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EU Development as an Econ Actor: Internal Dimensions - Coggle Diagram
EU Development as an Econ Actor: Internal Dimensions
Common Agricultural Policy
general info
introduced in TOR as part of Franco-German bargin
French interested in CAP, French had organised and large farming sector
was running by 1970s
CAP was very expensive
75% EC budget = unsustainable
currently 37% of budget
went through many reforms
well organised farmers made reform very difficult
still have poor farmers in East and Central Europe
use of chemicals and herbicides to minimise crop loss
weren't good for the environment
runs against EU Environment Policy
aims
influenced by wartime experience, wanted a better balance between consumers and producers
increase productivity
Europe needed to be more self sufficient in light of the Cold War emerging
fair standard of living for farmers
this prevents farmers from leaving
protects farmers from fluctuating price
secure suppliers
WW2 inspired due to malnutrition and famine
no imports from eastern Europe as CW
stabilising markets
EC was only 6 members so could bargain
how was CAP problematic?
difference national philosophies
different national interests in agriculture
WG: CAP £££ getting little back
other states it was vital for employment
British Budgetary Question
internal contradictories
min payment for farmers but mass production was damaging for other economies
fraud and links to other crime e.g. Greece
Single European Market
general info
product of successful Customs Union
WG reconstruction very successful helping bring up other EC states
58-72 inc EC imports between EC states as a % of all imports from 29.6 - 51..6
encourages Brits to join EC as can't compete with EC market
based on four freedoms
SEA commitment to complete by 1992
had common ground between EC leading states and supported by European President
arguments in favour
relaunch of community with major initiatives
goods response to 80s econ slow down
politically and economically advantageous
econ rationality, recognition of inc interdependence
countries less self efficient, relied heavily on 4 freedoms
this was v helpful for EC as helped drive communities forward
helped increase trust between states and build peaceful communities
remove tariffs and quotas
problems
national preference
subsidies and state aids
distorts market e.g. Brexit
different standards and regulations
health and safety, environmental, consumer protection
higher these standards the more expensive it becomes to produce goods
frontier controls
indirect tax (VAT, Business taX)
economic and monetary union
general info
produced through 1971 Werner Report, in theory in place by 1980, required convergence between states
narrow exchange bonds
improve coordination through the central bank
devising means for medium term aid if necessary (econ becomes under pressure)
1970s
oil shocks
Euroscleosis
unemployment
collapse of Bretton Woods
currencies were rapidly fluctuating, exchange rate scheme had mixed commitment
WG and Benelux stayed linked to exchange currencies as WG econ was linked to Benelux
Italy left
UK joined for 2 months
France kept joining then leaving
exchange rate system wasn't sustainable so ideas modified in European Monetary System
early 1990s EMS failed
size of exchange rate fluctuations made EU expand margin to 15% of the line
states still had issues maintaining presence/currency
Britain dropped out after reluctant entry
Italians dropped out
Irish developed their own currency
French revokes Franc
Germany secure but refused to help France
1989 delors report
3 stage process to EMU by 1999
developments
TEU endorse EMU as formal objective
bring economic closer together
by converging criteria on inflation rates, interest rates, budget deficit, total public debt, exchange rate stability
European Monetary Institute created as a forerunner of European Central Bank
1997 Stability and Growth Pact agreed
co-ordination of public sector deficits, budget deficits, and in/out surplus
stops economy of one state impacting another
1998: ECB created and conversion rates between 11 currencies and euro established
Amsterdam Treaty and Agenda 2000 would take away some of the political heat
1999 Euro becomes real currency
2002 it becomes a real coin/note in circulation
arguments in favour
inc competitiveness, P£ transparency, trade and investment flows, confidence
eliminate investment risks involved with differing currencies
inc European identity, single currency offers political advantage
better to withstand econ shocks
enhance EU international profile and influence
problems
loss of national sovereignty, tight converging criteria you cannot break
overly constrains fiscal policy, harder to adjust to in crisis
inc democratic deficit
dangers of a multispeed Europe
damage econ growth via a one size fits all model
lack of underlying common economic philosophy
economic integration beyond the economy
economies as low politics
relationship between econ integration and promoting security
TOP, creation of ECSC reassures France against WG rearment and economic gains
relationship between prosperity and support for integration
good integration = good prosperity