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1.4.  Main facts regarding European integration

    The course of the multinational integration process in the European Community/Union is determined by three currents that converge at certain points and strengthen the main flow: (a) the increasing number of the participants; (b) the continuous raising of their goals through the passage from one integration stage to another; and (c) the constant increase of their activities by the development of common policies. It is worth recapitulating the main facts on these major trends of European integration.

    The membership has kept growing together with the tasks assumed by the team. The multinational integration process began in 1951 as a customs union concerning only the coal and steel sectors of six countries on the basis of the ECSC Treaty. In 1958, these same countries extended the operation of the customs union and of the common market to all the sectors of their economies, thanks to the EEC Treaty. In 1973, they were joined by three countries, which had originally preferred intergovernmental cooperation inside a free trade area. In 1992, the builders of the common market had become twelve, had completed the work on that stage of their integration on the basis of the Single European Act and had signed the Treaty of Maastricht leading them to the next stage of their integration [see sections 2.2 and 6.1]. In 1995, the builders of the union were joined by three more states, which had originally believed in the benefits of the free trade area and, in 1997, the fifteen had decided to perfect their area of freedom, security and justice, on the basis of the Treaty of Amsterdam [see sections 2.3 and 8.1]. In 2007, the fifteen had opened the door of their enterprise to twelve more states, most of which less than twenty years before were considered to be their antagonists, were perfecting their economic and monetary union [see section 7.2.3] and were progressing in their political union on the basis of the Treaty of Lisbon [see sections 2.5 and 8.2].

    Despite the successive enlargements, the multinational integration process in Europe has followed a steady evolution in stages of ever closer economic convergence - customs union, common market, economic and monetary union - and is proceeding towards the final stage of political union. The customs union, nowadays taken for granted and almost forgotten, formed the solid foundation of the entire European edifice. The problem-free removal of customs barriers to trade filled the apprentices of European construction with the enthusiasm necessary for climbing up the steep and unfamiliar road of integration [see section 5.1.1]. The stage of the common market, completed in 1992, meant the freedom of movement within the single market of goods, persons, services and capital [see chapter 6]. These freedoms revolutionised trade and competition, the working methods and the economic conditions in the Member States of the Community. The reduction of administrative and financial costs of intra-Community trade and the realisation of economies of scale liberated the dynamism and the creativity of European businessmen and gave them a solid foothold from which to sustain international competitiveness [see section 6.2].

    In December 1991 in Maastricht, the Member States decided to initiate the next stage of their integration, viz. economic and monetary union (EMU), implying a single monetary policy, necessary for the management of a single currency, and the convergence of national economic policies, with a view to achieving economic and social cohesion. EMU was based on the common market in goods and services, but itself served the proper functioning of the common market, by eliminating exchange rate variations between Member States' currencies, which hindered the interpenetration of capital markets, disturbed the common agricultural market and prevented the common industrial market from wholly resembling an internal market. This stage of the integration process was completed with the successful circulation of the euro, on 1st January 2002, just ten years after its conception.

    At the same time that they designed their monetary integration, in Maastricht, the Member States decided to coordinate their non-economic policies as well, i.e.: justice and home affairs policies, in order to achieve a common area of freedom, security and justice; and their foreign and security policies, so that the economic giant that they were creating through economic integration would have a voice commensurate with its size in the international arena [see section 2.3 and chapter 8]. They have, thus, reached the threshold of political integration; but although the new common policies in the political field were given a boost with the Treaty of Lisbon, foreign and security policy is still detached from the prime objective of the EC/EU: an "ever closer union among the peoples of Europe".

    The preceding summary of events and trends demonstrates the extraordinary success of the multinational integration process as practised in Europe since the early 1950s. This success was due to the construction method taught by Monnet and Schuman, which is that of a step by step advance after careful evaluation of the previous experience. Brick upon brick, act after act, as taught by the old masters, the European edifice has been built up and is still expanding. Every new measure fits so well into the adjoining provisions that it fills a gap while consolidating the whole structure [see section 3.1]. In fact, the successful formula of European integration is based on common policies built by common institutions following the Community method. These three ingredients of the integration formula, amply brought out in the various chapters of this book, merit some observations.

    The fundamental elements of the multinational integration process are common policies pursuing common goals and serving common interests [see section 1.1.2]. The supreme interests of the citizens of the participating states are the assurance of peace with their neighbours and the increase of their wellbeing. The common policies of the European Community/Union serve those interests well. They have transformed the former enemies into partners. War between the members of the Union has become unthinkable and the wellbeing of their citizens has greatly increased through the constant development of their economies and through the abundance of good quality products and services inside the single market. In addition, the common policies attain a great number of secondary common goals. They monitor the free exchange of industrial and agricultural goods between the Member States. They stimulate and support the development of the poorer regions of the Union. They guarantee the rights of the citizens of the Member States to travel, to live and to work wherever they choose within its territory. They facilitate the access of all citizens to the universal banking, insurance, telecommunication and audiovisual services offered in the large European market. They bolster the competitiveness of European industries by imposing uniform rules of competition and by supporting their efforts in research and development. They prepare the future by laying the foundations of the information society and of transport, energy and telecommunications trans-European networks spanning the whole Continent. They try to protect in a uniform way the environment and the consumers of the member countries. Certainly, none of these policies is perfect, but all of them are under the constant scrutiny of the common institutions and they are amended very often, in order to be adapted to the new needs that emerge from internal or external causes.

    The common policies are closely knit together and support each other. Two horizontal policies - regional and social - pursue the objective of economic and social cohesion [see section 12.1.2], which is linked to the objective of economic and monetary union. Such a union, implying abandonment of the use of exchange rate adjustment as a means of balance of national economies, would be to the detriment of the poorer Member States, if there was not an efficient common regional policy operating capital transfers from the richer to the poorer regions of the EU [see section 12.1]. In fact, thanks to the common regional policy the standard of living in the Union's poor regions increased considerably and they recovered a great part of their disadvantages. Likewise, inside an economic and monetary union, where governments gradually lose the ability to confront separately the social problems of their peoples, since monetary and many economic decisions are taken in common [see sections 7.2 and 13.1], the process of social integration is pursued through common employment, vocational training and social protection policies. The common social policy has already built a "European social model" which guarantees, not only fundamental human rights and the democratic and pluralistic principles, but also the fundamental rights of workers: training adapted to the technical progress, fair pay allowing decent living conditions and social protection covering the hazards of life, illness, unemployment and old age [see chapter 13]. This model is the social bedrock of the European integration process.

    Three other horizontal common policies - on taxation, competition and environment protection - ensure a level playing field for European businesses. The harmonisation of indirect taxes brought about by the common taxation policy is instrumental for levelling the competition conditions inside the single market of products and services. The common competition policy is not only a necessary instrument for the smooth functioning of the internal market, preventing new compartmentalisation by the agreements of large companies and protectionism by national administrations through national aids, but is also a complement to common sectoral policies - industrial, agricultural, energy, transport - aimed at improving production structures and achieving international competitiveness. The common environment policy is essential, both for even-handed competition between nations respecting both market laws and citizens' welfare and for the sustainable development of the European and world economy.

    The large sectors of the European economy - industry, energy, transports and agriculture - are organised gradually at European level by the legislation of the single market and by specific legislation adopted in the context of sectoral common policies [see Part V]. In fact, the freedoms of the common market apply to the businesses of those sectors, either directly or through sector-specific adaptations. The sectoral common policies are therefore necessary for the smooth functioning of the customs union, the common market and the economic and monetary union. Both horizontal and sectoral policies, including research and development, strive to boost the international competitiveness of European businesses, while cementing the economic integration of the States of the Union.

    The economies of the member states are greatly influenced by common policies. As these economies are gradually opened up to multinational trade and competition, all economic parameters change: trade increases enormously within the large internal market, both supply and demand conditions are modified dramatically, state intervention is curbed and new dynamics are set in motion, notably concerning trade and investment opportunities, mergers and joint ventures. The creation and/or extension of multinational companies and the cross investments between them tend to connect the national economies to one another. The common policies build, in fact, a new concept and context of political economy, which has to be reckoned with by politicians, economists and businessmen.

    This is not to say that multinational integration has solved all the economic and social problems of the Member States. It cannot do so by itself. Integration is only an instrument for building an internal market by consensual methods between formerly antagonistic nations. This large internal market is useful for developing trade and other transactions between the Member States and through them for raising the standards of living of the populations concerned. It is also necessary for providing businesses with conditions of competition similar to those prevailing in other competing large markets, notably the US, Japan, China and India. Upon the internal market was built the European social model, i.e. high standards of social protection for the populations taking part in the integration process. But this social model is more and more threatened by nations practicing social dumping, i.e. providing workers with hardly the means of subsistence and low or no social protection. The internal market and the single currency have placed more than 60% of European agricultural, industrial and commercial transactions outside this wild competition; but for transactions with the rest of the world, Europe must find common answers to the common problem of preserving high social standards, while competing with countries with lower or no such standards at all. In a common market where products from third countries can enter a port in one Member State and therefrom find their way to the markets of all the others, the solution to the common problem can only be found in common economic and commercial policies. This is a major challenge facing European political leaders.

    The rejection of the Constitutional Treaty by the citizens of two founding members of the European Community/Union, the citizens of France and the Netherlands, on 29 May and 1 June 2005 respectively, caused a crisis to the functioning of the institutions and to the progress of the integration process. But this crisis was temporary. Two years and a half latter, on 13 December 2007, the political leaders of the 27 Member States signed the Treaty of Lisbon, which brought the reforms necessary for the EU to move forward [see section 2.5]. This fact shows that the political elite of Europe are determined to carry on the integration process on the basis of the existing acquis.

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    Your roadmap in the maze of the European Union.

    Based on the book of Nicholas Moussis:
    Access to European Union law, economics, policies
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    Translated into 14 languages


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