Europe 1945–2000 and Monetary Union

Background implications

The European Union has its origins in the European Coal and Steel Community, a union of six nations, established in 1951. In the year 2000 it is a union of 15 nations; this could well have doubled by 2020. The Euro and Schengen accords (open borders) have undoubtedly brought nations closer in Europe, with increasingly developed local and regional power relationships between the EU’s diverse membership assured. Involvement in Europe brings huge trade benefits; despite the globalisation of business, EU members do most of their trade within Europe. However, political ambivalence has weighed heavy around the EU’s neck since its inception, in terms of foreign and security policy.

The EU’s GDP in 1999 = $8 458 billion. The USA’s = $9 190 billion. Japan’s = $4 380 billion.

CASE STUDY - The single market and the Euro - EU members signed the Maastricht Treaty in 1992. Amongst the many things established, was a single economic and monetary market and currency by 2000–2002, the aim being to bring price stability to the everenlarging European Union.

In January 1999, 11 of the 15 members of the EU joined the EMU (European Monetary Union). The UK, Sweden and Denmark opted to stay out (Greece didn’t meet convergence criteria – but will join the EMU in 2001). If the EU enjoys a major boost and trade and GDP increases, Sweden, the UK and Denmark (whose peoples at present are all broadly opposed to the Euro) may well adopt it. In the first year and a half of trading the Euro has proved to be rather weak against the dollar, losing 20% plus of its original value since it was introduced.

In 2002 it completely replaces the natural currency of those under EMU at present. All financial business will then be subject to the financial disciplines of the ECB (European Central Bank).

The EMU/ECB and Euro will have massive economic and political clout, and the UK, Sweden and Denmark will surely think differently about their membership of the EMU. Already some big businesses are trading in Euros to ensure continued business footholds and stakes in the rich European Markets.

Summary

At least 12 other European States have shown great interest in joining the EU. We live in a rapidly changing Europe and one that will increasingly shape our lives. Three important European groups will in particular increasingly influence our lives through the next century.

• WEU the Western European Union was first formed as a defence grouping in 1948, and it has been revived as Europe’s Security Force. It consists of a 60 000- strong ‘rapid reaction’ force, of European multi-national forces. It’s thought it will replace NATO’s role in Europe in time.
• COREPER (the Committee of Permanent Representatives) is Europe’s top decision making body made up of national ambassadors who work to bring to fruition the dictates of the European Council, the heads of government and foreign ministers of member states.
• EP (European Parliament) has no law-making ability, but does control the EU budget.