Challenges Facing the EU

It was in 1951 that, Belgium, France, Germany, Italy, Luzembourg, and the Netherlands signed the European Coal and Steel Community (ECSG) Treaty, which was the first step toward what is now the EU.

 

 

“Today’s EU is an economic union, the EU blends their economies into a single economic entity”(Peng, pg. 243) (The 17 EU members use the euro while the other ten use other currencies). While some countries such as France believe that the EU's, "economic union should inevitably evolve toward a political union, through which Europe speaks as one voice", different views like Britain look at the EU as "primarily an economic union, which should focus on free trade" (Peng, 245). 

The two challenges that press the EU are: 

Internal Divisions  v.  Enlargement Concerns

*Should the EU be both  an economic and political union or just an economic union.

*Should the EU expand or limit enrollment.



Internal Divisions

The EU encompasses 27 member countries, 500 million citizens, and contributes about 26% of the world's GDP (Peng, 2014). The EU portrayed itself to be an economic union when it introduced its common currency; the Euro initially in 12 EU countries. Second the EU created the Euro zone which to use the euro currency. The EU has also removed most of its internal trade barriers and made the aviation market a single one making, "All European carriers  compete on equal terms across the EU" (Ping, 2014).

With so many operations in each of these countries structure and order is needed to keep the EU intact. The EU acts as a political union when it enforces its European Council. There are 3 main institutions involved in EU legislation; European Parliament, Council of the European Union and European Commission (Europa, 2014).  Together these three institutions produce through the "Ordinary Legislative Procedure" the policies and laws that apply throughout the EU.

In 2010-2012 bailouts to rescue Greece, Ireland and Portugal have intensified the the debate whether the EU should be an economic and political union, or just an economic union" (Peng, pg. 245). In the Greece bailout, Germany "demanded that the EU-wide "economic goverance" be strenghened and that insolvent countries have to lose some of their economic sovereignty by having their budgets approved (or vetoed) by the EU"(Peng, 245).  

Enlargement Concerns


With low economic growth and high unemployment throughout the EU, many EU citizens are sick and tired of taking on additional burdens to absorb new members (Peng, pg. 246). Back in 2004 with the EU's biggest expansion the event proved both a political triumph but also an economic burden. It is expected that if Turkey joins the EU its population will put it as the "most powerful member by commanding the most significant voting power" and also pose a concern to the predominantly Christian EU due to its large Muslim population (Peng, 2014).



I agree with Christine Lagarde (managing director of the IMF) that a common vision must be implemented for EU to have a solid foundation to tackle these challenges. 

References:



Peng, M. W. (2014). Global Business. (3rd Ed.). Mason, OH: South Western Cengage

Learning.

Europa (2014). EU Institutions and other bodies. Retrieved from: http://europa.eu/about-eu/institutions-bodies/index_en.htm