European Union

1. EUROPEAN UNION Presented by Atodaria Viraj(02) Kathiriya Alpesh(34) Doctor Parthav(21) Kapadia Hussain(30) Jethva Ketan(28) Mavani Hardik(39)

2. In a Nutshell <ul><li>History & Evolution of European Union </li></ul><ul><li>Objectives of EU </li></ul><ul><li>Legislation of EU </li></ul><ul><li>EU Trade Policy </li></ul><ul><li>Euro </li></ul><ul><li>Euro Currency Market </li></ul><ul><li>EU-India Trade Relations </li></ul><ul><li>EU-Microsoft Antitrust Case Study </li></ul>

3. European Union <ul><li>Intergovernmental and supernational union of 27 European countries </li></ul><ul><li>Established under that name in 1992 by the Treaty on European Union (the Maastricht Treaty) </li></ul><ul><li>With almost 500 million citizens, the EU generates an estimated 31% share of the world's nominal GDP (US$16.6 trillion) in 2007. </li></ul><ul><li>European Union's activities cover: </li></ul><ul><ul><li>public policy </li></ul></ul><ul><ul><li>health </li></ul></ul><ul><ul><li>economic policy </li></ul></ul><ul><ul><li>foreign affairs </li></ul></ul><ul><ul><li>defence </li></ul></ul>

4. History & Evolution Of European Union <ul><li>9 th May 1950 France proposed a `European Federation’ </li></ul><ul><li>1952: The basis of the EU began with the signing of the Treaty of Paris , establishing the European Coal and Steel Community (ECSC), to regulate European industry & improve commerce, post WWII . </li></ul><ul><li>The six founding states were Belgium, France, Germany, Italy, Luxembourg, and The Netherlands. </li></ul><ul><li>1957: the Treaties of Rome were signed by the six member states, forming: - The European Economic Community (EEC) -The European Atomic Energy Community (Euro atom ) </li></ul><ul><li>These units worked concurrently with the ECSC. </li></ul>

5. Contd. <ul><li>1967: ECSC, EEC, and EuroAtom merged to form the basis of the EC. </li></ul><ul><li>1973: the United Kingdom, Denmark and Ireland joined the EC. </li></ul><ul><li>1981: Greece joined. </li></ul><ul><li>1986: Spain and Portugal joined. </li></ul><ul><li>1995: Finland, Sweden, and Austria joined . </li></ul><ul><li>2004: Cyprus, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia, Slovenia </li></ul>

7. The Present

8. Goals of the EC <ul><li>To continue to improve Europe’s economy by regulating trade and commerce. </li></ul><ul><li>To form a single market for Europe's </li></ul><ul><ul><li>economic resources. </li></ul></ul><ul><li>As these goals were accomplished, other </li></ul><ul><li>goals were developed: </li></ul><ul><ul><ul><li>Environmental movements </li></ul></ul></ul><ul><ul><ul><li>Regulatory acts </li></ul></ul></ul><ul><ul><ul><li>Human rights concerns. </li></ul></ul></ul>

9. Principal Objectives of the EU <ul><li>Establish European Citizenship </li></ul><ul><li>Ensure freedom, security, and justice </li></ul><ul><li>Promote economic and social progress </li></ul><ul><li>Assert Europe’s role in the world </li></ul>

10. The EU is run by five institutions <ul><li>European Parliament - elected by the peoples of the Member States </li></ul><ul><li>Council of the Union - composed of the governments of the Member States </li></ul><ul><li>European Commission - driving force and executive body </li></ul><ul><li>Court of Justice - compliance with the law </li></ul><ul><li>Court of Auditors -sound and lawful management of the EU budget </li></ul>

11. European Parliament <ul><li>Members elected every 5 years </li></ul><ul><li>732 members, 750 max. </li></ul><ul><li>Three essential functions: </li></ul><ul><ul><li>Legislate laws along w/ Council </li></ul></ul><ul><ul><li>Budget authority along w/ Council </li></ul></ul><ul><ul><li>Supervision of Commission </li></ul></ul>

12. Council of the EU <ul><li>Composed of the head of each member country (Prime Minster/President, etc) & the President of the EU Commission (27 members) </li></ul><ul><li>1 Minister acts as President, rotating twice yearly </li></ul><ul><li>2 meetings a year, in President’s country </li></ul><ul><li>Main decision making body of the EU </li></ul><ul><li>Responsibilities </li></ul><ul><li>Legislation & budgetary policies along with Parliament </li></ul><ul><li>Economic policies </li></ul><ul><li>International agreements </li></ul>

13. European Commission <ul><li>Embodies and upholds the general interest of the Union. </li></ul><ul><li>27 members: 1 President, 2 vice-Presidents & 22 Commissioners </li></ul><ul><li>Elected every 5 years by the Member States after they have been approved by the European Parliament. </li></ul><ul><li>As the EU ’s executive body, it: </li></ul><ul><li>Drafts legislation for Parliament & Council; Implements legislation </li></ul><ul><li>Guardian of treaties, along with Court of Justice </li></ul><ul><li>Represents EU internationally </li></ul><ul><li>Manages the 15 EU agencies </li></ul>

14. Court of Justice <ul><li>25 judges and 8 advocate generals appointed </li></ul><ul><li>by member states for 6 year terms. </li></ul><ul><li>The Court of Justice ensures that Community </li></ul><ul><li>law is uniformly interpreted and effectively applied. </li></ul><ul><li>It has jurisdiction in disputes involving Member States, EU institutions, businesses and individuals </li></ul>

15. <ul><li>25 members </li></ul><ul><li>located in Luxembourg </li></ul><ul><li>checks how EU money is spent </li></ul><ul><li>help European taxpayers to get better value for the money </li></ul>European Court of Auditors

16. Financial Bodies <ul><li>European Central Bank – </li></ul><ul><ul><li>Frames & implements monetary policy </li></ul></ul><ul><ul><li>Conducts foreign exchange operations </li></ul></ul><ul><ul><li>Ensures smooth operation of payment system </li></ul></ul><ul><ul><li>European Investment Bank – </li></ul></ul><ul><ul><li>‘ owned’ by member states. Raise finance through financial markets, </li></ul></ul><ul><ul><li>Invest in projects to promote aims of EU – large scale projects </li></ul></ul>

17. What does the EU do? <ul><li>Euro - a single currency for Europeans </li></ul><ul><li>Free to move </li></ul><ul><li>Keeping the peace </li></ul><ul><li>An area of freedom, security and justice </li></ul><ul><li>Fewer frontiers: more jobs! </li></ul><ul><li>An information society for everybody </li></ul><ul><li>Caring about our environment </li></ul>

18. CURRENT EU ISSUES

19. CURRENT EU ISSUES <ul><li>1 Enlargement : Ten countries joined the EU in 2004, making 25 countries total & 2 countries joining later making 27 countries. </li></ul><ul><li>2. Single Market : free movement of goods, services, labour and capital between member states </li></ul><ul><li>3. The Euro : The Common Currency for the EU Countries. </li></ul><ul><li>4. Openness, Access and Transparency: </li></ul><ul><li>How to get the documents to the people? </li></ul><ul><li>5. Safety & security of Europe :Against terrorism. </li></ul>

20. <ul><li>27 EU COUNTRIES in 2007 </li></ul><ul><li>Austria </li></ul><ul><li>Belgium </li></ul><ul><li>Bulgaria </li></ul><ul><li>Czech Republic </li></ul><ul><li>Cyprus </li></ul><ul><li>Denmark </li></ul><ul><li>Estonia </li></ul><ul><li>Finland </li></ul><ul><li>France </li></ul><ul><li>Germany </li></ul><ul><li>Greece </li></ul><ul><li>Hungary </li></ul><ul><li>Ireland </li></ul><ul><li>Italy </li></ul><ul><li>Latvia </li></ul><ul><li>Lithuania </li></ul><ul><li>Luxembourg </li></ul><ul><li>Malta </li></ul><ul><li>The Netherlands </li></ul><ul><li>Poland </li></ul><ul><li>Portugal </li></ul><ul><li>Romania </li></ul><ul><li>Slovakia </li></ul><ul><li>Slovenia </li></ul><ul><li>Spain </li></ul><ul><li>Sweden </li></ul><ul><li>United Kingdom </li></ul>

21. Applicant Countries whose requests for EU membership are still pending <ul><li>country - date of EU application </li></ul><ul><li>Turkey - 14 April 1987 </li></ul><ul><li>Croatia - 2003 </li></ul>

22. Enlargement <ul><li>Advantages </li></ul><ul><ul><li>Economic growth </li></ul></ul><ul><ul><li>Stability </li></ul></ul><ul><ul><li>Global Presence </li></ul></ul><ul><ul><li>Business Confidence </li></ul></ul><ul><ul><li>Foreign Direct Investment (FDI) </li></ul></ul><ul><ul><li>Structural Funds </li></ul></ul><ul><li>Disadvantages </li></ul><ul><ul><li>Migration </li></ul></ul><ul><ul><li>Common Agricultural Policy </li></ul></ul><ul><ul><li>Regional Aid </li></ul></ul><ul><ul><li>EU Standards and Systems </li></ul></ul><ul><ul><li>The Legacy of the Soviet Economy </li></ul></ul>

23. What is the Single Market? <ul><li>building one internal market was intended to launch Europe as an economic superpower </li></ul><ul><li>as member states got rid of obstacles to trade, companies would start to enjoy new economies of scale </li></ul><ul><li>more cross-border competition would wipe out inefficient firms </li></ul>

24. How was it Created? <ul><li>Removal of barriers to the four freedoms of movement (people, goods, services, capital) within the EU </li></ul><ul><li>Barriers were: regulatory, technical, legal, bureaucratic, cultural and protectionist </li></ul><ul><li>EU Directives telling member states, governments to put changes into effect . </li></ul>

25. Who Benefits? <ul><li>Consumers: lower prices, greater choice of goods and services, work within EU </li></ul><ul><li>Businesses: fair competition, economies of scale, expand to global markets </li></ul>

26. By How Much? <ul><li>European Commission estimates the Single Market has produced: </li></ul><ul><li>2.5 m new jobs since 1993 </li></ul><ul><li>800 billion euro extra wealth </li></ul><ul><li>over 15 m people now go to another EU state either to work or retire </li></ul>

27. Issues dealt till now <ul><li>Recognition of Professional qualifications and diplomas </li></ul><ul><li>Access to education </li></ul><ul><li>Residence permits </li></ul><ul><li>Voting rights </li></ul><ul><li>Social security </li></ul><ul><li>Employment rights </li></ul><ul><li>Driving licences </li></ul><ul><li>Motor vehicle registration </li></ul><ul><li>Border controls </li></ul><ul><li>Market access for products </li></ul><ul><li>Market access for services </li></ul><ul><li>Establishment as self-employed </li></ul><ul><li>Public procurement </li></ul><ul><li>Taxation </li></ul><ul><li>Free movement of capital or payments </li></ul>

28. European Union Trade Policy

29. Facts About World Trade Evolution of World Trade: 1999-2004 Million Euro

30. EU in World Trade A Major Trading Power First Exporter Second Largest Importer 20% of world trade: 19% world trade in goods, 24% world trade in services Foreign direct investment (FDI): EU-25 source of 46% of the world’s FDI (€235 billion) and hosts 20% of the world’s FDI (€119 billion)

31. EU in World Trade A Major Trading Power Share in World trade in Goods Share in World trade in Services

32. EU in World Trade EU-27 Trade in goods- Export by Region (2004 Million Euro)

33. EU in World Trade EU-27 Trade in goods- Import by Region (2004 Million Euro)

34. EU in World Trade

35. EU in World Trade Degree of Insertion in world economy RATIO Total Trade = ( Imports + Exports)/GDP - 2004 EU 19.9 US 16.6 Japan 17.1 China 47.5

36. EU in World Trade Imports from Developing Countries (mn Euro) Others Imports from Least developing Countries (mn Euro)

37. EU Trade policy-Basic Features 3 Dimensions Multilateral Bilateral/ Regional Unilateral

38. EU Trade policy-Basic Features Multilateral Mostly implemented in the framework of the WTO with the aim of promoting market access with rules , in the context of effective global governance . For example - • for trade in goods : policies such as “tariff reduction” and technical barriers to trade. But not forgetting the promotion of EU values, including: • environmental concerns • food safety • cultural diversity • … and how to promote core labour standards ?

39. EU Trade policy-Basic Features Bilateral/ Regional In addition to the WTO's multilateral negotiations, the EU concludes bilateral agreements and devises specific trading policies with third countries and regional areas . 121 countries are potentially linked to the EU by regional trade agreements, many negotiated in the 1990s. EU policy rationale for bilateral agreements • Trade expansion and rules-making (WTO+) • F ostering development and promoting regional development • N ew ideas for “ Neighborhood” policy/ “Wider Europe” Key EU bilateral agreements include: • Economic Partnership Agreements in negotiation with ACP countries (Cotonou) • Free Trade Agreements with EFTA, EEA, Euromed, Mercosur (in negotiation), Mexico, South Africa... • Customs Unions with Turkey, Andorra and San Marino • Partnership and Cooperation Agreements with Russia &Ukraine

40. EU Trade policy-Basic Features Unilateral The EU also implements unilateral measures as an additional trade policy instrument in the interests of development and/or political stability in line with the Union’s key political priorities: General System of Preferences (GSP) classical instrument for fostering development is by granting tariff preferences. The EU's GSP grants products imported from GSP beneficiary countries either duty-free access or a tariff reduction depending on the sensitivity of the product and the GSP arrangement enjoyed by the Country concerned. “ Everything But Arms” initiative (EBA) - EBA is a special GSP arrangement for the least developed countries . EBA grants duty-free access to imports of all products from LDCs without any quantitative restrictions, except to arms and munitions . Asymmetrical preferences e.g. for the Balkans and Moldova, with the aim of ensuring peace, stability, freedom and economic prosperity in the region (cf. “Wider Europe”).

41. EU Trade policy A comparison between the EU and the US Efficiency Transparency Legitimacy • Exclusive EU competence • Council acts on the basis of QMV • Member States usually stick to common line • Legal texts quite complicated following the adoption of the Treaty of Nice • Community mandate from Council • EUParliament only plays a limited role EU • Congressional constitutional responsibility, “leased back” to Administration • Congressional ‘fast track’ procedure time ltd, politicized • Political debate over Trade Promotion Authority (adopted in 2001) heightened public awareness, allowed debate on trade policy priorities • Congress retains final say thanks to constitutional responsibility US

42. The impact of the EU decisions <ul><li>All areas of public policy: </li></ul><ul><li>market regulation, social policy, environment, agriculture, regional policy, research and development, policing and law and order, citizenship, human rights, international trade, foreign policy, defence, consumer affairs, transport, public health, education and culture </li></ul><ul><li>EU sets Over 80% of rules governing the production, distribution, exchange of goods, services and capital </li></ul><ul><li>About 300 of pieces of legislation pass through the EU institutions every year, more than in any other single set of policy institutions in the democratic world </li></ul>

43. The impact of the EU decisions <ul><li>Primary and secondary acts of the EU are supreme over national law. Most of the acts have direct effects and create rights for individuals. Powerful indirect effect on the distribution of resources between individuals, groups and nations in Europe </li></ul><ul><li>Several Member states receive around 5% of their gross domestic product from the EU budget </li></ul>

44. Euro

45. Introduction of Euro <ul><li>The euro was established by the provisions in the 1992 Maastricht Treaty on European Union </li></ul><ul><li>The introduction of the euro took place principally on 31 December 1998 </li></ul><ul><li>Physically launched as Banknotes & Coins on 1 January, 2002. </li></ul>

46. Introduction of Euro <ul><li>The rates were determined by the Council of the European Union, based on a recommendation from the European Commission based on the market rates on 31 December 1998 </li></ul><ul><li>one ECU (European Currency Unit) would equal one euro </li></ul><ul><li>The European Currency Unit was an accounting unit used by the EU, based on the currencies of the member states; it was not a currency in its own right </li></ul>

47. Criteria for Participating <ul><li>to participate in the new currency, member states had to meet strict criteria </li></ul><ul><ul><li>a budget deficit of less than 3% of their GDP </li></ul></ul><ul><ul><li>a debt ratio of less than 60% of GDP </li></ul></ul><ul><ul><li>low inflation and </li></ul></ul><ul><ul><li>interest rates close to the EU average. </li></ul></ul>

48. Euro <ul><li>currency sign: € </li></ul><ul><li>banking code: EUR </li></ul><ul><li>Official currency of the European Union (EU) </li></ul><ul><li>Currently consists of 15 states </li></ul><ul><li>Austria Belgium Cyprus France Germany Greece Ireland Malta Luxembourg Slovenia Portugal the Netherlands Spain Italy Finland </li></ul>

49. Cont.. <ul><li>It is the single currency for more than 320 million Europeans </li></ul><ul><li>the euro directly affects close to 500 million people worldwide </li></ul><ul><li>more than €610 billion in circulation as of December 2006 (equivalent to US$802 billion at the exchange rates at the time) </li></ul><ul><li>the currency with the highest combined value of cash in circulation in the world, having surpassed the U.S. dollar </li></ul>

50. Cont.. <ul><li>It is managed and administered by the Frankfurt-based European Central Bank (ECB) and the Eurosystem </li></ul><ul><li>Eurosystem participates in the printing, minting and distribution of notes and coins in all member states, and the operation of the Eurozone payment systems </li></ul>

51. Characteristics 1.Coins & Bank Notes <ul><li>Notes are issued in €500, €200, €100, €50, €20, €10, €5 </li></ul><ul><li>The euro coins are €2, €1, €0.50, €0.20, €0.10, €0.05, €0.02, and €0.01 </li></ul>

52. 2. Payments clearing, electronic funds transfer <ul><li>intra-Eurozone transfers shall cost the same as a domestic one </li></ul><ul><li>Credit/debit card charging and ATM withdrawals within the Eurozone are also charged as if they were domestic </li></ul><ul><li>The ECB has set up a clearing system, TARGET( T rans-European A utomated R eal-time G ross Settlement E xpress T ransfer System) for large euro transactions. </li></ul>

53. 3.Currency Sign <ul><li>The glyph is according to the European Commission "a combination of the Greek epsilon, as a sign of the weight of European civilization; an E for Europe; and the parallel lines crossing through standing for the stability of the euro" </li></ul>

54. Economic & Monetary Union <ul><li>A single currency for the EU has been an official objective since 1969 and work began in 1990 on Economic and Monetary Union </li></ul>Yielded currencies of the Eurozone Currency Abbr. Rate Fixed on EMU III Austrian schilling ATS 13.7603 1998 - 12-31 1999 Belgian franc BEF 40.3399 1998 - 12-31 1999 Dutch gulden NLG 2.20371 1998 - 12-31 1999 Finnish markka FIM 5.94573 1998 - 12-31 1999 French franc FRF 6.55957 1998 - 12-31 1999 German mark DEM 1.95583 1998 - 12-31 1999 Irish pound IEP 0.787564 1998 - 12-31 1999 Italian lira ITL 1936.27 1998 - 12-31 1999 Luxembourg franc LUF 40.3399 1998 - 12-31 1999 Portuguese escudo PTE 200.482 1998 - 12-31 1999 Spanish peseta ESP 166.386 1998 - 12-31 1999 Greek drachma GRD 340.750 2000 - 06-19 2001 Slovenian tolar SIT 239.640 2006 - 07-11 2007 Cypriot pound CYP 0.585274 2007 - 07-10 2008 Maltese lira MTL 0.429300 2007 - 07-10 2008

55. Euro zone <ul><li>euro is the sole currency in Austria, Belgium, Cyprus, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Malta, the Netherlands, Portugal, Slovenia and Spain </li></ul><ul><li>15 countries together are frequently referred as the Eurozone or the euro area, or more informally "euroland" or the "eurogroup" </li></ul>

56. Euro zone <ul><li>Andorra, Montenegro, Kosovo, and Akrotiri and Dhekelia adopted the foreign euro as their legal currency for movement of capital and payments without participation in the ESCB(European System of Central Bank) </li></ul>

57. Euro to Indian Rupee

58. Euro to Other Currencies using values from Friday, February 08, 2008 1 EUR in EUR American Dollar 1.4505 0.689417 Australian Dollar 1.62157 0.616685 Brazilian Real 2.56086 0.390494 British Pound 0.744879 1.3425 Canadian Dollar 1.44963 0.689831 Chinese Yuan 10.4189 0.095979 Danish Krone 7.4534 0.134167 Hong Kong Dollar 11.3145 0.0883823 Indian Rupee 57.4543 0.0174051 Japanese Yen 155.697 0.00642274 Malaysian Ringgit 4.68512 0.213442 Mexican Peso 15.6045 0.0640841 New Zealand Dollar 1.8405 0.543331 Norwegian Kroner 8.0278 0.124567 Singapore Dollar 2.05594 0.486396 South African Rand 11.3067 0.0884435 South Korean Won 1370.14 0.000729851 Sri Lanka Rupee 156.393 0.00639415 Swedish Krona 9.41419 0.106223 Swiss Franc 1.60106 0.624585 Taiwan Dollar 46.416 0.0215443 Thai Baht 45.4007 0.0220261

59. Euro-Currency Markets <ul><li>Introduction </li></ul><ul><li>Euro-currency Markets are also called Euro-dollar market. </li></ul><ul><li>Euro- currency market is a market principally located in Europe for lending and borrowing the world’s most important convertible currencies , namely dollar, sterling, DM, French franc, yen, etc. </li></ul>

60. Euro-Currency Markets <ul><li>Introduction </li></ul><ul><li>Currency Market & Exchange Market: </li></ul><ul><li>The international currency markets are a subordinate of the foreign exchange markets. In FEM currencies are exchanged one for the other & in the currency markets the currencies are borrowed and lent for varying maturities. </li></ul>

61. Euro-Currency Markets <ul><li>Origins of the Euro-Currency Markets: </li></ul><ul><li>US & European banks took deposits outside US, after 2 nd world war. </li></ul><ul><li>US dollars were used widely. </li></ul><ul><li>The momentum gathered & so these banks were encouraged to depend on dollars. </li></ul><ul><li>No restrictions on these banks were laid as that on domestic banks. </li></ul><ul><li>Lower costs as per domestic banks. </li></ul>

62. Euro-Currency Markets <ul><li>Impact on Exchange Markets: </li></ul><ul><li>Impact of Euro-currency markets on the foreign exchange markets is multi -dimensional . Not only the demand and supply of various currencies are influenced through pressures from the Euro-currency markets but the exchange rates are altered by speculation in currencies. </li></ul>

63. Euro-Currency Markets <ul><li>Segments of the Market: </li></ul><ul><li>Two segments: </li></ul><ul><li>Inter-Bank </li></ul><ul><li>Non-Bank Public </li></ul><ul><li>Purpose of banks’ involvement in the ECM is to satisfy the genuine demand for currency in the commercial operations of the borrowers which is the market for non-bank public. </li></ul>

64. Euro-Currency Markets <ul><li>Sources: </li></ul><ul><li>The main sources of funds for the market came from varied groups-individuals, corporations, commercial banks, international institutions, multinationals, the central banks, the governments. </li></ul>

65. Euro-Currency Markets <ul><li>Uses: </li></ul><ul><li>Balance of payments requirements of governments. </li></ul><ul><li>Monetary authorities for commercial short or long-term investments in the private sector. </li></ul>

66. Euro-Currency Markets <ul><li>Importance of the Market: </li></ul><ul><li>Financing deficits in BOP. </li></ul><ul><li>Investments & working capital requirements. </li></ul><ul><li>Channel for profitable investment for excess funds of governments, central banks and business corporations. </li></ul><ul><li>Lightening the pressures on the international monetary system </li></ul><ul><li>Dealers in the market: </li></ul><ul><li>Lawyers and Auditors: </li></ul>

67. Euro-Currency Markets <ul><li>Euro-bond market: </li></ul><ul><li>This is an international market for borrowing capital by any country’s government, corporate and institutions. </li></ul><ul><li>Instruments Issued and Traded </li></ul><ul><li>(1) Fixed Rate Bonds : </li></ul><ul><li>(2) Convertibles : </li></ul><ul><li>(3) Swaps : </li></ul>

68. Euro-Currency Markets <ul><li>Magnitude of Trade: </li></ul><ul><li>The magnitude of trade in this market runs into trillions of dollars, particularly in the inter bank deal. In 1987 the amount of Euro-bonds was $150 billion , while the same in 1964 was $500 million. </li></ul>

69. EU-India Trade Relations

70. <ul><li>Origins </li></ul><ul><li>EU-India relations go back to the early 1960s: India was amongst the first countries to set up diplomatic relations with EEC </li></ul><ul><li>Bilateral agreements signed in 1973, 1981, The 1994 co-operation agreement (signed 20 Dec 1993) is a wide-ranging 3rd generation agreement, well beyond trade and economic co-operation. </li></ul>

71. EU-India Relations- Milestones <ul><li>1963 India establishes diplomatic relations with EEC </li></ul><ul><li>1973 Commercial cooperation agreement </li></ul><ul><li>1983 EC sets up a Delegation in New Delhi </li></ul><ul><li>1988 EC-India, first Joint Commission meeting </li></ul><ul><li>1993 Joint Political Statement </li></ul><ul><li>1994 Cooperation agreement on partnership and development </li></ul><ul><li>1996 Enhanced EU-India partnership </li></ul><ul><li>2000 First Summit, in Lisbon </li></ul><ul><li>2004 5th Summit in Hague: launch of Strategic Partnership </li></ul><ul><li>2005 6th Summit in New Delhi: Joint Action Plan </li></ul><ul><li>2006 7 th Summit in Helsinki </li></ul>

72. INDIA-EU ECONOMIC RELATIONSHIP <ul><li>EU is India’s largest trading partner. </li></ul><ul><li>The bilateral relationship is reviewed annually by India –EU Summit at the level of our PM and the Presidency of the EU. </li></ul><ul><li>Announcement of Strategic Partnership was made at 5 th India-EU Summit held in Hague in November 2004. </li></ul>

73. EU—India Trade <ul><li>EU remains India’s largest trading partner, accounting for 21.77% of India’s exports and 18.33 per cent of total Indian imports in the year 2004-05 </li></ul><ul><li>total trade between EU and India increased from €28.4 billion in 2003 to €33.2 billion in 2004-05 registering a growth of 16.9%. </li></ul><ul><li>EU exports to India show an impressive growth of 17.2% in 2004-05 </li></ul><ul><li>EU imports on the other hand increased from €13.9 billion in 2003 to €16.2 billion in 2004-05 </li></ul><ul><li>India-EU trade has potential to touch $572b by 2015: Ficci </li></ul>

74. Bilateral Trade <ul><li>India’s exports </li></ul><ul><li>During 2005-06 - US$ 23.23 billion as against US$ 18.25 billion in 2004-05 </li></ul><ul><li>This was 22.5% of India’s total global exports. </li></ul><ul><li>Export growth to EU - 27.29% as against 23.41% of its global export growth. </li></ul><ul><li>India’s imports </li></ul><ul><li>During 2005-06 - US$ 26 billion as against US$ 19.3 billion in 2004-05 </li></ul><ul><li>This was 17.4% of India’s total global imports. </li></ul><ul><li>Import growth from EU – 34.7% as against 33.7% of its global import growth. </li></ul>

75. Major items traded (in US$ Billion) <ul><li>Major items exported </li></ul><ul><li>Apparel & Clothing - 4.7 </li></ul><ul><li>Mineral fuel etc. - 2.47 </li></ul><ul><li>Pearls, precious & semi- precious metal etc. - 2.04 </li></ul><ul><li>Organic Chemical - 1.09 </li></ul><ul><li>Machinery or Mechanical appliances -1.0 </li></ul><ul><li>Electrical machinery and equipment – 0.7 </li></ul><ul><li>Footwear and other products – 0.8 </li></ul><ul><li>Major items imported </li></ul><ul><li>Machinery or Mechanical appliances -4.81 </li></ul><ul><li>Pearls, precious or semi-precious stones, metals, etc. -5.6 </li></ul><ul><li>Electrical Machinery etc. - 2.9 </li></ul><ul><li>Aircrafts - 2.7 </li></ul><ul><li>Iron & Steel products – 2.0 </li></ul><ul><li>Organic Chemicals - 1.0 </li></ul>

76. What happened after October 2006 <ul><li>The decision at the Summit was considered by the Council of the EU and the European Commission was authorized to enter into negotiations with India in April 2007. </li></ul><ul><li>The First Round of negotiations took place in June 2007 in Brussels, Belgium. The delegation was led by Commerce Secretary, Government of India. </li></ul><ul><li>Broader objectives for negotiations were agreed. </li></ul><ul><li>Working Groups established for negotiating various issues. </li></ul>

77. Present Status <ul><li>Trade in Goods : </li></ul><ul><li>Text of Agreement exchanged. </li></ul><ul><li>India to identify: </li></ul><ul><li>Items that are sensitive - No tariff liberalization to be offered. (approximately 520 items covering an import value of not more than US$2.6 billion). </li></ul><ul><li>Items of export interest which we need to ask EU not to be kept in their Exclusion List. </li></ul><ul><li>Non-Tariff Measures which are increasing our exports to EU. </li></ul>

78. Key areas of co-operation are : <ul><li>Political relations </li></ul><ul><li>Trade and investment </li></ul><ul><li>Economic and Development Co-operation </li></ul><ul><li>Cultural exchanges </li></ul>

79. <ul><ul><li>Development Cooperation </li></ul></ul><ul><li>EU working with India to tackle poverty. </li></ul><ul><li>Integrating three pillars of sustainable development: social, economic and environmental development. </li></ul><ul><li>India is now a receiver and provider of development aid </li></ul><ul><li>The Indian context: human development indicators show good progress but poverty still widespread. Unemployment is high. Vast income disparities between and within states </li></ul><ul><li>New approaches: 2002-2006 Country Strategy Paper for India forecasts € 225 million in grants for India, focusing on Rajasthan and Chhattisgarh. Sectoral reform support in elementary education and health. </li></ul><ul><li>EU Cooperation in India: India has number of donors to 6 i.e (US, Russia, Japan, UK, Germany, EC). Better coordination needed among donors. </li></ul>An EU-India Strategic Partnership

80. EC Development and Economic Cooperation in India: <ul><li>The total of European Commission’s assistance to India, all in the form of grants, is reaching the landmark of </li></ul><ul><li>Euro 2 billion , over Rs 8000 crores . </li></ul><ul><li>The EC is the largest donor of grant funds to India. </li></ul>

81. The Development Cooperation Strategy: <ul><li>EU-India cooperation agreement focuses on: </li></ul><ul><li>Poverty reduction projects </li></ul><ul><li>These promote an efficient and sustainable use of resources and sector programmes aimed at improving basic social services </li></ul><ul><li>Public Health and Primary Education </li></ul><ul><li>These are the largest sector programme at the moment </li></ul>

82. 1.Primary Education 2.Sarva Shiksha Abhiyan Programme 3. Health : Support to Health and Family Welfare Sector Development 4. Development

83. State Partnership Programme <ul><li>A multi sector policy support Programme aims at Poverty Alleviation in Chhattisgarh and Rajasthan </li></ul><ul><li>Targeted Sectors </li></ul><ul><ul><li>Chhattisgarh- Education, Health and Forest </li></ul></ul><ul><ul><li>Rajasthan –Water Sector </li></ul></ul><ul><li>Budget Support Programme </li></ul><ul><li>Grant of € 160 Million total, € 80 M to each State </li></ul><ul><li>Scheduled to be launched in 2006 </li></ul><ul><li>Implementation Period – 6-7 Years </li></ul>

84. State Partnership Programme <ul><li>Both partnerships focus on policy and reforms with high Poverty Alleviation effects </li></ul><ul><li>Chhattisgarh and Rajasthan chosen as states with poor Human Development indicators, but ‘Reform Minded’ </li></ul><ul><li>Additionality of resources to Centre and State </li></ul><ul><li>Complementary to reforms through centrally sponsored schemes </li></ul><ul><li>Institutional reforms to promote Accountability </li></ul><ul><li>Decentralization and community Participation </li></ul>

85. Non Governmental Organizations Essential partners in the development process <ul><li>With more than 300 NGO projects in several fields, India is the largest recipient of the EC’s NGO funds in Asia. </li></ul><ul><li>The current portfolio consists of more than 130 NGO Co-financing projects accounting for about 125 million euros (Rs 500 crores) </li></ul><ul><li>The current allocation is 40 million euros (Rs 160 crores). </li></ul>

86. Emergency Aid/Humanitarian Aid <ul><li>Since 1998 the EC has increased its humanitarian operations in India contributing 300 million Euros (Rs 130 crores). </li></ul><ul><li>Emergency and humanitarian aid managed by the EC Humanitarian Office (ECHO) provides emergency aid of humanitarian/relief nature, financing assistance, protection and emergency food aid after disasters. </li></ul><ul><li>ECHO also provides assistance for pre-emptive action for disaster prevention. </li></ul>

87. Economic cooperation <ul><li>The EC has horizontal programmes and bilateral programmes for its economic cooperation. </li></ul><ul><li>Horizontal programmes aim at establishing new links and reinforcing existing ones between EU and India. They also promote European environment practices and facilitate business cooperation between EU and Asia in general. </li></ul><ul><li>Bilateral programmes include in addition to the scientific cooperation, the cooperation between EU and India on product standards, maritime transport and civil aviation. </li></ul>

88. Future prospective <ul><li>India’s trade with the European Union has the potential to reach a whopping $572 billion by 2015 once the FTA with the 27-nation bloc is implemented, Ficci says. </li></ul><ul><li>The India-EU FTA is likely to be fully implemented by 2015 by when India’s trade in goods with the bloc could be around $251 billion and trade in services $321 billion, according to a study by the chamber on ‘India-EU Trade & Investment: Current Status and Issues’. </li></ul><ul><li>Going by the study, India-EU trade would account for more than 25% of the country’s GDP which may grow up to over two trillion dollars if 10% economic growth is achieved and maintained. At present, bilateral trade accounts for less than 10% of India’s GDP. </li></ul><ul><li>According to the study, in 2008 India’s merchandise trade with EU would be about $79 billion and in services it would be $32 billion. </li></ul>

89. <ul><li>However, the study said trade deficit in goods between India and EU has grown six-fold to $3 billion in 2006-07 from $492 million in 2001-02. </li></ul><ul><li>The chamber further said a number of issues need to be resolved under the FTA negotiations to increase the share of India’s exports of goods and services to the EU market, which is currently only around 3%. </li></ul><ul><li>EU-India trade has grown impressively over the years, from €4.4 billion in 1980 to over €46 billion in 2006. Trade with the EU represents almost 20% of India's exports and imports and the EU thus as a bloc is India's largest trading partner. The EU is also India's largest source of foreign direct investment. However, India accounts for just 1.8% of total EU trade. India attracts only 1.3% of the EU's world-wide investments. </li></ul>

90. Summary of Case Study. Microsoft & European Union <ul><li>We think that the facts will show that there is strong competition and consumer choice. The impact of this case goes far beyond Microsoft. The ability to innovate is important for the success of any company and for the economic success of any country." </li></ul><ul><li>Brad Smith, Microsoft's General Counsel, in April 2006. </li></ul><ul><li>"The commission is not asking Microsoft to be nice to its competitors. It is asking it to compete on the merits." </li></ul><ul><li>- Per Hellstrom, European Commission's Lawyer, in April 2006. </li></ul>

91. The Case….. <ul><li>Introduction </li></ul><ul><li>EC Issues 'Statement of Objections’ </li></ul><ul><li>The Investigations </li></ul><ul><li>EC Slaps Fine </li></ul><ul><li>Appeal to Higher Court </li></ul><ul><li>Microsoft Complies But… </li></ul>

92. Problems with the Case:- <ul><li>1) Information not provided by Microsoft. </li></ul><ul><li>2) Non – Compliance with the Law. </li></ul><ul><li>3) Issue with the Windows Media Player. </li></ul><ul><li>4) Abusing Market Leader status. </li></ul>

93. Real Solution:- <ul><li>Removing the media player led to the loss of several functions in the trimmed O/S and deprived customers of the ability to play music provided by Yahoo! and Napster. </li></ul><ul><li>The hearing on antitrust case ended on April 28, 2006 </li></ul>

94. Bibliography <ul><li>International Business Environment </li></ul><ul><li>- Francis Cherunilam </li></ul><ul><li>- Himalaya Publishing House </li></ul><ul><li>International Finance </li></ul><ul><li>- V.A. Avadhani </li></ul><ul><li>- Himalaya Publishing House </li></ul>

95. Wibliography <ul><li>http://en.wikipedia.org/wiki/European_Exchange_Rate_Mechanism </li></ul><ul><li>http://en.wikipedia.org/wiki/Introduction_of_the_euro </li></ul><ul><li>http://www.caxtonfx.com/converter/converterpro.html </li></ul><ul><li>http://en.wikipedia.org/wiki/Euro </li></ul><ul><li>http://en.wikipedia.org/wiki/European_union </li></ul><ul><li>http://www.icmrindia.org/casestudies/catalogue/Business%20Environment/BENV005.htm(Link for Case study) </li></ul><ul><li>http://en.wikipedia.org/wiki/Maastricht_Treaty </li></ul><ul><li>http://en.wikipedia.org/wiki/European_Currency_Unit </li></ul><ul><li>http://finance.yahoo.com </li></ul><ul><li>http://answers.com/eu </li></ul>

96. Thank You <ul><li>Questions & Suggestions are Welcome </li></ul>