The European Union is a unique economic and political partnership between 27 European countries that has delivered peace, stability, and prosperity over the past 50 years. It was initially created to foster economic cooperation but has evolved to span all areas of policy. The EU has its own flag, currency (euro), and anthem. It has a bicameral legislative branch consisting of the directly elected European Parliament and the Council of the European Union composed of national ministers. The European Commission acts as the executive branch. The Court of Justice of the European Union interprets EU law.

1. European
Union
Submitted By:-
Avishek Singh
113
Pratik Akerkar

2. Agenda
 Brief Introduction
 History
 Member States
 Political and Judicial structure
 Economy
 Shortfalls
 MNE Implications
 EU and India

3. Introduction
 The EU is an unique economic and political partnership between 27 European
countries that has delivered half a century of peace, stability, and prosperity,
helped raise living standards, and is progressively building a single Europe-
wide market in which people, goods, services, and capital move among
Member States as freely as within one country.
 EU was initially created to foster economic cooperation and thus avoid conflict.
But over the years it has evolved into an organisation spanning all areas,
from development aid to environmental policy.
 EU has its own flag, currency i.e. EURO and anthem ―Ode to joy‖.
 Motto: United in diversity
 The EU is larger in area than all but six countries with an area of 4,423,147
sq.kms.
 The EU has the world's second-longest coastline, after Canada, which is
65,993 km.
 No of official languages in EU – 23 ; German the most widely spoken mother
tongue in EU.

4. History
 1950s- Beginning of cooperation
 9th May 1950 - Robert Schuman, French minister of
Foreign Affairs, proposed that France and Federal
Republic of Germany pool their coal and steel
resources.
 18th April 1951- Paris treaty signed between the six
countries Belgium, France, Federal Republic of
Germany, Italy, Luxembourg & Netherlands
establishing the European Coal and Steel
Community(ECSC) which came into force on 23rd July
1952.
 25th March 1957- Rome treaties were signed between
the six countries forming the European Economic
Community (EEC) and the European Atomic Energy
community(Euratom) which comes into force on 1st
January 1958.

5. History
 1960s- Period of economic growth
 4th January 1960- The Stockholm Convention
establishes the European Free Trade Association
(EFTA), comprising of Austria, Denmark, Norway,
Portugal, Sweden, Switzerland, and UK.
 8th April 1965- Merger treaty is formed merging the
executive bodies of the ECSC, EEC and Euratom and
thus creating a single Council and a single
Commission which comes into force on 1st July 1967.
 1st July 1968 - Customs duties between the member
states on industrial goods are completely abolished
and a common external tariff is introduced.

6. History
 1970s- Growing community
 1st January 1973- Denmark, Ireland and the
United Kingdom join the European Communities,
bringing their membership to nine.
 10th December 1974- At the Paris Summit, the
political leaders of the nine member states decide
to meet three times a year as the European
Council. They also give the go-ahead for direct
elections to the European Parliament.
 7th-10th June 1979 - The first direct elections to
the 410-seat European Parliament.

7. History
 1980s- The changing face of Europe - Fall of
Berlin wall
 1st January 1981- Greece joins the European
Communities, bringing the number of members to 10.
 14th June 1985 - The Schengen Agreement is signed
with the aim of abolishing checks at the borders
between member countries of the European
Communities.
 1st January 1986 - Spain and Portugal join the
European Communities, bringing their membership to
12.
 28th February 1986 - The Single European Act is
signed in Luxembourg and The Hague. It comes into
force on 1 July 1987.
 9th November 1989 – Fall of Berlin wall.

8. History
 1990s- Europe without frontiers
 7th February 1992- The Maastricht European Council
signed a Treaty on European Union, laying the foundation
for a common foreign and security policy, closer
cooperation on justice and home affairs and the creation of
an economic and monetary union, including a single
currency. It comes into force on 1st November 1993.
 1st January 1993 – Single European Market comes into
force.
 1st January 1995 - Austria, Finland and Sweden join the
EU, bringing its membership to 15.
 1st January 1999 – 11 EU countries adopt the euro. The
European Central Bank takes on responsibility for
monetary policy. The 11 countries are joined by Greece in
2001.

9. History
 2000s- Decade of further expansion
 26th February 2001- Signing of the Treaty of Nice. It comes
into force on 1 February 2003.
 1st January 2002 – Euro notes and coins are introduced in
the 12 euro-area countries.
 1st May 2004 - Cyprus, the Czech Republic, Estonia,
Hungary, Latvia, Lithuania, Malta, Poland, Slovakia and
Slovenia join the European Union, bringing its membership
to 25.
 1st January 2007 – Bulgaria and Romania join the
European Union, bringing its membership to 27. Slovenia
adopts the euro.
 13th December 2007 - The 27 EU countries sign the Treaty
of Lisbon, which amends the previous Treaties.
 1st January 2008 - Cyprus and Malta adopt the euro.
 1st January 2011 - Estonia adopts the euro as its currency,
becoming the 17th member of the euro area.

10. History
1950 1960 1970 1980 1990 Present

11. Member States
 The European Union is composed of 27 sovereign
Member States: Austria, Belgium, Bulgaria,
Cyprus, the Czech Republic, Denmark, Estonia,
Finland, France, Germany, Greece, Hungary,
Ireland, Italy, Latvia, Lithuania, Luxembourg,
Malta, the Netherlands, Poland, Portugal,
Romania, Slovakia, Slovenia, Spain, Sweden, and
the United Kingdom.
 Croatia is an acceding country and may become
the member on 1st July,2013.
 There are four candidate countries: Iceland,
Macedonia, Montenegro and Turkey
 The ‗Copenhagen criteria‘ for EU membership
 stability of institutions guaranteeing
democracy, the rule of law, human rights and
respect for and protection of minorities;
 the existence of a functioning market
economy as well as the capacity to cope with
competitive pressure and market forces
within the Union;
 the ability to take on the obligations of
membership including adherence to the aims
of political, economic & monetary union.

12. Benefits of Joining EU
 Political
 United Europe– minimizes the risk of war
 Economical
 Free transfer of goods, services, people & capital
 Gives smaller economies the ability to negotiate with
much bigger economies like US & China on an equal
footing
 Social
 Higher quality of life w.r.t. safety of citizens, job,
health, education, & information.
 Environmental
 Transfer of eco-friendly technologies

13. Political Structure
 The Principle of subsidiarity
 EU Law divided into primary & secondary
legislation
 The treaties (primary legislation) are the basis or
ground rules for all EU action
 Secondary legislation – which includes regulations,
directives and decisions – are derived from the
principles and objectives set out in the treaties
 Laws passed in two forms:
 Laws which do not require national implementation
measures
 Laws which specifically require national
implementation measures

14. Bicameral legislative branch
of the European Union
 Ordinary Legislative Procedure (previously called ‗Co-
decision procedure‘)
 European Parliament ( abbreviated as Europarl or EP)
 736(soon to be 751)
 directly elected every five years by universal suffrage since
1979
 shares equal legislative and budgetary powers with the
Council
 The Council of European Union (also called the
"Council" and sometimes referred to as the "Council of
Ministers")
 Composed of twenty-seven national ministers (one per state)
 Exact membership depends upon the topic
 Has legislative initiative in limited sensitive areas
 holds, jointly with the Parliament, the budgetary power of the
Union

15. Executive Branch
 European Council
 mentioned by the Lisbon Treaty as a body which "shall provide the Union with
the necessary impetus for its development"
 comprises the heads of state or government of the EU member states, along
with the President of the European Commission and the President of the
European Council
 Meetings are chaired by its President and take place at least twice every six
months
 Has no formal powers; it gathers the executive power of the member states
 European Commission
 body is responsible for proposing legislation, implementing decisions, upholding
the Union's treaties and the general day-to-day running of the Union
 operates as a cabinet government, with 27 members of the Commission (one
from each member state)
 Members proposed by the member states, however they are bound to act
independently
 develop medium-term strategies; draft legislation and arbitrate in the legislative
process; represent the EU in trade negotiations; make rules and regulations;

17. Judiciary
Court of Justice of the European Union
 The Court of Justice
 primarily deals with cases taken by member states, the
institutions, and cases referred to it by the courts of
member states
 The General Court
 mainly deals with cases taken by individuals and
companies directly before the EU's courts
 . Decisions from the General Court can be appealed to the
Court of Justice but only on a point of law
 The European Union Civil Service Tribunal
 adjudicates in disputes between the European Union and
its civil service

18. Economy– Overview
 GDP (figures for 2010)
 in PPP – $14.82 trillion
 real growth rate – 1.8%
 per capita – $ 32,000
 Sector wise composition
 Agriculture – 1.8 %
 Industry – 25 %
 Services – 73.2 %
 GINI Index for 2009 – 30.4
 HDI (2010) – 0.835
 External Debt – $16.08 trillion (as on June 30, 2011)

19. Economy
 26% share of the global GDP in 2010
 161 corporations out of the Fortune Global 500
in 2010 headquartered in EU
 Two of the original core objectives of the EEC
 Development of single market and a customs
union between its member states
 Ensure undistorted competition within the single
market

20. EU27 Foreign Direct
Investment
 Net Outflows– Decreased from 281to107
billion euro in 2010
 Net Inflows– Decreased from 216 to 54 billion
euro in 2010
 USA & Switzerland two largest investors into
EU27
 EU is the single largest investor in US
accounting for almost 75% of the total FDI
flowing into the US
 Belgium largest net investor
 United Kingdom largest net recipient

21. Monetary Union
 Maastricht Treaty in 1993 made the member
states legally bound to start the monetary
union by 1999
 Euro duly launched on Jan 1, 1999 by 11 of
the 15 member states – remained an
accounting currency
 Jan 1, 2002– Euro notes & coins issued;
phasing out of national currencies
 Euro is the sole currency of 17 EU member
states today

22. Benefits of Euro
 Remove the cost of exchanging currency
 Differences in prices – in particular in price
levels – should decrease because of the 'law
of one price‗
 Many national and corporate bonds
denominated in euro are significantly more
liquid and have lower interest rates than was
historically the case when denominated in
national currencies
 Strong effect on European financial integration

24. Shortfalls
 The globalization of finance
 Rising government debt levels
 Trade imbalances
 Monetary policy inflexibility
 Loss of confidence

26. c

27. Effect of a possible currency
conversion on MNEs
 Trigger contractually agreed mechanisms for termination or
adaptation of the contract
 Exchange Rate risk for international MNEs (EURIBOR or EONIA)
 Dependency on a single contractual partner
 Following items to be considered in new contracts:
 Terms of the contract
 Liquidity and insolvency
 Temporary government regulations
 Specifics in the case of company purchases
 Restrictions of the free movement of goods and capital

28. EU Cultural Initiatives
 European Capitals of Culture, 2011 - Turku and Tallinn
 EU‘s Culture programme (2007-2013)
 Budget of €400
 3 objectives:
 Promoting cross border mobility
 Encouraging transnational circulation of cultural & artistic output
 Fostering intercultural cultural dialogue
 3 stands:
 Cultural actions
 European level cultural bodies
 Analysis and dissemination of activities
 European Cultural Month event, Media Plus programme,
 Orchestras such as the European Union Youth Orchestra
 European Capital of Culture programme
 The Treaty of Lisbon, International Olympic Committee and FIFA
 EU Football 4 Peace project - Israeli, Jordanian, Irish and British football

29. EU - Exports
EUROSTAT (Comext, Statistical
regime 4)
8 June, 2011

30. EU - Exports
EUROSTAT (Comext, Statistical
regime 4)
8 June, 2011

31. EU v/s US – Porter’s Diamond

32. Rankings of the
EU27 in the
Global
Competitiveness
Index 2010–11
- The European Union has
proposed a new strategy—
Europe 2020—for smart,
sustainable, and inclusive growth
- Consists of consolidating public
finances while promoting
economic integration, investing in
pan-European energy and
transport infrastructure, and
developing further information and
communication technologies
-Emphasis on upgrading skills
and promoting innovation

33. Rankings of the EU27 in the
Global
Competitiveness Index 2010–
 Basic requirement
11  Institutions
 Infrastructure
 Macroeconomic Environment
 Health and Primary Education
 Efficiency enhancer
 Higher education and Training
 Goods Market Efficiency
 Labor market Efficiency
 Financial market Efficiency
 Technological Readiness
 Market Size
 Innovation and sophistication factor
 Business sophistication
 Innovation

34. EU and India
 India – one of the fastest growing economies in the
world, with a market potential of more than 1 million
people
 Trade in goods
 EU goods exports to India 2010 : €34.7
billion
 EU goods imports from India 2010 : €33.2 billion
 Trade in services
 EU services exports to India 2010 : €9.8 billion
 EU services imports from India 2010 : €8.1
billion
 Foreign Direct Investment

35. EU and India
 2004 – EU Strategic Partner
 2005 – EU-India Joint Action Plan
 2006 – negotiations for FTA as part of Global
Europe Strategy
 2008 – Revised Joint Action Plan
 Annual EU-India Summit
 10th Dec, 2010 in Brussels
 €13.4million allocated through the Trade and
Investment Development Programme (TIDP)
funded from the Country Strategy Paper (CSP)
2002-2006
 €470 million allocated for actions on health,
education and the implementation of the Joint
Action Plan through the Country Strategy Paper

36. EU and India

37. EU and India
EUROSTAT (Comext, Statistical
regime 4)
8 June, 2011

38. Open to Questions