What is the European Union (EU)?
The EU is the result of a process of co-operation and integration, which began in 1951 between six countries (see ‘What is the EC?’ below).
The ‘EU’ name came into use on 1 November 1993 when the Maastricht Treaty entered into force. The EU united under one ‘roof’ the three ‘pillars’ of European co-operation.
These are:
- the European Community (including the single market and single currency) as the first pillar;
- the Common Foreign and Security Policy as the second pillar;
- the area of Justice and Home Affairs co-operation as the third pillar.
In the first pillar, the member governments act as the Council (often taking decisions by majority vote) with the full involvement of the other EU institutions. In the second and third pillars, decisions are based on intergovernmental processes. This means that Member States act together to reach a joint position based on consensus. Other Community institutions, such as the European Commission and the European Parliament have a more limited role in these pillars.
What is the European Community (EC)?
The Treaty of Rome established the European Community in 1957. The six original members (Belgium, France, Italy, Luxembourg, the Netherlands and West Germany) negotiated it. The phrase ‘European Communities’ is used to denote the European Coal and Steel Community (established 1951), the European Economic Community (established 1957) and the European Atomic Energy Community (established 1957). The European Economic Community was renamed the European Community in 1992 (incorporating the other Communities) and remains a separate legal entity within the Union.
What does EU enlargement mean for the UK?
An enlarged European Union will mean greater European stability and security; more UK jobs, trade and prosperity (research estimates are that enlargement will add £1.75bn to UK GDP and create 300,000 jobs across the EU); and help countries to tackle global problems - such as cross border crime and pollution - more effectively.
News story: Bill to pave way for EU enlargement(02/05/03)
How are EU policies taken forward?
Policy proposals are initiated by the European Commission. The European Commission is the executive organ of the Community (the equivalent of our civil service). There are twenty Commissioners and each one is allocated an area of responsibility, for example agriculture or trade.
In the UK, the proposal is considered by the relevant Government Department. A proposal on health policy would fall to the Department of Health for example. Other Departments may have an interest - in particular, the Treasury will want to consider the budgetary impact of any proposal. If there is a dispute over policy, this will be resolved at ministerial level through aCabinet Committee chaired by the Foreign Secretary.
What about Britain’s Parliament?
Parliament is kept informed of all Community proposals through Explanatory Memoranda that set out the proposal, the estimated costs of compliance, and the financial consequences. The proposals are considered by the Scrutiny Committees in both the House of Commons and the House of Lords. These committees meet regularly and their reports can be read on the Parliamentary Publications website.
So it’s all decided by civil servants?
No, the Council of Ministers (Council of the European Union) decide whether proposals will become law. The Council consists of Government Ministers from each of the member states. Its membership will change according to the topic under discussion. For example, Finance Ministers will attend if the topic is economic and financial issues. Foreign Ministers meet once a month in the General Affairs Council; and Heads of State or Government usually meet twice a year in the European Council.
Where does the European Community’s authority to act come from?
The activities, or competencies, of the European Economic Community, as the European Union was then known, were first set out in the 1957 Treaty of Rome. Their main aim was to establish a common market between the Member States. They included:
- The elimination of customs duties and other trade barriers;
- The establishment of a common customs tariff towards third countries;
- The abolition of obstacles to freedom of movement for people, services and capital;
- The adoption of a common policy in agriculture;
- The adoption of a common policy in transport;
- The setting up of a competition system to ensure no distortions in the common market;
- The approximation of laws between Member States necessary for the proper functioning of the common market;
- The establishment of a European Social Fund to improve employment opportunities and living standards for workers;
- The association of the overseas (former colonial) countries and territories to increase trade and promote their development.
To what extent has the Community’s competences increased?
The Treaty of Rome still provides the basis for the most part of the European Union’s decisions and responsibilities, but it has been added to by a number of other Treaties and protocols over the years. Most importantly:
- The Single European Act (agreed in 1986) led to the adoption of a programme of nearly 300 measures to complete the Community’s Internal Market. It also gave the Community competence in the area of the environment.
- The Treaty of the European Union (1991), also known as the Maastricht treaty, provided inter alia for the setting up of an economic and monetary union (EMU); the development of common foreign and defence policies; and the confirmation or extension of Community powers in education, trans-European networks, industry, health, culture, consumer protection and development policy.
- The Treaty of Amsterdam, which came into force in 1999, inter alia strengthened the arrangements for a Common Foreign and Security Policy; brought the Schengen Agreement as well as asylum and immigration policies into the Community framework (Pillar One); incorporated the Social Chapter into the Treaty; and added an employment chapter.
What does the European Community spend its budget on?
The Community budget is very small compared to national budgets, some 86bn euros or just over 1 per cent of the Community’s Gross National Product.
Just over 40 per cent of the budget is spent on agriculture and fisheries; a further 40 per cent is spent on ’structural funds’ that includes regional policies, social policies and the Cohesion Fund which is aimed at assisting infrastructure investment in the four poorest member states.
Around 5 per cent of the budget is spent on research, industry, transport and energy; and some 6 per cent on development co-operation.
What about joining the single currency?
In a statement to Parliament (9 June 2003), Chancellor Gordon Brown said that the case for UK membership of the single European currency has not at the present time been made and a decision to join now would not be in the national economic interest.
Watch the statement in full:
- Windows media
- Realplayer
- Read the statement in full>>>
The Government is using five economic tests to judge the UK’s readiness to join the single European currency. These are:
- sustainable convergence between Britain and the economies of the single currency;
- whether there is sufficient flexibility to cope with economic change;
- the effect on investment;
- the impact on the financial services industry;
- whether it is good for employment.
Mr Brown said real progress has been made towards meeting the five economic tests but concluded that at this present time they had all not been met, including those on sustainable convergence orflexibility, which wouldallow the UKto cope with any potential difficulties within the euro area.
The Chancellor said the Government intends to join the single currency if the five tests are passed. The Government would therefore recommend the British people to vote yes in a referendum to join, he added. Mr Brown announced that a draft referendum Bill will be published later this year.
Useful websites
- FCO (external link)
- European Union (external link)
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