European Union's Main Policies

As the changing name of the European Union (from European Economic Community to European Community to European Union) suggests, it has evolved over time from a primarily economic union to an increasingly political one. This trend is highlighted by the increasing number of policy areas that fall within EU competence: political power has tended to shift upwards from the member states to the EU.

Some member states have a domestic tradition of strong regional government. This has led to an increased focus on regional policy and the European regions. A Committee of the Regions was established as part of the Treaty of Maastricht.

Autonomous decision-making: member states have granted the European Commission power to issue decisions in certain areas such as competition law, state aid control and liberalisation.
Harmonisation: member state laws are harmonised through the EU legislative process, which involves the European Commission, European Parliament and Council of the European Union. As a result of this European Union law is increasingly present in the systems of the member states.
Co-operation: member states, meeting as the Council of the European Union, agree to co-operate and co-ordinate their domestic policies.

The tension between EU and national (or subnational) competence is an enduring one in the development of the European Union.

All prospective members must enact legislation in order to bring them into line with the common European Union legal framework, known as the Acquis Communautaire. (See also European Free Trade Association (EFTA), European Economic Area (EEA) and Single European Sky.) See table of states participating in some of the initiatives.

Single market

Many of the policies of the EU relate to the development and maintenance of an effective single market. Significant efforts have been made to create harmonised standards designed to bring economic benefits through creating larger, more efficient markets.

Internal policies

Free trade of goods and services among member states (an aim further extended to three of the four EFTA states by the European Economic Area, EEA).
A common EU competition law controlling anti-competitive activities of companies (through antitrust law and merger control) and member states (through the State Aids regime).
The Schengen treaty allowed removal of internal border controls and harmonisation of external controls between its member states. This excludes the UK and Ireland, which have derogations, but includes the non-EU members Iceland and Norway. Switzerland also voted in 2005 to become part of the Schengen zone.
Freedom for citizens of its member states to live and work anywhere within the EU with their spouses and children, provided they can support themselves (also extended to the other EEA states and Switzerland). This has led to a gross anomaly whereby family related social welfare benefits are payable by the member state where an EU citizen is employed, even where the family of the worker are resident elsewhere in the Union.
Free movement of capital between member states (and other EEA states).
Harmonisation of government regulations, corporations law and trademark registrations.
Eurozone, a single currency area with the euro (excluding the UK and Denmark, which have derogations). Sweden, although not having a specific opt-out clause, has not joined the ERM II, voluntarily excluding itself from the monetary union.
A large amount of environmental policy co-ordination throughout the Union.
A Common Agricultural Policy and a Common Fisheries Policy.
Common system of indirect taxation, the VAT, as well as common customs duties and excises on various products.
Funding for the development of disadvantaged regions — structural and cohesion funds, as well as the emergency financial aid — the solidarity fund.

External policies and military

A common external customs tariff, and a common position in international trade negotiations.
Funding for programmes in candidate countries and other Eastern European countries, as well as aid to many developing countries, through programmes such as Phare, TACIS, ISPA.
The establishment of a single market energy community by means of the Energy Community South East Europe Treaty.
The establishment of a single market aviation area.
The establishment of a European Defence Agency.
The establishment of a European Rapid Reaction Force

Co-operation and Harmonisation in other areas

Freedom for citizens of the EU to vote in local government and European Parliament elections in any member state.
Co-operation in criminal matters, including sharing of intelligence (through EUROPOL and the Schengen Information System), agreement on common definition of criminal offences and expedited extradition procedures.
A common foreign policy as a future objective, however this has some way to go before being realised. The divisions between the member states (in the letter of eight) and then-future members (in the Vilnius letter) during the run up to the 2003 invasion of Iraq highlights just how far off this objective could be before it becomes a reality.
A common security policy as an objective, including the creation of a 60,000-member European Rapid Reaction Force for peacekeeping purposes, an EU military staff and an EU satellite centre (for intelligence purposes).
Common policy on asylum and immigration.
Common funding of research and technological development, through four-year Framework Programmes for Research and Technological Development. The Sixth Framework Programme is running from 2002 to 2006.

Economy

Total economical situation

If considered a single unit, the European Union has the largest economy in the world, with a GDP of 12,427,413 million USD (2005) using Purchasing power parity (PPP) equivalence. The EU economy is expected to grow further over the next decade as more countries join the union — especially considering that the new states are usually poorer than the EU average, and have the capacity to grow at a higher rate. The European Council published estimations on 17 November 2005 that the economy of the European Union will have grown approximately 1.5% in 2005 (1.3% in the eurozone), and 2.3% 2006 (2.1% in the eurozone) surpassing earlier growth predictions. In 2006, it is expected 3½ million jobs will be created in the Eurozone. The European Council is hopeful that the European Union will grow further in the future; economic growth for 2007 is expected to be at 2.7%. Germany, the largest economy in the EU, will grow about 2.9% in 2006 and 2.9% in 2007. After extremely slow growth, the EU's rate of growth is expected to increase in the next couple of years.

EU member states have agreed a programme called the Lisbon Strategy which aims at making "the EU the world's most dynamic and competitive economy" by 2010.

Economic variation

Below is a table and three graphs showing, respectively, the GDP (PPP), the GDP (PPP) per capita and the GDP (nominal) per capita for the European Union and for each of its 25 member states, sorted by GDP (PPP) per capita. This can be used as a rough gauge to the relative standards of living among member states, with Luxembourg and Ireland the highest; Poland and Latvia the lowest. The two future members Bulgaria and Romania (set for 1 January 2007) are also included in the table, as are the official candidates and officially recognised potential candidates. The data set is for the year 2007 and graphs are for the year 2004. All 2007 data are projections.

Criticisms

Language barriers

One major criticism of the EU is that it has 20 official languages for 25 member states (although there are only 3 internal working languages in the European Commission: French, English and German). This results in a potential 380 interpretations needed to translate all statements between all the languages of the EU.

The European Parliament employs over 4,000 interpreters at a cost of almost one billion euros annually, and translations can take up to a week to be translated into the languages of all member states. One of the problems is that sometimes translation needs to be done across intermediate languages because of a lack of interpreters for some languages, which can often lead to a loss of information and clarity, or even introduce errors into the translation.

It has been suggested, most notably by former UK commissioner of the EU Neil Kinnock, that these costs could be omitted by making English the official language of the EU.Some have also suggested that Esperanto or Interlingua could serve as a common second language for the EU.

On the other hand, there is an argument that all legislation, and indeed all proposed legislation, be available to the public of the EU in their national languages. The EU produces substantial legislation applicable to all member states: debate and accountability would be severely hampered if ordinary people could not have access to documents in their own language. Even worse, this would favour some countries over others.

Common Agricultural Policy

The Common Agricultural Policy, better known as the CAP, is a system of subsidies paid to EU farmers. Its main purposes are to guarantee minimum levels of production, so that Europeans have enough food to eat, and to ensure a fair standard of living for those dependent on agriculture.

The policy has been accused of distorting trade in agricultural products for decades. While the EU guarantees its farmers a price that is several times the world market price, Third World producers struggle in vain to compete in an unfair market. These subsidies, paid for by the EU taxpayers, secures the standard of living for farmers in EU countries, but also endangers Third World jobs, potentially causing increased poverty and malnutrition.

The policy costs around £30bn a year - or half the EU's £60bn annual budget. Common attempts to put the finances into some sort of perspective include examples along the lines of it adding £9 onto a family of four's weekly food bill, or that the annual income of an EU dairy cow exceeds that of half the world's human population. Another problem is that the subsidies cause overproduction. The CAP has also been blamed for encouraging environmentally damaging intensive farming. Critics say that the CAP has become badly unbalanced, with 70% of its funds going to only 20% of Europe's farms - predominantly the largest - and leaves nearly three-quarters of EU farmers surviving on less than £5,000 a year. Small farmers account for about 40% of EU farms, but receive only 8% of available subsidies from Brussels. For example, according to British government figures, five UK farms receive more than £1m a year in subsidies.

Since 2003 fundamental reforms have been implemented, sector by sector, with a view to "de-linking" agricultural support from market-distorting price support. Instead of being paid to produce (and thereby providing an incentive for surpluses which must be disposed of on the world market), farmers will receive payments for services such as conservation and rural development. Although the total financial level of support is not declining, the change in the type of subsidy is substantially reducing negative impacts on non-EU agricultural producers.

France led the anti-reform camp, which includes Spain, the Republic of Ireland and possibly Germany, while Britain, Sweden and the Netherlands were demanding change.

Biodiversity

The European Union has interpreted differently (relative to other advanced nations) the mission of creating a Biodiversity Action Plan under the 1992 Rio Accord. Instead of creating detailed inventories of biota and corresponding threat analyses and action plans for species, the EU has embedded references to protection of biological resources in a set of economic development policies related to fishing, agriculture etc. While this same strategy has been taken by a number of developing countries, the EU has not met the standard set by some advanced nations such as Canada and Australia in terms of extensive species identification, analysis of pathways of species decline and development of highly specific recovery plans. In contrast a number of individual countries within the EU (such as Sweden and the United Kingdom) have produced documentation in the spirit of the Rio Accord in a level of detail consistent with other advanced countries.

General situation