European Union

The European Union (EU) is a political and economic entity consisting of 27 member states that share a common political ideology. In legal form, it is a complex hybrid structure with elements of federalism (such as the European Court of Justice and the European Parliament), intergovernmentalism (the Council of Ministers) and some characteristics of an international organsation (the European Commission represents the Union in certain international negotiations). It has grown from the six founding member states of the European Economic Community in 1957, through many accessions of new members — especially, in recent years, much of the former European Communist bloc.

Rationale

Determined to lay the foundations of an ever closer union among the peoples of Europe, ... we are agreed ... preamble to the Treaty of Rome[1] by the heads of state of Belgium, France, Germany, Italy, Luxembourg, and The Netherlands.

Perceptions of the rationale for the European Union have differed among its participants. Its founders saw it as the foundation of a union of the peoples of Europe (see box), but some of its later participants have seen it solely as a union of the sovereign nations of Europe. Its member countries have not since relinquished control over their defence and international policies, and the progress toward union that has been achieved has been predominately in the sphere of economic policy. In that sphere, however, every step in the Union's evolution has involved a further partial surrender of its members' national sovereignty. The launch in 1988 of the Economic and Monetary Union was a step further than some of its members were willing to take at that time. The further surrender of national sovereignty by the countries that did take that step included the total relinquishment of control over monetary policy, and submission to agreed limits upon the exercise of fiscal policy. Member countries retained limited discretion over public expenditure and taxation, however, and in that respect the integration of economic policy has so far been incomplete.

The principal advantage of membership to a country has been seen as the unrestricted access that it provides to wider markets for its products. The adoption of a common currency as part of the Economic and Monetary Union was seen as further lowering barriers to those markets by reducing transaction costs and eliminating exchange rate risks. It was generally accepted that there could be offsetting disadvantages arising from loss of control over the domestic economy, but most of the continent's governments judged the balance to be positive. Some have since come to question that judgement because of the unsymmetrical impact of recent demand shocks upon the domestic economies of member countries.

Constitution

The term "european constitution" commonly refers to a document published in 2004, whose proposals have not been given formal effect because they have not received universal ratification. In the absence of an accepted codification, the constitution of the European Union consists of a collection of treaties, protocols, declarations and regulations. Notwithstanding its lack of status, the document of 2004 provides a valuable summary of the existing position as perceived by its authors.

The conditions for membership of the Union are defined in the document in two clauses:

Article I-58: The Union shall be open to all European States which respect the values referred to in Article I-2, and are committed to promoting them;

and,
Article I-2: The Union is founded on the values of respect for human dignity, freedom, democracy, equality, the rule of law and respect for human rights, including the rights of persons belonging to minorities. These values are common to the Member States in a society in which pluralism, non-discrimination, tolerance, justice, solidarity and equality between women and men prevail.

Exclusive competence is ascribed to the Union as regards:

- the customs union, competition rules, monetary policy (for eurozone members), conservation of marine biological resources, the common commercial policy, and certain (defined) categories of international agreement.

Shared competence between the Union and member states is deemed to apply to:

- internal markets, specified aspects of social policy, economic, social and territorial cohesion, agriculture and fisheries, the environment, consumer protection, transport, trans-European networks, energy, freedom, security and justice, and public health.

Most decisions by the Union's governing body are taken by a qualified majority, defined as at least 55 per cent of the members of the Council(72 per cent for proposals from other than the Commission or the Union Minister of Foreign Affars), comprising at least fifteen of them and representing member states comprising at least 65 % of the population of the Union. Exceptions include decisions on foreign and defence policy, the Union budget, the admission of new members, emergency financial assistance to members and penalties for breaches of the Unions rules.

Structure

The principal institutions of the European Union are

• The European Council Heads of State or Government of the Member States, together with its President and the President of the Commission (and the High Representative of the Union for Foreign Affairs and Security Policy if required.)
• The Council of the European Union - the main decision-making body of the EU (ministers of the member states - foreign affairs, finance, social affairs, transport, agriculture, etc.).
• The European Parliament - a directly-elected body that takes legislative decisions on some issues jointly with the Council of Ministers.
• The European Commission - the driving force in proposing legislation (to Parliament and the Council), administering and implementing EU policies, enforcing EU law (jointly with the Court of Justice) and negotiating in the international arena.
• The European Central Bank - executes the EU's monetary policy.

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Countries of the EU as of January 1, 2007