One of our blog readers "Anish" wanted to know more about the Eurozone Crisis. So, as a starting point to that complicated topic, let us first take a look at what this Eurozone or the European Union is. Once we get a fair idea about what the Eurozone is, it would be easier to understand about the crisis.
So, what is this European Union?
The European Union (EU) is a unification of 27 member states united to create a political and economic community throughout Europe.
The 27 member nations are:
5. Czech Republic
27. United Kingdom
Note: Croatia is scheduled to become the 28th member of the EU on July 1st 2013. So, as of now there are only 27 member nations.
Did the concept of EU just start recently?
Actually speaking, No. Though there was no formal European Union as such, the leaders of the European nations have always been working towards cooperation among the nations in Europe. In fact, the first ever known cooperative effort was in 1950 when the European Coal & Steel Community was created to facilitate easier trade between nations. 6 nations were involved in this initial treaty and they are often referred to as the founding members of this whole concept of EU. The nations were Belgium, France, Germany, Italy, Luxembourg and Netherlands.
During the cold war period, there was widespread tension and division between the Eastern & Western parts of Europe. To alleviate this, the Treaty of Rome was signed in March of 1957, thereby creating the European Economic Community. The creation of this community allowed people and products to move freely throughout Europe. As time went by, more and more nations joined this community.
Lastly, the demolition of the Berlin Wall in 1989 created a Single Market for Trade in Europe.
The Modern-Day EU
The modern day European Union or Eurozone effectively began due to the Treaty of Maastricht which was signed on February 7th 1992. It was put into action on 1st November 1993.
The Treaty of Maastricht identified five goals designed to unify Europe in more ways than just economically. The goals were:
1. To strengthen the democratic governing of participating nations.In order to reach these goals, the Treaty of Maastricht has various policies dealing with issues such as industry, education, and youth. In addition, the Treaty put a single European currency, the euro, in the works to establish fiscal unification in 1999. In 2004 and 2007, the EU expanded, bringing the total number of member states to 27.
2. To improve the efficiency of the nations.
3. To establish an economic and financial unification.
4. To develop the "Community social dimension."
5. To establish a security policy for involved nations.
How the European Union (EU) Works
One of the biggest complaints that citizens of India have is the fact that, the national ruling alliance is a coalition government and hence managing the expectations of all the member parties in the alliance is a challenge that the alliance leader has to live with day in and day out…
If collecting a bunch of state level parties that all belong to a single nation has its troubles, imagine how coordinating or governing a group that involves different countries would be??
With so many different nations participating, the governance of the EU is challenging to say the least. However, it is a structure that continually changes to become the most effective for the conditions of the time. Today, treaties and laws are created by the "institutional triangle" that is composed of the Council representing national governments, the European Parliament representing the people, and the European Commission that is responsible for holding up Europe's main interests.
The Council is formally called the Council of the European Union and is the main decision making body present. There is also a Council President here and each member state takes a six month turn in the position. In addition, the Council has the legislative power and decisions are made with a majority vote, a qualified majority, or a unanimous vote from member state representatives.
The European Parliament is an elected body representing the citizens of the EU and participates in the legislative process as well. These representative members are directly elected every five years.
Finally, the European Commission manages the EU with members that are appointed by the Council for five year terms- usually one Commissioner from each member state. Its main job is to uphold the common interest of the EU.
In addition to these three main divisions, the EU also has courts, committees, and banks which participate on certain issues and aid in successful management.
The Mission of the European Union
The European Union's mission today is to continue prosperity, freedom, communication and ease of travel and commerce for its citizens. The EU is able to maintain this mission through the various treaties making it function, cooperation from member states, and its unique governmental structure.
Now that we know what the European Union or the Eurozone is, we are well equipped to go into the topic of Eurozone Crisis.