European Union

Political and economic grouping, comprising 27 countries (in 2007) and a population of over 492 million. The six original members – Belgium, France, (West) Germany, Italy, Luxembourg, and the Netherlands – were joined by the United Kingdom, Denmark, and the Republic of Ireland in 1973, Greece in 1981, Spain and Portugal in 1986, Austria, Finland, and Sweden in 1995, Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, the Slovak Republic, and Slovenia in 2004, and Bulgaria and Romania in 2007. East Germany was incorporated on German reunification in 1990. The European Community (EC) preceded the EU, and comprised the European Coal and Steel Community (set up by the 1951 Treaty of Paris), the European Economic Community, and the European Atomic Energy Community (both set up by the 1957 Treaties of Rome). The EU superseded the EC in 1993, following intergovernmental arrangements for a common foreign and security policy and for increased cooperation on justice and home affairs policy issues set up by the Maastricht Treaty (1992). Other important agreements have been the Single European Act (1986), the Amsterdam Treaty (1997), and the Treaty of Nice (2000). The basic aims of these treaties have been the expansion of trade, the abolition of restrictive economic practices, the encouragement of free movement of capital and labour, and establishment of a closer union among European peoples.

The main consultative and decision-making institutions of the EU are the European Commission, the Council of the European Union (and the European Council), the European Parliament, the European Court of Justice and the Court of Auditors. Other important bodies include the Economic and Social Committee (including workers' and employers' representatives) and the Committee of the Regions. The European Investment Bank is the EU's financing institution, providing long-term loans for capital investment.

The most important policy areas of the EU include the common agricultural policy, economic and monetary union (and the creation of the single European currency or euro), the single European market, enlargement, security, and judicial and home affairs. The EU also agrees measures on environmental protection, regional development (through several structural funds), research, employment and social affairs, transport, and energy.

Budget revenue comes from levies on agricultural imports from non-member countries, customs duties, the proceeds of value-added tax receipts, and contributions from member states based on gross national product (the ‘own resources’ financing system). The United Kingdom gets an annual budget rebate (which has been in place since 1984).

Enlargement Enlargement aims at including other countries that share the EU's democratic values and are able to take on the obligations of membership. It is a major policy objective of the EU, and in 1998 an accession process with applicant states was launched. Membership negotiations began with Cyprus, the Czech Republic, Estonia, Hungary, Poland, and Slovenia. In 1999 Turkey's candidature for membership was recognized, and in 2000 negotiations began with Bulgaria, Latvia, Lithuania, Malta, Romania, and Slovakia. Institutional changes were necessary for enlargement and in December 2000 the European Council meeting at Nice, France, changed the voting rules to allow other countries to join. However, argument raged in the EU in 2001 over the distribution of its regional aid budget once poorer central and eastern European countries had joined. Both Spain and Italy urged moderation in EU enlargement, arguing that there were regions within their countries that needed attention first. Enlargement was further threatened by Ireland's rejection of the Treaty of Nice in a June referendum, as the treaty needed to be ratified by all 15 EU countries for enlargement to take place. However, the European Commission controversially declared that enlargement would go ahead despite Ireland's rejection. At a summit in Göteborg, Sweden, in June 2001, the end of 2002 was set as the date for applicant countries to conclude enlargement negotiations. Successful applicants would then be able to take part in the 2004 European Parliament elections. The ten successful applicants joined the EU on 1 May 2004, followed by Bulgaria and Romania on 1 January 2007.

Security The North Atlantic Treaty Organization (NATO) has been the cornerstone of Western European defence since World War II. However, the EU has more recently sought to take greater responsibility for its own security. An intergovernmental common foreign and security policy was established by the Maastricht Treaty in 1993, providing for member states to agree unanimously on common policies and/or joint actions on a wide range of international issues. Subsequently, the Amsterdam Treaty made changes to make these arrangements more effective. In 1998 EU member states agreed on a code of conduct on arms exports. In December 1999, the European Council, meeting in Helsinki, Finland, agreed to set up a rapid reaction force by 2003, with up to 60,000 personnel, to deal with conflict prevention, peacekeeping, and crisis management. Collective security remained the responsibility of NATO and, in December 2000, the European Council meeting in Nice agreed that European defence would operate only when NATO chose not to be engaged.

Justice and home affairs The Maastricht Treaty set up intergovernmental arrangements for greater cooperation among member states on justice and home affairs issues, including asylum, immigration, and other policies related to free movement of people, as well as police, customs, and judicial coordination in criminal matters. Conventions were agreed on Europol (a European police office to fight organized international crime) and on extradition. The Amsterdam Treaty further reorganized justice and home affairs coordination, establishing greater intergovernmental- and Community-based cooperation. The Treaty of Nice, once ratified, further extends qualified majority voting in the Council of the EU to cover matters such as regulation of the European Court of Justice and aspects of asylum and immigration policy.