European Union (EU)

The European Union (EU), formerly known as the European Community (EC), was formed in the 1950s to encourage and oversee political and economic cooperation between numerous European nations. In the nearly half-century since it was formed, the EU has gradually succeeded in becoming the dominant governing economic body in Europe, and it now affects every aspect of business in its member states.

HISTORY

The EU had its origins in an upsurge of warfare which began in 1870 with the Franco-Prussian war and then continued through two world wars. World War II barely over, Winston Churchill, in a speech at Zurich University given in September 1946 called for "a kind of United States of Europe." Churchill's was a prominent voice but he expressed what many other leaders in Europe were feeling at the time. Two years later Belgium, France, Luxembourg, the Netherlands and the United Kingdom formed the West European Union aimed at mutual defense; that same year 16 other nations joined to form the Organization for European Economic Cooperation (OEEC) to oversee implementation of the U.S.-created Marshall Plan. OEEC later evolved into OECD (Organization for Economic Cooperation and Development), with the U.S. and Japan joining as well.

Communities: Coal, Atomic Energy, Economics

In 1951 Belgium, West Germany, Luxembourg, France, Italy, and the Netherlands established the European Coal and Steel Community (ECSC) empowered to make decisions about these industries for the group as a whole. Jean Monnet, who had given an influential speech about this subject in 1950 was named as the ECSC president. ECSC was a great success. In 1957 the same six countries created the European Atomic Energy Community (EURATOM) and the European Economic Community (EEC) to handle atomics and economic development in the same way, principally by removing trade barriers and creating a "common market." These "communities," focused on specific areas, were a step toward a greater union.

Maastricht

Milestones along the way were the merger, in 1967, of the three "communities" under a single Commission alongside a Council of Ministers and a European Parliament. In 1979 member countries' populations participated in direct elections of members of this parliament. Elections have been held at five-year intervals since. The Treaty of Maastricht, signed in 1992, created the European Union itself in 1992 by enabling member states to cooperate in defense and in the areas of justice and home affairs as well.

Common Policies and Market—and a Single Currency

The collective aim of these arrangements had always been greater efficiency and the achievement of economic power on a larger and more coordinated scale. Removal of trade barriers, common policies in many fields (agriculture, culture, energy, food purity, transportation, trade, etc.), and a common point for negotiating trade and aid agreements have been aims. The EU formed an economic and monetary union in EMU in part to implement some of these goals; it created the European Central Bank and projected the use of a single currency, the euro. The euro became the official currency in 2002 of 12 of the then 15 members: Belgium, Germany, Greece, Spain, France, Ireland, Italy, Luxembourg, the Netherlands, Austria, Portugal, and Finland. Denmark, Sweden, and the U.K retained their own currencies. Since 2002 the euro has become an important global currency.

Expansion and Consolidation

In 2002 the EU voted to admit ten additional countries, most of them formerly communist states. In consequence, in 2003, Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia, and Slovenia joined the EU. The Treaty of Nice, which came into force on February 1, 2003 was intended to regulate the newly enlarged union. An EU constitution was framed and will replace Treaty of Nice regulations if all EU member nations approve it in 2006.

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