GROWTH OF THE EU

GROWTH OF THE EU

Admission of Romania and Bulgaria 2007

Major debates about Turkey

Croatia and Macedonia 2013

What Does it Take to qualify for Membership in the EU:

1. The candidate country has achieved stability of institutions guaranteeing democracy, the rule of law, human rights and respect for and protection of minorities.

2. The candidate country has the existence of a functioning market economy, as well as the capacity to cope with competitive pressure and market forces within the Union.

3. The candidate country has the ability to take on the obligations of membership, including adherence to the aims of political, economic and monetary union.

THE EURO• The euro – Europe's new single

currency - represents the consolidation and culmination of European economic integration.

• Its introduction on January 1, 1999, marked the final phase of Economic and Monetary Union (EMU), a three-stage process that was launched in 1990 as EU member states prepared for the 1992 single market.

The EUROEarly 1990’s

• 1990: Aimed at boosting cross-border business activity, the first stage of EMU lifted restrictions on movements of capital across internal EU borders.

• 1994: The European Monetary Institute was established in Frankfurt to pave the way for the European Central Bank.

1999: the Euro was introduced as the single currency for eleven EU member states: Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, the Netherlands, Portugal, and Spain.

1999-2002: The Euro and the previous national currencies were concurrently used in participating states.

The EURO1999-Present

2002: The participating countries had their previous national currencies withdrawn permanently as legal tender.

• EU member states not yet using the Euro as currency: Denmark, Greece, Sweden, United Kingdom

The Eurozone• Coins and banknotes 1st used Jan

1, 2002• Cyprus joined in 2008• Slovakia to join in 2009• Estonia joined in 2010• Sweden is technically obliged to

join but the EU has made public that they will not enforce this with regard to Sweden

• Britain and Denmark have a “derogation” releasing them from having to join

What about Switzerland?• Swiss are traditionally suspicious of other

countries• Swiss tradition of neutrality (WWI & WWII)– self-imposed–permanent– armed

• In some ways Switzerland is like the US–Nationalistic government not interested in

ceding sovereignty – Economic policies are currently designed to

protect local industries (esp. agriculture) from foreign competition

Initial cost of joining EU (progressive financial redistribution policy would cost the Swiss)

Switzerland has embarked on a policy of building bilateral agreements with the EU rather than joining outright

Costs of staying out

• Export problems–Access to EU markets is not guaranteed

• Inflation problems–Europeans nervous about the Euro due

to expansion of the EU invest in Swiss Francs, inflating the value of the currency and inhibiting Swiss exports

Capital flightHigh construction costs, expensive labor, and skill shortages already make investment in Switzerland unattractiveSeveral multinational corporations, such as Roche, Sulzer and Alusuisse, have frozen planned investment projects in SwitzerlandLarge Swiss companies, including Nestle, are shifting activities out of Switzerland in fear of discrimination by other nationsAlready four out of five employees of the top 15 Swiss companies work in other countries

Scientific information lagEU scientific exchange programs accept Swiss citizens only if they fail to fill such exchanges with persons from EU countries

Accumulated bilateral agreements and cooperation may create de-facto incorporation in the EU for Switzerland