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European Union

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Presentation of the European Union from the Economic Integration view. Explain the different stages of the European Economic Integration.

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European Union

  1. 1. Isis Quinones 2009535001 The European Union (EU) Isis Quinones
  2. 2. Table of Contents Introduction: Let’s go to the essentials of EU. The European Union Conclusions: The EU Future History of the EU The Microeconomics behind the European Union 5 4 3 2 1
  3. 3. REFERENCES Wilem Molle (2006). The Economics of European Integration: Theory, Practice, Policy, London: Ashgate. John Gllingham (2003). European Integration. 1950-2003 Superstate or New Market Economy, Cambridge University Press.
  4. 5. Isis Quinones 2009535001 The European Union (EU) HISTORY OF THE EU
  5. 6. Isis Quinones 2009535001 1815-1870
  6. 7. Introduction (1815-1870) <ul><li>Two Factors Stimulating Integration: Technical Progress and Political Idealism. </li></ul><ul><li>Trade remain slow: Luxury Goods </li></ul><ul><li>-Three main Reasons : Countless obstacles, Primitive means of transportation and Economic Policy. </li></ul><ul><li>Poor movement of production factors. </li></ul><ul><li>Capital Movements were in principle free but defected monetary system. </li></ul><ul><li>French Revolution: Political event </li></ul>History of EU
  7. 8. <ul><li>French Revolution </li></ul><ul><li>Britain Leadership on the European Market. </li></ul><ul><li>Eastern Europe: Growing Nationalism. </li></ul><ul><li>“ Protection” and “Free Trade” central topic among politicians and Economist. </li></ul><ul><li>1834 Germany Establish a Custom Union </li></ul><ul><li>1842 Britain has to abolished the Legal Barriers enforced by Citizens. </li></ul><ul><li>Europe Fast Economy Growth due to : Industrialization and Technological Advances. </li></ul>History of EU
  8. 9. <ul><li>Economic Integration spelled a way to political unity : Germany, Austria and Italy. </li></ul><ul><li>Specialization possible and desirable. </li></ul><ul><li>Railways advances but needed to be liberalized to a high degree. </li></ul><ul><li>River transport was liberalized. </li></ul><ul><li>International Agreements ensured free navigation on the Rhine. </li></ul><ul><li>Monetary Integration attempted in this period (1868) . </li></ul><ul><li>Western Germany has considerable degree of internal monetary integration. </li></ul>History of EU
  9. 10. <ul><li>Unsuccessful Monetary Integration due to some degree related to political union. </li></ul><ul><li>Peace in Europe three different initiatives were taken: </li></ul><ul><ul><li>Monarchist and anti-revolutionary </li></ul></ul><ul><ul><li>Philosophical and Visionary. </li></ul></ul><ul><ul><li>Republican and Democratic. </li></ul></ul><ul><ul><li>1870 Period of growth came to a sudden end: Depression, governments responded in a protectionist fashion. </li></ul></ul><ul><ul><li>French-German war and the Italian struggle for unity had completely upset the situation. </li></ul></ul><ul><ul><li>Tariffs and subsidy wars were fought between some countries. </li></ul></ul>History of EU
  10. 11. <ul><li>National states impose Taxes and Customs Duties: protectionist and nationalism policies. </li></ul><ul><li>Last part of 19 th century: Socialist International suggesting there is no gains from capitalists. </li></ul><ul><li>Foundation of International Institutions: International Telecommunication Union (1865) Universal Postal Union (1874). </li></ul><ul><li>1890 Abolition of Slavery. </li></ul><ul><li>First World War: Process of disintegration effects in markets and policy </li></ul><ul><li>The Peace Treaty of Versailles: Nations right to self determination . </li></ul>History of EU
  11. 12. <ul><li>German Debt after First World War: Low prices and diminishing sales prospects on export markets. </li></ul><ul><li>Unemployment, consolidated the protectionist tendencies reducing imports to half the pre war level, this led to a decrease of exports as well. </li></ul><ul><li>Decrease of Capital movements. </li></ul><ul><li>Monetary Policy most important area of disintegration: Devaluations . </li></ul><ul><li>“ In order to cut the depression the Second World War brought some integration among members states of the same Political Blocs was demanded”. Winston Churchill </li></ul>
  12. 14. Founders New ideas for lasting peace and prosperity… Konrad Adenauer Robert Schuman Winston Churchill Alcide De Gasperi Jean Monnet Founders Founders
  13. 15. History of EU On the 9th of May 1950 , Robert Schuman presented his proposal on the creation of an organized Europe, indispensable to the maintenance of peaceful relations. This proposal, known as the &quot;Schuman declaration&quot;, is considered to be the beginning of the creation of what is now the EU. Today, the 9th of May has become a European symbol (Europe Day).
  14. 16. 1952 The European Steel and Coal Community 1958 The treaties of Rome: The European Economic Community The European Atomic Energy Community (EURATOM) 1987 The European Single Act: the Single Market 1993 Treaty of European Union – Maastricht 1999 Treaty of Amsterdam 2003 Treaty of Nice
  15. 17. European Coal and Steel Community ( ECSC ) History of EU 18 April 1951 Based on the Schuman plan , six countries sign a treaty to run their heavy industries under a common management. In this way, none can on its own make the weapons of war to turn against the other, as in the past. The six are Germany, France, Italy, the Netherlands, Belgium and Luxembourg.
  16. 19. European Coal and Steel Community (ECSC) <ul><li>The Schuman Declaration that created the ECSC had several distinct aims: </li></ul><ul><li>Birth of a United Europe. </li></ul><ul><li>Make War impossible between member states. </li></ul><ul><li>Encourage World Peace </li></ul><ul><li>It would transform Europe 'step by step' process leading to the unification of Europe democratically, including both East and West Europe. </li></ul><ul><li>Create the world's first supranational institution </li></ul><ul><li>Create a single market across the Community </li></ul><ul><li>Revitalize the whole European economy by similar community processes </li></ul><ul><li>Improve the world economy and the developing countries. Africa. </li></ul>
  17. 20. 1952 The European Steel and Coal Community 1958 The treaties of Rome: The European Economic Community The European Atomic Energy Community (EURATOM) 1987 The European Single Act: the Single Market 1993 Treaty of European Union – Maastricht 1999 Treaty of Amsterdam 2003 Treaty of Nice
  18. 21. TREATY OF ROME 25 March 1957 Building on the success of the Coal and Steel Treaty , the six countries expand cooperation to other economic sectors. They sign the TREATY OF ROME , creating the European Economic Community (EEC), or ‘ common market ’. The idea is for people, goods, capital and services to move freely across borders.
  19. 22. COMMON AGRICULTURAL POLICY 30 July 1962 The EEC starts its ‘ COMMON AGRICULTURAL POLICY ’ giving the countries joint control over food production. The EEC grows enough food for its needs and farmers earn well. The unwanted side-effect is overproduction with mountains of surplus produce. Since the 1990s, priorities have been to cut surpluses and raise food quality
  20. 23. 1 July 1968 The six remove customs duties on goods imported from each other, allowing free cross-border trade for the first time. They also apply the same duties on their imports from outside countries. The world’s biggest trading group is born . Trade among the six and between the EEC and the rest of the world grows rapidly. 24 April 1972 The EU’s first plan for a single currency dates from 1970. To maintain monetary stability, EU members decide to allow their currencies to fluctuate against each other only within narrow limits. This exchange rate mechanism (ERM), created in 1972 through the European Monetary System the, is a first step towards the introduction of the euro, 30 years later. 1 January 1973 The six become nine when Denmark, Ireland and the United Kingdom formally enter the EU. 1 January 1981 Membership of the EU reaches double figures when Greece joins.
  21. 25. <ul><li>An organization established in Europe in 1979 to coordinate financial policy and exchange rates for the continent by running the Exchange Rate Mechanism (ERM) and assisting movement toward a common European currency and a central European bank </li></ul>European Monetary System (EMS)
  22. 27. <ul><li>The Schengen Agreement is a treaty signed on 14 June 1985 near the town of Schengen in Luxembourg, between five of the ten member states of the European Economic Community. </li></ul><ul><li>25 European countries , covering a population of over 400 million people and an area of 4,312,099 square kilometers ( 1,664,911 sq mi) </li></ul>Schengen Treaty
  23. 28. 1 January 1986 Spain and Portugal enter the EU, bringing membership to 12. 17 February 1986 Although customs duties disappeared in 1968, trade is not flowing freely across EU borders.
  24. 29. 1952 The European Steel and Coal Community 1958 The treaties of Rome: The European Economic Community The European Atomic Energy Community (EURATOM) 1987 The European Single Act: the Single Market 1993 Treaty of European Union – Maastricht 1999 Treaty of Amsterdam 2003 Treaty of Nice
  25. 30. European Single Act: The Single Market <ul><li>The Single European Act (SEA) 1987 revises the Treaties of Rome in order to add new momentum to European integration and to complete the internal market. </li></ul><ul><li>It was necessary to conclude, on the one hand, a Treaty relating to common foreign and security policy and, on the other hand, an act amending the  EEC Treaty, notably at the level of: </li></ul><ul><li>Decision-making procedure within the Council; </li></ul><ul><li>Commission's Powers </li></ul><ul><li>European Parliament's Powers; </li></ul><ul><li>Extension of the Communities' Responsibilities. </li></ul>
  26. 32. Forces of Change and Resistance in 1980s Europe: <ul><li>Influence by also abroad forces of changes. </li></ul><ul><li>European Community was facing the change of “ Globalization” in the form of “Regime Competition”. </li></ul><ul><li>Jaques Delors , was the incoming president of the European Commission who try to reverse by building a centralized, federal and state-directed Europe dedicated to the protection of the “European Social model”. </li></ul>
  27. 33. The United States and Globalization: Challenges To Europe Globalization brings ideological, organizational, financial and technological dimensions. The Expansion of World Trade in the 1970s brought: 1- Increase Cross-Border Capital Flows. 2- Advances in micro processing that reduced manufacturing costs, improved design and performance and stimulated product development. 3- Changes in America was the 3 rd ingredient in Globalization! If Europe do not change in combination with the United States it would have to become dependent of United States !TINA ! (There is not Alternative)
  28. 34. USA Reaganomics worked: Money Policy in 1983 applied by Volcker’s worked: <ul><li>These theories hold the view that decreases in taxes, especially for corporations, is the best way to stimulate economic growth. </li></ul><ul><li>Cut down inflation </li></ul><ul><li>The tax cut marked the beginning of the “SEVEN FAT YEARS” of prosperity that followed. </li></ul><ul><li>Growth-steady. </li></ul><ul><li>Wages grew. </li></ul><ul><li>The number of Jobs Increased and everyone seemed to work harder. </li></ul><ul><li>The pace of innovation stepped up. </li></ul><ul><li>The development and application of new technologies brought wide-ranging change in social organization and values. </li></ul>
  29. 35. According to Reagan’s former director of the council of economic advisors, Mr. Martin Feldstein: “ Much of our supply-side economics was a return to basic ideas about creating capacity and removing government impediments to individual initiative that were central in Adam Smith’s Wealth of Nations , and in the writings of the classical economists of the nineteenth century (that) has characterized most economic policy analysis during the past two hundred years”.
  30. 36. The European fear of American Financial takeover <ul><li>Rapid American Growth due to foreign capital inflows and heavy investments by Europeans would present a daunting economic challenge to ancient ways. Retreat from change was impossible; nevertheless, ongoing pressure for adaptation would be applied both nationally and regionally. </li></ul><ul><li>1980s scenario: </li></ul><ul><li>  </li></ul><ul><li>Large-Scale waves on industrial and financial reorganization </li></ul><ul><li>- Unhappy accompaniment, massive unemployment. </li></ul>
  31. 37. 1952 The European Steel and Coal Community 1958 The treaties of Rome: The European Economic Community The European Atomic Energy Community (EURATOM) 1987 The European Single Act: the Single Market 1993 Treaty of European Union – Maastricht 1999 Treaty of Amsterdam 2003 Treaty of Nice
  32. 38. Treaty of Maastricht <ul><li>7 February 1992 </li></ul><ul><li>The Treaty on European Union is signed in Maastricht, but entered into force on 1 November 1993. </li></ul><ul><li>In this context, the Treaty of Maastricht responds to five key goals: </li></ul><ul><li>Strengthen the democratic legitimacy of the institutions. </li></ul><ul><li>Improve the effectiveness of the institutions. </li></ul><ul><li>Establish economic and monetary union. </li></ul><ul><li>Develop the Community social dimension. </li></ul><ul><li>Establish a common foreign and security policy. </li></ul>
  33. 39. 1 January 1993 The single market and its four freedoms are established: the free movement of goods, services, people and money is now reality. 1 January 1995 Austria, Finland and Sweden join the EU.
  34. 40. The single market: freedom of choice Four freedoms of movement:  goods  services  people  capital © Getty Images <ul><li>The single market has led to: </li></ul><ul><li>significant reductions in the price of many products and services, including internet access and airfares. </li></ul><ul><li>40% drop in price of phone calls from 2000-2006 </li></ul><ul><li>2.8 million new jobs </li></ul>
  35. 41. 1952 The European Steel and Coal Community 1958 The treaties of Rome: The European Economic Community The European Atomic Energy Community (EURATOM) 1987 The European Single Act: the Single Market 1993 Treaty of European Union – Maastricht 1999 Treaty of Amsterdam 2003 Treaty of Nice
  36. 42. Treaty of Amsterdam 2 October 1997 The Treaty of Amsterdam meant a greater emphasis on citizenship and the rights of individuals, an attempt to achieve more democracy in the shape of increased powers for the European Parliament. Entered into force on 1 May 1999 ; it made substantial changes to the Treaty on European Union, which had been signed at Maastricht in 1992.
  37. 43. “ Schengen”:  No police or customs checks at borders between most EU countries  Controls strengthened at EU external borders  More cooperation between police from different EU countries  You can buy and bring back any goods for personal use when you travel between EU countries Free to move © Corbis Free to move
  38. 44. 1952 The European Steel and Coal Community 1958 The treaties of Rome: The European Economic Community The European Atomic Energy Community (EURATOM) 1987 The European Single Act: the Single Market 1993 Treaty of European Union – Maastricht 1999 Treaty of Amsterdam 2003 Treaty of Nice
  39. 45. Treaty of Nice . <ul><li>OBJECTIVES </li></ul><ul><li>The Intergovernmental Conference which resulted in the Treaty of Nice had the very clear mandate of preparing the European Union for enlargement by revising the Treaties in four key areas: </li></ul><ul><li>Size and composition of the Commission. </li></ul><ul><li>Weighting of votes in the Council. </li></ul><ul><li>Extension of qualified-majority voting. </li></ul><ul><li>Enhanced cooperation. </li></ul>
  40. 46. 13 December 1997 EU leaders agree to start the process of membership negotiations with 10 countries of central and eastern Europe: Bulgaria, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia and Slovenia. 1 January 1999 The euro is introduced in 11 countries (joined by Greece in 2001) for commercial and financial transactions only. Notes and coins will come later. Accomplishing EMU . 1 January 2002 Euro notes and coins arrive. Printing, minting and distributing them in 12 countries is a major logistical operation. At the moment 16 countries use the Euro. Eight countries of central and eastern Europe — the Czech Republic, Estonia, Latvia, Lithuania, Hungary, Poland, Slovenia and Slovakia — join the EU.
  41. 47. The euro – a single currency for Europeans EU countries using the euro EU countries not using the euro Can be used everywhere in the euro area  Coins: one side with national symbols, one side common  Notes: no national side The EURO – a single currency for Europeans
  42. 49. Treaty Of Lisboan
  43. 50. 1952 The European Steel and Coal Community 1958 The treaties of Rome: The European Economic Community The European Atomic Energy Community (EURATOM) 1987 The European Single Act: the Single Market 1993 Treaty of European Union – Maastricht 1999 Treaty of Amsterdam 2003 Treaty of Nice
  44. 51. Treaty of Lisbon Is an International agreement that amends the two treaties which comprise the constitutional basis of the EU. Signed on December 2007, and entered into force on December the first of 2009.
  45. 52. The Lisbon treaty - taking Europe into the 21st century The Treaty would make the European Union: More efficient Simpler processes, full-time president for the Council, etc. More democratic Stronger role for the European Parliament and national parliaments, &quot;Citizens Initiative&quot;, Charter of Fundamental Rights, etc. More transparent Clarifies who does what, greater public access to documents and meetings, etc. More united o n High Representative for Foreign Policy, etc. the world stage More secure New possibilities to fight climate change and terrorism, secure energy supplies, etc. Treaty of Lisbon
  46. 53. 1952 The European Steel and Coal Community 1958 The treaties of Rome: The European Economic Community The European Atomic Energy Community (EURATOM) 1987 The European Single Act: the Single Market 1993 Treaty of European Union – Maastricht 1999 Treaty of Amsterdam 2003 Treaty of Nice
  47. 54. Isis Quinones 2009535001 What is the EU? What is the Structure?
  48. 55. European Union Structure: The European Parliament - Voice of the People Jerzy Buzek, President of of the European Parliament The council of Ministers - Voice of the Member States Herman Van Rompuy, President of the European Council The European Commission - Promoting the Common Interest José Manuel Barroso, President of the European Commission
  49. 57. The single market: freedom of choice Four freedoms of movement:  goods  services  people  capital © Getty Images <ul><li>The single market has led to: </li></ul><ul><li>significant reductions in the price of many products and services, including internet access and airfares. </li></ul><ul><li>40% drop in price of phone calls from 2000-2006 </li></ul><ul><li>2.8 million new jobs </li></ul>
  50. 58. “ Schengen”:  No police or customs checks at borders between most EU countries  Controls strengthened at EU external borders  More cooperation between police from different EU countries  You can buy and bring back any goods for personal use when you travel between EU countries Free to move © Corbis Free to move
  51. 59. European Parliament Court of Justice Court of Auditors Economic and Social Committee Committee of the Regions Council of Ministers (Council of the EU) European Commission European Investment Bank European Central Bank Agencies European Council (summit) EU Institutions
  52. 60. Citizens, Interest Groups, Experts: Discuss, Consult Commission: Makes Formal Proposal Parliament and Council of Ministers: Decide Jointly Commission and Court of Justice: Monitor Implementation National or Local Authorities: Implement How the EU works?
  53. 63. Policy Areas Agriculture Audiovisual and media Budget Research and innovation Competition Consumers Culture Transport Taxation Customs Development and Cooperation Economic and monetary affairs Education, training, youth Employment and social affairs Energy Enlargement Enterprise Environment External relations External trade Fight against fraud Food safety Foreign and security policy Humanitarian aid Human rights Information society Institutional affairs Internal market Justice, freedom and security Maritime affairs and fisheries Public health Regional policy
  54. 64. 17
  55. 66. <ul><li>Major EU Duties: </li></ul><ul><li>Global Challenges: Peace, Security, Counterterrorism, Homeland Security, Democracy, Human Rights, Development Assistant, Humanitarian Relief. </li></ul><ul><li>Trade </li></ul><ul><li>Environmental Protection </li></ul><ul><li>Education & Research </li></ul><ul><li>Global Leadership : Transatlantic Relation </li></ul><ul><li>Dynamic Transatlantic Economy </li></ul>
  56. 67. <ul><li>Challenges: </li></ul><ul><li>Demography: Europeans live longer, have fewer children </li></ul><ul><li>Globalisation: European economy faces competition from other parts of the world </li></ul><ul><li>Climate change: Emission of greenhouse gases must come down </li></ul><ul><li>Solutions: </li></ul><ul><li>European leaders have therefore agreed on a joint strategy for: </li></ul><ul><li>More research and innovation </li></ul><ul><li>A more dynamic business environment </li></ul><ul><li>Investing in people </li></ul><ul><li>A greener economy </li></ul>
  57. 68. How rich is the EU compared to the rest of the world? EU China Japan Russia United States EU China Japan Russia United States 12 508 1 326 3 329 468 9819 25 100 4 400 27 800 12 200 38 700 Size of economy: 2008 gross domestic product in billion of euros Wealth per person: 2008 gross domestic product per person How rich is the EU compared to the rest of the world?
  58. 69. Facts: Size of economies <ul><li>Economic size distribution is VERY uneven </li></ul><ul><li>6 nations (Germany, the UK, France, Italy, Spain and the Netherlands) account for more than 80% of EU27’s economy. </li></ul><ul><li>Other nations are small, tiny or miniscule, </li></ul><ul><li>‘ Small’ is an economy that accounts for between 1% and 3% of the EU27’s output </li></ul><ul><ul><li>Sweden, Belgium, Austria, Denmark, Poland, Finland, Greece, Portugal and Ireland. </li></ul></ul><ul><li>“ Tiny’” is one that accounts for less than 1% of the total, </li></ul><ul><ul><li>Czech Republic, Hungary, Slovak Republic, Luxembourg, Slovenia, Lithuania, and Cyprus. </li></ul></ul><ul><li>“ Miniscule” as one that accounts for less than one-tenth of one percent . </li></ul><ul><ul><li>Latvia, Estonia and Malta. </li></ul></ul>
  59. 70. The budget: Expenditure Cohesion Spending refers to Regions in Disadvantages, small economies.
  60. 71. The European flag The European anthem Europe Day, 9 May The motto: United in diversity
  61. 72. Isis Quinones 2009535001 The Crisis of the Welfare State and the Challenge of Modernization in 1980s Europe: Country -Cases
  62. 73. Shift toward “less state” but also a shift toward a different kind of state . Feeling of different degree of forces. Member states roles : Agent – Excuse (both) introduce hard to impose change. Relationship between the EC and member state vary country to country so they must be study case by case basis. The Crisis of the Welfare State and the Challenge of Modernization in 1980s Europe: Country -Cases
  63. 74. New Zealand Experiments: <ul><li>Benchmark of European progress in the 1980s. Serve as a model for the Thatcherite Reform </li></ul><ul><li>Process: </li></ul><ul><li>  </li></ul><ul><li>Deregulation of the financial sector . </li></ul><ul><li>Creation of a legal and administrative framework to guide monetary, fiscal, and competition policy. </li></ul><ul><li>Privatization of state owned companies and marketization of the government services “costless” </li></ul><ul><li>- Labor reform (last item in the agenda) </li></ul>
  64. 75. Valuable Lessons applicable to Europe could be learned from New Zealand experience: -Imposing open financial markets, formidable disclosure requirements, and formal contractual relations with respect to monetary and fiscal policy, the reforms set constraints that future governments could not easily lift.   -Privatization, particularly of telecommunications yielded immediate and unsuspected payoffs.   -Fiscal Consolidation took rapid place 9% deficit turned into 10% surplus within 10 years.   -Intangibles as: “Credible Commitments” and “transparency” can produce immediate, demonstrable and widely recognize benefits.
  65. 76. Denmark Conserves : Two different governments: Social Democratic which gave up and then came the Bourgeois government of Poul Schlulter.   -1980s took a no accommodating policy, liberalizing only partially. - Inflation rates to high - Wage bargaining system - Decentralization of government services. -“Austerity” policy winning credibility in the Capital Markets bringing interest down. - Confronted labor directly. - Wages went down, unemployment remained high but declined, and growth resumed. - Deregulation of a Wage bargaining system - Employment raise.
  66. 77. Valuable Lessons applicable to Europe could be learned from Denmark experience: -Cut spending as a percentage of GNP. -Directed state enterprises to make profitability their goal, just privatized some of them. -Lifted all restrictions on the movement of capital, including restraints on foreign direct investment. -Centralized Wage Bargaining. -Swedish productivity problem was the extensive tax and benefit wedge, or spread between employer costs and employee wages.
  67. 78. France Regroups: <ul><li>Offer subsidizes into modern sectors of industry. </li></ul><ul><li>Restored managerial autonomy. </li></ul><ul><li>Encouraged nationalized companies to sell off subsidiaries. </li></ul><ul><li>Launched the next great signal of reform –the Privatization, with the purpose of restore national competitiveness. </li></ul><ul><li>Emphasis in reducing the power of an over-mighty state. </li></ul><ul><li>-“Enterprise as the source of national welfare” </li></ul><ul><li>Progress easily in the financial field: Top priority reform. </li></ul><ul><li>- The creation of a functional financial market . </li></ul>
  68. 79. Isis Quinones 2009535001 Microeconomics Behind the EU
  69. 80. How does the EU affect Economic Well Being? Who Gains? Who Loses? And how do the gains compare to the losses?
  70. 81. Price Before Trade Price After Trade A B C D Domestic Quantity Demanded Domestic Quantity Supplied International Trade in France Exporting Quantity of Wines Price of Wines EXPORTS   Before Trade After Trade Change Consumer Surplus A+B A - B Producer Surplus C B+C+D +(B+D) Total Surplus A+B+C A+B+C+D + D
  71. 82. Price Before Trade Price After Trade A B C D Domestic Quantity Demanded Domestic Quantity Supplied International Trade in France Importing Quantity of Wines Price of Wines IMPORTS   Before Trade After Trade Change Consumer Surplus A A+B+D +( B+D) Producer Surplus C+B C -B Total Surplus A+B+C A+B+C+D +D
  72. 83. Price without tariff Price with Tariff A C D B Q1S The effects of a Tariff Quantity of Wines Price of Wines Q2S Q2D Q1D F E G tariff Equilibrium without trade   Before Tariff After Tariff Change Consumer Surplus A+B+C+D+E+F A+B -(C+DE+F) Producer Surplus G C+G +C Government Revenue 0 E +E Total Surplus A+B+C+D+E+F+G A+B+C+D+E+G -(D+F)
  73. 84. Isis Quinones 2009535001 CONCLUSIONS
  74. 85. <ul><li>The European Union has accomplished : </li></ul><ul><li>1- Political Union </li></ul><ul><li>2- Economic Integration (due to technical progress, automation and mechanization). </li></ul><ul><li>This Economic Integration Process was stimulated by various factors: </li></ul><ul><li>Technical and Economical Factors (Rails, Transport advances, Tech., etc) </li></ul><ul><li>Strongly motivated to maintain PEACE in the continent. </li></ul><ul><li>Recover from World War II: Crisis are also motive for Success. </li></ul><ul><li>Until now the European Union has been the most dynamic example of Economic Integration, extending both: </li></ul><ul><li>Field of Activities ( Foreign, Security, Justice Policies, Home Affairs, Defense, and European Citizenship and Economic Union) </li></ul><ul><li>Field of Geographical Coverage: Starting with 6 member countries and </li></ul><ul><li>having 27 members country at the moment. </li></ul>
  75. 86. <ul><li>FUTURE OF THE EU: </li></ul><ul><li>Continuity Expansion </li></ul><ul><li>Require of more POLITICAL ENERGY </li></ul><ul><li>Budget Increment : Actual 1 % of GDP </li></ul><ul><li>No country has the possibility of block Progress: Door to Exit Cases ? </li></ul><ul><li>More Democracy : Establishment of Clear Conditions (Marginal Aspect) </li></ul><ul><li>Order Restoration of Unanimity </li></ul><ul><li>Constitutional Treaty </li></ul>
  76. 87. ¿ !Lessons learnt from the European Union !

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