A CRUCIAL YEAR FOR THE EUROPEAN UNION

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Miami, Jan 1 2007 (IPS) - It may sound dramatic, but it may be now or never for the EU, writes Joaquin Roy, \’\’Jean Monnet\’\’ professor and Director of the European Union Centre of the University of Miami. In this analysis Roy writes that this will be a decisive year for the organisation: it is now fifty years since it took its first daring step with the Rome Treaty of March 1957, which transformed the initial European Steel and Coal Community, formed in 1951, by incorporating the European Economic Community and the European Atomic Energy Community. It has now been five years since the adoption of the euro by 300 million citizens in the thirteen countries of the EU as well as a handful of mini-states that had used the currencies of member states. The euro was a success in all basic monetary operations. Although the dollar remains dominant in terms of the setting of prices and tallying debt, as an exchange currency the euro is on the verge of surpassing it. However, while these two ambitious moves proved highly successful, the warnings made simultaneously about the need for institutional reform of an organisation used to dealing with fifteen more-or-less collegial members have not been heeded. Unfortunately the Constitution was derailed halfway through the ratification process after rejection by Dutch and French voters. With the project on hold until more favourable conditions emerge, observers are now looking towards the German presidency of the EU in the current semester and the results of France\’s May elections. The energy of the former and the disposition of the new leadership in Paris will determine the future course of the EU.

This thoroughly economic dimension signalled that the new creation had made it to the third stage of economic integration and so graduated from the second, which was the Customs Union which imposed a system of common tariffs. It had come a long way from the first experiment, the ESCC, which was limited to a free-trade zone that included only two products — strategic ones necessary to make weapons production — and was intended to ”make war unthinkable” and eventually ”materially impossible”.

In the mid-1980s, a good thirty years after Rome, the architects of the experiment realised that to complete the Common Market they would need three hundred individual regulations. This was the only way to guarantee the full circulation of goods, capital, services, and people. And so Jacques Delors, president of the Commission, the EC’s executive body, convinced the Council of the need to approve a Single Act (1986) which would also prepare the way for what five years later would be the Maastricht Treaty (1992) which created the European Union.

Then came the double coup of adopting the euro as the common currency (the fourth level of integration, monetary union) and proceeding to the most spectacular broadening in its history –it almost doubled in size– with three phases of additions. In 1995, Austria, Finland, and Sweden were incorporated because of their ”neutral” stance during the post-war period. Then in 2004 ten countries were added in a single move, eight of which had been part of the Soviet bloc for almost 60 years, plus Cyprus and Malta. And now, to usher in 2007, two other countries, Rumania and Bulgaria, will join, bringing the total of members to 27. The EU already comprises half a billion people. All of this has been accomplished in just 15 years since the end of the Cold War.

It has now been five years since the adoption of the euro by 300 million citizens in the thirteen countries of the EU as well as a handful of mini-states that had used the currencies of member states. The euro was a success in all basic monetary operations. Although the dollar remains dominant in terms of the setting of prices and tallying debt, as an exchange currency the euro is on the verge of surpassing it. And while the dollar remains ahead of the euro as the official reserve currency, the euro is catching up in this regard as well.

However, while these two ambitious moves proved highly successful, the warnings made simultaneously about the need for institutional reform of an organisation used to dealing with fifteen more-or-less collegial members have not been heeded. In response, the EU committed to completing its legal framework with the approval of a constitutional treaty that would serve to codify and update the various proposals to render the EU project more viable and effective and give it an international profile more in keeping with that demanded by today’s complex world, after the last political union. Unfortunately the Constitution was derailed halfway through the ratification process after rejection by Dutch and French voters.

With the project on hold until more favourable conditions emerge, observers are now looking towards the German presidency of the EU in the current semester and the results of France’s May elections. The energy of the former and the disposition of the new leadership in Paris will determine the future course of the EU.(END/COPYRIGHT IPS)