THE EUROPEAN UNION - PowerPoint PPT Presentation

About This Presentation
Title:

THE EUROPEAN UNION

Description:

Title: PowerPoint Presentation Author: Phil Van Auken Last modified by: Phil Created Date: 2/12/2002 4:27:40 PM Document presentation format: On-screen Show (4:3) – PowerPoint PPT presentation

Number of Views:2424
Avg rating:3.0/5.0
Slides: 150
Provided by: PhilVa4
Category:

less

Transcript and Presenter's Notes

Title: THE EUROPEAN UNION


1
CHAPTER 10
  • THE EUROPEAN UNION

2
EU PRISMs
  • Is it a mistake for Europe to try to integrate so
    many different ethnic groups religions?
  • Should all EU members play by the same rules
    standards?
  • Should EU leaders be elected by EU citizens?

3
  1. Can nationalism play a constructive role in the
    world?
  2. To what extent do governments owe their citizens
    social welfare benefits?
  3. Should economically weak nations be excluded from
    free trade agreements?

4
THE EU VISION
5
  • Is the EU a model for 21st century global
    government?

6
WHY THE EU?
  1. To become a United States of Europe with one
    economic/political system on par with the United
    States of America.
  2. For European nations to stop being their own
    worst enemies in trade politics.
  3. Vision Infrastructure Cooperation
    Regionalism over nationalism Power
    Centralization THE WORLDS LARGEST ECONOMY
    MARKET (30 share of world gross product)

7
ECONOMIC ADVANTAGES OF THE USA THAT THE EU WANTS
TO EMULATE
  • One currency
  • One banking system
  • Uniform commercial laws
  • No tariffs between states
  • Federalism over states rights
  • These are referred to as the 4 EU freedoms
    freedom of goods, services, movement of labor
    capital.

8
EU ECONOMIC POTENCY
  1. 7 of the worlds population28 of the global
    GDP (larger than the USA)
  2. 454M population 60 more consumers than the USA
  3. The 12 member nations using the Euro exclusively
    account for 67 of the population 74 of the EU
    GDP
  4. One third of the worlds 100 largest corporations
    are European

9
EU vs. U.S.
  • Population of 454M for EU, 1.5 times larger than
    U.S.
  • EU gross regional product of 12.5T vs. 11.7T
    for U.S.

10
THE BENEFITS OF EUROPEAN INTEGRATION
  1. Lowered incidence of war due to increased
    economic interdependency
  2. The EUs single market opens up a huge new sales
    opportunities
  3. Merged EU corporations are becoming the largest
    in the world
  4. Poorer member nations benefit from the economic
    pull of richer members
  5. Democracy capitalism are promoted in weaker EU
    nations

11
THE COSTS OF EUROPEAN INTEGRATION
  1. Diminished national sovereignty of member nations
  2. Loss of national identity in in the EUs uniform
    laws standards
  3. Increased competition for corporations less
    protected from their cross-border rivals
  4. Increased organized crime enabled by removed
    border controls
  5. Head-butting among members over agricultural
    subsidies

12
EU MEMBERSHIP
13
(No Transcript)
14
  • In order to admitted for membership, EU candidate
    nations must fulfill the Copenhagen criteria
  • A secular, democratic government
  • Corresponding freedoms institutions
  • Respect for rule by law

15
POLITICAL EVOLUTION OF THE EU
  1. The economic unification of Europe began after
    WWII (1951) with 6 nations (Belgium, France,
    Germany, Italy, Luxembourg, the Netherlands)
    forming the European Coal Steel Community (the
    Common Market) to prevent another war via trade
    cooperation.
  2. In 1957, the European Community (EC) was
    established by the Treaty of Rome, which pledged
    cooperation towards four freedoms free
    movement of goods, services, capital, people

16
  • 3. Britain, Ireland, Norway, Denmark joined the
    EC in 1972. Greece, Spain, Portugal joined in
    the 1980s.
  • 4. The European Union emerged in 1992 with the
    Maastricht Treaty.
  • 5. The Euro was adopted the sole currency of 11
    EU members in 1999.
  • 6. New EU members in 2004 included Estonia,
    Latvia, Lithuania, Poland, Czech Republic,
    Hungary, Slovakia, Slovenia, Malta, Cyrus.
    Bulgaria Romania joined in 2007.

17
  1. Conspicuous by their absence Norway (has thus
    far rejected EU membership over concerns about
    the Euro centralization of EU power)
    Switzerland (historically a politically neutral
    nation).
  2. The political problem with Cyprus A civil war
    has split the island into 2 zones
    Turkish/Cypriot (north) vs. Greek/Cypriot
    (south). Only the north Greek-Cypriot partition
    is currently an EU member.

18
PER CAPITA GDP RANKINGS OF EU NATIONS
  • Luxembourg (highest per capita GDP income),
    Ireland, Denmark, UK, Austria, Netherlands,
    Belgium, Sweden, France, Germany, Italy, Finland,
    Spain, Cyprus, Greece, Slovenia, Portugal, Malta,
    Czech Republic, Hungary, Slovakia, Estonia,
    Lithuania, Latvia, Poland (lowest per capita GDP
    income)

19
UNEMPLOYMENT RANKINGS OF EU NATIONS
  • Luxembourg (lowest unemployment, around 4.5),
    Netherlands, Austria, Cyprus, Ireland, UK,
    Denmark, Sweden, Hungary, Portugal, Slovenia,
    Czech Republic, Belgium, Malta, Italy, Finland,
    Greece, France, Germany, Estonia, Latvia, Spain,
    Lithuania, Slovakia, Poland (highest
    unemployment, 18)

20
SEATS IN THE EU PARLIAMENT
  • Germany 99 UK, Italy France 78 Spain
    Poland 58 Netherlands 27 Greece, Belgium,
    Portugal, Czech Republic Hungary 24 Sweden
    19 Austria 18 Slovakia, Denmark, Finland
    14 Ireland Lithuania 13 Latvia 9 Slovenia
    7 Estonia, Cyprus, Luxembourg 6 Malta 5

21
  • 4 EU MEMBERSHIP GROUPS

22
  • ANGLO-SAXONS Ireland Britain
  • CONTINENTALS France, Germany, Belgium, Austria,
    Luxembourg
  • MEDITERRANEANS Greece, Spain, Italy, Portugal,
    Cyprus
  • NORDICS Demark, Sweden, Finland, Netherlands

23
RECENT EU EXPANSION
24
EU APPLICANTS FOR FUTURE MEMBERSHIP
  • Turkey Albania Bosnia
  • Macedonia Serbia Ukraine
  • Moldova Belarus Georgia

It will take the former USSR nations about 50
years to catch up economically to the rest of
the EU.
25
EU POPULATIONS
  • Italy 58M
  • Ireland 4M
  • Latvia 2M
  • Lithuania 3M
  • Luxembourg 16M
  • Poland 38M
  • Portugal 11M
  • Spain 42M
  • Sweden 9M
  • UK 60M
  • Austria 8M
  • Belgium 10M
  • Cyprus 1M
  • Denmark 5M
  • Estonia 1M
  • France 60M
  • Finland 5M
  • Germany 83M
  • Greece 11M
  • Hungary 10M

26
  • Austria (1995)
  • Belgium (1950)
  • Bulgaria (2007)
  • Czech Republic (2004)
  • Greek-Cyprus (2004)
  • Denmark (1973)
  • Estonia (2004)
  • Finland (1995)
  • France (1950)
  • Germany (1950)
  • Great Britain (1973)
  • Greece (1981)
  • Hungary (2004)
  • Ireland (1973)
  • Italy (1950)
  • Latvia (2004)
  • Lithuania (2004)
  • Luxembourg (1950)
  • Malta (2004)
  • Netherlands (1950)
  • Poland (2004)
  • Portugal (1986)
  • Romania (2007)
  • Slovenia (2004)
  • Slovakia (2004)
  • Spain (1986)
  • Sweden (1995)

27
  1. The 10 newest EU member nations in the EU (mainly
    former Communist Eastern European nations)
    receive tens of billions or Euros in economic
    subsidies (cohesion funds) annually from the EU
    budget (finance primarily by Germany, France,
    Britain, the Netherlands, Sweden). For
    example, new member Poland received 3.4B in
    2005, twice the amount of money it contributed to
    the 2005 EU budget.
  2. The overall biggest competitive advantage these
    newer members have is their low labor costs
    compared to Germany, France, etc.

28
APPLYING FOR EU MEMBERSHIP
  • Filling out the EUs Stabization Association
    Agreement (SAA) is the first step toward applying
    for formal membership. Macedonia submitted its
    SAA in 2001 graduated to candidate status in
    2005. Serbia has yet to file a SAA because it
    refuses to comply with the EUs war-crimes
    investigations. Bosnias SAA is currently in
    limbo until it implements police reform.

29
NEW MEMBER SPECIAL CHALLENGES
30
STANDARD OF LIVING DISPARITIES BETWEEN EU MEMBERS
  • 2003 per capita incomes
  • Germany 27,600
  • Poland 5,400
  • Romania 4,084
  • Bulgaria 3,735
  • Ukraine 1,000 (potential future member)

31
WHY TURKEY?
  1. Controversy surrounds the membership of
    Muslim/Islamic Turkey in the EU because of
    historical current conflict between Islam
    Christendom.
  2. The EU hopes Turkey will be a stable future
    political economic buffer zone between Europe
    the Middle East. The more dependent Turkey
    becomes on the EU for new jobs and increased
    trade, the greater the chances for peace between
    these two ancient religious spheres.

32
  • Most EU nations worry about Turkeys possible
    membership because of its large population (
    hence voting clout), islamic leaning, restricted
    human rights (especially for women), its
    illegal government in northern Cyprus.
  • Fear of Turkeys possible membership was a major
    factor that caused the French to reject the EU
    constitution.
  • Europes biggest worry about Muslim Europeans is
    that their high population growth rate will swamp
    Europe (which is currently experiencing
    population declines as a region) within 3
    decades.

33
  • 6. Turkeys Prime Minister, Tayyip Erdogan,
    pledged after elections in the summer of 2007 to
    maintain his countrys efforts to join the EU. He
    had to reassure many of Turkey's secular middle
    class that his Islamic-leaning administration
    would not seek to undo decades of state
    religiousneutrality. However, Turkeys secular
    elite feel more vulnerable than ever before.

34
RUSSIA THE EU
  1. Russia currently has no desire to join the EU
    because it continues to think of itself as an
    independent global power that can go it alone
    (like India China). Europe worries about
    Russias lack of human rights, corrupt business
    system, rogue foreign policy.
  2. Russia has attempted to corral former satellites
    Moldova Belarus into an informal economic
    confederation to counteract Europes growing
    unity.
  3. The former Soviet satellite nations in Eastern
    Europe would oppose Russias European entry,
    fearing future re-domination.
  4. France would like Russia to join their EU as a
    foreign policy counterweight to the U.S. Germany
    also is pro-Russia because of its large oil
    reserves.
  5. It is possible that Russia might align itself
    more closely with Europe economically in the
    future, but not politically.

35
EU OUTLIERS
  1. Four Western European have declined to join the
    EU Iceland, Liechtenstein, Norway, Switzerland
  2. The 3 official candidates for the next round of
    enlargement Croatia, Macedonia, Turkey
  3. Future potential candidates Albania, Bosnia,
    Herzegovina, Montenegro, Serbia
  4. The following 4 micro-states lack formal
    membership status but are part of the Euro-zone
    Andorra, Monaco, San Marino, the Vatican

36
THE EUS FINANCIAL FAULT LINES
  1. 5 EU nations have been red-flagged as EU
    PIIGS (Portugal, Ireland, Italy, Greece, Spain)
    because of their unmanageable government debt
    problems.
  2. Greece and Ireland developed serious financial
    problems in 2009-2010, each requiring billion
    dollar bail outs from the Eurozone, European
    Central Bank, and the International Monetary
    Fund.
  3. Both nations struggled with imminent national
    loan default Greece due to large government
    deficits that diluted its currency and Ireland
    due to bank defaults stemming from
    over-investment in subprime mortgages a la the US
    other EU nations.

37
  • 16 of 27 EU members that have adopted (1999) the
    Euro as their official national currency
  • PIIGS
  • Core EU govt. deficit nations
  • Portugal, Ireland, Italy,
  • Greece, Spain

38
  • PIIGS governments are in financial jeopardy due
    to high social welfare (vote-buying) deficits
    the high value of the Euro. Their rotten
    economies endanger the value of the Euro the
    existence of the EU.
  • PIIGS economies are too poor to afford the Euro
    on their own (like living in New York or Tokyo on
    a Waco income).

39
  • Northern EU nations subsidize their use of the
    Euro hence PIIGS social welfare benefits.
  • Germany the USA have pushed the EU to create an
    emergency bailout fund to use should any of the
    PIIGS go bankrupt.
  • EU USA leaders worry that this fund will not be
    adequate that the world doubts the stability
    of the Euro thus trade with the EU.

40
  • Should PIIGS be forced to drop the Euro reuse
    their weaker former currencies?
  • Should the EU cancel PIIGS membership to halt
    subsidies their economic baggage?
  • Is use of the Euro as the EUs official currency
    unrealistic hence the EU itself?

41
EU TREATIES
42
Brussels, Belgium El capital del EU (formally
established by the Maastricht November 1, 1993)
43
Belgium is partitioned into Flanders
(Dutch/Anglo-Saxon ethnicity) Walloonia
(French/Latin ethnicity). Thus Belgium is the 1
spot for test marketing of new products in Europe
with its mix of largely Anglo-Saxon Latin
citizens.
44
LE TRAITÉ 1993 SUR L'UNITÉ EUROPÉENNE (MAASTRICHT)
The Maastricht treaty established 4 economic
standards European nations must meet to qualify
for EU membership 1. Manageable government
deficits 2. Stable currency 3. Mainstream
interest rates (close to the EU regional
average) 4. Inflation control
45
THE 4 ONES OF EU CENTRALIZATION
1.One military 2.One foreign policy 3. One
banking system 4. One currency
46
THE 2000 TREATY OF NICE
  • Designed a complex weighted voting system to
    determine how much influence each member nation
    should
  • have based primarily on population, GDP,
    trade volume.
  • 2. Initiated a dialogue regarding how much
    influence the incoming 10 members should have.

47
THE EU MILITARY
  • 1. Since WWII, Europes main military capability
    was the North American Treaty Organization
    (NATO), a defense partnership with the USA.
  • 2. In 2003, the EU developed its own rapid
    deployment military force to augment NATO. Part
    of the Common Foreign and Security Policy (CFSP),
    this rapid deployment force is designed to put
    60,000 troops (gathered from all EU member
    nations) into European battle within 60 days.

48
  1. The EU headquarters in Brussels has an annual
    budget of 140B, funded by (1) A dedicated
    value-added sales tax (VAT) in each country (2)
    A government support fee paid by each nations
    population (which provides 68 of total
    government funding) (3) Tariffs on goods
    entering the EU. The bigger, richer member
    nationsparticularly Germany, France, and
    Britainprovide most of the funds. Inevitably,
    the biggest donors want the biggest say in
    determining how big the budget should be and what
    it should be used for.
  2. The European Central Bank (ECU) in Frankfort has
    18 members who set interest rates for the euro
    area.

49
  1. The EU government currently receives an annual
    budget equal to 1 of the EUs GDP. This will be
    raised to 1.14 in 2013. The 6 biggest
    contributors (who provide a quarter of the entire
    annual government budget) are Germany, Britain,
    France, the Netherlands, Sweden, Austria.
    Almost 40 of the total EU budget goes to
    agricultural subsidies (via the EUs Common
    Agriculture PolicyCAP).

50
EU GOVERNMENT
51
The EU is the prototype model for 21st century
global government which is emerging via GGOs such
as the WTO, NAFTA, the International Criminal
Court, Kyoto Climate Protocol, and the
International Standards organization. The EU is
seeking to solve such thorny governmental
problems as developing one constitution for 27
nations, managing a single currency, cobbling
together a multilateral foreign policy. Thus the
EU is blazing the trail for other new
organizations that fit into the global government
jigsaw puzzle.
52
  1. European Council of Ministers A multiple-headed
    executive branch of government (the chiefs of
    state) that recommends policies to the Euro
    Commission (The EU Civil Service). The Council
    elects its own president to a 2 1/2 year
    renewable term The current President is Jose
    Barroso of Portuga.l
  2. Euro Parliament Amends laws, controls EU budget,
    approves president of Euro Commission

53
  1. The executive (presidential) branch of the
    European Unionthe entity that does most of the
    work, and employs most of the fonctionnairesis
    the European Commission. This is essentially the
    cabinet of the European governmentthe ministers
    of health, finance, agriculture, and so on who
    implement the policies of the prime ministers and
    the European Parliament.
  2. The new Constitution dictates that there will be
    only fifteen cabinet jobs, and the twenty-five
    member countries will have to use lobbying and
    leverage to land one of the slots.

54
  • The EU Commission is charged with proposing new
    laws for the EU Parliament to consider. Each EU
    member nation is represented by a single
    commissioner with a 5-year renewable term who
    has one vote in the Council.
  • The members elect one of its own members to serve
    as president who oversees the day-to-day
    operations of the Eurocrats in Brussels.

55
  • The Council of the EU is charged with enacting EU
    laws controlling the EU budget. The Council is
    headed by a different nation on a rotating basis
    every 6 months.
  • During the half year a given nation presides over
    the Council, it is in the drivers seat to chair
    Council meetings, set the agenda, to broker
    deals between nations. The Council also is
    charged with enacting new laws.
  • Each nations has from 3 (Malta) to 29 (France,
    Germany, Italy, Britain) votes.

56
  1. The European Parliament is the legislative branch
    of the EU, an assembly of members elected to
    five-year terms by the voters of each of the
    member states.
  2. Parliament passes laws, passes the final EU
    budget, supervise other EU institutions.
  3. The parliament now meets half the time in
    Strasbourg and half the time in Brussels.

57
  1. There are 732 seats in the European Parliament,
    roughly one for each 600,000 people, which
    creates a constituency for each member about the
    same size as a congressional district in the
    United States.
  2. This means Germany, France, Britain, and Poland
    have the most seats in the Parliament (about
    eighty seats for each of those large countries),
    and the tiny states like Malta and Luxembourg get
    four or five seats apiece.

58
  • Voting in the Parliament, though, tends not to
    follow national lines. Rather, the MEPs (MEP is
    the abbreviation for Member of the European
    Parliament) have formed various party groupings
    along policy lines. The biggest party in the
    Parliament is a combination of Christian
    Democrats and Conservatives, a political
    alignment that is known in Europe as
    center-right, but is actually far more liberal
    on most issues than left-wing Democrats would be
    in the United States.
  • Theres also a large grouping called the party of
    European Socialists (PES), which is generally
    described as center-left but is not at all
    centrist by U.S. political definitions. The
    third largest party is a self-described Reform
    camp, which consists largely of people who are
    fed up with the traditional politics of both the
    Left and the Right.

59
  • EUROZONE
  • (EU 16 of 27 member nations who use the Euro as
    their official currency)
  • Austria, Belgium, Cyprus,
  • Estonia, Finland, France, Germany, Greece,
    Ireland, Italy, Luxembourg, Malta, the
    Netherlands, Portugal, Slovakia, Slovenia, and
    Spain

60
EU PROGRESS
61
EU PROGRESS CHECKThus far, the EU has
  • A flag
  • An anthem
  • A currency
  • A central bank
  • A supreme court
  • A parliament
  • A foreign minister
  • A president (of the European Commission)
  • A budget
  • A military
  • A (non-ratified) constitution

62
ECONOMIC PROGRESS
  • 1. Lisbon agenda for the EU to be the worlds
    strongest economy by 2010
  • 2. EU integration added only 1.3 to the regions
    GDP during the 1990s, but since 1992, EU output
    increased 2.2, creating 2.75M new jobs.
  • 3. EUs competitiveness has been limited by (1)
    Lower work hours vs. the USA (2) High welfare
    state benefits (3) Slow population growth

63
  1. 500B of trade between EU USA annually
  2. U.S. companies employ 6M EU workers vs. 4M
    Americans who work for EU companies
  3. The per capita income of Ireland went from 62 of
    the EU average in 1981 to 121 in 2002

64
L'EURO (official in 2002)
  • 1. The EU wants the Euro to pass up the American
    dollar as the worlds most used currency. The
    Euro has been stronger than the dollar over the
    past 2 years. 16 member nations currently use the
    Euro as their official currency.
  • 2. The U.S. dollar fell 31
  • vs. the Euro between 7/01 to
  • 12/03 (when 1 Euro was
  • worth 1.20)
  • 3. The main cause was tied to Americas record
    current account deficit (exports imports) in
    2003 of ½ T (5 of GDP)

65
HOW THE STRONGER EURO IS IMPACTING THE EU
  1. Increased off-shoring of manufacturing
  2. Greater reliance on exporting within the Euro
    zone
  3. Increased importing of supplies
  4. Seeking more non-European mergers

66
  • 5. Before the euro, prices for McDonalds Big Mac
    varied by as much as 75 percent across the
    eurozone, from roughly 3.55 in Finland to about
    2.00 in Greece. Two years after the euro was
    introduced, there were still national differences
    in McDonalds menus, but prices had converged
    dramatically. The average Big Mac price was 2.71
    euros (roughly 3.30), and the difference between
    Finland and Spain had dropped from 75 to 15
    percent.

67
THE BENEFITS OF CURRENCY UNIFORMITY
  1. Greater clarity of comparing prices across
    European borders
  2. Greater efficiency of conducting business
    investing across borders
  3. Greater willingness of investors to invest
    regionally instead of just locally
  4. Emergence of the Euro as a world-class currency

68
EURO DAMAGE CAUSE BY THE GREEK FINANCIAL CRISIS
  1. The EUs efforts (in partnership with the IMF) in
    the first quarter of 2010 to provide a financial
    bail-out for the 150 of GDP federal deficit of
    Greece caused the Euro to drop about 20.
    Currency traders inside outside the EU
    recognize that there is no instruction manual
    for rescuing a euro-zone country nearing default.

69
LOCAL OR TRULY REGIONAL MARKETING?
  • Although the EU promises regional integration of
    trade and business deals (reflected by EU
    corporations earning almost 2/3 of their revenue
    regionally), so far local consumers continue to
    do most of their shopping, investing, and work at
    home86 of peoples income was generated at home
    only 10 across borders. 2/3 of equity
    investments are with home companies rather those
    in other parts of the EU.

70
THE SCHENGEN NO-PASSPORT AGREEMENT
  • In 1985 (in the small town of Schengen,
    Luxembourg), 30 nations in Europe agreed to
    create passport-free passage across borders.
    Thus far, 15 of these nations have implemented
    the borderless policy, the others will comply
    in the near future. Security control is
    maintained by requiring people to show a passport
    upon leaving a signatory nation. Non-EU citizens
    can obtain a special visa to use instead of a
    passport.

71
SCHENGEN NO-PASSPORT ZONES
  • Austria , Belgium, Denmark, Finland, France,
    Germany, Greece, Iceland, Italy, Luxembourg,
    Netherlands, Norway, Portugal, Spain, Sweden,
    Switzerland

72
  • During 21C, the rest of the world will be
    evolving in the same direction as the EU less
    nationalistic regional cooperation power
    centralization the 2-generation effect

73
THE TWO GENERATION EFFECT
  • Peoples sense of history normally extends back
    only 2 generations, so over the next 20 years
    Europeans are likely to become less and less
    nationalistic as a result of emergent EU
  • regionalism.

74
  • EURO-NOMICS

75
  • 16 of 27 EU members that have adopted (1999) the
    Euro as their official national currency
  • PIIGS
  • Core EU govt. deficit nations
  • Portugal, Ireland, Italy,
  • Greece, Spain

76
  • PIIGS governments are in financial jeopardy due
    to high social welfare (vote-buying) deficits
    the high value of the Euro. Their rotten
    economies endanger the value of the Euro the
    existence of the EU.
  • PIIGS economies are too poor to afford the Euro
    on their own (like living in New York or Tokyo on
    a Waco income).

77
  • Northern EU nations subsidize their use of the
    Euro hence PIIGS social welfare benefits.
  • Germany the USA have pushed the EU to create an
    emergency bailout fund to use should any of the
    PIIGS go bankrupt.
  • EU USA leaders worry that this fund will not be
    adequate that the world doubts the stability
    of the Euro thus trade with the EU.

78
  • Should PIIGS be forced to drop the Euro reuse
    their weaker former currencies?
  • Should the EU cancel PIIGS membership to halt
    subsidies their economic baggage?
  • Is use of the Euro as the EUs official currency
    unrealistic hence the EU itself?

79
THE EU'S ADMINISTRATIVE STRATEGY
80
THE MODERN EUROPEAN MIXED CAPITALISM ECONOMIC
SYSTEM
  1. The state runs core economic sectors (public
    capitalism) and private companies the other
    sectors (private capitalism).
  2. The state owns parts of private companies and
    employs a significant number of people
  3. The state regulates the private sector shapes
    the overall economic system

81
  • 4. The state delivers an extensive welfare
    system generous welfare support, strong labor
    protections, single-payer health care systems,
    zoning restrictions on the encroachment of
    mega-retailers, subsides for child-care, pension
    security, pregnancy leave. Many European
    nations offer nationalized health care.

82
  • Germany, France, Italy are the big 3 economic
    powers in the EU, accounting for 70 of the
    regions total GDP.

83
THE EUS LURCH MUDDLE FEDERAL POWER STRATEGY
  • React to problems as they occur (such as approval
    of a constitution the admission of Turkey to
    membership) rather than have a principled master
    plan
  • Get the agreement and worry about the details
    later.
  • The nations will eventually cave in consent

84
  • Under the multiple-speeds EU, members
  • nations that want to experimentally
  • implement new policies (core Europe)
  • are free to do so, while other nations can
  • implement them when they are ready.
  • This approach would allow coalitions of
  • willing nations to work toward greater
  • cooperation in controversial
  • areas (such as defense the
  • constitution) and move ahead of those
  • nations who are uncertain.

85
SELECTIVE SUPPORT OF EU POLICIES
  • Only 13 of the EUs members use the Euro as their
    sole currency.
  • Fifteen have implemented the Schengen agreement
    for passport-free travel.
  • Sixteen nations have approved the proposed EU
    constitution 2 have rejected it.

86
Germany, France, the BENELUX nations
(Belgium, Luxembourg, the Netherlands) are the
lead climbers.
87
THE EUS UNOFFICIAL POLITICAL COALITIONS
  • In the absence of true European unity in a
    number of areas (immigration, addition of new
    members, approval of the constitution, foreign
    policy, etc.), EU members have aligned themselves
    into several birds of a feather factions those
    using the Euro vs. those who dont members of
    the Schengen passport-free zone nations
    participating in the Common Foreign Security
    Policy (the EUs rapid response military force)
    the 7-nation Prum group that seeks cross-border
    police border control cooperation those who
    support the membership of Turkey vs. those
    opposed the institutionalists vs. the
    incrementalists.

88
THE EU FEDERALIST GOVERNMENT OR CONFEDERATION?
89
EU INSTITUTIONALISTS vs. INCREMENTALISTS
  1. EU institutionalists want to seek integration
    primarily through creating formal institutions
    such as governmental units agencies
  2. Incrementalists would like to see the EU evolve
    slowly over time with maximum grass roots
    participation of member nations.
  3. Both factions agree that remedies for the
    following temporary structural compromises of the
    EU must be sought the 6-month rotating
    presidency the bizarre member weighted voting
    system a bloated European Commission
    (parliament) muddled foreign policy.

90
THE EUs FLIMSY POWER BASE
  1. Still in its infancy, the EU government lacks
    strong federalist (centralized) power over the
    member nations
  2. Brussels must thus rely on member
    cooperation/goodwill to advance its policy
    initiatives. Unless, members are happy
    campers, progressive change is tough to come by.
  3. An additional power problem for the EU is whether
    or not small, economically weak nations should be
    extended full membership privileges.

91
  • 7.Thus, in 2003, the EU developed an experimental
    European Neighborhood Policy originally
    designed to build informal, non-membership free
    trade relationships with areas outside, but
    strategically close to Europe North Africa
    (Morocco, Algeria, Tunisia) the southern
    Caucasus (former Soviet satellites Georgia,
    Moldova, Belarus, Ukraine) Eastern Europe
    (Bosnia, Montenegro, Macedonia, Albania, Serbia,
    Croatia, Bulgaria, Romania).

92
  1. These neighborhood nations would receive
    certain trading privileges with the EU but not
    become full-fledged members (due to their
    political economic deficiencies). The main
    benefits withheld would include passport-free
    travel, free movement of labor across European
    borders, agricultural subsidies, voting on
    constitutional issues.
  2. The EU government is now considering whether this
    neighborhood arrangement might be Europes
    future structurethe EU would become a loose
    confederation of first second class nations
    rather than a federation of nations all
    possessing the same privileges. This might be the
    best only way for Europe to continue to grow
    without contending with all of the problems of
    nations that are ill-matched economically
    politically.

93
  • Under this a la carte European (confederation)
    model, both full-privilege members
    partial-privilege neighbors would be able to
    pick choose among their benefits,
    responsibilities, desired level of
    self-governance.
  • The main drawback of a confederation EU structure
    (rather than a federalist structure) would be
    (1) less progressive government (2) rivalries
    between first class second class nations (3)
    diminished capacity of the EU government to
    upgrade the standard of living in weaker
    neighbor economies

94
  • Scandinavian nations Great Britain tend to be
    confederationists, preferring that the EU be
    mainly an economic free-trade agreement, but not
    the political union envisioned by the
    federalist-leaning Germans, French, Italians,
    Dutch, etc.

95
  • THE EU
  • CONSTITUTION

96
  1. In 2004, the EU put forth its first prototype
    constitution consisting of 200 pages 70,000
    words in length--10 times longer than the U.S.
    Constitution.
  2. In actuality, this initial constitution was a
    detailed rule book procedures manual for EU
    economic, governmental, and political policy

97
KEY FEATURES OF THE CONSTITUTION
  • Charter of fundamental rights
  • Primacy of EU law over national law
  • Gives the EU legal personality to sign
    international agreements
  • Provides nations with veto rights over direct EU
    taxation, foreign defense policy the EU
    budget
  • Right for EU members to leave the EU

98
ABCs of the CONSTITUTION
  • Approved by EU heads of state in 6/04.
  • To be adopted, they had to be ratified by all
    member nations.
  • 3. Under the prototype constitution, legislative
    policies would pass if approved by at least 15
    member nations, so long as they comprise at least
    65 of the 455M EU population
  • 4. Legislative measures can be blocked if vetoed
    by at least 4 member nations with 35 of the EU
    population

99
  • 5. Consolidates all previous EU treaties into a
    single document adds a bill of rights member
    expectations
  • 6. The constitution must be approved by ALL
    member nations (6 via popular referendum) in
    order to take effect
  • 7. Nations can re-vote as often as desired

100
THE CONSTITUTIONS PROGRESS
  • 16 EU nations have approved the constitution so
    far, but 2 (France the Netherlands) have
    rejected it. Four nations, led by Britain, have
    put their pending constitutional referendums on
    hold until EU leadership can figure out how to
    reverse the 2 no votes re-stabilize Europes
    current fractious political environment.
  • A period of reflection in 2006-2007 to gave EU
    members more time to resolve constitutional
    issues.

101
THE TWO NO VOTES
  1. The French rejected (by a 55 no vote) the EU
    competition in popular referendums in the summer
    of 2005, raising the specter of governmental
    paralysis as the EU hierarchy struggles to
    centralize enough power to run the economy
    foreign policy smoothly.
  2. 66 of Dutch voters voted the constitution down
    Denmark, Poland, the Czech Republic have said
    they will do the same thing.
  3. Since all EU members must approve the
    constitution, the no votes mean future
    constitutional compromise is mandatorybut how
    long will it take?

102
EU CONSTITUTIONAL WRANGLING
  • One size fits all member nations
  • 470M Europeans?
  • 2. Support the Constitution or leave the EU?
  • 4. EU parliament levying taxes passing
    federalist legislation?
  • 5. Popularly elected EU Commission President?
    (Until the constitution is approved, nations
    serve in a rotating ceremonial presidency every 6
    months)

103
  • 6. In the current debate over the new EU
    constitution, the 4 most populous nations
    (Germany, France, Britain, Italy) want a
    dominating 29 votes each in the EU Council of
    Ministers (sorta like the Executive branch of the
    USA), while Spain Portugal would get 27 each.
    The other EU members would then be left with less
    than 40 of the overall voting power
  • 7. The other nations back a proposal for laws to
    be approved by a simple majority vote as long as
    60 of the EUs overall population is represented
    in these votes.

104
  • 8. Uniformity of criminal law (such as legal
    drugs euthanasia
  • in the Netherlands)?
  • 9. Uniform immigrations policies, taxes social
    welfare benefits (the Scandinavian welfare
    state)?
  • 10. How can common citizens popularly elect EU
    govt. officials from diverse nations cultures?

105
  • Religious freedom? (No mention of religion in the
    constitution)
  • Womens rights?
  • Military inscription?
  • Citizens rights to
  • bear arms?

106
THE CONSTITUTIONAL ANXIETY OF EUROPEANS
  • 1. Worry over loss of national economic control
    at a time when many EU members nations are
    struggling economically and fear constitutional
    centralization will further sap their economic
    vitality
  • 2. Worry over possible diminished social welfare
    benefits in richer EU nations as poorer nations
    receive greater benefits under constitutional
    entitlement
  • 3. Worry that Europes recent economic stagnation
    high unemployment rate may be harder to reverse
    with 25 member nations all walking lock-step

107
  • 4. Worries about the mythical Polish plumber (
    other workers from low wage EU nations) stealing
    jobs away from workers in EU nations with a
    higher standard of living (especially Germany,
    France, Netherlands, Italy)
  • 5. Worry in non-Anglo/Saxon nations that A/S
    profit maximization (neo-liberal) capitalism
    might run rampant over community consumer
    rights social welfare benefits

108
  • 6. Worries about Europe's shrinking population
    heavy burden of providing for the retirements of
    a record number of baby boomers continued
    decline of Europes standard of living.
  • 7. Resentment among the Dutch, Germans, French,
    Swedes, Brits, Austrians that they contribute
    significantly more to the EU budget than they get
    back.
  • 8. Europeans feel geographically vulnerable due
    to their close proximity to unstable Russia
    Muslim nations.

109
  • Several EU nations (especially Britain) growing
    public opinion would prefer that the EU grow in
    an organic, grass-roots (non-federalist) manner
    that makes a constitution unnecessary.
  • Do you think Americans would
  • re-approve the U.S. Constitution if voted on
    today?

110
OPTIONS FOR BREAKING THE EU CONSTITUTIONAL LOG JAM
  1. Cherry pick which pieces of the constitution EU
    members do agree on and jettison the remainder of
    the document.
  2. Let nations who back the constitution proceed to
    operate under its provisions, while foot-draggers
    would carry on independently.
  3. Empower the 10 or 12 strongest EU nations to
    control the constitutional approval process,
    binding the other members.

111
  1. Seek to get approval for a future revised
    constitution via national parliaments instead of
    the more politically volatile grassroots
    referendum approach.
  2. To hem in the potential for controversy, reduce
    the number of constitutional provisions to a bare
    minimum.
  3. Abandon symbolic constitutional provisions (the
    EU flag design, adopting an EU national anthem,
    creation of an EU foreign minister position).

112
  • THE LISBON AGENDA A BACK DOOR CONSTITUTION

113
The Lisbon agenda (an 2000 EU developmental plan
that calls for the EU to become the worlds
largest most dynamic economy by 2010) outlines
a political agenda for the EU to phase in between
2014-2017 that achieves much of what the proposed
constitution seeks. The Council of Ministers
(made up of representatives of national
governments) will convert to majority voting
decision-making in which decisions will be
approved if 55 or more of nations representing
at least 65 of the EU population agree.
114
Majority voting will also go into effect in 50
policy areas, including immigration, criminal
justice, the policies of the European Court of
Justice. The European Council (comprised of the
heads of state) will elect their own president to
as many as 2 two-and-a-half year terms. A Charter
of Fundamental Rights will extend EU workers the
right to strike, access to preventive health
care, and governmental intervention into labor
disputes. Also a majority of national parliaments
have the right to protest any EU governmental
policy write an alternative proposal.
115
IS THE LISBON TREATY ALREADY DEAD?
  • Ireland rejected the Lisbon Treaty in the summer
    of 2008, raising doubts that the Lisbon reversion
    of the original EU constitution is viable. Even
    though the Lisbon treaty sought to improve the
    Brussels bureaucracy and synthesize a fairer
    voting system for EU members, few EU governments
    or institutions are genuine enthusiasts for the
    treaty in its present form. Most nations want to
    simply get it out of the way to move on to more
    compelling and viable issues.

116
The EU vs. AMERICA
117
WHERE EUROPE HAS THE EDGE OVER AMERICA
118
WHERE THE EU LEADS AMERICA IN QUALITY OF LIFE
  • Better income distribution High income Americans
    average 5.6 times more income than low-income
    Americans vs. 3 times more in Northern Europe
    3.3 times more in Central Europe. Overall, the
    U.S. has the highest income inequality of the 18
    wealthiest nations
  • During the 1980s, the U.S. had the least growth
    (-0.3) in total workforce compensation among
    developed nations

119
  • More Americans (17 8 of whites 24 of
    blacks) live in poverty than in the top 16
    European nations Finland 5.1 Sweden 6.6
    Germany 7.5 France 8 Netherlands 8.1
    Belgium 8.2 Spain 10.1 Ireland 11.1
    Italy 14.2.
  • 37 of Americans work more than 50 hours per week
    80 of male Americans work more than 40 hours.
    70 of Americans say they lack quality time with
    their children 61 say they rarely have excess
    time. Europeans average 4-10 weeks of vacation
    annually.

120
  • 48M (mostly working) Americans currently lack
    health insurance, even though America spends more
    on per person on health care (4900) than any
    other nation (primarily due to higher
    administrative costs associated with a complex
    net of private insurers).
  • The premiums of corporate-provided health care
    policies are rising by about 12 annually, and
    Medicare recipients about 15.
  • Americas future Medicare costs will be a
    tsunami compared to the a mere tidal surge caused
    by Social Security.

121
  • 8. Between 1997-1999, Americas homicide rate was
    6.26 per 100,000 vs. 1.7 per 100,00 for Europe.
    Americas rate of childhood diseases, suicides,
    and gun-related deaths are the highest of the 25
    wealthiest nations in the world. The homicide
    rate for American children was 5 times higher
    than the combined total of the 25 nations U.S.
    suicide rates for children were 2 times higher
    than the combined 28 European nations.

122
  1. The U.S. houses one quarter of all the prisoners
    in the world (2M). Europe has 87 prisoners per
    100,00 vs. 685 for the U.S.
  2. The U.S. has the highest rate of senior citizen
    poverty in the industrialized world.
  3. The EUs 2003 GDP was 10.5T vs. 10.4T in the
    U.S.
  4. Average number of annual vacation days for
    workers France (39) Germany (27) Netherlands
    )25) Britain (23) Canada (20) USA (12)
  5. Americas work a longer work day than Europeans
    take less time for lunch (29 minutes).

123
RECENT AREAS OF AMERICAN SOCIAL PROGRESS
  • Successful welfare reform
  • Improved racial attitudes
  • Rising volunteerism charitable contributions
  • Smooth absorption of recent immigration

124
EU vs. THE USA IN COMPETITIVENESS
  1. 61 of the top 140 global corporations are
    European vs. 50 for the U.S. 29 in Asia.
  2. 14 of the 20 largest commercial banks in the
    world are Euro 3 of the top 5 engineering/constru
    ction firms 5 of the top 10 food drug
    retailers 6 of the top 11 telecommunications
    firms 5 of the top 10 pharmaceuticals (with the
    U.S. having the other 5)
  3. In a recent survey by Global Finance magazine, 49
    of the 50 companies judged best in the world were
    European.

125
  1. Europe now has a larger share of small-to-medium
    size entrepreneurial firms (67 of the total Euro
    economy) than the U.S. economy (46).
  2. The EU lags behind the U.S. in value-added to
    high tech products, number of high tech patents,
    of workers with a high school degree. The
    U.S. lags behind Europe in number of
    science/engineering college grads
    government-financed RD in new capital raised.
  3. The U.S. consumes 1/3 more energy than Europe.

126
EU vs. THE USA IN PRODUCTIVITY
  1. From 1990-1995, 12 EU nations experienced higher
    productivity growth than the U.S. the U.S. moved
    ahead from 1996-1999, with a 1.9 productivity
    increase vs. 1.3 for the EU.
  2. In 2000, 6 European nations out-produced the U.S.
    in productivity per worker. The U.S. per worker
    output 38.83 vs. 45.55 for Norway 41.85
    for France.

127
DECLINING AMERICAN COMPETITIVENESS
  • The World Economic Forums 2006 annual poll of
    national showed that America fell from first
    place in annual competitiveness in 2005 to 6th
    place in 2006 due to the high deficits produced
    by Hurricane Katrina federal government
    corruption associated with the Abramoff political
    scandals restrictions on immigration and debt
    financing the Iraqi war. While strengths in
    technological innovation and economic efficiency
    explain Americas overall high ranking of 6th,
    the economy suffers from significant weaknesses.
    The World Economic Forum concluded that Americas
    overall future competitiveness is currently at
    risk, which means that the future of the overall
    global economy is also at risk given Americas
    dominate position in the global marketplace.

128
AMERICAS FALLING LIFE EXPECTANCY
  • A 2007 survey disclosed that 41 nations
    (including almost all of Europe) have a longer
    life expectancy than America. The average
    American lifespan of 77.9 years ranks 42nd in the
    world (down from 11th two decades ago). Health
    experts blame the sky high American obesity rate
    and luxury lifestyle available to most Americans.
    Somethings wrong when on of the richest
    countries in the world, and the one that spends
    the most of health care, is unable to keep other
    with other developed countries.

129
WHERE AMERICA HAS THE EDGE OVER EUROPE
130
  • European markets (especially in the big 3
    economies of Germany, France, Italy, which
    produce 1/3 of the EUs entire regional GDP) are
    over regulated inflexible due to unions, high
    employee benefits, complex government
    regulations.

131
  • Right now, Europeans seem to look to the future
    with more fear than hope. The core fact is that
    the European model is foundering under the fact
    that billions of people are willing to work
    harder than the Europeans are. The recent Western
    European standard of living is about a third
    lower than the American standard of living, and
    its sliding. Europeans clearly love their way
    of life but dont know how to sustain it.

132
  • Europe resembles a teenager who has just gone
    through a tremendous physical growth spurt but
    without a parallel growth in intellectual and
    moral maturity physically an adult but
    philosophically an adolescent.

133
EUROPES DECLINING POPULATION
  • 18 European nations have a declining population
    rate. France, Britain, the Netherlands, Norway
    are holding their own with a fertility rate of
    over 2.0. Italy Spain have the most pessimistic
    future population outlook.
  • Number of children per family France 1.7
    Germany 1.3 Italy 1.2 Spain 1.1
  • By 2050, Spains population will decline by 31M
    to 40M Germany will lose more people than in
    all of former East Germany.
  • 55 of EU workers will retire over the next 25
    years its total workforce will shrink by 8.
  • If these population trends persist, Muslims will
    emerge as the dominant ethnic group in Europe by
    2050

134
  • Why is Europe committing demographic suicide,
    systematically depopulating itself well beyond
    what the Black Death wrought in the 14th century?
    Europe is experiencing a crisis of civilization
    morale today stemming from its violent wars of
    the 20th century, loss of religion, and its
    profound secularization. It has forgotten its
    history. Europeans have convinced themselves
    that in order to be modern and free, they must be
    radically secular. That conviction has had
    crucial, indeed lethal, consequences for European
    public life and culture.

135
WHAT EUROPE MUST DO IN THE FUTURE TO IGNITE MORE
ECONOMIC GROWTH
  • Strengthen the work ethic
  • Strengthen innovative entrepreneurship
  • Rein in the cradle-to-grave social welfare
    system
  • Increase indigenous population growth
  • Keep the EU governments bureaucracy in check

136
  • 1. Americas population is rising more
  • than twice as fast as the EUs. In the
  • 20th century, Americas population
  • increased by 250 vs. just 60 in
  • France Britain.
  • 2. America has freer markets U.S.
  • companies capitalize on new
  • technology at a faster rate.
  • 3. America spends twice as much as Europe on
    higher education.

137
  1. New markets are easier for American companies to
    penetrate in comparison with European companies.
  2. Americas markets for financial capital are
    deeper than European capital markets.
  3. The hyper-competitive American marketplace weeds
    out weak, uncompetitive companies more
    efficiently than Europes competitive system.

138
  • ECONOMIC PERFORMANCE OF THE EUs 4 MEMBERSHIP
    GROUPS

139
  • ANGLO-SAXONs High employment rates but
    significant economic inequality
  • CONTINENTALS Good at helping people avoid
    poverty (due to generous social benefits), but
    sub-par job creation
  • MEDITERRANEANS Sub-par performance in both
    elimination of poverty avoiding unemployment
  • NORDICS Successful in both economic performance
    areas of poverty reduction achieving high
    employment

140
FUTURE CHALLENGES FOR THE EU
141
The EU has accomplished most of the easy stuff
is currently stuck in a holding pattern waiting
for a constitution to be approved determining
where Turkey Russia fit in stabilizing its
many struggling new members. Future progress
promises to be much tougher to come by.
142
THE ROADBLOCK OF LOW CITIZEN AWARENESS
  • 90 of Spaniards werent aware of the EU
    constitution
  • 25 of Brits didnt know GB belonged to the EU
  • 31 of Germans had never heard of the EU
    Commission (the EUs giant Civil Service)

143
PERCENTAGE OF EU MEMBERS WITH A POSITIVE IMAGE OF
THE EU
  • Italy 58
  • Spain 56
  • Portugal 55
  • Turkey 53
  • France 45
  • Slovakia 42
  • Poland 38
  • Germany 36
  • Netherlands 33
  • Britain 27

144
OF EUROPEANS WHO FEEL THE EU SHOULD BE A SUPER
POWER LIKE THE USA
  • France 82
  • Netherlands 77
  • Spain 75
  • Germany 71
  • Italy 71
  • Poland 68
  • Portugal 66
  • Britain 58
  • Turkey 40

145
SOCIALISM THE EUs ARTERIOLOSCLEROSIS
  1. Bloated welfare/pension/health-care system
  2. Rigid labor market regulations unionism, short
    work week, early retirements
  3. Sweden/Denmark/Finland spend 33 of GDP on social
    benefits (vs. 25 for Germany France 14 for
    USA).
  4. For every 100 working Europeans, 35 are on
    pensions by 2050, there will be 75 on pensions
    for every 100 working

146
ONE-UPMAN-SHIP vs. THE USA
  • The EU is gunning to surpass America as the
    worlds largest economy by 2010
  • The EUs political rivalry with the U.S. is
    reflected in its post 9/11 anti-American foreign
    policy stances

147
THE EU WANTS ONLY EUROPEAN COMPANIES TO HAVE THE
RIGHT TO USE THE FAMOUS NAMES OF THE FOLLOWING
REGIONAL EUROPEAN FOOD PRODUCTS
  • Champagne
  • Cognac
  • Burgandy
  • Chianti
  • Madeira
  • Port
  • Mozzarella
  • Roquefort
  • Feta
  • Bologna
  • Nougat
  • Saffron
  • Parmagian

148
EU-USA TRADE TENSIONS
  • Unresolved disputes over U.S. tariffs, ag.
    subsidies, U.S. airline subsidies, EU beef
    hormones, genetically modified foods
  • EU trade commission fined Microsoft 613 million
    (500M Euros) in 2004 for monopolistic practices
    in Europe an additional 357M in 2006 for
    failing to comply with the 2004 antitrust order.

149
  • 3.In the summer of 2005, the EU broke up
    Coca-Colas dominance (50 market share twice
    the sales of the nearest soft drink competitor)
    of the European market by outlawing exclusive
    contract arrangements Coke forced its retailers
    into. Coke can longer require retailers to give
    shelf space preference to Coke products or to ban
    certain products of competitors. The EU ruled
    that Cokes competitive practices were unfair and
    in restraint of trade.
Write a Comment
User Comments (0)
About PowerShow.com