Institutions and Politics of the European Union

Compulsory Question

Introduction. The European Union (EU) is often described as a supranational union, or a loosely organized federation of nation-states that elect officials into organizations that make legislative, executive and judicial decisions on behalf of everyone. In the EU, there are 27 member states and seven separate entities that control it: European Parliament (EU), Council, European Council, European Commission (EC), the Court of Justice of the European Union, the Court of Auditors and the European Central Bank. Together, these entities control the decision-making process and require input from representative nation-states, their governments, and constituents. The EU is mostly comprised of nations that are in Europe. The EU has control over matters that deal with social, economic and political matters. For a law to be passed, it must go through a specific process where each relevant institution plays an integral role in proposing, auditing or agreeing to the final proposal. 

Decision-making process. Before any legislation is passed, it is first evaluated by the European Commission (EC) for the benefits that it would offer for the whole Union. The EC also deals with intergovernmental agencies that are similar to interest groups that must deal with the implications of any law. The EC is ultimately the first step, or initiative, in drafting a new EU law. Institutions like the Council or other parties can formally request laws to be passed; however, they must first go through the EC. Afterward, the Council and EP audit the legislative proposal and offer potential changes or amendments. If the EP and Council do not agree, then they must go through a process of resolution by proposing further amendments. If both of these entities agree, then the law is passed. Finally, the European Council can propose legislation directly to the Commission.  

Example of legislation. One example of a law that went through this process is Directive 2009/136/EC, which dealt with online users’ universal right with regard to electronic communication. Mainly, the law dealt with how private data was utilized, stored and dealt with on the World Wide Web. This directive was first proposed by the Commission 2001 and made into law in 2002. The law required the input and advice from various EU organizations: European Economic and Social Committee, Committee of the Regions and the European Data Protection Supervisor. All of these institutions added their own opinion on what would be best. Afterward, the directive was sent to the EP and the Council for further review. Here, the legislation underwent numerous amendments (the latest one being in 2009) until it was passed. Also, the EP and Council had to engage in discourse until they agreed on the final law. One example where one entity exercised the power of veto over it was in regards to the treatment of cookies, or bits of data that websites store. The EP fought vigorously to make websites disclose to users what data they retained. As a result, both parties had to compromise until the law was passed into legislation. 

Question Two: Major aspects and milestones of the EU’s supranational integration process for the Economic and Monetary Union.

Major aspects and milestones. The Euro is the second most widely used currency in the entire world. It is used by over half of the nations in the European Union and some 330 million individuals. In the collection of nations that utilize the Euro as their primary form of currency, the Eurozone, it is one of the largest economies of the world. In 2012, the EU reached a milestone of having almost a hundred billion dollars in circulation, a contrast to what would later occur with Brexit. It is managed by the European Central Bank, an entity that has almost complete control over the policies and regulations surrounding the ubiquitous currency. 

Consequences. While having one centralized currency that is shared by numerous nations is advantageous in terms of uniformity and trading, it does offer some consequences within this same regard. For example, if a few nations like Greece and Spain undergo a severe debt crisis, then the rest of the European Union follows suit in terms of the impact. If Greece and Spain go completely under and declare themselves bankrupt in the Eurozone, then the accountability falls of the other nations to help them in the form of a bailout. Since the currency would be suffering in one country, other countries would face the same financial implications. If these nations (or others) resort back to their old currencies, then billions of dollars worth of trades and contracts would have to be re-evaluated under a different currency. Otherwise, many companies would be forced to declare bankruptcy and rely on the IMF and European Central Bank for support in the form a bailout. 

To exemplify, the case of Spain shows that such a high potential bailout (100 billion Euros) would result in a heightened debt ceiling and an interest rate that would skyrocket. Surely, higher interest rates and potential inflation in the Eurozone would not be mutually exclusive for the financially delinquent nation; the effects would be felt in every other nation. Greece is the same story in terms of the financial risk for global finance and trade. For instance, when Greek government bonds (which are tied to the Euro) were deemed as ‘junk’ by analysts, investors suddenly lost their confidence in the nation and the nation saw a debt crisis. Like Spain, this resulted in a bailout that had to be paid by International Monetary Fund in the form of a loan. However, this bailout was still in the form of a loan that brought down the integrity of the Euro as a whole. 

Implications of a single currency. Clearly, the implications of a single currency are that one country alone cannot suffer if its economy goes down. Every country that uses that currency is going to face an economic downturn simultaneously. 

Question Three: Explain the major aspects of EU’s Common Agricultural Policies and the reform process it has been going through.

Major aspects. The EU’s Common Agricultural Policies (CAP) are a unified set of laws and regulations that are aimed at controlling agricultural output, prices and the nature of importing/exporting activities. CAP’s primary aims are to protect farmers’ ways of lives through guaranteed subsidies, minimum prices and protection from foreign importers through tariffs and quotas. Also, another major purpose of CAP is to ensure that consumers have fair prices for buying commodities such as sugar, wheat, and vegetables. Mainly, the major interest is protection over the EU’s agricultural marketplace against global competitors. The EU’s policies are similar to that of the USA and other nations that depend on government intervention for the prosperity of agricultural products. 

Reform Process. While major reforms began to really come to fruition around the year 2000, the last seven years have shown many attempts to utilize CAP as a productive form of government support rather than a wasteful one. For instance, legislation proposed that spending should be decreased by about 30% after 2013 because of new measures taken place to avoid surpluses or unfair market practices. Since almost fifty percent of the EU budget is spent on CAP, it is a formidable amount of money to contend with. Also, many have sought to decrease the amount of leverage and control that the EU had over importing. Since other nations depend on the EU for importing their goods, less intervention by the controlling authority would result in a more competitive market. However, the EU’s interest is mainly to protect farmers and consumers. So, there is a clear balance that needs to be achieved. 

Pros and cons of CAP. While there are some positive aspects of CAP, there are many negative facets of it that have come under intense international scrutiny. For example, many international exporters like Russia and China have expressed that the EU’s localized protection of farmers through importing quotas and high tariffs is anti-competitive in nature. The EU has been criticized in comparison with the USA for these types of practices. Also, since external nations rely on cheap import prices from EU manufacturers, lower subsidies clearly impact how much they have to pay if EU farmers are charging higher prices without subsidies. Together, market fairness and the overwhelming control of agricultural prices have been criticized as being negative facets of CAP.

Despite this, CAP has pros in the form of helping poor people make a living through agricultural goods. Domestically, many of the poorest people in the EU depend on subsidies in order to make a living and survive. Even when there is an overwhelming surplus of domestic production (which EU regulators see as a waste of subsidies), foreign nations benefit from the cheaper prices that they pay for goods. 

Question Four: Explain the external policies and foreign policies of the EU.

External and foreign policies of the EU. In being a complex political body that encompasses many national and regional interests, foreign and external policy is a complicated matter of the EU. It is important to understand that the EU relies on various organizations and groups within itself for certain areas of interest. For example, while the EU has much influence and control over commercial matters, policies like the Common Foreign and Security Policy (CFSP) control how diplomatic and security relations are handled. This requires cooperation with other third-party organizations like the WTO and others. Moreover, while the EU strives for a consensus over all matters of foreign policy, it is important to understand that select nations exert a higher level of influence in the international landscape: Germany, France, and the United Kingdom. 

Policy objectives and implementation. The EU’s foreign commercial objectives are to effectively reduce barriers to trade while assuring that third world nations have access to the benefits of globalization. By the numbers, the EU comprises 20% of the world’s total global trade activity. Because of that, the EU works hard to make sure that trade is fair, accessible and regulated with respect to all nations that want to actively participate. Often times, the EU must work closely with organizations such as the WTO in order to foster a global effort. Other times, the EU must make agreements and promises with individual nations. Ultimately, these policies are implemented through increased collaboration and communication. With respect to trade, both the EU and other nations have an incentive to keep the peace and be collaboratively involved in coming to swift resolutions. After all, if the EU is not allowed to trade with a nation because of issues, then every part suffers.

Implementation problems, security, and diplomacy. In regard to security and keeping the peace, the EU faces formidable challenges. Unlike commercial interests which are more universal through uplifted trade restrictions, different nations have strong perspectives on what is appropriate for military intervention and such. For instance, the EU had implementation problems when dealing with Yugoslavia through NATO. This effort was seen as a disaster as the EU did not show to have much actual authority through muscle over the delinquent parties. Having reliance on other organizations for peace-keeping has forced the EU to utilize its own means of internal policing and military intervention. However, this has posed even more problems as it is oftentimes difficult to reach a consensus when so many different nations have different interests. One example is the USA-Iran conflict. The EU could not simply align every nation towards a unilateral agreement that the USA should be supported. As a result, military and diplomacy implementation of foreign policy has been ineffective and difficult to coordinate.