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Chapter One 1 Introducing the 2 Chapter Two 2 How Is the EU Run? A Unique Governing System 6 Chapter Three 3 The EU-U.S. Partnership 13 Chapter Four 4 Economic and Monetary Union and the 18 Editor’s Notes The entry into force of the European Union’s The term “European Union” (EU) is used in Chapter Five , in December 2009, ushered this brochure whenever appropriate. Other 5 European Enlargement and in a more efficient, more democratic, more terms, such as “European Community” and the European Neighborhood: transparent, more united, and more secure EU “European and Steel Community”, are than ever before. The treaty’s provisions have used when the historical context is appropriate Whole and Free 21 modernized the EU’s operations, reinforced its or to describe the statutory functions of bod- capacity to take action, enhanced democratic ies that still have legal identities within the EU. Chapter Six processes within the EU, and given the EU a 6 The EU on the World Stage – single voice in external relations. All information regarding EU institutions, Policies, Tools, and Global Relationships 26 policies, and programs is the most recent avail- The evolution brought about by the Treaty of able at the time of publication. For updated in- Chapter Seven Lisbon is only one of the many aspects of the formation, please consult www.euintheus.org, 7 European Union covered by this “Guide for the website of the Delegation of the European Signature EU Policies 38 Americans.” It also outlines the growth of the Union to the . EU from its initial incarnation as the six-na- Chronology: Milestones on the tion European Coal and Steel Community to Where possible, financial amounts appear in 44 today’s 28-nation partnership; the day-to-day U.S. dollars and are converted from us- Road to functioning of the EU; the EU’s Economic and ing the appropriate annual dollar to euro ex- Monetary Union; the EU’s relations with the change rate. United States as well as other international ac- tors; and signature EU policy areas. Ambassador’s Welcome

As we progress into the 21st century, the and Steel Community. We have deepened our partnership—known as TTIP—that is a once- European Union continues to be one of the cooperation on foreign and security matters, in-a-generation opportunity to strengthen the world’s most successful studies in economic created a , developed common greatest economic corridor in the world and and political integration. Rooted in democracy, policies, allowed citizens to circulate freely, give a significant boost to global trade and the EU is a community based on law and and launched an economic and monetary investment. values, and a society built on cooperation and union that includes a single currency shared solidarity. Through the years, the European by 19 of our countries… so far. As we envisage the roles the EU and the Union has evolved like a living organism, United States will play in the years ahead in and continues to grow, adapt, and develop to The transatlantic partnership has continued to a globalized world, we need a deep mutual accommodate its citizens and the wider world, prosper for more than six decades, constructed understanding of: each other’s values; our striving always to foster stability, security, and on a solid foundation of common values, respective histories and political evolutions; prosperity at home and abroad. including a commitment to the rule of law, the how decisions are made on each side of the democratic process, respect for rights, Atlantic; how our economies and currencies From the earliest days of European and alleviating poverty. work; and our respective and complementary integration, we found a steadfast partner in actions on the world stage. the United States. Following World War II, Together, the EU and the U.S. tackle global the U.S. helped to ensure Western Europe’s challenges and promote peace, democracy, For these reasons, our Delegation has security, encouraged European cooperation and sustainable development around the published, “The European Union: A Guide by requiring joint administration of the U.S. world. Every day, we work side-by-side for Americans”. In the pages that follow, we Marshall Plan funds, and welcomed the to help stabilize fragile states, end nuclear have endeavored to cover the most important initiative by the six founding nations of today’s proliferation, fight , and eradicate details about the European Union—what it EU to place their coal and steel production deadly diseases. We strive to become energy is, how it works, what it does—presented in under a common authority. The United States independent, grow sustainably, and together the context of the EU-U.S. relationship. I also was the first non-member country to officially combat the threat of climate change. encourage you to visit our website at recognize the nascent European Coal and Steel www.EUintheUS.org, which offers Community, just months after its inception in A deep-rooted part of our relationship revolves comprehensive details about many of the areas 1952. around our trade and investment ties, which covered in this “Guide for Americans”. David O’Sullivan, already create millions of jobs on both sides EU Ambassador to the United States More than sixty years later, today’s 28-member of the Atlantic and account for approximately European Union has transformed the European half of global and continent, spanning a substantial part of its one-third of world trade. We want to create territory and counting a population of more even more opportunity, by making it possible than half a billion. The EU has made a lasting for our businesses and workers to succeed in contribution to a Europe that is safer, stronger, a very competitive global economy. That is more prosperous, and considerably more why the EU and the U.S. are working on a far- influential than the original European Coal reaching transatlantic trade and investment

The European Union: A Guide for Americans 1 , President of the ECSC High Authority, Chapter One and Introducing the European Union

1The European Union is unique. It is not a and religion. They support free market While contributing to economic recovery, this like the United States. It is neither economies—where economic development plan would also control the raw materials of a state intended to replace existing states, and growth are driven by the private sector war. The was regarded nor an organization for cooperation between and facilitated by governments. They believe as the first step toward achieving a united governments, like the . It is prosperous countries have an obligation to Europe—an ideal that in the past had been much more than any other international help poorer and less developed regions and pursued only by force. organization. nations. And they value living together in peace and promoting these principles globally. , the Federal Republic of , What makes the EU unique? Never before have , , and the countries voluntarily agreed to set up common The EU sets high standards for membership. accepted the French proposal and signed the institutions to which they delegate some of Candidate states must have stable democratic European Coal and Steel Community (ECSC) their so that decisions on specific governments; respect for the rule of law, Treaty in Paris on April 18, 1951. matters of joint interest, and which are directly minorities, and ; a functioning applicable to citizens of all the countries, can market economy; and the ability to take on the The Six set up the ECSC High Authority, be made democratically at a higher, in this case obligations of EU membership. Prospective to which member governments transferred economic policies; and the second to create a European, level. members must have the capacity to adopt portions of their sovereign powers. Coal and European Atomic Energy Community (EAEC and implement the body of EU laws and steel trade increased by 129 percent over the or EURATOM) to further the use of nuclear All EU decisions and procedures are based regulations that ensure cooperation in a next five years. energy for peaceful purposes. on the treaties agreed to by all EU countries, multitude of areas in addition to trade and the under which sovereignty is shared in specified economy, including citizens’ rights, freedom, Encouraged by the success of the ECSC, the The Six signed the treaties on March 25, 1957, areas. The result is a union of 28 Member States security, and justice, job creation, regional Six sought to pursue integration in the military in Rome. Often referred to as the “Rome covering 1.7 million square miles with half a development, environmental protection, and and political fields. A European Defense Treaties”, both the EEC and the EAEC Treaties billion people producing almost a third of the making work for everyone. Community treaty was signed, but not ratified came into force in January 1958. world’s gross national product and speaking and political cooperation—forerunner of History: The Union’s Origins dozens of languages. The Member States are the EU’s Common Foreign and Security Building a Union, Treaty by Treaty The economic integration that would lead to bound together by a desire to promote peace, Policy—was not achieved until 1970. When The European Union has been built through today’s European Union was conceived in the democracy, prosperity, stability, and the rule these efforts were derailed, European leaders a series of treaties that represent binding wake of World War II, as a devastated Western of law. decided to continue the unification of Europe commitments by the Member States. Treaties Europe sought to rebuild its economy. on the economic front alone. A historic are negotiated by Member States through The EU embraces the fundamental values meeting in Messina, Italy, in June 1955, intergovernmental conferences, which are On 9, 1950, French Foreign Minister shared by its Member States across a multitude launched the negotiations for two new treaties, followed by ratification of the treaties or Robert Schuman announced a plan—in a of cultures, languages, and traditions. The the first to establish a European Economic agreed amendments by all Member States. Member States agree that democracy is the speech inspired by French businessman- Community (EEC) to merge separate national turned-advisor Jean Monnet—that proposed best form of government. They believe in markets into a single market that would ensure This process began with three separate pooling European coal and steel production societies that encourage pluralistic political the free movement of , people, capital, treaties dating from the 1950s: the European under a common authority. thought and endorse freedom of speech and services through development of common Coal and Steel Community Treaty (ECSC),

2 The European Union: A Guide for Americans Following an in-depth review, EU leaders re-worked the Constitutional Treaty and on December 13, 2007, signed the new Treaty of Lisbon. The Treaty of Lisbon, which Signing of the entered into force on December 1, 2009, after ratification by all EU Member States, was designed to modernize the EU’s operations, reinforce its capacity to take action, enhance the European Atomic Energy Community given a weighting, with smaller countries a Constitution for Europe, which provided for democratic processes within the EU, and give Treaty (EAEC), and the European Economic getting a greater share than their populations changes to the EU’s governing institutions the EU a single voice in external relations. Community Treaty (EEC). In 1967, the ECSC, alone would warrant; increasing the European and decision-making processes. The treaty the EAEC, and the EEC collectively became Parliament’s responsibilities by making the grew out of the 2002-2003 “Convention on Innovations included appointing a single known as the . The co-decision procedure for adopting legislation the Future of Europe” and built upon previous individual to serve as president of the European in 1987 facilitated the with the Council of the European Union the efforts to institute internal reforms enabling an Council for up to five years; creating the inter- creation of the “single market”, gradually general rule; extending the number of policy enlarged EU to function more effectively, more institutional post of EU High Representative abolishing internal borders to allow for the areas—such as employment, social issues, transparently, and closer to EU citizens. It also for Foreign Affairs and Security Policy and free movement of goods, services, capital, and and —in which Parliament can contained measures to raise the EU’s visibility a foreign (known as the European people. exercise veto power; and strengthening the on the world stage. External Action Service); increasing the powers Common Foreign and Security Policy and of the ; and simplifying Major elements of the Single European the EU’s ability to undertake joint foreign As with all treaties, to enter into force, the voting procedures. It also provides citizens Act included institutional reform and the policy actions. Indeed, as few as two-thirds Constitutional Treaty required unanimous with new avenues for direct participation in expansion of European Community powers in of Member States can act together on behalf ratification by all EU Member States— EU governance and more actively involves the research and development, the environment, of the EU. Member States that “constructively by popular referendum or parliamentary national parliaments. Other changes improve and common foreign policy. abstain” on CFSP issues are not able to take vote, depending upon individual country operations and transparency. The Treaty also any action that impedes the majority decision. requirements. Although a majority of Member legally guarantees citizens’ fundamental rights. The , signed in States had ratified the Constitutional Treaty, Maastricht, the Netherlands (“the Maastricht The , which came into effect in the French and Dutch “No” votes prevailed. Treaty”), and in effect since November 1993, 2003, set the stage for EU expansion by revising was a major overhaul of the founding treaties. institutional policies. The treaty extended The EU Today Maastricht provided a blueprint to achieve majority voting even further, re-weighted Economic and Monetary Union (EMU), votes within the Council of the European Member States: 28 further developed the Union’s inherent political Union, and extended the use of “enhanced Official dimension through the new Common Foreign cooperation”, which allows groups of at least languages: 24 and Security Policy (CFSP), and expanded eight Member States to proceed with policy cooperation in judicial and policing matters. initiatives that do not infringe on the rights of Area: 4.3 million km² Maastricht also created European other members. It also redistributed Member (1.7 million mi²) and strengthened the European Parliament’s State representation within the European Population: 510 million legislative role in certain areas. Parliament, restructured the European GDP (2015): $16.2 trillion Commission, and strengthened its presidency. In 1999, the reformed EU institutions to support its economic and From the European Constitutional security objectives. Major provisions include Treaty to the Treaty of Lisbon extending the scope of qualified majority In 2004, EU heads of state and government and voting, where each Member State’s vote is foreign ministers signed the Treaty establishing

The European Union: A Guide for Americans 3 Chapter One Introducing the European Union

The Lisbon Treaty amends the EU’s two EU residents benefit in numerous ways. They core treaties, the Treaty on European Union can expect consistent delivery of important and the Treaty Establishing the European services, from education to health care to Community (which became The Treaty on transportation, which must meet agreed-upon the Functioning of the European Union). The standards. They know that products such amendments ended the distinction between as food or medical supplies will be safe and the European Union and the European environmentally sound regardless of where Community, providing the EU with a single they originate in the EU. They know that men legal personality, which enables the Union and women must receive equal pay for equal to conclude international agreements and work, a requirement that reflects the EU’s combat terrorism and transnational crime. service companies, and has resulted join international organizations. The Lisbon pioneering role in the fight for women’s rights. in a vibrant economic relationship—the largest Treaty also established a clear division of labor Citizens of the European Union know they are The EU and its Member States are the largest in the world—that provides more than two between the European and national levels. For free to live in any EU country and have equal providers of official development assistance billion dollars in transatlantic trade each day the first time, the treaty includes provisions access to justice throughout the Union. Most around the world—from combating poverty and supports jobs for 7.5 million Americans that would apply if a Member State decided to importantly, they know that their fundamental to fighting Ebola, malaria, HIV/AIDS, and and about the same number of Europeans. leave the EU. rights, including the , other communicable diseases. And the UK Votes to Leave EU conscience, and religion, are protected. Union is involved in other areas that support The Impact of the EU development and reduce poverty, such By a margin of almost 52 percent to 48 The EU has also strengthened Europe’s as , election observing, and percent in a June 23, 2016 referendum, the The European Union has delivered more voice in the world. The Union is engaged in providing humanitarian and reconstruction voted to leave the EU. The than half a century of peace, stability, and rebuilding lives and communities in areas of aid in the wake of natural disasters and conflict. withdrawal process begins once the UK prosperity, helped raise living standards, conflict such as Afghanistan. The EU supports submits its formal notice under Article 50 of launched a single European currency (the efforts to achieve peace in the Middle East, European and global markets benefit from the the Treaty on European Union, and the process euro), and is progressively building a single promotes sound environmental practices, and EU’s ability to negotiate international trade could take approximately two years. Until the Europe-wide market in which people, goods, contributes to global efforts to control nuclear agreements on behalf of its Member States. UK leaves, however, it remains a full member services, and capital move among Member proliferation. Judicial, law enforcement, and For example, open and uniform access to the of the EU with all the rights and obligations States as freely as within one country. security officials cooperate internationally to European market for U.S. manufacturers, this entails.

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The European Union is often compared to States. So far, 19 Member States have in areas such as security and defense, The practical outcome is that the Union the United States, and some similarities also joined together their although they now can take joint action in is granted jurisdiction only over those in function and organization do exist. The and adopted the euro as their currency. certain foreign and security policy areas. policies that can be handled more Member States of the EU have agreed to All Member States are expected to Additionally, the EU operates according effectively at the EU level. pool some of their sovereign powers for join the euro area once they meet the to the principles of “”— the sake of unity and promotion of shared economic criteria, with the exception of meaning that responsibility for issues for Europe is constructing its own unique values, just as American states did to and the United Kingdom, which which the EU and Member States have model for integration, ensuring respect create a federal republic. In the fields have officially opted out. oversight devolves to the lowest level at for the historical, cultural, and linguistic where national sovereignty has been which it can be effectively addressed— diversity of the European nations. pooled, such as trade, the EU negotiates However, there are also many differences. and “proportionality”, which seeks to directly with the United States and other Unlike the American states, EU Member keep the content and form of EU action countries on behalf of all the Member States retain their individual authority in proportion to the desired objective.

4 The European Union: A Guide for Americans UNIUNEA EUROPEANĂ UNION EUROPEENNE EUROPEAN UNION ЕВРОПЕЙСКИ СЪЮЗ UNIONE EUROPEA UNIÓN EUROPEA UNIA EUROPEJSKA EUROPÄISCHE UNION

EU Awarded 2012 The 28 European Union Member States The European Union’s award reflects more than 60 years of Country MEPs Population GDP 2015 Currency (2014- 2015 ($ billions) EU contributions to peace, reconciliation, 2019) (millions) World Bank democracy, and human rights in Europe. 18 8.6 374 Euro Belgium 21 11.3 454 Euro 17 7.2 49 Lev Twenty-Four Official Languages 11 4.2 49 Kuna 6 1.2 19 Euro The 24 official languages of the EU’s 28 182 Member States represent the Union’s 21 10.6 broad cultural diversity: Denmark 13 5.7 295 Bulgarian, Croatian, Czech, Danish, 6 1.3 23 Euro Dutch, English, Estonian, Finnish, French, 13 5.5 230 Euro German, Greek, Hungarian, Irish, Italian, 74 66.8 2,422 Euro Latvian, Lithuanian, Maltese, Polish, Por- Germany 96 81.4 3,356 Euro tuguese, Romanian, Slovak, Slovenian, 21 10.8 195 Euro Spanish, Swedish. 21 9.8 121 Forint 11 4.6 238 Euro Italy 73 60.8 1,815 Euro The EU and the U.S. – A Long-Standing Partnership 8 2.0 27 Euro 41 Euro The United States has played an The Marshall Plan was vital to 11 2.9 important role in the development of the launching Europe’s post-war Luxembourg 6 0.6 58 Euro European Union. From the very beginning, economic boom, and was made 6 0.4 10 Euro European integration has benefited from conditional on cooperation between Netherlands 26 16.9 753 Euro American support. The United States was European nations. NATO created 51 38.0 475 Zloty the first nation to recognize the European a secure space in Western Europe 21 10.4 199 Euro Coal and Steel Community (1952) and where this new cooperation 32 19.8 178 Leu the first to establish diplomatic relations flourished, and the United States has 13 5.4 87 Euro (1956). And, more than 60 years ago, consistently supported the EU’s drive, 43 Euro the ECSC—precursor to today’s EU— through successive enlargements, to 8 2.1 1,199 Euro launched its official presence in the U.S. open its cooperation and structures to 54 46.4 in 1954. ever more people and countries. 20 9.8 493 Swedish Krona United Kingdom 73 65.1 2,849 Pound Sterling Total EU 28 751 510 million $16.2 trillion

The European Union: A Guide for Americans 5 Chapter Two How is the EU Run? 2A Unique Governing System The European Union is governed by throughout the EU. The Member States and the EU treaties are applied correctly, represents chooses the other Members of the institutions that reflect the EU’s unique, the Commission then implement the laws. the EU internationally, and negotiates with Commission, in consultation with Member dual supranational and intergovernmental Three other institutions also play a vital role: non-EU countries in areas falling within its State governments. character. The EU has the power to enact laws the Court of Justice of the European Union jurisdiction. The Commission also fulfills an n Parliament interviews each Member and that are directly binding on the citizens of the upholds the rule of European law, the Court administrative role. issues its opinion on the whole team. Once 28 Member States. of Auditors checks the financing of Union approved, the new Commission can officially activities, and the European is The leadership of the start work. Member States have ceded part of their responsible for the EU’s single currency— consists of 28 Members—one from each national sovereignty to EU institutions, leading the euro—and monetary policy in the euro Member State—who are appointed or re- The Commission has seven Vice- to descriptions of the Union as a supranational area. Other bodies also play important roles, appointed every five years, within six months Presidents, one of whom is also the EU’s entity, with many decisions made and final including the European Economic and Social of the European Parliament elections. The High Representative for Foreign Affairs authority residing at the EU level. In specified Committee (EESC—made up of employers’ process involves several steps with input from and Security Policy. This inter-institutional areas, the Member States work together in their and representatives) and the Member States and the European Parliament: role—combining positions from both the collective interest through EU institutions to Committee of Regions (COR—consisting Commission and the Council—helps to administer sovereign powers jointly. of representatives of local and regional n Member State governments agree on a new ensure consistency across the spectrum of EU authorities), both of which support the Commission President-designate. external relations. The present Commission’s The general political direction and priorities institutions in advisory capacities. n Parliament approves the Commission term runs through October 31, 2019. The of the European Union are defined by the President-designate. President of the European Commission is , which comprises the heads Governing Institutions n The Commission President-designate Jean-Claude Juncker of Luxembourg. of state and/or government of the EU Member The European Commission States. The European Commission (EC) is the The EU’s decision-making process involves European Union’s executive branch and has three main institutions, all set up in the 1950s the sole right of legislative initiative, except under the EU’s founding treaties. Through where the Treaties provide otherwise. It subsequent treaty changes—culminating in is independent of national governments the 2009 Treaty of Lisbon—these institutions and represents the European (as opposed have adapted to a larger, more complex to individual Member State) perspective. European Union than was envisaged more The Commission comprises 28 appointed than half a century ago. Commissioners—one from each EU country—each of whom is responsible for Generally, the European Commission specific policy areas. Approximately 33,000 proposes new legislation while the Council people work for the Commission, with the of the European Union and European majority based in . Parliament adopt the laws. This institutional triangle produces policies and laws that apply The Commission ensures that the provisions of

6 The European Union: A Guide for Americans Who Does What? seeks the opinions of national parliaments and represents the assent of the whole government. Shared Responsibility between the governments. To get the technical details right, The Presidency of the Council, with the EU and Its Member States the Commission consults experts through its exception of the Foreign Affairs configuration, various committees and groups. is held by a pre-established group of three The EU operates according to the prin- Member States for an 18-month period, with ciple of subsidiarity, which means that 2. Managing and implementing EU policies each of the three countries acting as chair for the European Union does not take action and the budget. one six-month rotation. (except in the areas which fall within its The Commission is responsible for exclusive jurisdiction) unless it is more ef- administering and supervising expenditures The Treaty of Lisbon formalized fective than action taken at national, re- under the oversight of the Court of Auditors. this cooperation between successive gional, or local level. It also adheres to the Most of the actual spending is done by national presidencies—a “team presidency”—which proportionality principle, which means and local authorities. is guided by a common program for the that EU involvement is proportionate to 18-month period drawn up by all three agreed objectives. 3. Enforcing European law (jointly with the Member States. Each EU country in turn takes Exclusive EU jurisdiction: Only the EU may European Court of Justice). charge of the Council agenda and chairs all the legislate and adopt legally binding acts The Commission acts as guardian of the meetings for its six-month period, promoting in fields including the , the Treaties and can take legal action and refer legislative and political decisions and common commercial policy, cases to the European Court of Justice against brokering compromises among the Member rules, and monetary policy for euro coun- persons, companies, or Member States that States. tries. violate EU rules. The Court has the power to Shared EU-Member State jurisdiction: Juris- impose penalties, and its judgments are binding The oversees diction is shared between the EU and the on the Member States and the EU institutions. the operation of the different Council Member States in specified areas includ- The Commission remains politically configurations. EU relations with the rest of ing internal market rules; aspects of social accountable to Parliament, which has the 4. Representing the EU internationally on the world are dealt with by the Foreign Affairs policy; economic, social, and territorial power to dismiss the entire Commission by certain key issues. Council, chaired by High Representative cohesion; agriculture and aspects of fish- adopting a motion of censure. Individual The Commission represents the EU on specific Federica Mogherini. eries; the environment; consumer protec- members of the Commission must resign if external policy issues, such as trade and the tion; transport; trans-European networks; asked to do so by the President, provided the implementation of development assistance. The Council of the European Union has six energy; the area of freedom, security, and other Commissioners approve. It also negotiates agreements between the EU key responsibilities: justice; aspects of public health; aspects and other countries in areas falling within its 1. Adopting European laws—jointly with the of research and technological develop- The Commission attends all the sessions of jurisdiction (e.g. World Trade Organization European Parliament in most policy areas. ment and space; and aspects of develop- Parliament, where it must clarify and justify negotiations). Both Commission and External 2. Coordinating the economic policies of the ment cooperation and humanitarian aid. its policies, in addition to replying regularly to Action Service officials are present throughout Member States. Member State jurisdiction with support from written and oral questions posed by Members the EU’s global network of approximately 140 3. Concluding international agreements the EU: Although Member States retain of the European Parliament. The seat of the external delegations. between the EU and other countries or jurisdiction in areas related to the protec- Commission is in Brussels (Belgium), but it also international organizations. tion and improvement of human health; has offices in Luxembourg, and is represented Council of the European Union 4. Approving the EU’s budget, jointly with industry; culture; tourism; education, vocational training, youth and sport; civil in each EU Member State. The Council is one of the EU’s main decision- the European Parliament. protection; and administrative coopera- making bodies and represents the Member 5. Playing a key role in the development of The European Commission has four main the EU’s Common Foreign and Security tion, EU actions can support, coordinate, States. One minister from each of the EU’s or supplement Member State activities. roles: national governments attends Council Policy (CFSP), based on guidelines set by 1. Proposing legislation to the Parliament meetings. Different ministers are assigned the European Council. The EU also coordinates economic em- and the Council. to specific issue areas (e.g., agricultural 6. Coordinating cooperation between the ployment policy and a common foreign Proposed legislation must defend the interests ministers decide farm policy). Each minister national courts and police forces in and security policy; however, these areas of the Union and its citizens, not those of specific in the Council is empowered to commit his criminal matters (see the freedom, security, are managed separately from the above framework. countries or industries. The Commission also or her government—the minister’s signature and justice section).

The European Union: A Guide for Americans 7 Chapter Two How is the EU Run?

European Council, February 12, 2015

The European External Action Service (EEAS) Most of these responsibilities relate to policy be decided. Prior to November 1, 2014, most Unanimity is required on important questions areas where the Member States have decided to Council decisions were reached by a qualified including taxation, Treaty amendments, the pool their sovereignty and delegate decision- majority of the weighted votes of Member State launch of a new common policy, or allowing The European External Action making powers to the EU institutions. ministers. Since November 1, 2014, the system a new country to join the EU. Effectively, each Service (EEAS) serves as the EU’s However, the last two responsibilities listed has been simplified. In most cases, decisions Member State has veto power in areas subject foreign ministry and official diplomatic above relate largely to areas in which the require a qualified majority vote (now based to unanimous votes. service. It was officially launched on Member States have not delegated their powers on the principle of a double majority: e.g., January 1, 2011, to support the High but are simply working together. This is called a majority of the Member States and of the When Member States are unable to get the Representative and assist the Presi- intergovernmental cooperation. population), and a measure will be adopted agreement of all the other Member States, they dents of the European Council and if 55 percent of the Member States (16) are in may cooperate more closely in policy areas the European Commission with their The Council votes on measures either by favor and if they represent at least 65 percent that are not within the EU’s exclusive domain, functions in the areas of external re- a simple majority, a qualified majority, or of the EU’s population. by using “”. At least nine lations. EEAS staff comprises expert unanimously, depending on the subject to Member States can use the EU institutions to staff transferred from the Council, the achieve closer cooperation provided that it Member States, and the European furthers EU objectives and is open to other Commission. High Representative Co-Decision Procedure Member States if they wish to join. The process Federica Mogherini heads the EEAS. has been used to find common solutions for Co-decision—where the European Parliament and the Council of the European Union divorce law for couples from different EU share legislative power equally—is the “ordinary legislative procedure” now used for countries and for a unitary patenting system EU policy and resolve issues that could not most EU law-making. that involves most, but not all, Member States. be settled at the ministerial level (e.g., by the To block a decision from being reached, at The co-decision procedure requires the two bodies to agree on identical text before a ministers at the Council of the EU meetings). least four countries, representing more than 35 proposal becomes law. If the Council and Parliament cannot agree, a special Concilia- The High Representative for Foreign Affairs percent of the population, must vote against it. tion Committee is formed. Even if the committee agrees to a joint text, the Parliament and Security Policy/ Commission Vice- may still reject the proposed act by a majority vote of its members. President also participates in the European These rules ensure that Council decisions not Council’s work. Areas covered by the co-decision procedure include: agriculture, energy security, legal only have broad support across Europe, but immigration, justice and home affairs, public health, the internal market, employment, that small minorities cannot block decisions. customs cooperation, , research, environment, and preventing Under the Treaty of Lisbon the European and combating fraud. Council became an official EU institution, European Council and a new position was created—permanent In certain cases specified by the Treaty, legislative acts may be adopted by the Council The European Council, comprising the president of the European Council—a 2 ½ year alone rather than by the two institutions jointly. This “special legislative procedure” ap- presidents or prime ministers of the Member renewable term. plies in certain areas of justice and home affairs (e.g., matters concerning the European States, together with the Presidents of the public prosecutor’s office, operational police cooperation, measures relating to pass- European Commission and the European ports, identity cards and residence permits, and family law measures with cross-border Donald Tusk of Poland, only the second implications); budget and taxation; and specific aspects of certain policies—environ- Council, operates at a political level and does permanent president of this institution, chairs mental measures of a fiscal nature, R & D programs; and social and protection not legislate. European Council summits, the European Council and drives forward its for workers. which take place several times a year, set overall work; ensures the preparation and continuity

8 The European Union: A Guide for Americans European Parliament: Number of seats per political group (2016)

European Parliament. ENF NI Plenary session, January 2015 EFDD 16 39 © European Parliament/Pietro Naj-Oleari 46 EPP Greens/EFA 215 50

EUL/NGL of the Council’s work; facilitates cohesion and European Commission President and the court, in a Grand Chamber of 15 judges or in 52 consensus within the Council; and reports Commissioners, and it has the right to Chambers of three or five judges, depending to the European Parliament following each censure the Commission as a whole, and on the complexity and importance of the European Council meeting. The President of call for its mass resignation. case. The Court is assisted by nine advocates- ALDE the European Council also represents the EU 3. Full parity with the Council in the approval general who present reasoned opinions on the 70 abroad on foreign and security matters at the of the whole EU budget and of the cases brought before the Court, publicly and equivalent level. legally binding multi-annual financial impartially. ECR S&D programming. 74 189 European Parliament EU Law and Legislation TOTAL 751 Since 1979, the European Parliament (EP) has Members of the European Parliament (MEPs) do not sit in national blocks, but in Europe- EPP European People’s been directly elected by the EU’s citizens, with Legislation is drafted by the Commission wide political groups. Between them, they and requires approval by the Council and Party (Christian each member serving a five-year term. represent all views on European integration, the Parliament under the ordinary legisla- Democrats) The present Parliament, elected in May from the strongly pro-federalist to the openly tive procedure. The Commission consid- S&D Progressive Alliance 2014, has 751 members representing all 28 “Euroskeptic.” Although the institution has ers legislation only when it believes an of Socialists and EU-level remedy is necessary for a prob- EU countries. The treaty sets the number three places of work (, France, lem that cannot be solved by national or Democrats Group of members per country according to a Brussels, Belgium, and Luxembourg), the local governments. Legislation takes dif- population-based proportional system, official seat of Parliament is in Strasbourg, ECR European France, where the main plenary sessions take ferent forms, depending on the objective with no Member State having fewer than six to be achieved. Conservatives representatives, nor more than 96. Nearly one- place 12 times a year. and Reformists third of Parliament’s members are women. Court of Justice of the European Union • Laws, called regulations, are binding ALDE Alliance of Liberals Parliament elects a president who serves a 2 ½ in their entirety, self-executing, directly and Democrats for year renewable term. In 2012, The Court of Justice of the European Union applicable, and obligatory throughout Europe of Germany was elected President of the was set up under the ECSC Treaty in 1952. EU territory. They can be compared to European Parliament and re-elected in 2014 Based in Luxembourg, it acts as the European U.S. federal laws passed by Congress. EUL/NGL European United for a second term. Union’s Supreme Court. The Court ensures • Directives are binding in terms of the Left-Nordic Green Left that EU legislation is interpreted and applied results to be achieved and are ad- dressed to individual Member States, Greens/EFA Greens/ European Parliament has three main roles: uniformly in all EU countries. The Court has which are free to choose the best forms Free Alliance 1. Passing European laws jointly with the power to settle legal disputes between EU the Council in most policy areas. All Member States, EU institutions, businesses, and methods of implementation. EFDD Europe of Freedom international treaties with the EU require and individuals. Its rulings are binding. • Decisions are binding in their entirety and Direct Democracy the consent of the European Parliament. The Court is composed of one judge per upon those to whom they are ad- dressed—Member States, companies, 2. Exercising democratic supervision over Member State—28—who are appointed by or persons. ENF Europe of Nations and the other EU institutions, in particular the joint agreement between the governments • Recommendations and opinions are Freedom Commission. Parliament has the power to of the EU Member States for a renewable not binding and can be initiated by in- approve or reject the nomination of the term of six years. The Court may sit as a full NI Non-aligned members stitutions other than the Commission.

The European Union: A Guide for Americans 9 Chapter Two

How is the EU Run? which come from the taxpayers, are collected its own initiative or at the request of another properly, spent legally and economically, EU institution. and are used for their intended purpose. Functioning as an independent external audit The 353 members are nominated by the institution of the EU, the ECA aims to ensure Member State governments and roughly reflect To help the Court of Justice cope with a large The Court of Justice and the General Court that taxpayers get maximum value for their the size of each Member State’s population. caseload and to afford citizens better legal each have a president chosen by their fellow money, and it has the right to audit any person However, they work with complete political protection, the General Court was created judges to serve for a three-year renewable or organization handling EU funds. independence and are appointed by the in 1988. This court (which is attached to the term. Council for a five-year term. Court of Justice) is responsible for certain The Court is comprised of one member from kinds of cases, particularly actions brought European Court of Auditors each EU country, appointed by the Council for Committee of the Regions - the Voice a renewable six year term. Members elect one by private individuals, companies, and some of Local Government The European Court of Auditors (ECA) was of their number as President for a renewable organizations, as well as cases relating to Set up in 1994, the Committee of the set up in 1975 and is based in Luxembourg. term of three years. . The Court’s job is to check that EU funds, Regions (CoR) is an advisory body whose members represent Europe’s regional and Other Bodies local authorities. The CoR must be consulted Budget: Revenue and Expenditure Explained European Economic and Social before EU decisions are made on matters Committee - the Voice of Civil Society which have local and regional repercussions. The European Union finances its expenditures from its “own resources,” which are The Committee can also adopt opinions on made up of the following: Founded in 1957 under the Treaty of Rome, its own initiative and present them to the n Revenue collected from customs duties and import levies (around 10 percent of total the European Economic and Social Committee Commission, Council, and Parliament. revenue). (EESC) is an advisory body representing n A set share of the value-added tax collected by each Member State (9 percent). employers, trade unions, farmers, consumers, The 353 members of the Committee are elected n A further contribution from the Member States based on the size of their gross na- and other sectors of organized civil society in municipal or regional officials, often leaders tional income (GNI) and ability to pay (74 percent). policy discussions with the Commission, the of regional governments or city mayors, n Miscellaneous revenue from sources including income taxes paid by EU officials, Council, and the European Parliament. The nominated by Member State governments contributions by non-EU countries to certain EU programs, and fines on companies Committee must be consulted before decisions that breach competition or other laws (7 percent). and appointed by the Council for a five year are made on economic and social policy. It renewable term. The total EU budget for 2016 is approximately €155 billion. The European Union is re- may also give its opinion on other matters on quired to balance its budget annually, so deficit financing is not permitted. In addition, the amount of EU revenue available for expenditure is capped and currently may not exceed 1.23 percent of the GNI of the EU as a whole. The European Commission prepares the draft budget and submits it to the budget- ary authority—the Council of the EU and the European Parliament—which amend and adopt the draft budget. Should the Council and the Parliament disagree, a specific Conciliation Committee is convened, and given 21 days to reach agreement on a joint text that meets with the budgetary authority’s approval. If rejected by the Council, the European Parliament has the right to ultimately approve or reject the budget. If the Parliament rejects the text, the Commission must submit a new draft budget, and if the budget is not adopted before the start of the new year, one twelfth of the previous year’s budget may be spent each month under certain conditions before the new budget is finally agreed. The EU’s Court of Auditors regularly audits and reports on the EU’s accounts and re- source management.

10 The European Union: A Guide for Americans European Central Bank made by the ’s decision-making Federica Mogherini, bodies—the Governing Council, the Executive EU High Representative for Foreign Affairs and Security Policy The European Central Bank (ECB) was European Commission Vice-President set up in 1998, and is based in Frankfurt, Board, and the General Council. Germany. The ECB is responsible for framing The ECB’s main task is to maintain price and implementing the EU’s monetary policy stability in the euro area, ensuring that the including managing the euro, the EU’s single euro’s purchasing power is not eroded by currency. inflation. The ECB strives to keep the year- to-year increase in consumer prices under 2 To carry out its role, the ECB works within the percent, controlling the money supply and European System of Central Banks (ESCB), monitoring price trends in order to assess the which covers all 28 EU countries. Nineteen risk posed to price stability in the euro area. EU Member States have adopted the euro to Controlling the money supply involves, among date. Collectively, these 19 make up the euro other things, setting interest rates throughout area and their central banks, together with the euro area, one of the Bank’s better known the European Central Bank, comprise the activities. Eurosystem. In response to the economic crisis, ECB The ECB works in complete independence. oversight ensures that banks operate in a Neither the ECB, the national central banks safe and reliable way. New banking rules set of the Eurosystem, nor any member of their stricter conditions—including the amount decision-making bodies can ask for or accept of reserves banks must maintain. Under the instructions from any other body. The ECB, Single Supervisory Mechanism (SSM), the working closely with the national central ECB directly supervises the largest banks, banks, prepares and implements the decisions while Member State authorities monitor the

EU Agencies

An EU agency is a body governed by and the European Union Satellite European public law; it is distinct from Center (EUSC)—carry out tasks for the the EU institutions (such as the Council, Common Foreign and Security Policy. EU Foreign and Security Policy the Parliament, and the Commission) and Three others—CEPOL, , and has its own legal personality. It is set up —help coordinate police and In 2009, the Treaty of Lisbon combined more consistent, more effective, and by an act of secondary legislation in order judicial cooperation in criminal matters. three formerly separate functions— more visible on the world stage, the High to accomplish a very specific technical, CEPOL is the European Police College, High Representative of the Council for Representative is the counterpart to the scientific, or managerial task specified in Europol is the European Police Office, Common Foreign and Security Policy U.S. Secretary of State, and steers foreign the relevant EU act. and Eurojust is a permanent network of (CFSP), President of the Foreign Affairs and security policy; represents the EU judicial authorities. Council, and internationally on CFSP; and enhances There are currently more than forty for External Relations—into the single the consistency and unity of the EU’s agencies set up to perform specific tasks The objectives of the EU’s individual inter-institutional position of the High external action. The High Representative under EU law, even though differing agencies and other bodies are many Representative for Foreign Affairs and is appointed for a five-year term and is terms are used to designate them (e.g. and varied, with each fulfilling a unique Security Policy/ European Commission assisted by the European External Action Vice-President. Service (EEAS), which is comparable to center, foundation, agency, or office). function defined at the time of its creation. the U.S. Foreign Service. Three of them—the European Defense These entities introduce a degree of Designed to make the EU’s conduct of Agency (EDA), the European Union to EU activities. foreign and security policy more coherent, Institute for Security Studies (EUISS),

The European Union: A Guide for Americans 11 Chapter Two How is the EU Run? 3 smaller ones, under a common system. The SSM covers all euro area countries, and non- euro countries have the option to participate. Noteworthy Innovations under the Treaty of Lisbon: Top Ten The 2009 Treaty of Lisbon modernized the parliaments are consulted directly early The European Investment Bank (EIB) was EU’s operations, reinforced its capacity in the EU decision-making process, set up in Luxembourg in 1958 by the Treaty to take action, enhanced democratic and have the power to intervene when of Rome. Its job is to lend money for projects processes within the EU, and gave the a legislative act is still a Commission of European interest (such as rail and road EU a single voice in external relations. It proposal. links, airports, or environmental efforts), shareholder in the . has improved the EU’s ability to partner • European Council President. The first particularly in the less well-off regions, with others, including the U.S., to address permanent president of the European candidate countries, and the developing The European Investment Fund global and regional concerns. Council provides cohesion and continuity for the Council's work and world. It also provides credit for small business The European Investment Fund (EIF) was set Major innovations include: represents the EU abroad on matters of investments. up in 1994 to help small businesses. The EIB is • Citizens' Initiative. One million EU common foreign and security policy. its majority shareholder, with which it forms citizens may sign a petition inviting • High Representative for Foreign The EIB is non-profit and financed through the “EIB Group”. The EIF provides venture the European Commission to submit a Affairs and Security Policy/ borrowing on the financial markets and by the capital to small firms (SMEs), particularly new legislative proposal on any area within Commission Vice-President. This Bank’s shareholders—the Member States of the firms and technology-oriented businesses. EU jurisdiction. inter-institutional position—comparable European Union. They contribute jointly to its It also provides guarantees to financial • Lawmaking. The European to the U.S. Secretary of State— capital, each country’s contribution amount institutions (such as banks) to cover their Parliament's role as co-legislator with fuses several previous functions and the Council is substantially reinforced reflecting its economic weight within the to SMEs. enables the EU to act more coherently, because the co-decision legislative Union. This Member State backing gives the consistently, effectively, and visibly in procedure becomes the norm in most EIB the highest possible credit rating (AAA) The EIF is not a lending institution: it does the international arena. cases. on the money markets, enabling it to raise large not loans or subsidies to businesses, nor • European External Action Service. • Simplification of Legislative amounts of capital on very competitive terms. does it invest directly in any firms. Instead, A professional diplomatic corps to Procedures. The Treaty broadens the In turn, the Bank is able to invest in projects it works through banks and other financial support the HR/VP. application of the ordinary legislative of public interest that would otherwise not get intermediaries, using either its own funds • Single Legal Personality. This enables procedure (co-decision) and expands the EU to conclude international the money – or would be forced to borrow at or those entrusted to it by the EIB or the qualified majority voting. agreements and join international a higher rate. European Union. • National Parliaments. Member State organizations. legislatures act as "watchdogs" on • Charter of Fundamental Rights. The The EIB also supports sustainable development The Fund is active in the Member States of the subsidiarity principle—meaning Charter becomes legally binding. in , the Mediterranean the European Union, candidate and potential that decisions/legislation must be • Withdrawal. For the first time, the EU countries, Africa, the Caribbean, and the candidate countries, including , and made at the most appropriate level treaty addresses a Member State's Pacific, as well as projects in Latin America four EFTA countries (, , of government—regional, national, or right to withdraw from the EU. and Asia. Finally, the EIB is the majority , and ). European. Additionally, the national

12 The European Union: A Guide for Americans Chapter Three 3The EU-U.S. Partnership The historic relationship between the alone was worth more than $700 billion. European Union and the United States is crucial and unique. Based on shared values Despite the impact of the worldwide financial and a strong fundamental belief in democratic crisis and recession, the EU-U.S. economic government, the rule of law, human rights, and relationship remains on solid ground and is the market economy, the EU-U.S. partnership more important than ever. The two economies is not limited to trade relations and economic each provide the other with its most important ties. Promoting energy security and efficiency, sources of foreign direct investment (FDI), and combating climate change, countering close to a quarter of all EU-U.S. trade consists extremism and terrorism, helping developing of transactions within firms based on their nations lift themselves out of poverty, and investments on either side of the Atlantic. The fighting the spread of infectious diseases are overall transatlantic workforce is estimated at only some of the global challenges that the EU 15 million workers, and approximately half and the U.S. face together. are Americans who owe their jobs directly or indirectly to EU companies. Transatlantic Economic Ties Addressing Global Challenges The economic relationship between the Together European Union and the United States is perhaps the most defining feature of the global The relationship between the two partners, economy. The integration is broader and however, goes beyond economic ties. The deeper than between any two other political European Union and the United States regions in the world. The EU and U.S. account increasingly share the opportunities and for almost 30 percent of global merchandise responsibilities of world leadership. trade, close to 40 percent of world trade in services, and about half of global GDP. The Together they work to promote common partnership is also the single most important values, including peace, freedom, and the John Kerry, U.S. Secretary of State and Federica Mogherini, EU High Representative for Foreign driver of global economic growth, trade, rule of law; create conditions for harmonious Affairs and Security Policy/ European Commission Vice-President and prosperity; bilateral economic ties are economic development worldwide; advance increasing every year. the stability of international trade, financial, and monetary systems; and strengthen the have played a significant role in promoting poverty, terrorism, threats to security and The EU and the U.S. are each other’s main economies of developing countries and those the institutions and international norms that stability, weapons proliferation, drugs, and trading partners in goods and services in transition. Together, the EU and the U.S. helped bring an end to the Cold War and organized crime. and account for the largest bilateral trade provide the bulk (more than three-quarters subsequently encouraged global trends toward relationship in the world. The huge amount in 2015) of official development assistance democratization and market integration. As partners promoting peace and stability, of bilateral trade and investment illustrates worldwide. the EU and the United States recognize the the high degree of interdependence of the two The EU and the U.S. work together to confront impact of regional conflicts, both in the direct economies. In 2015, bilateral trade in goods Acting on these shared values, the EU and U.S. global challenges such as climate change, consequences of violence, and the wide-

The European Union: A Guide for Americans 13 Chapter Three The EU-U.S. Partnership

ranging, spin-off impact of crime, terrorism, poverty, and disease that often result from such conflicts. The two partners worked side- by-side to bring stability to the in the years following the breakup of the former . The EU and the U.S., through the Sizing Each Other Up Organization for Security and Cooperation in In Afghanistan, the EU and the United States Europe (OSCE), have supported the Ukrainian together have provided the lion’s share of the EU28 U.S. international reconstruction effort, and the EU government in adapting legislation, structures, Population (2015) 510 million 321 million and processes to the requirements of a modern provides a vital component of the international drive to ensure security and stability in the democracy. EU actions in 2014 and beyond Percent of global population 6.9 % 4.4 % have bolstered the transatlantic approach, country, while helping the Afghan government thanks to the EU- Association establish the rule of law and good governance. GDP (2015) $16.2 trillion $17.9 trillion Agreement, which includes a Deep and Comprehensive Free . In order to help the reconstruction of a Percent of global GDP 21.8 % 24.4 % democratic and stable Iraq, the European Source: World Bank The EU and the U.S. Launch Negotiations on a Transatlantic Trade and Investment Partnership Union and U.S. government both contribute common security in the North Atlantic Treaty To further intensify the transatlantic economic relationship, in July 2013, the U.S. and financial resources, technical expertise, and an Organization (NATO). The U.S. also maintains the EU launched negotiations for a comprehensive Transatlantic Trade and Investment unbending commitment to the principles of strong political, economic, and cultural Partnership (TTIP). Designed to further liberalize all sectors of the transatlantic democracy and freedom. relations with many individual European economy—including manufactured goods, agricultural products, services, and nations, EU and non-EU countries alike. investment—TTIP is intended to eliminate border tariffs and as many investment Differing Approaches to Some Issues The European Union and the United States restrictions as possible, and foster more compatible regulatory requirements. TTIP hold regular presidential summits, which will enable European and American companies to compete on equal terms for public Naturally, differences exist, just as they will were launched with the 1990 Transatlantic contracts in a truly transatlantic marketplace. A successful TTIP will benefit business, between any partners. Differing positions consumers, and regulators, and generate economic gains estimated at €220 billion on the U.S. death penalty and certain trade Declaration that formalized U.S. relations with and €240 billion in sales of goods and services for EU and U.S. producers. issues are among the most visible. However, what is now the EU. 98 percent of economic relations between the All but a handful of conventional barriers to trade in goods, such as tariffs and tariff- two partners are dispute-free, and the EU and The emergence of an EU Common Foreign and rate quotas, are likely to be eliminated. Although tariffs are already fairly low, ranging the U.S. share an overarching commitment Security Policy in 1993 further strengthened between 3.5 to 5 percent, the massive transatlantic trade flows mean that even the to the democratic values that underpin their the relationship by providing the United smallest reduction will have considerable impact. respective ways of life. States with a stronger partner in areas beyond trade matters. An additional step was taken Costly non-tariff barriers, including regulatory issues and red tape, are even more Structure of at the EU-U.S. Summit in December 1995 important, and TTIP talks aim to increase the compatibility and interoperability of with the adoption of the New Transatlantic EU and U.S. regulations, while also preventing future regulatory barriers. The global Transatlantic relations encompass more Agenda (NTA), which provided a new economy stands to benefit from TTIP as the EU and the U.S. develop rules and than EU-U.S. relations. The United States framework for the partnership to deal with the principles on issues of common concern. and many EU countries provide for their growing number of external challenges. The

14 The European Union: A Guide for Americans relationship moved from one of consultation The EU’s Lisbon Treaty, which took effect on The Transatlantic Economic Council: to one of joint action in four major fields: December 1, 2009, facilitates and strengthens Integrating the Transatlantic Economy the European Union’s external relations— Established in 2007, the Transatlantic n Promoting peace, stability, democracy, and including its partnership with the United Economic Council (TEC) advances EU-U.S. — development. States through provisions that increase the economic integration by bringing together n Responding to global challenges. impact, coherence, consistency, and visibility governments, the business community, and n Contributing to the liberalization and ex- of the EU’s actions abroad. consumers to work on key areas where greater pansion of world trade. regulatory convergence and understanding n Improving communication and ensuring a can reap rewards on both sides of the Atlantic. long-term commitment to the partnership.

The NTA was accompanied by a Joint EU-U.S. Euro Challenge Action Plan setting out specific actions ranging The Euro Challenge is an annual aca- from promoting political and economic demic competition that tests U.S. high reform in Ukraine to combating AIDS; from school students about their knowledge reducing barriers to transatlantic trade and of European economic affairs and the investment to promoting links between euro. Student teams make presentations universities and professional associations. on specific aspects of the European The EU and the United States also cooperate economy and the EU’s single currency. outside the NTA framework to improve the They are also asked to select one euro dialogue between EU and U.S. regulators and area country, examine an economic ensure that regulatory processes on both sides problem at the country level, and identify of the Atlantic are as open and transparent appropriate policy solutions. More than as possible for all given the intertwined 100 schools from throughout the United transatlantic economies. States participate.

As the EU’s political and legal structure has The program was developed by the Del- evolved, active cooperation between the EU egation of the European Union to the and the U.S. has expanded to encompass areas United States, with technical support beyond economic and trade relations, such as provided by the Federal Reserve Bank counterterrorism, crisis management, energy of New York. The Moody’s Foundation and energy security, the environment, research funds prize awards for the winning team. and development, and education and training. Eurochallenge winners 2014 More information is available online at http://euro-challenge.org.

The European Union: A Guide for Americans 15 Chapter Three

The EU-U.S. Partnership Of particular value is the opportunity that beneficial job creation, economic growth, and TEC provides to defuse transatlantic trade international competitiveness. disputes through consultation on standards as they are being formulated, rather than after- The Delegation of the European Union the-fact. A new EU-U.S. innovation dialogue to the United States aims at spurring growth, productivity, and The EU is represented in the United States entrepreneurial activity, by sharing best by the Washington, DC Delegation of the policy practices and improving the policy European Union, which works in close Chaired by the EU Trade Commissioner and environment for innovative activities by coordination with the diplomatic and consular the U.S. Deputy National Security Adviser drawing on talents and ideas from both missions of the 28 EU Member States. for International Economic Affairs, the TEC markets. provides a high-level forum to address such The EU Delegation presents and explains complex areas as investment, the financial At their 2011 summit, EU and U.S. leaders EU policy to the U.S. Administration and to markets, mutual recognition of accounting established a High-Level Working Group Congress, and analyzes and reports on the standards, and secure trade, as well as more on Jobs and Growth, tasked with identifying political, social, and economic situation in the technical regulatory issues. policies and measures to increase EU-U.S. U.S. to its headquarters in Brussels. Through trade and investment to support mutually its engagement with political actors, the

The EU and the U.S.—Deep Integration

“Despite economic turbulence, the U.S. and EU-U.S. merchandise trade climbed to Europe remain each other’s most important more than $700 billion in 2015, double markets. No other commercial artery in the the level of 2000. world is as integrated.” The U.S. and Europe continue to be each “The transatlantic economy generates other’s primary source and destination $5.5 trillion in total commercial sales a for foreign direct investment: EU direct year and employs up to 15 million workers investment in the U.S.—on a historic cost in “onshored” jobs on both sides of the basis—totaled $1.7 trillion in 2014, or 59 Atlantic.” percent of total foreign direct investment in the U.S.; and U.S. direct investment in “Europe remains the most profitable the EU—on a historic cost basis—totaled of the world for U.S. companies… Total $2.5 trillion in 2014, or 51 percent of total output of U.S. foreign affiliates in Europe in U.S. foreign direct investment. 2014 was $693 billion, surpassing the pre- crisis high of $660 billion in 2008.” This means that EU FDI in the U.S. in 2014 was more than three times the total “The U.S. is the most important market for FDI in the U.S. by Asia and the Pacific, earnings of many European multinationals… and U.S. FDI in the EU in 2014 is almost European affiliate output in the U.S. in 2014 three and one-half times the FDI in the was $556 billion.” EU from all of Asia and the Pacific.

Source: “The Transatlantic Economy 2016,” Daniel S. Hamilton and Joseph P. Quinlan, Center for Source: U.S. Department of Commerce, Bureau Official White House Photo by Lawrence Jackson Transatlantic Relations, Johns Hopkins University of Economic Analysis School for Advanced International Studies. Ambassador David O’Sullivan presented his credentials to President at a White House ceremony on November 18, 2014, formally assuming the role of European Union Ambassador to the United States.

16 The European Union: A Guide for Americans media, academia, business circles, and civil States and the European Union. Since 1964, society, the EU Delegation raises awareness the EU has also maintained an office in New of EU issues and concerns, and promotes the York, which now serves as the EU’s Delegation importance of the EU-U.S. relationship among to the United Nations. the broader American public. The European Union Delegation to the The European Union has had a permanent United States is headed by Ambassador presence in Washington since 1954; as the EU’s David O’Sullivan, who is only the second EU first overseas representation, the Washington Ambassador to the United States since the office is a testament to the deep and long- Lisbon Treaty entered into force on December standing relationship between the United 1, 2009.

How the Relationship Works

To ensure that EU-U.S. relations markets are needed to create a business People-to-people contacts are vital to policy research centers. Additionally, remain robust, the EU and the U.S. environment that will stimulate innovation, increasing awareness and understanding under the “Europe and US: Getting to have developed formal and informal economic growth, and more investment as in the U.S. of the EU and its policies. Know Europe” grant competition, the mechanisms to foster transatlantic well as create new jobs. TABD members Under Erasmus Plus (2014-2020), the European Commission awards grants to cooperation. include leading American and European EU’s Jean Monnet program supports U.S.-based non-governmental and civil companies both large and small and with university-level teaching and research society organizations for programs that Presidential summits, held alternately strong transatlantic credentials. TABD is the on European integration. Historically, the promote a greater knowledge of the EU in the EU and the U.S., take place highest forum of the Transatlantic Business EU has awarded the highest number of within communities around the U.S. between the Presidents of the European Council, a cross-sectorial business Jean Monnet teaching projects outside Commission and the European Council association representing global companies Europe to projects at universities in the The EU’s Horizon 2020 program (2014- and the President of the United States. with headquarters in the U.S. and the EU. United States. 2020) for research and innovation funds The Senior Level Group (SLG), comprising the very best basic or “frontier” science senior EU and U.S. State Department Transatlantic Consumers’ Dialogue (TACD) The EU’s long-running Jean Monnet through the European Research Council, officials, prepares for EU-U.S. summits The TACD is a forum of EU and U.S. program supports excellence in the and its grants will reward the best ideas with the support of a joint task force consumer organizations that develops joint teaching, study, and research of the EU, from top researchers of any nationality which meets regularly to oversee the consumer policy recommendations and its institutions, and policies by funding (including the U.S.) who are willing to do day-to-day implementation of summit works to promote consumer interest in EU academic centers, professors, courses, much of their work in Europe. decisions. and U.S. policymaking. TACD conferences and projects at leading universities take place once a year, alternately in the U.S. across the United States. Such activities Through Marie Skłodowska-Curie Actions, Thematic dialogues ensure that a wide and the EU and produce recommendations foster EU-U.S. relations and provide the European Commission promotes range of actors contributes to the EU- related to food, nanotechnology, trade, a platform for the EU Delegation to the training and mobility of researchers U.S. policy process by encouraging health, and intellectual property issues. engage with communities and young through all stages of their careers by legislators, businesspeople, consumers, people around the country. offering fellowships for Europeans to scientists, academics, and citizens’ Transatlantic Legislators’ Dialogue (TLD) work in non-EU countries, including the groups to build and sustain links with The TLD involves biannual meetings In 2014, the European Commission U.S. Funding is also available for non- their transatlantic counterparts. of the European Parliament and U.S. established the Partnership Instrument European researchers to work in the EU. Congressional delegations along with (PI) to support conferences, briefing Transatlantic Business Dialogue (TABD) a series of teleconferences organized sessions, fellowships, and public Programs such as the EU Visitors Program The TABD’s goal is to help establish a on specific topics of mutual concern outreach—activities designed to and the EU Visiting Fellows Program also barrier-free transatlantic market which with a view to fostering an ongoing and encourage reflection and discussion help build long-term relationships and will serve as a catalyst for global trade uninterrupted dialogue. on the EU-U.S. relationship—at U.S. mutual understanding. liberalization and prosperity. Unified universities, think tanks, and public

The European Union: A Guide for Americans 17 Chapter Four Economic 4and Monetary Union and the Euro

The EU’s Economic and Monetary Union rules-based Stability and Growth Pact, and the economic and fiscal policies, a common (EMU) is unprecedented in modern history exchange rate realignments that periodically monetary policy, and a common currency, the and has transformed the global economic traumatized European economies have euro. landscape. become a thing of the past. Achieved in three main stages, EMU is More than a decade after its launch, EMU’s EMU has also increased the EU’s resilience to based on the concept of a single market for most visible accomplishment, the euro, adverse shocks and fostered the EU’s leadership sovereign nations. During the first stage, provides transparency and predictability in in the global economy, as demonstrated by its beginning in 1990, the EU ensured completely terms of price stability for businesses and response to the global economic and financial free movement of capital within the EU and national economies. A single monetary policy upheaval. The EU also addressed the sovereign established the single market. Stage two for the 19 euro area Member States, combined debt crises in several euro area countries by (1994–1999) included the introduction of with coordinated national fiscal policies, helps creating firewalls and new instruments to the European Monetary Institute (EMI), the foster an area of macroeconomic stability, provide appropriate frameworks to strengthen precursor to the European Central Bank. spurs the economic integration of Europe, the banking and financial sectors. The final stage, launched in 1999, witnessed and boosts cross-border trade, financial the birth of both the euro and the European integration, and investment. These elements Economic and Monetary Union Central Bank’s single monetary policy for the are essential conditions for growth. Fiscal The EU’s Economic and Monetary Union euro area. responsibility has improved thanks to the (EMU) encompasses the coordination of

18 The European Union: A Guide for Americans Although all EU Member States are part of hands of individual national governments, as Who Uses the Euro? the Economic and Monetary Union, not all do policies about labor, pensions, and capital EU countries are part of the euro area, which markets. However, sound public finances and includes only those that have adopted the flexible and appropriately integrated product, euro as their currency. Within the euro area, labor, and financial markets are vital for EMU monetary policy is conducted by the European to function effectively. Central Bank (ECB). All EU Member States— with the exception of Denmark and the Governments commit to respect commonly United Kingdom, which negotiated “opt-out” agreed rules on public finances through clauses—are expected to join the euro area adherence to the Stability and Growth Pact once specific economic convergence criteria (SGP), and coordinate their structural policies are met. to better achieve continental level stability, growth, and development through the Europe It was agreed that EU member countries that 2020 strategy. acceded since 2004 will join the euro area once they fulfill the necessary conditions; Estonia, The Stability and Growth Pact helps to enforce Cyprus, Latvia, Lithuania, Malta, Slovakia, and fiscal discipline within the EMU and to ensure Slovenia have already adopted the euro. sound and sustainable public finances.

Economic policy under EMU requires In mid-2010, the European Commission that Member States ensure coordination introduced a strategy for strengthening of their economic policies, provide for economic governance of the EU and the multilateral surveillance of this coordination, euro area, particularly in the aftermath of and demonstrate financial and budgetary the sovereign debt crisis that resulted from discipline. Monetary policy underpins the the recession. Cornerstones of the new single currency’s stability through price approach include enhanced surveillance of stability and respect for the market economy. fiscal policies, macroeconomic policies, and Fiscal policy (tax and spending) remains in the structural reforms.

The Maastricht Economic Convergence Criteria Austria Latvia Belgium Lithuania Five economic convergence criteria must be fulfilled before an EU Member State can Cyprus Luxembourg adopt the euro: Estonia Malta Finland Netherlands n Price stability. The inflation rate should be no more than 1.5 percentage points above France Portugal the previous year’s rate for the three EU countries with the lowest inflation. Germany Slovakia Greece Slovenia n Budget deficit. The national deficit generally must be below three percent of GDP. Ireland Spain n Debt. National debt should not exceed 60 percent of GDP, although a country with a Italy higher rate can still adopt the euro, provided its debt level is falling steadily. n Interest rates. Long-term rates should be no more than two percentage points above the previous year’s rate in the three EU countries with the lowest interest rates. n Exchange rate stability. The national currency’s exchange rate should have remained within the authorized fluctuation margins for two years.

The European Union: A Guide for Americans 19 Chapter Four

Economic and Monetary Union and the Euro The European Central Bank and the The Global Financial Crisis Eurosystem EU leaders responded rapidly and resolutely The Eurosystem, comprising the independent to the global financial crisis in 2008, crafting European Central Bank (ECB) and the a common approach for restoring business national central banks (NCBs) of the EU and consumer confidence and promoting Member States using the euro, is the monetary economic growth. The rescue plan, which authority responsible for safeguarding price succeeded in preventing a meltdown of global stability in the euro area. The Eurosystem and European financial markets, allowed Non-Euro Area Countries and ERM II ERM II ensures that exchange rate fluctuations also supports the EU’s general economic governments to guarantee interbank lending, Once a Member State adopts the euro, an between the euro and other EU currencies do policy objectives, including sustainable, non- provide short-term liquidity, and buy into exchange rate is irrevocably fixed between its not disrupt economic stability within the single inflationary economic growth and a high level banks to increase their capital. The European national currency and the euro throughout market, and helps countries prepare to join the of employment. Central Bank quickly and effectively injected the transition to full use of the single currency. euro area. Euro area candidates are required liquidity into the financial system to get credit Member States outside the euro area can also to participate successfully in ERM II for at Unlike the Federal Reserve in the U.S., the flowing again. choose to link their currencies to the euro least two years before joining the euro area to European Central Bank does not have direct under the Exchange Rate Mechanism (ERM satisfy the convergence criteria on exchange responsibility for bank supervision and As the economic crisis evolved into a sovereign II), in which participating currencies fluctuate rate stability. Denmark is currently a member financial stability, which remain under national debt crisis in some Member States, the EU within a specified margin around a stable but of ERM II, and other member countries will jurisdiction in EU countries. However, the adopted new rules on hedge funds and private adjustable central rate. When necessary, a follow as part of their transition to the euro. ECB is charged with “contributing to the equity, a new financial supervision system for currency is supported by intervention (buying smooth conduct of policies… relating to the the 28 EU Member States, and a permanent or selling) to maintain the exchange rate The Euro prudential supervision of credit institutions crisis management mechanism (the ESM) within the set limits. The most visible symbol of European and the stability of the financial system.” to safeguard the financial stability of the integration, the euro was launched as a “virtual . currency” on January 1, 1999, followed by the To fulfill this role, the ECB monitors and introduction of banknotes and at the assesses financial stability at the euro area In January 2012, all EU countries, except the start of 2002. The euro area has expanded from level; advises on the design and review of Czech Republic and the United Kingdom, its initial 11 members to 19 with the January regulatory and supervisory requirements agreed on a new Treaty on Stability, 2015 addition of Lithuania. for financial institutions; and promotes Coordination, and Governance in the cooperation between central banks and economic and monetary union. The Treaty Countries earn their way into the euro area supervisory authorities on issues of common aims to strengthen fiscal discipline through through adopting the economic, monetary, interest, such as payment system oversight and automatic sanctions, stricter surveillance, and and fiscal discipline necessary to comply financial crisis management. the “balanced budget rule”. with required economic convergence criteria, known as the “Maastricht criteria.” Main Tasks of the European Central Bank and the Eurosystem n Define and implement monetary policy for the euro area; After just a decade, the euro was already the n Conduct foreign exchange operations; world’s second most important international n Hold and manage the official foreign reserves of participating EU Member States; ECB President Mario Draghi currency, after the U.S. dollar. It is the second n Promote the smooth operation of payment systems; most actively traded currency in foreign n Authorize the issue of banknotes by NCBs in the euro area; exchange markets worldwide, and is used in n Contribute to financial stability and supervision through monitoring, assessment, and more than one-third of all foreign exchange advice to the national authorities. transactions. The European Central Bank and the NCBs of all EU Member States comprise the Euro- pean System of Central Banks (ESCB). As long as some EU states remain outside the euro area, the ESCB and the Eurosystem will co-exist.

20 The European Union: A Guide for Americans Chapter Five European Enlargement and Finland the European Neighborhood: Sweden Estonia

Europe Whole and Free Latvia Denmark Lithuania 5Enlargement the European Union enlarged from 15 to 25 Ireland United Enlargement—Now There Are 28 member countries. The EU invested more Kingdom Netherlands On July 1, 2013, Croatia became the 28th than $85 billion between 1990 and 1999 to support the new Member States during Poland EU Member State, following ratification of Belgium Germany the accession process, approximately what the Accession Treaty by 27 EU countries and Luxembourg the U.S. Marshall Plan provided to aid the Czech Croatia. Republic reconstruction of Europe after World War Slovakia II. Previous enlargements occurred in 1973 France Despite the turmoil that besieged the Austria (Denmark, Ireland, and the United Kingdom), Hungary countries that made up the former Yugoslavia, Slovenia today, Croatia is a stable democracy with 1981 (Greece), 1986 (Spain and Portugal), and Croatia Romania 1995 (Austria, Finland, and Sweden). a functioning market economy. Croatia (Bi-H) presented its application for membership in Portugal Spain Italy Bulgaria 2003 and was accepted as a candidate country EU enlargement is a historic step toward the the following year. Negotiations were launched long-cherished goal, supported by all U.S. fYROM on October 3, 2005, and concluded June 30, presidents since Eisenhower, of a Europe 2011. “whole, free, at peace, and growing in Greece Turkey prosperity.” The Historic “Fifth” Enlargement Any European state that respects liberty, The most expansive enlargement to date was Malta the “fifth enlargement”, which took place in democracy, human rights and fundamental Cyprus freedoms, and the rule of law is eligible to 2004 and 2007 and added 12 new Member 28 EU Member States States to the European Union. apply for EU membership, and must satisfy the for the process to begin. 5 EU candidates: Albania, former Yugoslav Republic of Macedonia (fYROM), Montenegro, Serbia, and Turkey On January 1, 2007, Bulgaria and Romania 2 Potential EU Candidates: Bosnia-Herzegovina (Bi-H), Kosovo (under UNSCR 1244) joined the European Union, completing Copenhagen Criteria the EU’s historic fifth enlargement. It was Any European country that adheres to the On the Path to EU Membership the remaining Western Balkan nations whose a momentous achievement, symbolizing following principles is considered eligible for According to EU nomenclature, “candidate future lies within the EU. Potential candidates Europe’s unification after 50 years of artificial membership in the EU: countries” are those whose EU membership are Bosnia-Herzegovina and Kosovo (under division, and created a new political order 1. Stable institutions that can sustain application has been accepted by all relevant UNSCR 1244). based on common values and a shared desire democracy, the rule of law, human rights, EU institutions, allowing the applicant to to construct a space of stability, security, and and respect for minorities. begin accession negotiations. Currently, Because accession often requires major prosperity. 2. A functioning market economy and the there are five candidate countries: Albania, political and economic reforms within the capacity to cope with competitive pressures. the former Yugoslav Republic of Macedonia candidate country, the process moves forward Eight countries from Central and Eastern 3. The ability to apply the EU’s rules and policies (fYROM), Montenegro, Serbia, and Turkey. at a pace which is largely determined by Europe, along with Cyprus and Malta, (known as the ). the applicant’s proven ability to take on the acceded to the EU on May 1, 2004, when “Potential candidate countries” encompass obligations of membership.

The European Union: A Guide for Americans 21 Chapter Five European Enlargement and the European Neighborhood: Europe Whole and Free

Photo by Kevin Botto

Candidate Countries phase of the European integration process. of minorities; and establishing a degree of Reform efforts paid off and the EU opened Albania From an economic perspective, candidate macroeconomic stability. As a result, on accession negotiations with Montenegro on June 29, 2012. Albania submitted its formal application for status will encourage foreign investments and, December 17, 2010, the European Council EU membership in 2009, and was granted as a result, lead to job creation. granted Montenegro the status of candidate Serbia candidate status on June 24, 2014, as a result of country. former Yugoslav Republic its accomplishments in areas including judicial In March 2012, Serbia became a candidate of Macedonia (fYROM) reform and the fight against and Before accession negotiations could begin, country. Serbia applied for EU membership in organized crime. To advance further on its fYROM became a candidate country in Montenegro had to address specific areas December 2009, and already has close ties with path of EU integration and toward eventual December 2005 and is well on its way including the rule of law; judicial, electoral, and the EU. The European Union is the country’s membership, however, Albania must continue to satisfying the political criteria for EU administrative reform; the role of Parliament; main trading partner and visa liberalization and consolidate its systematic approach to membership. It is a functioning democracy, freedom of the press; cooperation with civil for Serbian citizens traveling to the Schengen reforms, address existing shortcomings, and with stable institutions that generally guarantee society; and the fight against organized crime area entered into force in 2009, making it and corruption. tackle remaining EU-related challenges. the rule of law and respect for human rights. easier to establish contacts across borders. Additional work is necessary to improve the Candidate country status is an important electoral process, implement judicial and The EU Accession Process political signal for Albania and its citizens, police reform, and strengthen anti-corruption Applying for EU membership is the start of a long and rigorous process. When a country showing that the country is moving to the next efforts. submits an application to the Council of the EU, it triggers a sequence of EU evaluation procedures that may, or may not, result in the country being invited to become a member. The country has made major strides toward establishing a The European Commission issues a formal opinion on the applicant country, after which functioning market economy, the Council of the EU decides whether to accept the application. Once the Council unani- and economic reform mously agrees to begin accession negotiations, discussions may be formally opened pro- continues, particularly in the vided that the applicant country has met the core conditions—the Copenhagen criteria. areas of property ownership, the business and investment Negotiations in 35 separate policy areas (known as “chapters”) are conducted individually climate, and labor and with each candidate country, proceeding from one stage of the process to the next, but financial markets. only moving forward once all conditions have been met at each stage. Because of this meticulously managed process, the prospect of accession acts as a powerful incentive for Montenegro reform, providing simultaneous benefits to the EU and to its acceding members.

Since gaining its independence Once negotiations are concluded to the satisfaction of both sides, a detailed, comprehen- in 2006, Montenegro has sive Draft Accession Treaty is submitted for approval by the Council of the EU, the Europe- made significant progress in an Commission, and the European Parliament. Once approved, the treaty is signed by the building stable democratic candidate country and the representatives of all EU Member States, after which it is sub- institutions; fostering the rule mitted to all Member States and the candidate country for ratification, according to their of law, human rights, and respective constitutional rules. When the ratification process is complete, the treaty enters respect for and protection into force on its scheduled date, and the candidate country becomes an EU Member State.

22 The European Union: A Guide for Americans Photo by Nikos Koutoulas Photo from World Bank Photo Collection

The EU opened accession negotiations with adoption of EU law on transport, agriculture, The EU is committed to keeping Turkey’s to market economies (including, eventually, a Serbia on January 21, 2014. food safety, environment, climate change, and accession negotiations on track, even if at a free trade area), while also promoting regional energy; competitiveness and economic and somewhat slower speed. cooperation. Turkey social development; and development of good Turkey stands both as an anchor of stability relations with neighboring nations. This is in Potential Candidate Countries Individual Stabilization and Association in one of the most unstable and insecure addition to more than €4.8 billion between Since the 1990s, the EU has been working in Agreements provide a mix of trade concessions and EU economic and technical regions in the world and as a benchmark of 2007-2013 to support infrastructure and social Southeast Europe to help the region achieve assistance designed to help the EU’s Balkan democracy for the wider Middle East. Its improvements. peace, stability, prosperity, and freedom. neighbors build capacity and adapt to formal relations with the EU date back to the And the progression of a number of Western European standards, including the EU acquis In addition, €259 million in EU aid and Balkan nations toward EU membership is 1963 Turkish Association Agreement—the communautaire—the full body of EU laws Ankara Agreement—which envisioned closer trade measures are designed to encourage evidence that the EU approach is bearing fruit. Through the Stabilization and Association and policies—as required for eventual EU relations through a customs union, closer the economic development of the Turkish membership. economic and trade ties, and Turkey’s eventual Cypriot community and help facilitate the Process (SAP), which includes the prospect of EU membership, the Union is working to membership in the EU. The customs union, reunification of the island of Cyprus. strengthen democracy and speed the transition which allows most goods to cross the border in both directions without customs restrictions, In December 2006, the EU decided to delay became reality in 1995, jump-starting bilateral the opening of certain “chapters” (subject trade. areas) of the accession negotiations with Turkey pending Turkey’s compliance with Turkey attained candidate country status in an “Additional Protocol” to the Ankara 1999, and accession negotiations began in late Agreement, under which Turkey agreed 2005. The country has undertaken notable to open its ports and airports to goods political and human rights reforms: abolition transported from the Republic of Cyprus, an of the death penalty; increased civilian control EU Member State. of the military; abolition of State Security Courts; recognition of the supremacy of Turkey’s screening process continues and international human rights conventions over negotiations on other chapters will be domestic law; progress in the fight against opened when ready, but no negotiations torture; and greater gender equality in the can be concluded without resolution of the constitution and civil code. outstanding issue related to the Additional Protocol. The EU expects Turkey to actively Turkey benefits from considerable pre- support the negotiations toward a fair, accession assistance—€4.5 billion for the 2014- comprehensive, and viable settlement of the 2020 period, including €626.4 million in 2015— Cyprus issue within the UN framework and in focused on: the rule of law and judicial reforms; line with the EU’s founding principles.

The European Union: A Guide for Americans 23 Chapter Five European Enlargement and the European EU High Representative Mogherini Visits Pristina Neighborhood: Europe Whole and Free

The EU is by far the single largest donor of Kosovo (under UNSCR 1244) assistance to the Western Balkans as a whole. The EU has been providing significant support Substantial EU financial aid and has helped to Kosovo under UNSCR 1244 since 1999, establish numerous security, economic when the UN Security Council authorized development, and law enforcement programs a civilian and military presence there under to help countries in the region rebuild their UN authority. EU Member States continue to economies and rejoin the mainstream of provide about 75 percent of the forces in the European development. NATO-led KFOR peacekeeping force.

The EU and its Member States also lead on The European Commission Liaison Office the ground, having committed thousands of supports the Stabilization and Association troops and military police, the lion’s share of Process and helps drive through reforms that the international force, to peacekeeping and strengthen institutions, develop the economy, relief missions in the region. and adopt European standards. Bosnia-Herzegovina recognized standards and best practices. The laws and practices, particularly in such sectors In 2008 the EU established its largest ever EULEX Kosovo mission has been extended as the rule of law, public administration, The EU’s Stabilization and Association civilian mission in Kosovo—EULEX. This until June 14, 2018. economy, competition, and trade. Agreement (SAA) with Bosnia-Herzegovina Rule of Law mission helps to develop an (Bi-H) was signed in 2008 and ratified in 2011. independent and multi-ethnic justice system The EU’s political envoy to Kosovo—the EU EFTA and the EEA In 2015, the EU concluded that Bi-H had met and police and customs service, and to ensure Special Representative (EUSR)—promotes The European Free Trade Association (EFTA) the necessary conditions to proceed with the that these institutions are free from political overall coordination among the EU presences is an intergovernmental organization set up conclusion and the June 1, 2015 entry into interference and adhere to internationally- on the ground by providing political guidance more than fifty years ago to promote free trade force of the SAA, which is a testament to the to the Head of the EULEX rule of law and economic integration among its Member reform process in Bi-H and a milestone toward EU Facilitated Dialogue between mission and contributing to the development States. Originally comprising Austria, eventual EU membership. Serbia and Kosovo and consolidation of human rights and Denmark, Norway, Portugal, Switzerland, and fundamental freedoms in the country. the UK, and joined later by Finland, Iceland, The EU continues to fund pre-accession The EU facilitates a dialogue between and Liechtenstein, EFTA nations were not at reforms in BiH with €165.8 million between and Pristina that aims to pro- The EU and Kosovo concluded a Stabilization that time EU Member States. (Once a country 2014-2020. The EU’s financial and technical mote cooperation; achieve progress to- ward integration with the EU; and gener- and Association Agreement, which entered becomes an EU Member State, it relinquishes support helps the beneficiary country make the ally improve people’s lives. The historic into force on April 1, 2016. A milestone on its EFTA membership.) political and economic reforms that prepare “First agreement of principles govern- Kosovo’s path to European integration, the SAA them to take on the rights and obligations that ing the normalization of relations” was will provide for enhanced political dialogue, Instead, EFTA members sought a different accompany EU membership. reached April 19, 2013. The accord and closer trade integration, and other new forms relationship with the EU, but one that was its implementation are a breakthrough in of cooperation. All of this hinges on Kosovo’s characterized by robust and progressively relations between both sides and led to continued commitment to comprehensive freer trade. Current members of the concrete changes on the ground. reform and legislative alignment with the EU

24 The European Union: A Guide for Americans The European Neighborhood Policy The ENP is complemented by the Eastern and the Partnership, which fosters further engagement The EU launched the European Neighborhood with the EU’s eastern neighbors—, Policy (ENP) in 2004 to promote democracy, , , , , and economic development, stability, and security Ukraine—and offers them concrete, far- in the countries around the borders of the reaching support for democratic and market- expanded EU. The idea was to create a oriented reforms that contribute to their ring of friends with the Union’s immediate political and economic stability. neighbors and to avoid the emergence of new dividing lines between the enlarged EU and its Under the Eastern Partnership, existing neighbors. Partnership and Cooperation Agreements (PCAs) negotiated in the 1990s are being Through agreed upon programs of financial replaced by more ambitious Association and technical support, the EU provides Agreements and Deep and Comprehensive incentives for political and economic reform Free Trade Agreements. In June 2014, Georgia, in neighborhood countries, including access Moldova, and Ukraine signed Association to the Union’s single market, closer energy Agreements with the EU that include Deep and transportation links, and a chance to and Comprehensive Free Trade Agreements. participate in certain internal EU programs. The Eastern Partnership enables the EU’s ENP is helping countries strengthen the rule of neighbors to the east that are interested in law, democracy, and respect for human rights, moving toward greater integration with the EU to increase their political, economic, and EFTA—Norway, Iceland, Liechtenstein, and Iceland while enabling market-oriented economic reforms. cultural links with the EU. And, the process Switzerland—have chosen not to become part Iceland applied for EU membership in July is underpinned by a shared commitment to of the Union at this time. 2009 and began accession negotiations in July Distinct from the enlargement process and fundamental values— 2010 that were put on hold by the Icelandic (although eventual membership is not democracy, the rule of law, and respect for In referenda in 1973 and 1994, Norway government in May 2013. human rights and fundamental freedoms— decided against EU membership; Switzerland precluded for otherwise qualified European states), ENP includes Algeria, Armenia, and to the market economy, sustainable has applied for EU membership in the past, but Iceland has deep democratic roots, a development, and good governance. has not actively pursued it, choosing instead to Azerbaijan, Belarus, , Georgia, Israel, tradition of good governance, high social and , , Libya, Moldova, , conclude agreements in specific policy sectors environmental standards, and historically including transport, the environment, free the Palestinian Territories, , , and close ties with other European countries. It Ukraine. movement of people, procurement, research, already has a high degree of integration with agricultural trade, and conformity assessment. the EU thanks to its long-term membership in the (EEA) and As members of the 1994 European participation in the , which Economic Area (EEA), Norway, Iceland, allows its citizens to work and travel freely and Liechtenstein participate in the EU’s throughout the EU. Through the EEA, Iceland internal market while not assuming the full already participates in the single market, and a responsibilities of EU membership. significant number of EU laws apply in Iceland.

Iceland officially withdrew its candidacy for EU membership in March 2015.

The European Union: A Guide for Americans 25 Chapter Six The EU on the World Stage – 6Policies, Tools, and Global Relationships The EU’s Common Foreign and Regional conflicts in Europe and elsewhere in CFSP is designed to safeguard the values, Security Policy (CFSP) the 1990s, along with the emerging threat of interests, independence, and integrity of the In parallel with its growing economic and international terrorism, persuaded EU leaders Union; to strengthen the Union’s security; to political power, the EU has created its own to go beyond the original system of political preserve peace and strengthen international foreign and security policy which enables it to cooperation and create formal instruments for security; to promote international cooperation; EUFOR Tchad/RCA speak—and act—as one in world affairs. both joint diplomacy and intervention. The to develop and consolidate democracy and the Common Foreign and Security Policy (CFSP), rule of law, and respect for human rights and Chair of the —made up The need for European political cooperation established in 1993 when the fundamental freedoms. of the foreign ministers of the Member States— first emerged in the 1970s, and in 1974, EU took effect, provides a formal structure that and is a Vice-President of the Commission. As ministers of foreign affairs began meeting allows Member States to coordinate consistent Because foreign and security policy is one such, the High Representative ensures effective regularly to coordinate their foreign policy. policies and assert the EU’s inherent political area where essential authority remains with inter-institutional coordination leading to the identity. the governments of the EU Member States, implementation of coherent external policies. Global Strategy for the EU’s Foreign and Security Policy CFSP decision-making procedures are The EUHR is supported by the European intergovernmental. However, all of the EU’s External Action Service (EEAS), comprising major institutions play a role. Decisions under staff recruited from the Council Secretariat, The EU’s Global Strategy for Foreign CFSP are reached unanimously, except where the European Commission, and the diplomatic and Security Policy, presented in the treaties provide otherwise. corps of the EU Member States. mid-2016, responds and adapts to a dramatically different security The European Council, consisting of heads The European Parliament is consulted environment in the second decade of state and/or government, is responsible of the 21st century. The strategy regularly, although it has no direct powers in for foreign policy, defining policy principles this realm. defines how the European Union and general guidelines, agreeing on common will engage with the world, while strategies for activities with individual remaining true to its defining values, Member States not willing to participate in a countries, and adopting joint actions principles, and interests, including particular foreign policy or security action may and common positions within the CFSP the rule of law, democracy, and opt out without holding back the rest of the respect for human rights. The goal framework. The President of the European Union through a process called “constructive is security and prosperity for the EUNAVFOR Med-Operation Sophia responds to the Council ensures the external representation abstention.” EU and beyond. To accomplish in the central Mediterranean Sea. of the EU in the area of Common Foreign and this, the EU invests in its partnerships and promotes a rules-based global order with Security Policy at the level of heads of state and Common Security and Defense Policy multilateralism as its key principle and the United Nations at its core. government. (CSDP)

Security challenges increasingly require a response that combines aspects of both The EU’s High Representative for Foreign In 1999, as part of the EU’s Common Foreign internal and external policies. The strategy aims at greater EU effectiveness in tackling Affairs and Security Policy (EUHR) is charged and Security Policy, European leaders decided challenges such as energy security, migration, climate change, terrorism, and hybrid with coordinating and carrying out the EU’s to put in place the EU Security and Defense warfare. While continuing to use its “soft power”, the EU is also determined to stand CFSP and the Common Security and Defense Policy (ESDP) to develop the international together internally on security and defense and take responsibility in neighboring Policy (CSDP).The EUHR also serves as the crisis management capacity needed to regions to promote resilience and address conflicts and crises. undertake security-related operations, such

26 The European Union: A Guide for Americans as peacekeeping, monitoring, and conflict In addition, the Lisbon Treaty introduced a Treaty Organization—to which 22* of the 28 prevention. provision, known as “enhanced cooperation” Member States belong—have built a genuine that enables a group of at least nine willing strategic partnership with the shared goal of In March 2003, the EU deployed its first Member States to deepen their cooperation regional stability and peace. military operation to the former Yugoslav in the field of military crisis management Republic of Macedonia. Since then, the EU following the unanimous approval of the The initial framework for EU-NATO has launched more than 30 civilian and/ Council. A second measure, “permanent cooperation was the 1999 “Berlin Plus” or military operations worldwide within structured cooperation”, provides for a flexible arrangement, which first granted the EU the ESDP framework, including actions in and permanent defense mechanism which access to NATO operational planning assets Southeast Europe, the Middle East, Africa, does not require a minimum number of when leading crisis management operations; EU NAVFOR Atalanta South Asia, and Georgia. To allow for such participating countries to proceed, and within made NATO capabilities and common assets Since 2005, commercial shipping in the a rapid expansion of the ESDP, substantial which the European Defense Agency plays a available to the EU; offered NATO European Gulf of Aden, off the Somali coast, and in institutional and conceptual innovations were key role. command options for EU-led operations; and the western Indian Ocean increasingly has introduced in 2009 under the Lisbon Treaty, took the possibility of making NATO forces been prey to modern-day pirates, who not and the ESDP became the Common Security Finally, the Treaty of Lisbon codifies and available for EU operations into account only endanger cargo and crew, but also and Defense Policy (CSDP). updates the scope of CSDP operations. In during the NATO planning cycle. threaten the free movement of commerce addition to traditional humanitarian and and humanitarian aid. The EU battles such The Treaty of Lisbon introduced a solidarity relief work, peacekeeping and post-conflict Today, agreements between the EU and NATO modern-day piracy through its first Com- and mutual assistance clause that obliges all EU stabilization, and the use of combat forces in also provide for specific cooperation on crisis mon Security and Defense Policy (CSDP) Member States to provide aid and assistance crisis management, the treaty provides for management, anti-terrorism, nonproliferation naval operation, EU NAVFOR Somalia/Op- in the event that another Member State were joint disarmament operations, military advice of weapons of mass destruction, and the eration Atalanta. to become a victim of armed aggression. (It and assistance, and a contribution to the fight exchange of classified information. In addition, Conducted in support of 2008 UN Secu- does not, however, affect the specific character against terrorism. the EU has access to NATO’s planning rity Council Resolutions calling on mari- of the security and defense policies of certain capability. time nations to deploy naval vessels and The EU and NATO EU Member States, their neutrality, or their military aircraft to fight piracy and armed commitments under NATO.) The European Union and the North Atlantic The culmination of those agreements was the robbery on the high seas, Operation Ata- EU’s assumption on March 31, 2003, of NATO’s lanta protects vulnerable vessels cruis- EULEX Kosovo mission in the former Yugoslav Republic of ing off the Somali coast, including World Macedonia. Called Operation Concordia, Food Program vessels delivering food aid the deployment of about 400 troops from EU to displaced persons in Somalia. Up to 12 The European Union’s Rule of Member States and other nations marked the EU ships and a number of Maritime Patrol Law Mission in Kosovo (EULEX) first time the Union led a military mission. Aircraft operate at any given time, and aid is the largest civilian mission ever ships protected by the EU carry supplies launched under the CSDP. It assists to feed approximately 1.6 million Somalis the Kosovo authorities in implement- Collaboration between the EU and NATO is every day. EU NAVFOR Atalanta’s mission ing the rule of law, particularly by likely to grow in the future. has been extended until December 2016. helping to develop an independent and multi-ethnic justice system and *Austria, Cyprus, Finland, Ireland, Malta, and police and customs service, and by Sweden are not NATO members. ensuring that these institutions are free from political interference and Bilateral and Multilateral Relationships and deepen relations with its partners. adhere to internationally-recognized standards and best practices. across the Globe As a major global actor, the EU is at the forefront of promoting free trade, sustainable Since its inception, the EU has developed Fully deployed, EULEX included nearly 2,000 international police officers, judges, prose- development, freedom, democracy, respect for a network of bilateral and multilateral cutors, and customs officials, supported by around 1,200 local staff. Its mandate extends human rights, and the fight against poverty. agreements designed to continually expand until June 14, 2018.

The European Union: A Guide for Americans 27 Chapter Six The EU on the World Stage – Policies, Tools, and Global Relationships

Container terminal Hamburg Harbor. Credit: Raimond Spekking

EU has been a key player in the successive by increasing transparency and improving EU Trade Partners by Country (2015) USA rounds of international negotiations on trade customs procedures. Ministers also agreed € millions 619,660 liberalization. The World Trade Organization on a series of Doha Development Agenda Percentage of EU’s Total External Trade by Country (WTO) and the multilateral trading system (DDA) issues related to agriculture and USA 17.6% 520,909 are at the core of EU trade policy—the EU development, including areas of concern to the Rest of world Switzerland believes that a system of global rules is the best Least Developed Countries. WTO members 36.9% 253,199 way to ensure that trade between countries is continue to reflect on the best way to move fair and open. forward on the remaining DDA issues. 209,622 Turkey Although all EU Member States are individually The EU has complemented its Doha strategy 140,714 members of the WTO, trade policy is the by launching a series of negotiations on deep Norway exclusive jurisdiction of the European Union, and comprehensive bilateral agreements, which represents the interests of all 28 EU particularly free trade agreements (FTAs). 123,128 Member States at bilateral and multilateral The Comprehensive Economic and Trade 1.9% China Japan 14.8% 116,318 levels. Trade agreements are authorized by the Agreement between the EU and Canada was Council of the EU, negotiated by the European completed in 2014. Once the agreement is South Korea Commission, and require the approval of both implemented, 99 percent of customs duties 2.2% 90,248 Switzerland the Council and the European Parliament will be eliminated along with many other India South Korea 7.2% before entering into force. obstacles affecting business. Negotiations 77,589 2.6% are ongoing with a number of other trading Japan Russia Brazil As a strong advocate of multilateral action, partners, including Japan and Malaysia. 3.3% 6.0% 65,666 Norway Turkey the EU has firmly supported the WTO’s Doha Rest of world 3.5% 4.0% Development Round of trade negotiations European Commission, DG Trade 1,301,606 since it was launched to negotiate further trade liberalization for goods and services, improve To advance its aims, the EU holds regular The EU is a staunch proponent of market access for developing countries, and summit meetings with major partners such multilateralism—relying on an effective review trade rules. as the United States, Japan, Canada, Russia, multilateral system—a principle at the core of Ukraine, India, China, and Brazil. The Union its external relations, whether in international At the 9th WTO Ministerial Conference also holds regional dialogues with other trade, development, human rights, or foreign in 2014, ministers finalized the negotiation countries in Asia, the Mediterranean, the and security policy. of the Trade Facilitation Agreement (TFA) Middle East, Latin America, and Africa. which, once implemented, will boost global These relationships cover political dialogue, International Trade and the World economic growth and provide significant investment, economic cooperation, finance, Trade Organization benefits to economic operators around the energy, science and technology, human rights, Because the harmonization of trade policies world. The agreement aims to make importing environmental protection, counterterrorism, was central to European integration, the and exporting more efficient and less costly and international crime.

28 The European Union: A Guide for Americans The EU and the United States launched Foreign Aid and Development ECHO funding aids millions of people each EU-UN cooperation occurs on a broad range negotiations on the Transatlantic Trade and In 2000, 189 world leaders adopted the eight year, and its assistance, relief and protection of issues: human rights; development; climate Investment Partnership (TTIP) in July 2013 Millennium Development Goals (MDGs)— operations, along with its actions to facilitate change; peace-building in conflict-ridden to help deliver new rules, better access to the the first ever set of shared development the free flow of assistance, play a key role countries; humanitarian assistance in crises; partners’ respective markets, and decrease red targets at global level—to address the world’s in alleviating the worst effects of serious fighting corruption and crime; addressing tape for businesses. major development challenges by 2015. While humanitarian crises. global health concerns; labor issues; dramatic progress was achieved, in 2015, and culture. The partnership reflects the In addition to opening its markets to the international community, including the Global Governance and European Union’s commitment to “effective trading partners that reciprocate, the EU EU and its Member States, followed up by multilateralism”, with the United Nations at employs a combination of preferential trade adopting the 2030 Sustainable Development Effective Multilateralism its core—a central element of the EU’s foreign arrangements, technical assistance, and Agenda, which sets specific targets to help policy. grant funding to contribute to the economic progress further toward eradicating poverty United Nations development, stability, and prosperity of and achieving sustainable development by Today’s global challenges—sustainable Together, the 28 EU Member States comprise developing and least developed countries. 2030. development, climate change, and more than one-eighth of all votes in the humanitarian crises, among others—can only UN General Assembly and one-fifth of the The 2030 Agenda for Sustainable The European Union has been active in be managed by nations working in partnership. membership in the UN Security Council. Development, Adopted by the development cooperation from its start in EU Member States together are the single United Nations, Targets Key Areas the late 1950s. As enshrined in its treaty, To respond successfully, the international largest financial contributor to the UN system, the reduction and eradication of poverty is community needs an efficient multilateral funding 30 percent of the organization’s the EU’s primary objective in development system founded on universal rules and values. n Poverty, inequality, food security, regular budget, 33 percent of UN peacekeeping cooperation policy. Since adopting the MDGs, and health; operations, and about one-half of all UN development assistance provided by the EU In addition to the active participation of the member countries’ contributions to UN funds n Sustainable production and and its Member States has nearly doubled, and EU Member States, the European Union has and programs. The European Commission consumption; this aid now provides two-thirds of the world’s been a permanent observer at the United also contributes more than $1.5 billion to n Growth, employment, and official development assistance—67 percent in Nations since 1974, with Delegations at major support external assistance programs and infrastructure; 2015 (approximately $87 billion). UN sites: New York, , , Rome, projects. With the United States providing n Sustainable management of natural and Paris. around one-quarter of UN resources, the EU resources; Humanitarian Aid. The EU is a leading donor and the U.S. together account for more than 60 of emergency and humanitarian assistance, With the entry into force of the Treaty of percent of the United Nations’ budget. n Climate change and oceans; and delivers aid to those in need regardless Lisbon, the European Union replaced and n Gender equality; of race, religion, or politics. Through the succeeded the European Community, and The EU Member States, the Council of the EU, European Commission’s Directorate-General n Peaceful, inclusive societies; the European Union now exercises all rights and the European Commission meet regularly for Humanitarian Aid and Civil Protection and assumes all obligations of the European to coordinate their positions and give their n Access to justice and accountable (ECHO), the EU has supported humanitarian Community, including its status within the collective weight greater impact. Since the institutions. aid programs in more than 140 countries by United Nations. Talks are ongoing to shift the mid-1990s, they have stood together on about providing funding, technical expertise, and EU from observer status to full member of the 95 percent of all resolutions passed by the UN operational coordination. United Nations. General Assembly. EU candidate countries,

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potential candidate countries, and members , counts all 28 EU countries G7. The (G-7), launched in of the European Free Trade Association and among its 47 member states. The COE’s 1975 (initially as the G6, then G7 when Canada European Economic Area also frequently align European Convention for the Protection of joined in 1976, and G8 when Russia joined in their positions with those of the EU. Human Rights and Fundamental Freedoms 1998) is a forum for the leaders of seven of the EU Delegations (ECHR) lies at the heart of both organizations’ world’s most industrialized countries. It aims The EU is party to more than 50 UN activities, and is enshrined in the EU’s treaty. to find solutions to global issues, including The European External Action Service multilateral agreements and conventions as the international development, health, peace and is supported by a network of approxi- only non-state participant, and has obtained The EU cooperates with the Council of security, and climate change. G7 members mately 140 EU delegations throughout “full participant” status in many major UN Europe on issues including protection of include Canada, France, Germany, Italy, Japan, the world, staffed by EU diplomats and conferences. persons belonging to national minorities, the United Kingdom, the United States, and locally recruited employees. With the sta- the fight against discrimination, racism and the European Union (as a “non-enumerated” tus of diplomatic missions, the delega- xenophobia, the fight against torture and ill- member). In 2014, the G8 reverted back to the tions officially represent the EU to their treatment, the fight against human trafficking, host countries, and in several cases to The Council of Europe (COE), an G7, as members met without Russia due to and freedom of expression and information. international organizations, including the international organization established in 1949, Russian activities in Ukrainian territory. The EU Agency for Fundamental Rights also United Nations. in Strasbourg, France, to promote democracy works with the Council of Europe to promote . Since 1999, the Group of Twenty and protect human rights and the rule of Each delegation has a mandate that re- respect for human rights inside the EU. (G20) has contributed to strengthening flects the specific EU relationship with the the international financial architecture and individual country, whether it is an appli- All EU Member States have acceded to the fostering sustainable economic growth and ECHR, and the Treaty of Lisbon requires the cant for EU membership, a neighboring development. Established in the wake of the nation that benefits from the European EU itself to accede, placing it on the same 1997 Asian financial crisis, the G20 brought footing as its Member States vis-à-vis the Neighborhood Policy, an industrial nation together the finance ministers and central with which the EU has specific strategic system of fundamental rights protection bank governors of the major advanced and and trade relations, or one of the many supervised by the European Court of Human emerging economies to stabilize the global beneficiaries of development assistance. Rights. With accession, the EU becomes the financial market. 48th signatory of the ECHR and will have its The delegations are essential to the pro- own judge at the Strasbourg court. Accession To address the global financial and economic motion of EU interests and values around negotiations began in 2010. crisis that began in 2008, G20 summits were the world, and are at the front line in de- livering EU external relations policy and G7 and G20 held twice in 2009 and again in 2010. G20 members are , , Brazil, action, from the common foreign and The European Union is a full member of Canada, China, the European Union, France, security policy through trade and de- both the G7 and the G20; it is represented at Germany, India, Indonesia, Italy, Japan, velopment cooperation to scientific and technical relations. They work in close summits by both the European Commission Mexico, Russia, , , cooperation with the local diplomatic and European Council presidents. Republic of Korea, Turkey, United Kingdom, missions of the EU Member States. and the United States.

30 The European Union: A Guide for Americans Specific Relationships Africa, Caribbean, and Pacific The EU maintains special links to African, Caribbean, and Pacific (ACP) countries that were already in place, based on colonial and other historical and geographic ties. The EU is also Africa’s biggest trading partner and largest donor, providing more than 50 percent of development aid to the region. development, economic, and trade matters, own strategies to reduce poverty. EU funding democratic governance and human rights; Following decades of special cooperation and also in the political sphere. supports economic reform efforts of ACP human development; sustainable and inclusive and assistance to ACP countries, in 2000 governments, expansion of the private sector, development and growth and continental the EU and the ACP—which now includes Economic Partnership Agreements. For more and improved social services, including better integration; and global and emerging issues. 79 countries and acts as a group within than 30 years, ACP exports to the EU market water supplies and modern energy services. a legal framework—signed the 20-year were granted non-reciprocal preferential African Union. With the creation of the Cotonou Partnership Agreement to facilitate access (i.e., reduced import tariffs). Today, the Everything but Arms. Since 2001, the EU African Union in 2002, the European Union development, cooperation, and dialogue. EU and ACP countries instead work together has offered “duty-free/quota-free” or DFQF took a broader approach to its relations with Cotonou establishes a comprehensive EU- through regional Economic Partnership access (no tariffs, no restrictions on quantity) Africa. The European Commission quickly ACP partnership that seeks to reduce and Agreements (EPAs), specialized and “tailor to imports of all products except arms and initiated strategic support of the African eventually eradicate poverty in ACP countries, made” to take account of the specific socio- ammunition from the 49 countries on the Union Commission by funding its institutional promoting sustainable development and economic circumstances of the various ACP UN Least Developed Countries list, including development and core activities, including the gradual integration of the regions into regions. many ACP countries. initiatives to promote peace and security, the world economy through cooperation on good governance, regional integration, and EPAs seek to kick-start reform, strengthening EU-Africa Strategic Partnership. Established increased trade. The EU has had a delegation economic and institutional change and in 2007 at the second EU-Africa summit, to the African Union in Addis Ababa, , the rule of law, helping to attract foreign this strategic relationship is designed to since 2008. direct investment and generate sustainable further develop dialogue and cooperation economic growth, and leading to the gradual in areas of joint political concern; openly Russia integration of ACP countries into the world address not only African issues but also The Russian Federation’s role in Ukraine has economy. EPAs have been concluded with the those at a European and global level; find seriously impacted EU-Russian relations. Caribbean, the Southern Africa Development regional and continental responses to Africa’s Consequently, many bilateral activities have Community, West Africa, and the East African most important challenges; and leverage the been halted, and sanctions have been adopted Community. Negotiations are progressing involvement of stakeholders including national in response to Russia’s illegal annexation of in the Pacific and the remaining African parliaments, civil society, the private sector, Crimea and continuing destabilization of regions. As part of the EPAs, the EU provides and the African diaspora. Roadmap 2014- Ukraine, including aggression by Russian considerable cooperation and assistance 2017, adopted at the 4th EU-Africa summit in armed forces on Ukrainian soil. Nevertheless, to ACP countries and works to ensure that Brussels in 2014, focuses on jointly identified the EU and Russia are global players bonded efforts are complementary to the countries’ priorities including: peace and security; by proximity and shared interests.

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Ukraine, Georgia, and Moldova Ukraine, Georgia, and Moldova are The Deep and Comprehensive Free Trade Area all participants in the EU’s European agreements will boost bilateral trade in goods Neighborhood Policy as well as the EU’s and services and gradually align the partners’ Eastern Partnership program (described in trade-related rules and standards with those chapter five). The EU concluded and signed of the EU. It will also provide the basis for comprehensive Association Agreements modernizing and developing Georgia’s, (AAs) with Ukraine, Georgia, and Moldova in Moldova’s, and Ukraine’s economies. legal training, and implementing the legal EU Response to Russian Actions Central Asia guarantees for those accused in court. in Ukraine Following the 2004 and 2007 enlargements, the EU moved closer to Central Asia The Mediterranean Region n Suspended: talks on visas, a new geographically, politically, and economically, The Euro-Mediterranean Partnership, EU-Russia agreement, and most EU- and is intent on strengthening and deepening introduced in 1995 and formerly known as Russia cooperation programs. its relationship with Central Asian countries: the Barcelona Process, was re-launched in Kazakhstan, Kyrgyzstan, Tajikistan, n Targeted Measures Imposed: on ac- 2008 as the Union for the Mediterranean Turkmenistan, and Uzbekistan. cess to capital markets, defense, du- (UfM). The partnership includes all 28 EU al-use goods, sensitive technologies Member States plus 15 partners ringing the (including those in the energy sector). The EU has established Partnership and Mediterranean: Algeria, Egypt, Israel, Jordan, n Suspended: signing of new financing Cooperation Agreements with each country, Lebanon, Morocco, the Palestinian Territories, operations in Russia by the European which encompass political dialogue, trade Syria (suspended), Tunisia, Turkey, other Investment Bank and the European and economic relations, and cooperation Bank for Reconstruction and Develop- in a variety of sectors, including energy, Mediterranean coastal states (Albania, Bosnia ment. environment, transport, security, and & Herzegovina, Montenegro, ), and n Ban: on trade and investment for education. EU priorities in Central Asia include Mauritania. The Arab League has observer Crimea/Sevastopol (supporting the promoting stability and security, contributing status. EU’s non-recognition of the annexa- to sustainable economic development tion of Crimea). and poverty reduction, promoting good The Union for the Mediterranean has a n Travel Bans and Frozen Assets: ap- governance and economic reform, and special role, because it complements bilateral ply to specified individuals and bodies facilitating closer regional cooperation both relations, which will continue to develop under in Russia and Ukraine. within Central Asia and with the EU. the European Neighborhood Policy (ENP) and the pre-accession framework (for the In late 2008, the EU launched a Rule of Law Western Balkan countries and Turkey). UfM 2014. The agreements include provisions for Initiative for Central Asia to foster exchanges priorities include reversing Mediterranean Sea a Deep and Comprehensive Free Trade Area of experience in the legal and judicial spheres. pollution; developing transportation corridors (DCFTA). The EU-Georgia agreement entered Under this program, EU and Member State to enhance the free flow of people and goods; into force July 1, 2016. Implementation of the projects work toward reinforcing cooperation establishing a civil protection scheme focused agreements is underway in all three countries. between constitutional courts, modernizing on prevention, preparation, and response

32 The European Union: A Guide for Americans to disasters; creating alternative energy The Middle East and Northern Africa Afghanistan Iraq sources, including a Mediterranean solar plan; In early 2011, populations in several countries The EU has a long-term commitment to help On May 11, 2012, the EU and Iraq signed establishing the Euro-Mediterranean Higher in the Middle East and North Africa forced Afghanistan and its people achieve a secure, a Partnership and Cooperation Agreement Education, Science, and Research Area; and out autocratic rulers and began a process of stable, free, prosperous, and democratic (PCA), a landmark achievement representing supporting micro-, small-, and medium- political transformation. Such democratic society. The overarching strategy is the the first ever contractual agreement sized businesses with technical and financial change is consistent with the EU’s core values development of Afghanistan’s institutions to between the partners. The PCA provides a assistance. of human rights, pluralism, the rule of law, provide the resilience needed to safeguard comprehensive platform for engagement in and democracy, and the European Union is progress to date and provide the platform for areas including: political and social issues; In addition, the EU’s European Neighborhood prepared to commit important technical and an effective and sustainable Afghan state. The human rights; the rule of law; migration; the Policy encompasses strong political and financial resources, as well as its extensive specific focus encompasses: environment; trade; culture; energy; transport; economic relations with partners in the region, experience on transition, at the request of and security. Experts from both sides meet underpinned by Association Agreements with countries in the region. Priorities include n Promoting peace, security, and regional sta- regularly in technical working groups to countries including Algeria, Egypt, Israel, supporting democratic transformation and bility; discuss cooperation in these fields. Jordan, Lebanon, Morocco, Tunisia, and an institution building; increasing dialogue n Reinforcing democracy; Interim Association Agreement on Trade and with and support to civil society; promoting n Encouraging economic and human devel- The EU has been one of the largest donors Cooperation with the Palestinian Authority. mobility and people-to-people contacts; and opment; supporting the Iraqi political and electoral buttressing economic growth, notably by n Fostering the rule of law and respect for hu- process, with more than €94 million since improving market access. man rights, particularly for women. 2004, including the deployment of an Electoral Assessment Team for the March 2010 general Israel and the Palestinian Territories Afghanistan received more development elections. EU support also targets the refugee The EU is firmly committed to the objective aid from the EU and its Member States crisis and the rule of law. The EU’s first CSDP of two States, Israel and a democratic, viable than from any other country. The European integrated rule of law mission—EUJUST Palestine, living side-by-side in peace and Commission alone has committed €1.4 billion LEX—ran from July 2005 through December in development assistance over seven years security, in the framework of a comprehensive 2013. Middle East peace. With Russia, the United (2014-2020)—the largest EU program in any country. Funds will focus on vital sectors States, and the United Nations, the EU forms The EU continues to provide financial for growth and stability, including rural the “Quartet” that drafted the 2002 roadmap support to Iraq—more than €1 billion since development and agriculture, improvements of goals and timelines to encourage progress. 2003, which includes both reconstruction in health, policing and the democratic In addition to diplomatic efforts, the EU and humanitarian assistance. The EU has oversight of government. also supports or runs various civic, business, earmarked an additional €75 million (2014- and social initiatives to promote peace and 2020) for strengthening human rights and the Since 2007, the EU’s EUPOL Afghanistan—a tolerance in the region. civilian Common Security and Defense rule of law; improving primary and secondary Policy operation—has functioned as part of education; and providing access to sustainable The EU is the biggest donor to the Palestinians the international effort to help Afghans take energy for all. and the biggest trading partner and major responsibility for maintaining law and order. economic, scientific and research partner of The police training mission supports the In addition, as the EU develops a regional Israel. Israel and the Palestinian Authority development of sustainable and effective civil strategy for Iraq and Syria and the threat are partner countries in the European policing arrangements that ensure appropriate from Da’esh (also referred to as ISIS or ISIL), Neighborhood Policy, and have agreed to interaction with the wider criminal justice in February 2015, the European Commission action plans with commitments on issues system under Afghan ownership. proposed a €1 billion aid package (2015- relevant to the peace process. 2016) to help cope with the region’s profound humanitarian crisis, counter terrorism and violent extremism, and stem regional instability.

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Iran Relations between the EU and have evolved High Representative for Foreign Affairs is the only intergovernmental forum aimed considerably in recent years, progressing from and Security Policy, resulted in the JCPOA at promoting peace and security through the international dispute over Iran’s nuclear agreement of July 14, 2015, by the E3+3 dialogue and cooperation in Asia Pacific. program and the consequent sanctions regime with Iran. The agreement aims to ensure the imposed against Iran to the agreement on a exclusively peaceful nature of Iran’s nuclear EU and ASEAN negotiations for a regional Joint Comprehensive Plan of Action (JCPOA) program. In return, sanctions (imposed by the free trade agreement (FTA), launched in 2007, by the EU3 + 3 (EU, France, Germany, the UN Security Council, the EU, and the U.S.) have slowed and are temporarily suspended. United Kingdom, Russia, China, and the related to Iran’s nuclear program were to be Meanwhile, the EU is pursuing bilateral United States) and Iran. removed. FTAs with some ASEAN countries. The EU has concluded Free Trade Agreements with Negotiations on the Iranian nuclear program, On January 16, 2016—Implementation Day— Singapore and Vietnam and is negotiating co-chaired by Federica Mogherini, the EU the EU lifted all nuclear-related economic FTAs with the Philippines, Malaysia, and and financial sanctions against Iran following (although talks with the latter two are verification by the International Atomic on hold). These agreements are stepping stones Energy Agency that Iran had implemented toward an eventual full agreement between the the nuclear related measures as agreed in the EU and ASEAN. JCPOA. The conclusion and implementation of this agreement have opened the way for a The ten ASEAN countries are Brunei renewal of broader relations between the EU Darussalam, Cambodia, Indonesia, Lao PDR, and Iran. Malaysia, Myanmar (Burma), Philippines, Singapore, Thailand, and Vietnam. To facilitate further cooperation and prepare for the future opening of an EU Delegation, China an EU liaison team was sent to Tehran in May Europe has a major political and economic 2016. stake in supporting China’s full and successful transition into a prosperous, stable, and open ASEAN country that embraces the rule of law and free human rights. The EU and the Association of South East market principles. n Encouraging China’s ongoing integration in Asian Nations (ASEAN) share a commitment the global economy and trading system, to regional integration, as a means of fostering EU policy toward China is centered on several while supporting the economic and social regional stability, building prosperity, and principal objectives: reform process. addressing global challenges. n Raising the EU’s profile in China to enhance n Broadening and deepening dialogue with mutual understanding. The EU holds regular dialogues on regional China bilaterally and on the world stage. political and security issues with ASEAN n Supporting China’s transition to an open so- To reflect the growing depth of their relations, through the ASEAN Regional Forum, which ciety based on the rule of law and respect for the EU and China upgraded their strategic

34 The European Union: A Guide for Americans partnership in 2010 to include foreign affairs, more secure legal framework for investors on security matters, and global challenges, both sides. such as climate change and global economic governance. The institutional architecture of The EU and China are two of the world’s the EU-China relationship is based on three biggest traders, and the EU is committed to pillars: political, economic and trade, and open trading relations with China, provided people-to-people contacts. The EU—China that China trades fairly, respects intellectual Strategic 2020 Agenda for cooperation is the property rights, and meets its WTO guiding document underpinning EU—China obligations. relations. Both sides will fully implement the Agenda through their annual summit, regular Japan meetings of counterparts, and their broad As democracies sharing the same values range of sectorial dialogues. Human rights and beliefs in the rule of law, human rights, are discussed regularly as part of the regular and sustainable economic development, the enhance the economic and trade partnership, Trade Agreement (FTA), which is predicted political dialogues, as well as through specific EU and Japan together have the potential to work together to tackle global challenges, and to generate up to a 40 percent increase in Human Rights dialogues held biannually since project joint interests and ideals on a global bring people and cultures together. bilateral trade. The FTA will eliminate tariffs 1995. scale. Both provide support internationally on industrial and agricultural goods, break where it is needed most: stabilization and The EU and Japan are working together down non-tariff barriers in areas including In 2008, the EU and China launched a democratization work in Afghanistan and toward a new Framework Agreement covering automobiles, electronics, pharmaceuticals, High-level Economic and Trade Dialogue Pakistan, help in Sudan’s Darfur region, and political dialogue, policy cooperation, and and medical devices, and boost market access as a platform for tackling issues of mutual participation in anti-piracy efforts off the coast regional and global challenges. Negotiations in the services area. The FTA, which entered concern in trade, investment, market access, of Somalia. underway since 2013 on an EU-Japan Free into force in 2011, also includes chapters on and protection of intellectual property rights. Trade Agreement are designed to stimulate protection of intellectual property rights, In late 2013, negotiations were launched To form a solid strategic partnership, the EU jobs and growth on both sides. government procurement and sustainable on a comprehensive EU-China Investment and Japan agreed to a ten-year Joint Action development (environmental and labor rights Agreement designed to provide a simpler and Plan designed to promote peace and security, Cooperation occurs at all levels, and covers protections). foreign policy, economic and trade relations, and regional and global issues. Ongoing South Asia bilateral dialogues address the environment, India information society, science and technology, The EU is India’s largest trading partner, trade, financial services, and industrial policy. accounting for roughly one-fifth of India’s trade, and India is the EU’s ninth largest South Korea trading partner. Both partners are committed Since 2010, the EU and South Korea have to further increase their bilateral trade in goods upgraded to a strategic relationship. The EU- and services and access to public procurement South Korea Framework Agreement addresses through the Free Trade negotiations that were a wide range of international concerns, launched in 2007, and are ongoing. including non-proliferation of weapons of mass destruction, human rights, cooperation The EU and India have also agreed to intensify in the fight against terrorism, climate change, their cooperation in areas of mutual concern, energy security, and development assistance. from climate change, , and promoting multilateral trade liberalization to In late 2010, EU and South Korean leaders nuclear non-proliferation, good governance, concluded the landmark EU-South Korea Free human rights, and the fight against terrorism.

The European Union: A Guide for Americans 35 Chapter Six The EU on the World Stage – Policies, Tools, and Global Relationships

North and South America global governance to project common values Canada on the world stage. over the years, including assistance to the The EU and Canada marked the end of Latin America and the Caribbean most vulnerable victims of Pakistan’s severe successful negotiations for a Strategic flooding in 2010, 2011, and 2012. Partnership Agreement (SPA) in 2014. The The EU and Latin America and the Caribbean SPA complements the EU-Canada economic have enjoyed privileged relations since the Relations between the EU and Pakistan relationship and encompasses the political first region-to-region summit, held in Rio are based on a Cooperation Agreement on and value-based dimension of the strategic de Janeiro in 1999, established a strategic Partnership and Development, in force since partnership. The SPA will: strengthen partnership. The partners cooperate closely 2004, which seeks to enhance bilateral trade, sectorial and foreign policy cooperation, at the international level and maintain an support comprehensive and sustainable with an increased focus on CSDP issues— intensive political dialogue at the regional, sub- development, and promote investment and crisis management and security; bolster regional (Central American, the Caribbean, mutually beneficial economic, technical, and cooperation on issues including education, Andean Community, and Mercosur), and cultural links. migration, consular protection, people-to- bilateral levels. The EU’s regional counterpart people relations, youth and the promotion of is the Community of Latin American and The EU and Pakistan are working together to cultural diversity; and, deepen ties in areas Caribbean States (CELAC), launched in 2010 eradicate poverty and extremism by advancing such as energy, transport, and the Arctic. and encompassing all 33 LAC countries. economic and development goals and The EU and CELAC advance the bi-regional Areas of particular focus include the following: supporting sustained economic governance. In 1976, Canada became the first industrialized partnership process through political dialogue The EU values Pakistan’s resolve to fight country to sign a commercial and economic and cooperation and biennial summits. The n Strengthening dialogue and consultation terrorism in its own territory and seeks a agreement with the EU. In 2014, negotiations partners are also engaged in a Joint Initiative mechanisms. long-term, high-level political engagement were concluded on an ambitious new EU- on Research and Innovation; a Structured n Deepening political dialogue and with Pakistan that addresses the root causes Canada Comprehensive Economic and Trade Dialogue on Migration; and a Coordination cooperation. of the violent extremism, radicalization, and Agreement (CETA) that will provide a new and Cooperation Mechanism on Drugs. n Bringing together people and cultures. terrorism. The EU is working with Pakistan impetus to trade, investment, innovation, and n Enhancing economic policy dialogue and to develop its democratic structures, its job creation. cooperation. counterterrorism capacity, its police, law n Developing trade and investment enforcement, and criminal justice sectors. The EU and Canada work together on global opportunities. challenges including the environment, climate In March 2012, the EU and Pakistan agreed change, energy security, and regional stability Pakistan to a new political framework—the Five Year throughout the world. Cooperation ranges From the start of bilateral relations in the Engagement Plan—to enhance relations from research into alternative energy sources mid-1970s, the EU has committed more than by intensifying bilateral dialogues in areas to providing police training in Afghanistan. €500 million to projects and programs aimed including: political cooperation, security, In foreign and security policy, the EU and at poverty reduction in Pakistan. The EU has governance, and human rights, trade, and Canada draw on a shared commitment to also provided timely humanitarian assistance energy. effective multilateral institutions and good

36 The European Union: A Guide for Americans As the region’s primary foreign and existing political dialogue and extended its second most important trade partner, the EU scope to include conflict prevention, good is an important economic and political partner governance, immigration, money laundering, for Latin America. The EU is the leading and the fight against organized crime and provider of development cooperation to Latin terrorism. America and the Caribbean and supports the region’s efforts at economic and social reform Negotiations toward an association agreement and regional integration. stalled in 2008, resulting in a split negotiating format: continued regional negotiations with Combined contributions from the EU and the Andean Community on political dialogue its Member States aim to reduce poverty, and cooperation, plus multi-party WTO- inequality, and exclusion; support regional compatible trade negotiations with individual integration and economic cooperation; and states. develop human resources and promote mutual understanding between the EU and Latin and Peru reached an agreement America. EU funding (2014-2020) targets with the EU in 2010 on a multi-party trade areas including climate change, sustainability, accord that provides for progressive and security, good governance, higher education, reciprocal liberalization through creation of and regional economic integration. a comprehensive and balanced free trade area for goods and services. Mercosur. The EU is negotiating an association agreement with the Mercosur countries The EU’s FTAs with Peru and Colombia have (Argentina, Brazil, Paraguay, Uruguay, been in force since 2013, and according to and Venezuela) that encompasses political estimates, once fully implemented, the FTAs Mexico. In 2000, Mexico became the first Latin and security; democracy and human rights; dialogue, cooperation, and the creation of a will save half a billion euros in customs duties American country to sign a Comprehensive and global economic governance. free trade area. alone and are expected to boost the economies Partnership Agreement with the EU. The of Colombia and Peru by 1 percent of GDP. accord enhances EU-Mexican cooperation on Brazil. EU relations with Brazil are governed Central America. In 2010, EU and Central a range of political, security, environmental, by the 1992 EU-Brazil framework cooperation American leaders concluded an association Negotiations with Ecuador concluded in July and socio-economic issues; strives for closer agreement and the 1995 EU-Mercosur agreement that includes a free trade area, 2014. And the two sides are exploring the coordination on global issues of common framework cooperation agreement. In 2007, reinforces the political and economic possibility of integrating Bolivia into the trade concern in multilateral forums; and aims to the EU and Brazil formalized a strategic stability of Central American nations, fosters deal with the EU. jointly promote common values and principles partnership with an emphasis on effective sustainable development, and deepens regional in the international arena. The agreement multilateralism; the environment, particularly integration. Central American countries are Chile. Through an association agreement in also established a comprehensive free trade climate change; sustainable energy; the fight Costa Rica, El Salvador, Guatemala, Honduras, force since 2005, the EU and Chile coordinate area, which covers trade in goods and services against poverty; Mercosur’s integration Nicaragua, and Panama. The Association their positions in international forums, and and contains specific provisions on public process; and Latin America’s stability and Agreement, the EU’s first region-to-region the EU helps fund Chilean modernization procurement, competition, intellectual prosperity. accord, encompasses all aspects of the EU- programs, encouraging innovation in property rights, and investment. Negotiations Central American relationship—political Chilean business and supporting sustainable are underway to modernize and update the The EU and Brazil also cooperate on dialogue, cooperation, and a free trade area. development. The agreement also establishes agreement. political issues, energy and climate change, a free trade area for goods, services, and macroeconomic and financial affairs, and Andean Community (Bolivia, Colombia, government procurement; liberalizes The EU and Mexico are strategic partners and science and technology. Ecuador, Peru). In 2003, the EU-Andean investment and capital flows; and strengthens engage in productive dialogue on multilateral Community Political Dialogue and the protection of intellectual property rights. and global issues including: climate change; Cooperation Agreement institutionalized the sustainable development, international peace

The European Union: A Guide for Americans 37 Chapter Seven Signature EU Policies

7 CAP has been transformed into a multi- For a comprehensive overview of all EU functional policy, supporting market-oriented policies—including business, culture, education and youth, health, regional policy, agricultural production throughout Europe the information society, transport, and while contributing to vibrant rural areas and environmentally sustainable production. more—see: of approved organizations and EU Member a Memorandum of Cooperation on civil http://europa.eu/pol/index_en.htm States. The Single European Sky initiative, aviation research and development. Aviation launched in 2004, is an ambitious program Aviation plays a fundamental role in the to create an EU-wide air traffic management Competition Agriculture European economy both for EU citizens and system where airspace is configured on the Competition encourages companies to Created in 1962 to guarantee food supply industry. By supporting 5.1 million jobs and basis of operational efficiency instead of offer consumers goods and services on and farm incomes in Europe, the Common contributing €365 billion, or 2.4 percent to national frontiers, thereby reducing delays and the most favorable terms, promoting Agricultural Policy (CAP) comprises a set European GDP, it makes a vital contribution congestion and increasing safety standards. efficiency, innovation, and lower prices. For of rules and mechanisms which regulate to economic growth, employment, tourism, The technological pillar of this initiative, the effective competition, companies must act the production, trade, and processing of people-to-people contacts, and the EU’s SESAR program, aims to develop and deploy independently of each other, yet subject to the agricultural products in the European Union. regional and social cohesion. Over the last new air traffic management technologies competitive pressures from other economic Initially, CAP was designed to increase two decades, by removing historic barriers, and capabilities. The EU has also adopted operators. EU law covers several aspects of agricultural productivity and help farmers the EU has transformed and integrated important legislation in the fields of aviation competition policy. attain a fair standard of living; stabilize fragmented national aviation markets into the security, environmental rules, and passenger markets; and ensure a secure supply of single largest and most open regional aviation protection. EU Antitrust policy is based on two main affordable food. market in the world. provisions in the EU’s treaty: EU-U.S. aviation relations. The EU-U.S. Since the 1990s, CAP has moved away from The EU has established common aviation “Open Skies” Air Transport Agreement was n Agreements between two or more supporting product prices, and today’s safety rules which apply to both industry signed in 2007, ushering in unprecedented independent market operators that restrict and the civil liberalization of the transatlantic aviation competition are prohibited. This applies to aviation authorities market by removing restrictions on routes, actual or potential competitors operating at across the EU. prices, and number of flights, and resulting the same level of the supply chain (horizontal The Europeanin increases in transatlantic air services. agreements) and to firms operating at different Aviation Safety The second stage of the Agreement, signed levels, for example between a supplier and Agency (EASA) was in 2010, includes additional market access its distributor (vertical agreements). Cartels established in 2002 opportunities and strengthens the cooperative between competitors that involve price-fixing and is responsible framework in regulatory areas such as safety, or market sharing, are strictly prohibited. for aviation security, and the environment. From 2011, the n Firms holding a dominant market position safety strategy, Agreement also applies to Iceland and Norway. are prohibited from abusing that position with certification of actions that include unfair pricing, limiting aviation products, The EU and U.S. have also signed a production, or refusing to innovate to the and safety oversight Bilateral Aviation Safety Agreement and detriment of customers.

38 The European Union: A Guide for Americans The European Commission is empowered to Democracy, Freedom, and Human All trade and cooperation agreements—more apply these rules and is given the tools to do Rights than 120—include a human rights clause so, including a number of investigative powers Human rights, democracy, and the rule of stipulating that respect for human rights is and the ability to impose fines. law are core EU principles, embedded in the central to relations with the EU. In a number European Union’s treaty, and reinforced by its of instances, the EU has imposed sanctions for support for free media organizations, and Mergers. The EU prohibits mergers and Charter of Fundamental Rights. The EU views human rights breaches. The EU also pursues election observation. More than 90 percent of acquisitions that would significantly reduce human rights as universal and indivisible and human rights dialogues with numerous EIDHR partners are local and international competition in the single market, for actively promotes and defends them within its countries and organizations. And respect for civil society organizations; the remainder are example, by creating a dominant company borders, in its external relations, and across its human rights is a precondition for countries international intergovernmental bodies with likely to impose price hikes on consumers. policies. seeking to join the Union. special expertise, such as the Office of the UN The European Commission only examines High Commissioner for Human Rights and larger mergers (exceeding a certain turnover EU human rights policy focuses on protecting Election Monitoring. Credible and fair threshold) with an EU dimension. the Council of Europe. Additional EU funding the rights of women, children, minorities, elections are vital to democracy, the rule of law, supports projects with partner governments to and displaced persons. The EU opposes the and respect for human rights, and EU election State Aid. EU rules prohibit state aid improve the implementation of human rights death penalty, torture, human trafficking, and observation missions (EOMs) assess whether (government support) that distorts in areas such as police training and prison and discrimination. Human rights policies in the the electoral process conforms to international competition in the internal market and gives judicial reform. EIDHR funds more than 1200 EU defend civil, political, economic, social, standards for democratic elections. Observers the subsidized company an unfair advantage projects in more than 100 countries. and cultural rights. examine whether political parties can over its competitors. participate freely and openly in the electoral Torture and . The process; the level of access candidates have Internationally, the EU’s main objective The EU’s 2012 Strategic Framework on EU unconditionally supports the right to Human Rights and Democracy and its Action to the media; voter education; and the safety life and the right not to be subject to cruel, has been to promote the convergence of and security of voters. Since 2000, the EU has competition policy instruments and practices Plans are designed to advance human rights inhuman, and degrading treatment or and democracy worldwide in partnership deployed more than 130 election observation punishment—standards recognized in the across jurisdictions and facilitate cooperation missions in more than 60 countries. in enforcement activities with competition with Member States, partner governments, Universal Declaration of Human Rights, other authorities in other jurisdictions. the United Nations, and civil society. Their international human rights agreements, and aim is to make EU human rights policy more European Instrument for Democracy and many national constitutions. The EU’s Charter Human Rights. The EU provides direct EU-U.S. Cooperation. The EU cooperates effective and consistent and to raise the profile of Fundamental Rights—a legally binding funding for human rights and democratization with the U.S. competition authorities—the of human rights in the EU’s foreign policy. To document—states, “Everyone has a right to through the European Instrument for Department of Justice and the Federal Trade this end, the EU appointed its first ever EU life. No one shall be condemned to the death Democracy and Human Rights (EIDHR). Commission—primarily on the basis of the Special Representative (EUSR) for Human penalty, or executed.” Launched originally in 1994, EIDHR’s current 1991 Cooperation Agreement and the 1998 Rights in 2012. annual budget (between 2014 and 2020) Positive Comity Agreement. Cooperation is Abolition of the death penalty is a prerequisite of around €190 million supports activities intensified if the parties to a case have granted The EU publicly condemns human rights for EU membership, and the European Union including global campaigns against the death a waiver allowing the exchange of otherwise violations wherever they occur, appealing to actively promotes a global moratorium on the penalty, the rehabilitation of torture victims, protected information. the countries concerned to end such violations use of the death penalty and protests against and pressuring the authorities in question. assistance for human rights defenders at risk,

The European Union: A Guide for Americans 39 rises, improve the adaptability of workers through political dialogue, enhanced Chapter Seven and enterprises, provide better education and transparency, and by bringing Europe closer skills, and adapt social protection systems to to citizens. Signature EU Policies the challenges of innovation, globalization and mobility. EU Energy and Climate Goals for Through the strategy, the 2020 include: EU has identified three key drivers for European growth in the 21st century—smart n 20 percent reduction of GHG emis- growth (fostering knowledge, innovation, sions over 1990 levels; education, and digital society), sustainable n 20 percent share of renewables in en- the practice in individual cases throughout outlaw torture. The EU also champions anti- growth (making EU production greener ergy consumption; the world. The EU has insisted that bilateral torture initiatives in international forums, and more resource efficient while boosting n 20 percent increase in EU energy effi- ciency; extradition treaties with non-EU countries consistently raises its concerns with other competitiveness), and inclusive growth (enhancing labor market participation, skills n Binding targets reducing CO² emis- automatically preclude the use of the death countries through political dialogue and sions from new cars and vans. penalty in all cases of extradited prisoners bilateral initiatives, and provides substantial acquisition, and the fight against poverty)— from EU Member States. funding for relevant projects by civil society designed to help Europe emerge stronger organizations. from the economic crisis and prepare the EU economy for the coming decade. As a global leader in the fight against torture Energy and Environment and other forms of ill treatment, the EU works Growth and Jobs The EU has set and achieved sustainable energy to prevent and eliminate torture and to end The EU’s strategy for creating sustainable The European Commission’s (2014-2019) goals since 2008 that are helping to advance the impunity of those responsible. Through growth and jobs promotes innovation within priorities, billed as a new start for Europe, Europe’s transition to a low carbon economy. its Guidelines on Torture and Other Cruel, businesses and investment in people to create highlight jobs, growth, fairness, and Responding to geopolitical, environmental, Inhuman and Degrading Treatment, the a knowledge-based society. The strategy also democratic change and include: and economic imperatives to diversify energy EU strives to persuade non-EU countries seeks to attract more people into employment, n Boosting jobs, growth, and investment; sources away from fossil fuels, Europe is setting to produce and apply effective measures to keep them in work longer as life expectancy n Creating a connected digital single market the bar even higher for 2030 and beyond. in Europe; n Creating a new European Energy Union Aiming beyond its 2020 goals, the EU’s 2030 that encompasses a forward-looking climate Framework for Climate and Energy sets even change policy; more ambitious targets for greenhouse gas n Bolstering the internal market with a emissions (GHG), renewable energy, and strengthened industrial base; energy efficiency that will also provide stability n Deepening the Economic and Monetary and predictability for Europe’s economic Union and making it more fair; operators: n Achieving a reasonable and balanced free trade agreement (TTIP) with the United n A 40 percent cut in GHG compared to 1990 States; levels; n Strengthening the area of justice and n A minimum 27 percent share of renewable fundamental rights based on mutual trust energy consumption; and shared values; n A 30 percent improvement in energy n Developing a new migration policy that efficiency (compared to projections); encompasses a common asylum policy and n Completion of the internal energy market: a European policy on legal migration; reaching an electricity interconnection rate n Fortifying Europe’s role in foreign policy of 15 percent between Member States and and generally as a global actor; pushing forward important infrastructure n Ensuring democratic change in Europe projects.

40 The European Union: A Guide for Americans Progress on the internal energy market has The EU-U.S. Energy Council improves EU. By 2015, new passenger cars, for example, internal borders. The Union spearheads a full already delivered positive results including: transatlantic coordination on strategic energy must meet an emissions standard of 130 grams range of policy areas to fight terrorism; tackle a decline in wholesale electricity prices; issues, bringing together key EU and U.S. per kilometer on average, and by 2020, this organized crime; manage migration; establish increased consumer choice in energy suppliers; actors to collaborate in the areas of energy number falls to 95 grams per kilometer. a common asylum area; develop supportive construction of missing infrastructure links security. This includes cooperation on the measures on integration to maximize the between EU countries; increased trade in to bring gas from the The EU’s 2030 climate and energy objectives positive impact of migrants in the EU; and gas and electricity among Member States; Caspian Sea region; addressing energy security that include a 40 percent reduction in GHG further develop an integrated management of more efficient use of pipelines; and regulatory concerns for the EU’s eastern neighbors, emissions go even further. And, by mid- the external borders and a common visa policy progress ensuring fair and competitive including Ukraine and Moldova; advancing century, the strategy aims to fully transform to guarantee the free movement of people practices. energy research in areas including clean the EU into a competitive low-carbon within the EU. energy technologies and electric vehicles; and economy through measures including GHG Toward a European Energy Union pursuing energy policies in areas such as smart emissions reductions of 80 to 95 percent over The European Agenda on Security prioritizes grids and other smart technologies. 1990. Achieving this goal relies on long-term the fight against terrorism, organized crime, investment in new low-carbon technologies, and cybercrime—interlinked areas with a In 2015, the European Commission ad- Climate Action. Climate change is one renewable energy, energy efficiency, and smart strong cross-border dimension, where EU opted its strategy for achieving a resilient of the gravest challenges facing humanity. grid infrastructure. action can make a real difference. The Agenda European Energy Union, an initiative that The EU is leading global action on climate focuses on improving information exchanges integrates a series of policy areas into and operational cooperation between Member one cohesive strategy. To reach the long- change, both by setting out what needs to International action is essential since climate State law enforcement authorities, and established EU energy policy goals—se- be done internationally and by committing change does not respect national boundaries. curity of supply, sustainability, and com- to and achieving significant cuts in its own The EU was instrumental in the development supports actions through training, funding, petitiveness—the Energy Union focuses greenhouse gases. In parallel, the European of the United Nations Framework Convention research, and innovation. on five mutually supportive dimensions: Commission and a number of Member States on Climate Change, signed in 1992, and the energy security; solidarity and trust; the have developed adaptation strategies to help 1997 Kyoto Protocol, which limits GHG The EU focuses on preventing radicalization by internal energy market; energy efficiency strengthen Europe’s resilience to the inevitable emissions from developed countries. Today, tackling the root causes that attract individuals (moderating demand); decarbonization of impacts of climate change. however, more than half of global emissions to terrorist groups; protecting its citizens and the economy; and research, innovation, come from developing countries. To address infrastructure and reducing their vulnerability and competitiveness. The EU fights climate change through the EU this, the EU led an international effort to reach to attack through improved security of Emissions Trading Scheme (EU ETS), the a new UN global climate agreement, adopted borders, transport, and critical infrastructure; The results are expected to include a free world’s first and largest international trading in late 2015 in Paris, to be implemented by pursuing and investigating terrorists across flow of energy across borders and a se- system for greenhouse gas emissions (GHG). 2020. borders and globally; and developing systems cure supply in every EU country, for every The EU ETS uses a binding cap-and-trade to respond rapidly and effectively to a terrorist citizen. New technologies and renewed market mechanism to put a price on carbon Freedom, Security, and Justice attack. infrastructure will cut household bills and and allow companies to cut emissions cost- create new jobs and skills, as companies One of the fundamental objectives of the effectively. The EU has set one of the most While the individual EU Member States have expand exports and boost growth. The European Union is to offer its citizens an ambitious climate targets for 2020, and is the primary responsibility for combating Energy Union will lead to a sustainable, area of freedom, security, and justice without terrorism, the EU adds value by strengthening low carbon and environmentally friendly on track to reach and even exceed the GHG economy, putting Europe at the forefront emissions goal of a 20 percent decrease over The Schengen Area of renewable energy production and the 1990 levels. By 2013, the EU had already fight against global warming. achieved a 19 percent drop, while the economy maintained a healthy growth rate (45 percent) The Schengen area, which encompasses 22 EU countries plus several non-EU states, is over the same period, breaking the link an area without internal borders within which citizens, many non-EU nationals, business EU measures also aim to reduce dependence between economic growth and increased people, and tourists can circulate freely without being subject to border checks. Most EU on imports of gas and oil and help shelter emissions in all Member States. Member States participate along with Iceland, Norway, Switzerland, and Liechtenstein. the economy from volatile energy prices and Ireland, the United Kingdom, Cyprus, Bulgaria, Romania, and Croatia are not currently part uncertain supplies. More than 50 percent of In parallel, EU legislation now requires of the Schengen area, although Bulgaria and Romania are in the process of joining. With the EU’s energy comes from countries outside significant reductions in CO² emissions from internal borders abolished, Schengen countries have tightened controls at their common the Union. cars and vans, which are responsible for external borders according to Schengen rules to ensure the security of those living or roughly 15 percent of CO² emissions in the traveling within their borders.

The European Union: A Guide for Americans 41 knowledge across borders, better coordination renewed in 2014 until 2018, brings a pan- Chapter Seven of research programs and coherent research European dimension to transatlantic S & T and innovation policies at national and EU cooperation to complement the many bilateral Signature EU Policies levels, thus securing the competitive future arrangements with individual Member of the EU and prosperity of its citizens. States. Collaboration occurs in such areas Recognizing that future economic growth and as Marine and Arctic science, transportation jobs will increasingly come from innovative technologies, nanotechnology, health research products, services, and business models, and energy technologies. EU leaders have made reaching an R&D investment level of 3 percent of GDP a central Single Internal Market goal in the Europe 2020 strategy to achieve The single market is at the core of today’s national capabilities, facilitating European smart growth and expand employment. European Union. To make it happen, the EU cooperation, developing collective capabilities In 2002, EUROJUST—a “college” of institutions and the Member States worked and standards, and promoting international experienced judges and prosecutors—was The EU’s Framework Programs for research doggedly to draft and adopt the hundreds of partnership. The EU has agreed collectively established to facilitate interaction between and technological development, multiannual directives needed to sweep away the technical, on a common list of terrorist organizations the judicial authorities of the different Member funding programs which began in 1984, are vital regulatory, legal, and bureaucratic barriers that and provided Europol, which assists the EU State legal systems, through international to stimulating cooperation among partners in stifled free trade and free movement within Member States in preventing and combating mutual legal assistance, extradition requests, different countries by funding transnational the Union. all forms of terrorism and other serious crime and cross-border criminal investigations. research and promoting coordination among (including human and drug trafficking), with scientific and technological facilities and During its 20-plus years of existence, the additional resources to analyze terrorist threats Consolidation of a genuine common national programs. single market has grown from 345 million and further improve information exchange. immigration and asylum policy—including consumers in 1992 to over 500 million today. the development of a new and flexible In 2014, the EU launched Horizon 2020, the Cross-border trade between EU countries Europol—the European Police Office— admission system for economic immigration; latest seven-year Framework Program to fund has also grown from €800 billion in 1992 to supports EU Member State law enforcement initiatives to support smooth integration research and innovation with three main €3 trillion in 2015 in terms of the value of goods agencies through fast information exchange, of immigrants into society; and a common objectives and corresponding components: exchanged. During the same time period, sophisticated intelligence analysis, European Migration and Asylum system based ensure scientific excellence; boost industrial trade between the EU and the rest of the world coordination, expertise, and training. Unlike on solidarity and respect of human rights—is leadership and competitiveness; and tackle tripled, from €500 billion in 1992 to more national police forces, Europol does not have also a priority. FRONTEX, the European societal challenges. Between 2014 and 2020, than €1.7 trillion in 2015. This is in addition any autonomous investigative or coercive Agency for the Management of Operational almost €80 billion will be provided under to a greater choice of goods and services, lower powers—its officials are not entitled to arrest Cooperation at the External Borders of the the Horizon 2020 framework to research prices for the EU’s consumers, creation of suspects or act without the approval of national Member States of the EU, assists Member institutions, universities, innovative private and improved efficiency, authorities. States in applying EU measures relating to the companies, and small businesses. The program and the enhanced capacity of European firms management of the EU’s common external is expected to lead to more breakthroughs, to compete in today’s globalized markets. border. discoveries, and world firsts by taking great ideas from lab to market. The four freedoms of movement (enshrined Research, Development, and Innovation in the Treaties)—for goods, services, people, Europe has a long tradition of excellence Although the funds provided by the EU account and capital—are underpinned by a range of in research and innovation. The European for only around 10 percent of the overall supporting policies. Union has its own research and innovation civilian public research funds in Europe (most policies and programs as does each individual research is funded nationally), this funding is Firms are prevented from fixing prices or EU Member State, given the shared nature a major instrument for encouraging research carving up markets among them by the EU’s of policy jurisdiction in this area. Since collaboration in Europe and beyond. Central robust antitrust policy. EU citizens can work 2000, the “European research area” (ERA) to the success of the Framework Programs is throughout the EU territory because Member has been gradually taking shape. ERA is the their relevance to European industry. States recognize many other individual research and innovation equivalent of the Member States’ academic and professional “common market” for goods and services. It The EU-U.S. Science and Technology certifications. aims to enable the free flow of researchers and Agreement, originally signed in 1998 and

42 The European Union: A Guide for Americans industries, but also households and small businesses across Europe, are increasingly able to choose their suppliers for electricity and gas.

Still, more red tape must be eliminated— such as those administrative and technical barriers to the free flow of goods and services, including Member State reluctance to accept other Member State standards and norms or, at times, to recognize the equivalence of professional qualifications. The fragmented nature of national tax systems also puts a brake on market integration and efficiency. Currently, remedial action is under way, although neither at a uniform pace nor in all sectors.

Trade and Customs Trade policy is the exclusive jurisdiction of The creation of the single market gave the European Union, which represents the European Union countries a stronger interests of all 28 EU Member States at bilateral 1. Create a global system for fair and open incentive to liberalize previously protected 4. Ensure trade is a force for sustainable and multilateral levels, including the WTO. trade. The EU adheres to the World Trade monopoly markets for utilities such as development. This entails helping poor Organization’s system of global trade rules telecommunications, electricity, gas, and countries trade their way out of poverty, Within the Union, Member States have as an effective method for keeping the global water. The independent national regulators ensuring the highest health and safety removed all tariffs on trade, while having economy open for trade. All 28 EU Member who supervise the now-liberalized markets for standards for the products we buy and sell, unified tariffs on imports from outside the States are members of the WTO individually, telecommunications and energy coordinate and supporting environmental protection and EU (the “common external tariff”). This but the EU negotiates and acts as a single body their activity at EU level. Not only big working conditions. means that the same tariff is paid on products within the WTO. regardless of which EU country is the entry The Negotiation Process. The European point to the EU market, and once customs Digital Agenda 2. Open up markets with key partner Commission sets and carries forward the procedures are complete, goods can be shipped countries. The EU is negotiating better access EU priorities and objectives as spelled throughout the EU without additional duties. and conditions for trade and investment out in guidelines from the Council of Too many barriers still block the free flow The achievement of this “customs union” in through free trade agreements (FTAs). The EU of online services and entertainment the EU. Officials from the Commission’s 1968 is one of the EU’s earliest milestones. has concluded a number of FTAs (including across national borders in the EU. The Directorate-General for Trade, under the with Canada, Singapore, and Vietnam) Digital Agenda, a top Commission pri- Trade Commissioner’s authority, are charged EU customs authorities also ensure the ority, will update EU single market rules and negotiations are ongoing with others, with actually conducting the negotiations, for the digital era. The aims are to boost smooth flow of trade while protecting the including Japan and Malaysia. and speak on behalf of the EU as a whole. the music download business, establish environment and citizens’ health and safety. Coordination with Member States is assured a single area for online payments, and Customs authorities are on the front lines 3. Ensure that rules are respected. By using at all times, while the Commission keeps the further protect EU consumers in cyber- in the fight against terrorism and organized the WTO court system or trade defense European Parliament regularly informed. The space. Creating a connected digital single crime. Transatlantic cooperation in these mechanisms, the EU ensures that imports Council and the European Parliament must market could generate an additional €250 areas is particularly active, with EU and U.S. entering the EU are traded at fair prices and formally agree to the outcome of bilateral and billion in growth by 2019, leading to the customs officials working together to ensure do not cause unfair damage to European multilateral negotiations. creation of thousands of new jobs and a container security and combat counterfeiting. companies or their workers. vibrant knowledge-based society. Generally, EU trade policy aims to:

The European Union: A Guide for Americans 43 Chronology : Milestones on the Road to European Integration

May 9, 1950: March 13, 1979: October 21, 1991: countries. Belgium, Germany, France, French Foreign Minister Robert Schuman The (EMS) The European Community and European Free Luxembourg, the Netherlands, Spain, and proposes pooling Europe’s coal and steel becomes operational. Trade Association (EFTA) agree to form the Portugal agree to adopt a common border industries. is commemorated each year European Economic Area (EEA). The EEA security area. as . June 1979: enters into force January 1, 1994. The European Parliament becomes the first December 3, 1995: April 18, 1951: directly-elected transnational political body. December 8, 1991: The EU-U.S. Summit in Madrid launches The European Coal and Steel Community The USSR dissolves, and the Commonwealth the New Transatlantic Agenda (NTA), (ECSC) Treaty is signed in Paris by Belgium, January 1, 1981: of Independent States is formed. providing a new framework for the France, Germany, Italy, Luxembourg, and the Greece joins the European Community. transatlantic partnership, moving it from one Netherlands; it enters into force in 1952. December 11, 1991: of consultation to one of joint action in four June 29, 1985: European Council meeting in Maastricht major fields: promoting peace and stability, March 25, 1957: The European Council endorses the “White agrees on Treaty on European Union, which democracy, and development around the The European Economic Community (EEC) Paper” plan to complete the single market by enters into force November 1, 1993. In world; responding to global challenges; and European Atomic Energy Community the end of 1992. addition to creating the EU, the Maastricht contributing to the expansion of world trade (EURATOM) Treaties are signed in Rome; Treaty establishes the Common Foreign and and closer economic relations; and building they enter into force in 1958. January 1, 1986: Security Policy and lays the groundwork for bridges across the Atlantic. Spain and Portugal join the Community. European Economic and Monetary Union and April 8, 1965: a single European currency. June 17, 1997: The Treaty merging the institutions of the July 1, 1987: The Treaty of Amsterdam is concluded, and three European Communities (the European The Single European Act (SEA), which (among December 16, 1991: enters into force May 1, 1999. Coal and Steel Community, the European other innovative measures) provides for the Poland, Hungary, and Czechoslovakia sign the Economic Community, and the European creation of a single internal market, enters into first Europe Agreements on trade and political May 2, 1998: Atomic Energy Community) is signed, and force. cooperation. Eleven EU Member States qualify to launch enters into force in 1967. the euro on January 1, 1999. June 26-27, 1989: January 1, 1993: July 1, 1968: The Madrid European Council endorses a plan The is achieved on June 1, 1998: The customs union is completed. for Economic and Monetary Union (EMU). schedule. The European Central Bank, responsible for framing and implementing the EU’s monetary January 1, 1973: November 9, 1989: January 1, 1995: policy and managing the euro, is inaugurated Denmark, Ireland, and the United Kingdom The falls. Austria, Finland, and Sweden join the in Frankfurt, Germany. join the Community. European Union. October 3, 1990: January 1, 1999: February 28, 1975: The five Länder of the former German March 26, 1995: Eleven EU Member States are the first to adopt The first Lomé Convention with African, Democratic Republic enter the Community as The Schengen Area is created and border the euro (as a “virtual” currency). Caribbean, and Pacific (ACP) countries is part of a united Germany. checks are abolished between seven EU signed.

44 The European Union: A Guide for Americans June 23, 2000: December 2003: January 1, 2007: January 1, 2009: A new partnership agreement (2000-2020) EU leaders adopt the European Security Slovenia adopts the euro. Slovakia adopts the euro. between the EU and the ACP countries is Strategy. signed in Cotonou, Benin. December 13, 2007: January 1, 2011: May 1, 2004: The Treaty of Lisbon, intended to optimize Estonia adopts the euro. December 7-11, 2000: Cyprus, the Czech Republic, Estonia, Hungary, the EU’s institutions and working methods, EU leaders formally proclaim the Charter of Latvia, Lithuania, Malta, Poland, Slovakia, and is signed in Lisbon and enters into force December 18, 2011: Fundamental Rights of the European Union, Slovenia join the European Union, bringing December 1, 2009. Liechtenstein joins the Schengen area. outlining fundamental rights for all EU membership to 25. citizens, including , freedoms, equality, December 21, 2007: January 30, 2012: solidarity, citizens’ rights, and justice. June 2004: The Schengen area is enlarged to include Treaty on Stability, Coordination, and The European Council endorses the European Estonia, the Czech Republic, Lithuania, Governance in the Economic and Monetary January 1, 2001: Neighborhood Policy. Hungary, Latvia, Malta, Poland, Slovakia, and Union, agreed by 25 of 27 EU Member States Greece joins the euro area. Slovenia. (no the United Kingdom or Czech Republic). October 29, 2004: February 26, 2001: The Treaty establishing the Constitution January 1, 2008: December 10, 2012: The Regulation establishing the Rapid for Europe is signed by Heads of State and Cyprus and Malta adopt the euro, bringing The European Union is awarded the 2012 Reaction Force is adopted. Government and EU foreign ministers. The euro-area membership to 15 EU countries and Nobel Peace Prize in recognition of the EU’s Constitution requires approval by Member a population of around 320 million. contribution to the promotion of peace, February 26, 2001: States. reconciliation, democracy, and human rights. The Treaty of Nice is signed, and enters into March 30, 2008: force February 1, 2003. June 16-17, 2005: The new EU-U.S. Air Transport “Open July 1, 2013: The European Council, following the Skies” Agreement takes effect; European Croatia joins the EU as its 28th Member State. January–February 2002: French and Dutch negative referenda on the and American airlines can now fly without Twelve EU countries begin using the euro as a Constitutional Treaty, agree to a period of restrictions from any point in the EU to any January 1, 2014: legal tender for daily transactions. reflection in order to determine how best to point in the U.S., and vice-versa. Latvia adopts the euro. proceed with the Constitutional process. January 1, 2003: December 13, 2008: January 1, 2015: The first European Security and Defense October 3, 2005: The EU launches Operation Atalanta, the EU’s Lithuania adopts the euro. Policy mission launches with the deployment Accession negotiations begin with Croatia and first joint naval operation, to deter attacks by of 500 European Union Police Mission officers Turkey. pirates on vessels off the Somali coast. June 23, 2016: to Bosnia-Herzegovina to train local police UK referendum: UK votes to leave EU officers and establish sustainable policing January 1, 2007: December 12, 2008: arrangements. Bulgaria and Romania join the EU and The EU welcomes Switzerland to the Schengen complete the fifth round of enlargement; EU area. membership expands to 27 and brings the total EU population to 500 million people.

The European Union: A Guide for Americans 45 Delegation of the European Union to the United States EUintheUS ISBN 92-79-00379-8 2175 K Street NW Catalogue Number IQ 70 16 993 EN C @EUintheUS Washington, DC 20037 ©2016 by the Delegation of the European Union to the United States 202.862.9500 delegation-usa-info@eeas..eu Reproduction is authorized provided the source is acknowledged.