THE EUROPEAN UNION

- The twenty-eight independent states based on the European Communities and founded
to enhance political, economic and social co-operation. Formerly known as European
Community or European Economic Community (EEC).

- The unique feature of the EU is that, although these are all sovereign, independent
countries, they have pooled some of their ‘sovereignty’ in order to gain strength and the
benefits of size. Pooling sovereignty means, in practice, that the Member States delegate
some of their decision-making powers to the shared institutions they have created, so that
decisions on specific matters of joint interest can be made democratically at European
level.

- Consider first the case of a customs union. Once such a union is established, tariff
administration is relatively easy: Goods must pay tariffs when they cross the border of the
union, but from then on can be shipped freely between countries. A cargo that is
unloaded at Marseilles or Rotterdam must pay duties there, but will not face any
additional charges if it then goes by truck to Munich. To make this simple system work,
however, the countries must agree on tariff rates: The duty must be the same whether the
cargo is unloaded at Marseilles, Rotterdam, or, for that matter, Hamburg, because
otherwise, importers would choose the point of entry that minimizes their fees. So a
customs union requires that Germany, France, the Netherlands, and all the other countries
agree to charge the same tariffs. This is not easily done: Countries are, in effect, ceding
part of their sovereignty to a supranational entity, the European Union.

- Since its creation in 1950, the EU:

1) has built a single market for goods and services that spans 28 countries with over 500
million citizens free to move and settle where they wish;
2) created the single currency — the euro — now a major world currency, and which
makes the single market more efficient; and
3) is also the largest supplier of development and humanitarian aid programmes in the
world.

- Looking ahead, the EU:

1) is working to get Europe out of the current economic crisis;
2) is at the forefront of the fight against climate change and its consequences;
3) helps neighbouring countries prepare themselves for EU membership; and
4) is building a common foreign policy which will do much to extend European values
around.

COMPOSITION

- At the core of the EU are the Member States —
the 28 countries that belong to the
Union — and their citizens. These are: Austria, Belgium, Bulgaria, Croatia, Cyprus,
Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland,
Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania,
Slovakia, Slovenia, Spain, Sweden, United Kingdom of Great Britain and Northern
Ireland

- candidate countries: Albania, Montenegro, Serbia, Yugoslavia, Turkey

- potential candidates: Bosnia and Herzegovina

BRIEF HISTORICAL SKETCH

When French Foreign Minister Robert Schuman proposed integrating western Europe’s
coal and steel industries in 1950, his ideas were set out in the Treaty of Paris the
following year, and the precursor to the EU — the European Coal and Steel Community
— was born. Since then, the EU has regularly updated and added to the treaties to ensure
effective policy and decision-making.

XX The Treaty of Paris, establishing the European Coal and Steel Community, was
signed in Paris on 18 April 1951 and entered into force in 1952. It expired in 2002.

XX The Treaties of Rome, establishing the European Economic Community (EEC) and
the European Atomic Energy Community (Euratom), were signed in Rome on 25 March
1957 and came into force in 1958.

XX The Single European Act (SEA) was signed in February 1986 and came into force in
1987. It amended the EEC Treaty and paved the way for completing the single market.

XX The Treaty on European Union — the Maastricht Treaty — was signed in Maastricht
on 7 February 1992 and came into force in 1993. It established the European Union, gave
the Parliament more say in decision-making and added new policy areas of cooperation.

XX The Treaty of Amsterdam was signed on 2 October 1997 and came into force in
1999. It amended previous treaties.

XX The Treaty of Nice was signed on 26 February 2001 and entered into force in 2003. It
streamlined the EU institutional system so that it could continue to work effectively after
the new wave of Member States joined in 2004.

XX The Treaty of Lisbon was signed on 13 December 2007 and came into force in 2009.
It simplified working methods and voting rules, created a President of the European
Council and introduced new structures with a view to making the EU a stronger actor on
the global stage.

LEGAL BASIS OF THE EU

Treaty on European Union

Article 1
By this Treaty, the HIGH CONTRACTING PARTIES establish among themselves a
EUROPEAN UNION, hereinafter called "the Union", on which the Member States
confer competences to attain objectives they have in common.

This Treaty marks a new stage in the process of creating an ever closer union among the
peoples of Europe, in which decisions are taken as openly as possible and as closely as
possible to the citizen.

The Union shall be founded on the present Treaty and on the Treaty on the Functioning
of the European Union (hereinafter referred to as "the Treaties"). Those two Treaties shall
have the same legal value. The Union shall replace and succeed the European
Community.

Article 2

The Union is founded on the values of respect for human dignity, freedom, democracy,
equality, the rule of law and respect for human rights, including the rights of persons
belonging to minorities. These values are common to the Member States in a society in
which pluralism, non-discrimination, tolerance, justice, solidarity and equality between
women and men prevail.

Article 3

1. The Union's aim is to promote peace, its values and the well-being of its peoples.

2. The Union shall offer its citizens an area of freedom, security and justice without
internal frontiers, in which the free movement of persons is ensured in conjunction with
appropriate measures with respect to external border controls, asylum, immigration and
the prevention and combating of crime.

3. The Union shall establish an internal market. It shall work for the sustainable
development of Europe based on balanced economic growth and price stability, a highly
competitive social market economy, aiming at full employment and social progress, and a
high level of protection and improvement of the quality of the environment. It shall
promote scientific and technological advance.

It shall combat social exclusion and discrimination, and shall promote social justice and
protection, equality between women and men, solidarity between generations and
protection of the rights of the child.

It shall promote economic, social and territorial cohesion, and solidarity among Member
States.

It shall respect its rich cultural and linguistic diversity, and shall ensure that Europe's
cultural heritage is safeguarded and enhanced.
4. The Union shall establish an economic and monetary union whose currency is the euro.

5. In its relations with the wider world, the Union shall uphold and promote its values and
interests and contribute to the protection of its citizens. It shall contribute to peace,
security, the sustainable development of the Earth, solidarity and mutual respect among
peoples, free and fair trade, eradication of poverty and the protection of human rights, in
particular the rights of the child, as well as to the strict observance and the development
of international law, including respect for the principles of the United Nations Charter.

6. The Union shall pursue its objectives by appropriate means commensurate with the
competences which are conferred upon it in the Treaties.

Article 13

1. The Union shall have an institutional framework which shall aim to promote its values,
advance its objectives, serve its interests, those of its citizens and those of the Member
States, and ensure the consistency, effectiveness and continuity of its policies and actions.
The Union's institutions shall be:
- the European Parliament,
- the European Council,
- the Council,
- the European Commission (hereinafter referred to as "the Commission"),
- the Court of Justice of the European Union,
- the European Central Bank,
- the Court of Auditors.

2. Each institution shall act within the limits of the powers conferred on it in the Treaties,
and in conformity with the procedures, conditions and objectives set out in them. The
institutions shall practice mutual sincere cooperation.

3. The provisions relating to the European Central Bank and the Court of Auditors and
detailed provisions on the other institutions are set out in the Treaty on the Functioning of
the European Union.

4. The European Parliament, the Council and the Commission shall be assisted by an
Economic and Social Committee and a Committee of the Regions acting in an advisory
capacity.

Treaty on the Functioning of the European Union

Article 2

1. When the Treaties confer on the Union exclusive competence in a specific area, only
the Union may legislate and adopt legally binding acts, the Member States being able to
do so themselves only if so empowered by the Union or for the implementation of Union
acts.
2. When the Treaties confer on the Union a competence shared with the Member States in
a specific area, the Union and the Member States may legislate and adopt legally binding
acts in that area. The Member States shall exercise their competence to the extent that the
Union has not exercised its competence. The Member States shall again exercise their
competence to the extent that the Union has decided to cease exercising its competence.

3. The Member States shall coordinate their economic and employment policies within
arrangements as determined by this Treaty, which the Union shall have competence to
provide.

4. The Union shall have competence, in accordance with the provisions of the Treaty on
European Union, to define and implement a common foreign and security policy,
including the progressive framing of a common defence policy.

5. In certain areas and under the conditions laid down in the Treaties, the Union shall
have competence to carry out actions to support, coordinate or supplement the actions of
the Member States, without thereby superseding their competence in these areas.
Legally binding acts of the Union adopted on the basis of the provisions of the Treaties
relating to these areas shall not entail harmonisation of Member States' laws or
regulations.

6. The scope of and arrangements for exercising the Union's competences shall be
determined by the provisions of the Treaties relating to each area.

Article 3

1. The Union shall have exclusive competence in the following areas:

(a) customs union;
(b) the establishing of the competition rules necessary for the functioning of the internal
market;
(c) monetary policy for the Member States whose currency is the euro;
(d) the conservation of marine biological resources under the common fisheries policy;
(e) common commercial policy.

2. The Union shall also have exclusive competence for the conclusion of an international
agreement when its conclusion is provided for in a legislative act of the Union or is
necessary to enable the Union to exercise its internal competence, or in so far as its
conclusion may affect common rules or alter their scope.

Article 4

1. The Union shall share competence with the Member States where the Treaties confer
on it a competence which does not relate to the areas referred to in Articles 3 and 6.
2. Shared competence between the Union and the Member States applies in the following
principal areas:
(a) internal market;
(b) social policy, for the aspects defined in this Treaty;
(c) economic, social and territorial cohesion;
(d) agriculture and fisheries, excluding the conservation of marine biological resources;
(e) environment;
(f) consumer protection;
(g) transport;
(h) trans-European networks;
(i) energy;
(j) area of freedom, security and justice;
(k) common safety concerns in public health matters, for the aspects defined in this
Treaty.

3. In the areas of research, technological development and space, the Union shall have
competence to carry out activities, in particular to define and implement programmes;
however, the exercise of that competence shall not result in Member States being
prevented from exercising theirs.

4. In the areas of development cooperation and humanitarian aid, the Union shall have
competence to carry out activities and conduct a common policy; however, the exercise
of that competence shall not result in Member States being prevented from exercising
theirs.

Article 5

1. The Member States shall coordinate their economic policies within the Union. To this
end, the Council shall adopt measures, in particular broad guidelines for these policies.
Specific provisions shall apply to those Member States whose currency is the euro.

2. The Union shall take measures to ensure coordination of the employment policies of
the Member States, in particular by defining guidelines for these policies.

3. The Union may take initiatives to ensure coordination of Member States' social
policies.

Article 6

The Union shall have competence to carry out actions to support, coordinate or
supplement the actions of the Member States. The areas of such action shall, at European
level, be:
(a) protection and improvement of human health;
(b) industry;
(c) culture;
(d) tourism;
(e) education, vocational training, youth and sport;
(f) civil protection;
(g) administrative cooperation.