European Union
In 1967, three European institutions merged. The three institutions were
the European Coal and Steel Community (ECSC), the European Economic Community
(EEC), and the European Atomic Energy Community (Euratom). When the three
merged, they formed the European Community or EC. On November 1, 1993, the 12
members of the European Community ratified the Treaty on European Union, or
Maastricht Treaty. The twelve members were- Belgium, Denmark, France, Germany,
Great Britain, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal,
and Spain. The countries of the Benelux Economic Union- Belgium, the
Netherlands, and Luxembourg- continue to and in some ways as a single economic
entity within the European Union. The EC became the policy-making body of the
European Union.
In 1994 Austria, Finland, and Sweden became members of
the European Union. By 1997 more than a dozen countries had applied for European
Union membership, but the European Union had only admitted the three listed
above. The other countries that applied for membership include Turkey, Cyprus,
Malta, Switzerland, Hungary, Poland, Romania, Slovakia, Latvia, Estonia,
Lithuania, Bulgaria, and the Czech Republic. Of those countries, six are
considered associate members of the European Union: Bulgaria, Czech Republic,
Hungary, Poland, Romania, and Slovakia. Three other countries-Estonia, Latvia,
and Lithuania-are being considered for associate membership. Other potential
European Union applicants include members of the European Free Trade
Association. The European Union was expected to decide which counties it would
open negotiations for full membership with by the end of 1997.
The
purpose of the European Union was to increase economic integration and
strengthen cooperation among its member states. European citizenship was granted
to citizens of each member state, under the Treaty on European Union. Customs
and immigration agreements were enhanced to allow European citizens more freedom
to live, work, and study in any of the member states, and border controls were
also eased. The European Union also set a goal of establishing a single European
currency, the Euro, by 1997; this date was later changed to 1999. It is proposed
that full circulation of the Euro is to be in effect by the year 2002. At that
time the individual states notes will no longer be valid.
The European
Union’s attempts to establish a single European currency have had some
controversy. An example is, some member countries, such as Great Britain, have
worried that a shared European currency would threaten their national identity
and their government’s authority. On the other hand, some of the other European
Union member countries have been struggling to meet the economic requirements
for participating in a common currency. To meet the requirements, which include
a budget deficit of no more than three percent of their gross domestic product,
by the deadline of late 1997. To meet the requirements some countries have
imposed budget cuts and new taxes. Some of the measures taken by these countries
have faced some resistance.
The people who will mainly benefit from the
common currency are the European citizens. The overall benefit that the euro
will bring is a stable economic environment that will lead to low inflation and
low interest rates. There are three main areas that the member states will gain
savings from, they include, reduced losses created by currency exchanges, lower
costs created by better competition in the euro zone, and a more favorable
trading and investment environment for local businesses. The reduction of losses
due to the elimination of currency exchanges within the euro zone will produce
almost a whole percentage point of annual European Union GDP every year. The use
of a common currency will allow easier price comparisons in the member states.
By eliminating the currency exchange risk, economic and monetary union will
bring more business and trading potential to commercial companies, especially
small and medium-sized businesses. Large European companies will have a
reduction in a lot of their costs, mainly in the processes of foreign exchange
transactions.
Consumers will benefit greatly from the common currency.
Some of the benefits include: reduced costs for traveling to other countries;
easier and less expensive transfer of funds to other countries; increased
competition between businesses, which will lead to lower prices; low interest
rates; and more economic growth, which will lead to increased job security. The
European Union has recognized that the translation of values to the euro will be
confusing to the public, so considerable efforts will be made by private
operators and public authorities to make it as easy as possible for the
people.
The main entities that will have a disadvantage from the
transition to a common currency will be the companies, large and small, that
have failed to adequately prepare for the
changes.
Bibliography
"Europa" European Union.
Online.
http://www.europa.eu.int March 6, 1999
"European Union"
European Union. 1994. Online.
http://www.encyclopedia.com/articles March 6,
1999
"European Union" Microsoft Encarta Encyclopedia. Microsoft. 1998
ed.
1993-1997