process by applying for membership in 2003 and eventually joining in 2013. © Craig — Campbell/Moodboard/Corbis The ‘Pearl of the Adriatic’ — Dubrovnik in Croatia, the EU’s newest Member State. 19 EUROPE IN 12 LESSONS ENL ARGING THE EU AND GET TING ON WITH THE NEIGHBOURS B. Negotiations under way Turkey, a member of NATO with a long-standing association agreement with the EU, applied for European Union membership in 1987. Given Turkey’s geographical location and political history, the EU hesitated for a long time before accepting its application. However, in October 2005, accession negotiations finally began. Some EU countries have expressed doubts as to whether Turkey will or should become a member of the European Union. They propose an alternative arrangement — a ‘privileged partnership’. Negotiations were galvanised in 2015, when Turkey agreed with the EU to help reduce and control the number of asylum seekers passing into the EU via the country. The EU intends to remain a reference point for Turkey in relation to political reforms and fundamental rights. The EU insists on the fact that respect of these values remains a non-negotiable condition of accession. The western Balkan countries, most of which were once part of Yugoslavia, are also turning to the EU to speed up their economic reconstruction, improve their mutual relations (long scarred by ethnic and religious wars) and consolidate their democratic institutions. The EU has given ‘candi- date country’ status to Albania, the former Yugoslav Republic of Macedonia, Montenegro and Serbia. Bosnia and Herzegovina submitted its application to join in 2016. Kosovo (this designation is without prejudice to positions on status, and is in line with UNSCR 1244 and the ICJ Opinion on the Kosovo Declaration of Independence) declared its independence in 2008 and could also become a candidate country, once the ongoing negotiations on its future have been concluded. Formal negotiations on accession to the EU have started with Montenegro and Serbia. Iceland, hit hard by the financial crisis in 2008, applied for EU membership in 2009. Accession negotiations were discontinued in 2013 at the request of the country itself. Public opinion in Iceland was less keen on EU membership after an upturn in the country’s economy. In his inauguration speech at the European Parliament in 2014, Jean-Claude Juncker announced that there would be no new accessions during the term of his Presidency which ends in 2019. III. HOW LARGE CAN THE EU BECOME? A. Geographical frontiers Public debate on the future of the EU shows that many Europeans are concerned about where the borders of the EU should be drawn. Questions also arise on what constitutes European identity. There are no simple answers to these questions, particularly since each country views its geopol itical and economic interests differently. The Baltic countries and Poland have been favourable 20 EUROPE IN 12 LESSONS ENL ARGING THE EU AND GET TING ON WITH THE NEIGHBOURS towards Ukraine joining the EU, but the conflict between Ukraine and Russia culminating in the Russian annexation of Crimea has created geopolitical tensions that make this option unrealistic. Furthermore, the strategic position of Moldova highlights the tensions between western countries and a Russia that strongly promotes its regional ambitions. Despite fulfilling the conditions, Liechtenstein, Norway and Switzerland are not members of the EU, in line with public opinion in their countries. In different EU countries, public opinion is more or less divided over the question of the European Union’s final frontiers. If geographical criteria alone were applied, taking no account of democratic values, the EU could — like the Council of Europe (not an EU body) — end up with 47 Member States. The sensible approach is to say that any European country is entitled to apply for EU membership provided it can take on board the full body of EU law and is prepared to adopt the euro. European integration has been a continuous process since 1950, and any attempt to fix the EU’s boundaries once and for all would run counter to that process. B. Neighbourhood policy Enlargements in 2004 and 2007 pushed the EU’s borders further east and south, raising the ques- tion of how the EU should handle relations with its new neighbours. Stability and security are an issue in the regions beyond its borders, and the EU wished to avoid the emergence of new dividing lines between itself and these neighbouring regions. Emerging threats to security such as illegal immigration, the disruption of energy supplies, environmental degradation, organised cross-border crime and terrorism were issues the EU now had to deal with more intensively. For this reason, the EU developed a new European neighbourhood policy, governing relations with its neighbours to the east and south-east (Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine), and to the south (Algeria, Egypt, Israel, Jordan, Lebanon, Libya, Morocco, the occupied Palestinian territory, Syria and Tunisia). As of 2004, almost all these countries have signed bilateral ‘partnership and cooperation’ agree- ments or association agreements with the EU, under which they are committed to common values (such as democracy, human rights and the rule of law) and to making progress towards a market economy, sustainable development and reducing poverty. The EU, for its part, offers financial, technical and macroeconomic assistance, easier access to visas and a range of measures to help these countries develop. However, recent geopolitical developments have radically changed the situation. 21 EUROPE IN 12 LESSONS ENL ARGING THE EU AND GET TING ON WITH THE NEIGHBOURS To the east, the fall of the authoritarian government of Ukraine led to the election in May 2014 of a new President — Petro Poroschenko — who was more in tune with western values. This brought about the signature of an association agreement between Ukraine and the EU in September 2014. The tough economic situation and the military confrontations between Ukrainian forces and separ atist groups supported by Russia have put the country in a very difficult situation that does not, nevertheless, prevent ties with the EU being strengthened. Between 2014 and 2015, the EU granted Ukraine more than €7 billion in financial assistance, linked to political and democratic reforms. The ‘Arab Spring’ of 2011 brought about significant changes to the political situation on the south- ern coast of the Mediterranean and the Middle East. This included regime changes in Tunisia and Egypt, civil war in Syria, chaos in Libya after the overthrow of the Gaddafi regime and the creation of the so-called Islamic State or ‘Daech’ — which took hold of large areas of Syria and Iraq by means of terrorist actions. Some EU countries form part of the military coalition fighting the so-called Islamic State or Daech, while the EU is dealing with a large influx of migrants coming from Syria, the Horn of Africa and sub-Saharan Africa, all of whom are fleeing war, religious persecution or economic misery. In 2015 around 1 million people tried to cross the Mediterranean from the coast of Libya or Turkey in boats provided by criminal human traffickers. Facing this humanitarian disaster, the EU is revising its common asylum and immigration policy (see Chapter 10). 22 EUROPE IN 12 LESSONS ENL ARGING THE EU AND GET TING ON WITH THE NEIGHBOURS © josefkubes/Adobe Stock The EU gives financial aid to help build the economy in neighbouring countries. 23 CHAPTER 4 How does the EU work? Council Commission Citizens Laws Treaties Voting Elections Representatives Parliament Decisions Agreement Parties EUROPE IN 12 LESSONS HOW DOES THE EU WORK ? qq The European Parliament, which represents the citizens of the EU, shares legislative and budgetary power with the Council. qq The EU’s Heads of State or Government meet, as the European Council, to set the EU’s overall political direction and to take major decisions on key issues. qq The Council, made up of ministers from the EU Member States, meets frequently to take policy decisions and make EU laws. qq The European Commission, which represents the common interest of the EU, is the main executive body. It puts forward proposals for legislation and ensures that EU policies are properly implemented. 25 EUROPE IN 12 LESSONS HOW DOES THE EU WORK ? I. THE DECISION-MAKING INSTITUTIONS The European Union is more than just a confederation of countries, but it is not a federal state. In fact, its structure does not fall into any traditional legal category. It is historically unique, and its decision-making system has been constantly evolving for the past 60 years or so. The treaties (known as ‘primary’ legislation) are the basis for a large body of ‘secondary’ legisla- tion which has a direct impact on the daily lives of EU citizens. The secondary legislation consists mainly of regulations, directives and recommendations adopted by the EU institutions. These laws, along with EU policies in general, are the result of decisions taken by the European Parliament (representing the people), the Council (representing national governments) and the European Commission (the executive body independent of EU governments that upholds the collective European interest). Other institutions and bodies also play a role, as outlined below. A. The European Parliament The European Parliament is the elected body that represents EU citizens. It supervises the EU’s activities and, together with the Council, enacts EU legislation. Since 1979, members of the Euro- pean Parliament (MEPs) have been directly elected, by universal suffrage, every 5 years. In 2017, an Italian, Antonio Tajani (European People’s Party — Christian Democrats), was elected President of the Parliament for a period of two and a half years. © European Union The European Parliament — this is where you can make your voice heard. 26 EUROPE IN 12 LESSONS HOW DOES THE EU WORK ? Number of seats in the European Parliament per country Austria 18 Belgium 21 Bulgaria 17 Croatia 11 Cyprus 6 Czech Republic 21 Denmark 13 Estonia 6 Finland 13 France 74 Germany 96 Greece 21 Hungary 21 Ireland 11 Italy 73 Latvia 8 Lithuania 11 Luxembourg 6 Malta 6 Netherlands 26 Poland 51 Portugal 21 Romania 32 Slovakia 13 Slovenia 8 Spain 54 Sweden 20 United Kingdom 73 Total 751 Parliament holds its major debates at monthly gatherings (known as ‘plenary sessions’) attended, in principle, by all MEPs. These plenary sessions are normally held in Strasbourg, France, with any additional sessions held in Brussels. The preparatory work is also usually done in Brussels: the ‘Conference of Presidents’ — i.e. the chairs of the political groups together with the President of Parliament — sets the agenda for the plenary sessions while 20 parliamentary committees draft the legislative amendments that are to be debated. Parliament’s day-to-day administrative work is done by its Secretary-General, based in Luxembourg and Brussels. Each political group also has its own secretariat. The Parliament takes part in the legislative work of the EU in two ways. Via ‘co-decision’, which is the ordinary legislative procedure, Parliament shares equal respon- sibility with the Council for legislating in all policy areas that require a ‘qualified majority’ vote in the Council. Since the Treaty of Lisbon came into force, these areas cover about 95 % of 27 EUROPE IN 12 LESSONS HOW DOES THE EU WORK ? EU legislation. Council and Parliament can reach an agreement following the first reading. If an agreement is not reached after two readings, the proposal is brought before a conciliation committee. Via the ‘assent’ procedure, Parliament must ratify the EU’s international agreements (negotiated by the Commission), including any new treaty enlarging the European Union. The European Parliament also shares with the Council equal responsibility for adopting the EU budget (proposed by the European Commission). The Parliament can reject the proposed budget, and it has already done so on several occasions. When this happens, the entire budget procedure has to be restarted. By using its budgetary powers Parliament exercises considerable influence over EU policymaking. Last, but not least, the European Parliament exercises democratic supervision over the Union, and in particular over the European Commission. The European Parliament is elected every 5 years. The eighth direct elections took place between 22 and 25 May 2014, with the participation of 42.5 % out of the 380 million eligible voters. This participation rate was about the same as in the previous elections in 2009. Following the Treaty of Lisbon and for the first time in 2014, the European-wide parties each selected their top candidate, who was also a candidate for the post of President of the European Commission. The European People’s Party gained the largest number of seats, and the European Council decided by qualified majority to nominate the candidate from this party for the job. This was Jean-Claude Juncker, former Prime Minister of Luxembourg. A large majority in the Parliament voted for him (422 votes ‘for’, with 250 ‘against’ and 47 abstentions). Parliament thereafter held ‘hearings’ of the 27 proposed candidates from each Member State to consider their suitability for posts as Members of the Commission, before approving the Commis- sion as a whole. At any time, Parliament can dismiss the whole Commission by adopting a motion of censure. This requires a two-thirds majority. Parliament also supervises the day-to-day management of EU policies by putting oral and written questions to the Commission and the Council. Members of the European Parliament and members of national parliaments of the Member States often work closely together. This happens within the political parties and in specialised bodies that exist for this purpose. Since 2009, the EU Treaty has defined the role of national parliaments in the EU. They can express their opinions on all new laws proposed by the Commission and thereby ensure that the principle of subsidiarity is followed. This principle states that the EU should only deal with a subject when action at European level is more efficient than at national or regional levels. 28 EUROPE IN 12 LESSONS HOW DOES THE EU WORK ? The political groups in the European Parliament Progressive Alliance of Socialists and Democrats 189 European Conservatives and Reformists European People’s Party 73 (Christian Democrats) 215 Alliance of Liberals and Democrats for Europe Non-attached members 18 68 Europe of Nations European United Left — and Freedom Nordic Green Left 52 40 Europe of Freedom Greens/European and Direct Democracy Free Alliance 42 51 Total 748 (3 seats vacant) - Situation in August 2017 B. The European Council The European Council is the EU’s top political institution. It consists of the Heads of State or Government — the presidents and/or prime ministers — of all the EU member countries, plus the President of the European Commission. It normally meets four times a year, in Brussels. It has a permanent President, whose job is to coordinate the European Council’s work and ensure its con tinuity. The permanent President is elected (by a qualified majority vote of its members) for a period of two and a half years and can be re-elected once. The former Polish Prime Minister, Donald Tusk, has occupied this post since 1 December 2014. The European Council establishes the EU’s goals and sets the course for achieving them. It provides the impetus for the EU’s main policy initiatives and takes decisions on thorny issues that the Coun- cil of Ministers are not able to agree upon. The European Council also tackles current international problems via the ‘common foreign and security policy’ — which is a mechanism for coordinating the foreign policies of the EU’s Member States. C. The Council The Council (also known as the Council of Ministers) is made up of ministers from the EU’s national governments. The Member States take it in turns to hold the Council Presidency for a 6-month period. Every Council meeting is attended by one minister from each EU country. Which ministers attend a meeting depends on which topic is on the agenda: foreign affairs, agriculture, industry, transport, the environment, etc. 29 EUROPE IN 12 LESSONS HOW DOES THE EU WORK ? Presidencies of the Council of Ministers Year January-June July-December 2017 Malta Estonia 2018 Bulgaria Austria 2019 Romania Finland 2020 Croatia Germany 2021 Portugal Slovenia Meetings of the Council of the Ministers for Foreign Affairs are chaired by the High Representative of the Union for Foreign Affairs and Security Policy, who is also a Vice-President of the Commission. Federica Mogherini, former Foreign Minister of Italy, has occupied this post since November 2014. The Council’s main job is to pass EU laws. Normally it shares this responsibility with the European Parliament. The Council and the Parliament also share equal responsibility for adopting the EU budget. In addition, the Council signs international agreements that have been negotiated by the Commission. The Council has to take its decisions either by a simple majority vote, a ‘qualified majority’ vote or unanimously, depending on the subject to be decided. The Council has to agree unanimously on important questions such as taxation, any amendments to the treaties, launching of a new common policy or a new accession to the EU. In most other cases, qualified majority voting is used. This means that a Council decision can only be taken with the so-called double majority. A decision will be adopted if 55 % of the Member States are in favour (16 of the 28 countries) and if they represent at least 65 % of the EU’s popu- lation (about 332 million citizens out of 510 million). When the euro was launched, a new body was set up within the Council — the ‘Eurogroup’ — the meetings of which are attended by all the economic and finance ministers of the 19 countries of the euro area. D. The European Commission The Commission is a key EU institution. It alone has the right to draw up proposals for new EU legislation, which it then sends to the Council and Parliament for discussion and adoption. Its members are appointed for a 5-year term by agreement between the Member States, subject to approval by the European Parliament (as described above). The Commission is answerable to the Parliament, and the entire Commission has to resign if the Parliament passes a motion of censure against it. 30 EUROPE IN 12 LESSONS HOW DOES THE EU WORK ? © European Union The European Commission is the EU’s executive organ and its members must constantly listen to what people want, as shown here, for example, at one of its ‘Citizens’ Dialogues’. There is one Commission member (‘Commissioner’) from each EU country, including the Commis- sion President and the High Representative of the Union for Foreign Affairs and Security Policy, who is one of the Commission’s Vice-Presidents. The current Commission, with Jean-Claude Juncker as its President, took office on 1 November 2014. He appointed seven Vice-Presidents to coord inate the work of the Commissioners and to ensure focus on his priority areas such as jobs and growth, the digital single market, energy and climate change and economic and monetary union. To help ensure that the Commission concentrates on the most important priorities and respects the principles of subsidiarity, the President appointed Frans Timmermans as First Vice-President with responsibility for better regulation and institutional relations. The Commission enjoys a substantial degree of independence in exercising its powers. Its job is to uphold the common interest, which means that it must not take instructions from any national government. As ‘Guardian of the treaties’, it has to ensure that the regulations and directives adopted by the Council and Parliament are being implemented in the Member States. If they are not, the Commission can take the offending party to the Court of Justice to oblige it to comply with EU law. As the EU’s executive arm, the Commission implements the decisions taken by the Council in areas such as the common agricultural policy. It has wide powers to manage the EU’s common policies, such as research and technology, overseas aid and regional development. It also manages the budget for these policies. 31 EUROPE IN 12 LESSONS HOW DOES THE EU WORK ? The Commissioners are assisted by a civil service, based mainly in Brussels and Luxembourg. There are also a number of agencies set up to carry out specific tasks for the Commission and mostly located in other European cities. E. The Court of Justice The Court of Justice of the European Union, located in Luxembourg, is made up of one judge from each EU country, assisted by eleven advocates-general. They are appointed by joint agreement of the governments of the Member States for a renewable term of 6 years. Their independence is guaranteed. The Court’s role is to ensure that EU law is complied with, and that the treaties are correctly interpreted and applied. F. The European Central Bank The European Central Bank in Frankfurt is responsible for managing the euro and the EU’s monetary policy (see Chapter 7). Its governing board consists of six directors and the governors of the national central banks of the 19 countries in the euro area. The main tasks of the Central Bank are to maintain price stability and to supervise banks in the euro area. Former Governor of the Bank of Italy, Mario Draghi, has been President of the Central Bank since 2011. G. The Court of Auditors The European Court of Auditors, located in Luxembourg, was established in 1975. It has one member from each EU country, appointed for a term of 6 years by agreement between the Member States following consultation of the European Parliament. It makes sure that all the European Union’s income has been received and all its expenditure incurred in a lawful and regular manner and that the EU budget has been managed soundly. II. OTHER BODIES A. The European Economic and Social Committee When taking decisions in a number of policy areas, the Council and the European Commission consult the European Economic and Social Committee. Its members represent the various economic and social interest groups that collectively make up ‘organised civil society’, and are appointed by the Council for a 5-year term. 32 EUROPE IN 12 LESSONS HOW DOES THE EU WORK ? B. The Committee of the Regions The Committee of the Regions consists of representatives of regional and local government. They are proposed by the Member States and appointed by the Council for a 5-year term. The Council and the Commission must consult the Committee on matters of relevance to the regions, and it may also issue opinions on its own initiative. C. The European Investment Bank The European Investment Bank, based in Luxembourg, provides loans and guarantees to assist the EU’s less developed regions and to help make businesses more competitive. D. The European Ombudsman The Ombudsman is elected by the European Parliament for a renewable period of 5 years. Its role is to investigate complaints relating to poor administration in the EU institutions. Citizens, compan ies and residents in the EU can file complaints. Ireland’s former Ombudsman, Emily O’Reilly, has been the European Ombudsman since 2013. © belahoche/Adobe Stock The Court of Justice ensures that European law is fully respected. It has, for example, confirmed that discrimination against workers with disabilities is forbidden. 33 Rights Digital Migration Jobs Trade Investment Energy Growth Justice Internal market Climate Economy CHAPTER 5 What does the EU do? EUROPE IN 12 LESSONS W H AT D O E S T H E E U D O ? qq The European Union acts in a wide range of policy areas where European leaders have judged that joint action is beneficial, including the single market, the euro, promotion of economic growth, security, justice and foreign affairs (see later chapters). Other policy areas include: — innovation policies, which promote the use of new solutions in fields such as climate and environmental protection, research and energy; — solidarity policies (also known as cohesion policies) in regional, agricultural and social affairs. qq The EU funds these policies through an annual budget which enables it to complement and add value to action taken by national governments. The EU budget is small in comparison with the collective wealth of its Member States: it represents no more than 1.04 % of their combined gross national income. 35 EUROPE IN 12 LESSONS W H AT D O E S T H E E U D O ? I. INNOVATION POLICIES The European Union’s activities impact on the day-to-day life of its citizens by addressing many of the real challenges facing society: environmental protection, health, technological innovation, energy, etc. A. The environment and sustainable development Scientists have been warning since the 1960s that the earth’s temperature is increasing. Political leaders were initially slow to respond but in 1988 the United Nations set up its ‘Intergovernmental Panel on Climate Change’. This expert panel has managed to draw the world’s attention to the potentially disastrous consequences of global warming which is caused by the emission of harmful gasses — particularly from burning fossil fuels containing hydrocarbons. © Westend61/gettyimages The EU is at the forefront of the fight to prevent climate change and encourage sustainable development. 36 EUROPE IN 12 LESSONS W H AT D O E S T H E E U D O ? In 2008, the European Union made an important contribution to the fight against climate change. The European Council agreed that, by 2020, the European Union would cut its emissions by at least 20 % (compared with 1990 levels), raise renewable energy’s share of the market to 20 % and cut overall energy consumption by 20 %. In 2014, EU leaders agreed the more ambitious target of a reduction of at least 40 % by 2030, as compared with 1990. The EU countries also acted decisively together to help ensure that the United Nations’ conference on climate change in Paris in December 2015 led to a binding agreement by 195 countries on a 2 °C ceiling on global warm- ing. The poorest countries in the world need financial assistance to reduce their emissions and to adapt to climate change. To this end, between 2014 and 2020, the EU will be contributing at least €14 billion from the European Development Fund. The political process of ratification of the Paris Agreement by the EU was finalised on 4 October 2016 when the European Parliament approved the ratification, thereby allowing it to enter into force. The EU countries have agreed on binding legislation aimed at achieving a reduction in harm- ful emissions within the EU. Much of the effort is about investing in new technology, which also creates jobs and economic growth. An EU-wide ‘emission trading scheme’ aims to ensure that the required reductions in the emission of harmful gases are carried out efficiently. The EU is also tackling a wide range of other environmental issues including noise, waste, the protection of natural habitats, exhaust gases, chemicals, industrial accidents and the cleanliness of bathing water. It also works to prevent natural or man-made disasters such as oil spills or forest fires. The EU is constantly improving its legislation to provide better protection for public health. For example, EU legislation on chemicals has been reworked, replacing earlier piecemeal rules with a single system known as REACH — which stands for the Registration, Evaluation and Authorisation of Chemicals. This system uses a central database, managed by the European Chemicals Agency, located in Helsinki. The aim is to prevent contamination of the air, water, soil and buildings, to preserve biodiversity and to improve the health and safety of EU citizens while at the same time keeping European industry competitive. B. Technological innovation The founders of the European Union rightly saw that Europe’s future prosperity would depend on its ability to remain a world leader in technology. They understood the huge advantages to be gained from joint European research. So, in 1958, alongside the European Economic Community, they established Euratom. Its aim was for EU countries to exploit together nuclear energy for peaceful purposes, with the help of a Joint Research Centre, which consists of seven research institutes. 37 EUROPE IN 12 LESSONS W H AT D O E S T H E E U D O ? However, to keep pace with increasing global competition, European research had to diversify — and to break down the barriers between national research programmes, bringing together as wide a variety of scientists as possible and helping them find industrial applications for their discoveries. Joint research at EU level today is designed to complement national research programmes. It focuses on projects that bring together a number of laboratories in several EU countries. It also supports fundamental research in fields such as controlled thermonuclear fusion — a potentially inexhaustible source of energy for the 21st century. Moreover, it encourages research and techno logical development in key industries such as electronics and computers, which face stiff com petition from outside Europe. The EU’s goal is to spend 3 % of its gross domestic product (GDP) on research. The main vehicle for funding EU research is a series of ‘framework’ programmes. ‘Horizon 2020’ is the eighth research and technological development framework programme and covers the period 2014-2020. Most of the €80 billion-plus budget is being spent on research in areas like health, food and agriculture, infor- mation and communications technologies, nanosciences, energy, the environment, transport, secur ity and space and socioeconomic sciences. Other programmes promote international cooperation on leading-edge research projects and provide support for researchers and their career development. C. Energy Over half of all energy sources in the EU are currently being imported, making the EU the world’s biggest importer of energy. Europeans are vulnerable to cuts in supply or price hikes caused by international crises. In this context the EU is working to reduce the consumption of fossil fuels and reverse the process of global warming. Various steps are being taken, for example, to save energy by using it more intelligently, to develop alternative energy sources (particularly renewable energy sources), and to increase international cooperation. Better insulation of buildings is one key area, since this is where the EU uses 40 % of its energy and creates 36 % of harmful emissions, such as greenhouse gases. Research and development on energy in Europe focuses on solar, wind, biomass and nuclear power. An important priority in energy policy is to ensure better connectivity of the energy and transport grids across Europe. This can lead to more efficient use of energy, both for technical reasons and because of common markets. Most projects benefiting from the Investment Plan for Europe, launched by President Juncker in 2014, promote efficient, clean and renewable energy. These include the linking of the energy grids of Spain and Portugal with that of France, and the linking of grids around the Baltic Sea. Europe also acts on the international stage, particularly with Russia and the Middle East, to guar- antee the continuity of energy supplies. 38 EUROPE IN 12 LESSONS W H AT D O E S T H E E U D O ? © sergbob/fotolia Energy grids must be better connected across Europe in order to supply safer and more efficient energy. II. SOLIDARITY POLICIES To make sure the single market (see Chapter 6) works properly, imbalances in that market need to be corrected. That is the purpose of the EU’s ‘solidarity policies’, designed to help underdeveloped regions and troubled sectors of the economy. The EU also contributes to help restructure industries which have been hard hit by fast-growing international competition. A. Regional aid and cohesion policy Under the EU’s 2014-2020 budget, the EU’s cohesion policy is investing €325 billion, or 34 % of the EU budget in the EU’s Member States, their regions and cities, to promote the EU-wide goals of creating growth and jobs as well as tackling climate change, energy dependence and social exclusion. 39 EUROPE IN 12 LESSONS W H AT D O E S T H E E U D O ? These objectives are financed by specific EU funds, which top up or stimulate investment by the private sector and by national and regional governments. The European Regional Development Fund is used to finance regional development projects and to boost the economy in regions that are lagging behind. This includes the redevelopment of declining industrial areas. The European Social Fund is used to finance vocational training and to help people find work. A new initiative with a budget of €6 billion has been designed to help young people enter the job market in regions where youth unemployment tops the 25 % mark. Funding is particularly directed towards ensuring that the unemployed receive relevant training. The Cohesion Fund finances transport infrastructure and environmental projects in EU coun- tries whose GDP per capita is lower than 90 % of the EU average. B. The common agricultural policy and common fisheries policy The aims of the EU’s common agricultural policy, as set out in the original Treaty of Rome from 1957, were to ensure a fair standard of living for farmers, to stabilise markets, to ensure that supplies reach consumers at reasonable prices and to modernise farming infrastructure. These goals have largely been achieved. Moreover, consumers today enjoy security of supply and the prices of agricultural products are kept stable, protected from fluctuations on the world market. The common agricultural policy is financed by the European Agricultural Guarantee Fund and the European Agricultural Fund for Rural Development. © European Union Anna from Lublin, Poland, runs her own kindergarten thanks in part to a project aimed at women entrepreneurs that is backed by the European Social Fund. 40 EUROPE IN 12 LESSONS W H AT D O E S T H E E U D O ? However, the EU’s agricultural policy became a victim of its own success. Production outgrew consumption, placing a heavy burden on the EU budget. In order to resolve this problem, agricul- tural policy had to be redefined. These reforms have produced results: production has been curbed. The new role of the farming community is to ensure a certain amount of economic activity in every rural area and to protect the diversity and sustainability of Europe’s countryside. This diversity and the recognition of a ‘rural way of life’ — people living in harmony with the land — are an import ant part of Europe’s identity. Furthermore, European agriculture has an important role to play in combating climate change, protecting wildlife and feeding the world. Moreover, there are schemes in place designed to promote and protect the names of local and regional quality agricultural products and foodstuffs in the EU. The European Union has also a common fisheries policy. Rules on how to manage the fishing fleets and to conserve fish stocks are set at European level. C. The social dimension The aim of the EU’s social policy is to correct the most glaring inequalities in European society. The European Social Fund was established in 1961 to promote job creation and help workers move from one type of work and/or one geographical area to another. Financial aid is not the only way in which the EU seeks to improve social conditions in Europe. Aid alone could never solve all the problems caused by economic recession or by regional underdevel- opment. The dynamic effects of growth must, above all, encourage social progress. This goes hand in hand with legislation that guarantees a solid set of minimum rights. Some of these rights are enshrined in the treaties, e.g. the right of women and men to equal pay for equal work. Others are set out in directives concerning the protection of workers (health and safety at work) and essential safety standards. The EU’s Charter of the Fundamental Social Rights of Workers, which became an integral part of the EU Treaty in 1997, sets out the rights that all workers in the EU should enjoy: free move- ment; fair pay; improved working conditions; social protection; the right to form associations and to undertake collective bargaining; the right to vocational training; equal treatment of women and men; worker information, consultation and participation; health protection and safety at the work- place; protection for children, the elderly and the disabled. Discussions are taking place on how European social protection can be organised in a future labour market increasingly influenced by new technologies and globalisation. 41 EUROPE IN 12 LESSONS W H AT D O E S T H E E U D O ? III. THE EU BUDGET To fund its policies, the European Union has an annual budget which, in 2017, amounts to more than €157 billion. This is approximately 1 % of the total gross national income of all the Member States put together. This budget is financed by what are called the EU’s ‘own resources’. These resources are mainly drawn from: customs duties on products imported into the EU, including farm levies; a percentage of the value added tax (VAT) levied on goods and services throughout the EU; contributions from the Member States, reflecting the wealth of each country. The breakdown in spending can be illustrated by the 2017 budget: smart and inclusive growth: €75 billion, including support to regions and investment, research programmes and the trans-European transport and energy networks; natural resources: €58 billion, mainly for farming, rural development and the environment; security and citizenship: €4 billion, for example for border protection and the ‘Erasmus+’ programme; ‘Europe in the world’: €10 billion, for foreign policy and development aid; administrative expenses: €9 billion. 42 EUROPE IN 12 LESSONS W H AT D O E S T H E E U D O ? Each annual budget is part of a 7-year budget cycle known as the ‘multiannual financial frame- work’. This is drawn up by the European Commission and requires unanimous approval from the Member States and negotiation and agreement with the European Parliament. The multiannual financial framework for the period 2014-2020 was decided in 2013. The overall spending limit was reduced by about 3 % in real terms compared to the previous period covering 2007 to 2013. This spending plan seeks to increase growth and jobs in Europe, encouraging sustainable agricul- ture, and to make Europe more environmentally friendly. There are funding increases for research and innovation, education and training and external relations. Specific funds will be used to fight crime and terrorism, and for migration and asylum policies. Climate spending is expected to repre- sent at least 20 % of EU spending in the period 2014-2020. Ten priorities for Europe Since November 2014 the European Commission, headed by Jean-Claude Juncker, has set the following as its top 10 priorities. 6. A reasonable and balanced 1. A new boost for jobs, growth free trade agreement with and investment the United States 7. An area of justice and 2. A connected digital single fundamental rights based market on mutual trust 3. A resilient energy union with a forward-looking climate 8. A new policy on migration change policy 4. A deeper and fairer internal market with a strengthened 9. A stronger global actor industrial base 5. A deeper and fairer economic and monetary 10. A union of democratic union change 43 EUROPE IN 12 LESSONS W H AT D O E S T H E E U D O ? Who does what? How responsibilities are shared between the EU and its Member States. The European Union alone is responsible for: — customs union; — rules governing competition within the single market; — monetary policy for countries using the euro; — conservation of marine biological resources under the common fisheries policy; — common commercial policy; — concluding an international agreement when this is provided for in EU legislation. The European Union and its Member States share responsibility for: — the single market; — aspects of social policy as defined in the Treaty of Lisbon; — economic and social cohesion; — agriculture and fisheries, except for the conservation of marine biological resources; — the environment; — consumer protection; — transport; — trans-European networks; — energy; — creating an area of freedom, security and justice; — aspects of common security challenges relating to public health, as defined in the Treaty of Lisbon; — research, technological development and space; — development cooperation and humanitarian aid. 44 EUROPE IN 12 LESSONS W H AT D O E S T H E E U D O ? Fields for which the Member States remain responsible and in which the EU may play a supporting or coordinating role: — protection and improvement of human health; — industry; — culture; — tourism; — education, vocational training, youth and sport; — civil protection; — administrative cooperation. 45 CHAPTER 6 The single market Transport Investment Protection Mobility Banking Free movement Rights Competition Access Health Fair Opportunities EUROPE IN 12 LESSONS THE SINGLE MARKET qq The single market is one of the European Union’s greatest achievements. Restrictions on trade and free competition between member countries have gradually been eliminated, thus helping standards of living to rise. qq The ‘four freedoms’ are the basis for the single market: free movement of persons, goods, services and capital. qq Over the years, the EU has introduced a number of policies (on transport, competition, etc.) to help ensure that as many businesses and consumers as possible benefit from opening up the single market. qq The single market has not yet become a single economy: some sectors (in particular services of general interest) are still subject to national laws. Freedom to provide services is beneficial, as it stimulates economic activity. qq The financial crisis that began in 2008 has led the EU to create a ‘banking union’ with tighter rules on the protection of savings and a common European supervision of banks. 47 EUROPE IN 12 LESSONS THE SINGLE MARKET I. ACHIEVING THE 1993 OBJECTIVE A. The original common market The 1957 Treaty establishing the European Economic Community made it possible to abolish customs barriers between the member countries and to apply a common customs tariff on imports from countries outside of the Community. This objective was achieved on 1 July 1968. However, customs duties are only one aspect of protectionism. In the 1970s, other trade barriers hampered the full realisation of the common market. Technical norms, health and safety stand- ards, exchange controls and national regulations on the right to practise certain professions all restricted the free movement of people, goods and capital. B. The 1993 objective In June 1985, the Commission, under its President Jacques Delors, published a White Paper setting out plans to abolish, within 7 years, all physical, technical and tax-related barriers to free move- ment within the EEC. The aim was to stimulate the growth of trade and industrial activity within the ‘single market’ — a large, unified economic area on a par with the United States of America. Negotiations between the Member States’ governments led to a new treaty — the Single Euro- pean Act, which came into force in July 1987. Its provisions included: extending the powers of the EEC in some policy areas (such as social policy, research and the environment); establishing the single market by the end of 1992; making more frequent use of majority voting in the Council of Ministers, to make it easier to take decisions about the single market. 48 EUROPE IN 12 LESSONS THE SINGLE MARKET II. PROGRESS IN BUILDING THE SINGLE MARKET A. Physical barriers All border controls within the EU on goods have been abolished, together with customs controls on people, but the police still carry out random spot checks as part of the fight against crime and drugs. In June 1985, five of the 10 Member States signed the Schengen Agreement under which their national police forces undertook to work together, and a common asylum and visa policy was set up. This made it possible to completely abolish checks on persons at the borders between the Schengen countries (see Chapter 10). Today, the Schengen area is made up of 26 European countries, including four which are not members of the European Union (Iceland, Liechtenstein, Norway and Switzerland). B. Technical barriers EU countries have agreed to recognise one another’s rules on the sale of most goods. Since the land- mark ‘Cassis de Dijon’ ruling by the European Court of Justice in 1979, any product legally manufactured and sold in one Member State must be allowed to be placed on the market in all the others. Where services are concerned, EU countries mutually recognise or coordinate their national rules allow- ing people to practise professions such as law, medicine, tourism, banking or insurance. However, free- dom of movement for persons is far from complete. In spite of the 2005 directive on the recognition of professional qualifications, there are still obstacles hindering people from moving to other EU countries or doing certain types of work there. Nevertheless, qualified people (whether lawyers or doctors, builders or plumbers) are increasingly free to practise their profession anywhere in the European Union. The European Commission has taken action to improve worker mobility, and particularly to ensure that educational diplomas and job qualifications obtained in one EU country are recognised in all the others. Some people work temporarily in another EU country, for example, if a construction company has a project in an EU country other than where it is based. EU rules state that the working conditions for so-called posted workers must be at the same level as those for other workers in the country where the work is done. C. Tax barriers Tax barriers have been reduced by partially aligning national VAT rates. Member States have agreed common rules and minimum rates to avoid distorting competition across borders within the EU. 49 EUROPE IN 12 LESSONS THE SINGLE MARKET D. Public contracts Contracts for work in the public sector are a major part of the economy, representing 19 % of GDP. Contracts in any EU country are now open to bidders from anywhere in the EU. This is thanks to EU directives covering services, supplies and works in many sectors, including water, energy and telecommunications. The single market benefits all consumers. For example, opening up national markets for services has brought down the price of telephone calls to a fraction of what they were 10-15 years ago. Competitive pressure has also significantly reduced air fares in Europe. III. WORK IN PROGRESS A. Financial services In 2008, in the wake of the ‘sub-prime’ mortgage crisis in the United States, a massive financial crisis rocked the world’s banking systems and economies, and plunged the European Union into recession in 2009. Part of the subsequent reaction was to reform the way banks and financial institutions oper- ate in order to make them more transparent and accountable. This was made possible through the creation of the ‘banking union’. New EU rules provide greater protection for bank deposits, increase the amount of capital banks must hold so as to make them more stable, regulate complicated finan- cial products and put limits on bank executives’ bonuses. Banks in the euro area are supervised by a Europe-wide system under the direction of the European Central Bank. There are also new rules on how to close down failing banks. A special fund now ensures that the costs involved in these closures are carried by the banks and not by taxpayers. European leaders are working on further strengthening the single markets for capital. The aim is to make it easier for small businesses to finance their activities and to make it more attractive to invest in Europe. Reforms of corporate taxation are also under discussion. The idea is that the EU Member States should agree on common rules on how to calculate the basis on which they tax businesses. Coun- tries would still have different tax rates, but common rules would make it much cheaper for busi- nesses to operate across borders and reduce tax avoidance. It would also make it impossible for individual countries to offer favourable tax deals to businesses in order to attract investments from abroad. 50 EUROPE IN 12 LESSONS THE SINGLE MARKET © Rolf Bruderer/Corbis By opening up the telecommunications market to competition, the EU has brought about drastic cost reductions. B. Piracy and counterfeiting EU products need protection from piracy and counterfeiting. The European Commission estimates that these crimes cost the EU thousands of jobs each year. This is why the Commission and national governments are working together on extending copyright and patent protection. IV. POLICIES UNDERPINNING THE SINGLE MARKET A. Transport The EU’s activities have focused on ensuring the freedom to provide services in land transport. In particular, this means giving transport companies free access to the international transport market and allowing transport firms from any EU country to operate in all other EU countries. The EU is also working to ensure fair competition in road transport, by (for example) harmonising the rules on worker qualifications and market access, the freedom to establish a business and provide services, driving hours and road safety. 51 EUROPE IN 12 LESSONS THE SINGLE MARKET Air transport in Europe used to be dominated by national flag carriers and state-owned airports. The single market has changed all that. All EU airlines may now operate air services on any route within the EU and set fares at any level they choose. Consequently, many new routes have been opened up and prices have fallen dramatically. Passengers, airlines, airports and employees have all benefited. Similarly, passengers are benefiting from increased competition between railway companies. Shipping — whether carried out by European companies or by vessels flying the flag of non-EU countries — is subject to EU competition rules. These rules are intended to combat unfair pricing practices (flags of convenience) and also to address the difficulties facing the shipbuilding industry in Europe. The European Union has been funding ambitious new technology projects such as the Gali- leo satellite navigation system, the European rail traffic management system and SESAR — a programme for modernising air navigation systems. Road traffic safety rules (in areas such as vehicle maintenance, the transport of dangerous goods and the safety of roads) have been made much more stringent. Passengers’ rights are also better protected thanks to the implementation of a comprehensive set of rights for all modes of transport: road, air, rail and water. Passengers in the EU, including disabled passengers and those with

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