The European Union

1
The European Union

• By
• Jack Duong
• Julia Inoue
• Nancy Phong

2
What is the European Union?

• A supranational intergovernmental union of
  nation-states in Europe.
• Established in 1992 by the Treaty on European
  Union (EU).
• Currently has 27 member countries.
• Largest political economic entity in Europe w/
  493 million people.
• GDP of 10.5 trillion.

3
About the European Union

• Has its own currency (the euro) adopted by 13
  countries.
• Citizens of EU directly elect the European
  Parliament, once every 5 yrs.
• They are allowed to live, travel, work, invest
  in other member countries.

4
History of the European Union

• Evolved from a western European trade body.
• After WWII, cooperation formed between countries
  determined to rebuild Europe eliminate the
  possibility of another WW.
• May 9, 1950 Robert Schuman proposed joint
  management of France West Germanys coal
  steel industries, a.k.a. the Schuman
  Declaration.

5
Robert Schumans Schuman Declaration

• Lead to the first concrete step towards a
  European federation.
• Was considered the beginning of the creation of
  the EU.

• Robert Schuman

6
Why did the European Union form?

• Formed because of WWII.
• The EU idea was born because Europeans were
  determined to prevent such killing destruction
  from ever happening again.
• Earlier years, cooperation was between 6
  countries mainly about trade the economy.

7
Reasons for Starting the European Union

• To deal w/ a wide range of issues of direct
  importance for our everyday life.
• To defend the shared values of Europe such as
  democracy, freedom, social justice.
• To promote unity ensure that decisions are
  taken as close as possible to citizens.
• To preserve diversity.

8
Reasons for Starting the European Union

• Encourages every European citizen to work
  together from other countries in a spirit of
  curiosity, openness solidarity.

• EU Flag

9
Britain joining the Eurozone
(ICM polls for the Guardian and the News of the
World)
10
Reasons

• National pride.
• The U.K. Treasury pride.
• Strength of the sterling.

11
Key Points for Joining

• A single currency would be of benefit in terms of
  trade, transparency costs and currency stability.
  
• Membership is in the national interest and there
  is popular consent.
• Treasury's comprehensive and rigorous assessment
  of the five economic tests.
• Whenever the decision to enter is taken by the
  British government, it should be put to a
  referendum of the British people.

12
The 5 Tests

• Are business cycles and economic structures
  compatible so that we and others could live
  comfortably with euro interest rates on a
  permanent basis?
• If problems emerge, is there sufficient
  flexibility to deal with them?
• Would joining EMU create better conditions for
  firms making long-term decisions to invest in
  Britain?
• What impact would entry into EMU have on the
  competitive position of the UK's financial
  services industry, particularly the City's
  wholesale markets?
• Will joining EMU promote higher growth, stability
  and a lasting increase in jobs?

13
Advantages and Disadvantages

• Advantages
• Currency is more useful the wider the
  acceptability.
• Rise in Trade.
• Disadvantages
• One size does not fit all.
• Loss of ability to adjust for idiosyncratic
  shocks.

14
New Developments

• Doubts about the exchange rates as shock
  absorbers.
• Monetary Union gt Increased Trade
• gt Decline in Idiosyncratic Shocks.
• Removing exchange rate risk, stimulates the
  financial integration of the area, facilitating
  risk-sharing.
• Countries may wish to join (leave) a monetary
  union if that union offers a superior (inferior)
  policy framework.

15
Critics of the EU

• Critics argued that there is
• corruption fraud in the EU
• Resulted in some European Union Officials to
  resign in mass
• With a new group, there were still some criticism
  regarding accounting policies
• Europe as a whole is not a democracy, but a
  bureaucracy

16
Critics of the EU

• France, Austria, Germany, Italy are some that
  argue against the Euro.
• Some European
• citizens have argue
• that the Euro has
• damage their
• economies
• United States of Europe

17
European Union Today

• Largest Exporter in the world and is the second
  largest importer

GDP (PPP) per capita (2006)
 gt30,000  gt25,000
 gt20,000  gt15,000
 gt10,000
18
European Union Today
19
Conclusion

• For some countries, the EU have been beneficial
  while for other, the EU has taken a toll on them.
  But despite the many challenges it faces along
  with the advantages and disadvantages, the EU
  stands as one of the largest exporters and
  importers in this globalize world.