European Union

Main policies

As the changing name of the European Union (from European Economic Community to European Community to European Union) suggests, it has evolved over time from a primarily economic union to an increasingly political one. This trend is highlighted by the increasing number of policy areas that fall within EU competence: political power has tended to shift upwards from the member states to the EU.

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This picture of increasing centralisation is counter-balanced by two points.

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First, some member states have a domestic tradition of strong regional government. This has led to an increased focus on regional policy and the European regions. A Committee of the Regions was established as part of the Treaty of Maastricht.

Related Topics:
European regions - Committee of the Regions - Treaty of Maastricht

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Second, EU policy areas cover a number of different forms of co-operation.

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• Autonomous decision making: member states have granted the European Commission power to issue decisions in certain areas such as competition law, State Aid control and liberalisation.
• Harmonisation: member state laws are harmonised through the EU legislative process, which involves the European Commission, European Parliament and Council of the European Union. As a result of this European Union Law is increasingly present in the systems of the member states.
• Co-operation: member states, meeting as the Council of the European Union agree to co-operate and co-ordinate their domestic policies.

The tension between EU and national (or sub-national) competence is an enduring one in the development of the European Union. (See also Inter-governmentalism vs. Supra-nationalism (above), Euroscepticism.)

Related Topics:
Inter-governmentalism ''vs. '' Supra-nationalism - Euroscepticism

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All prospective members must enact legislation in order to bring them into line with the common European legal framework, known as the Acquis Communautaire. (See also European Free Trade Association (EFTA), European Economic Area (EEA) and Single European Sky.)

Related Topics:
Acquis Communautaire - European Free Trade Association - European Economic Area - Single European Sky

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See table of states participating in some of the initiatives.

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Single market

Many of the policies of the EU relate in one way or another to the development and maintenance of an effective single market. Significant efforts have been made to create harmonised standards – which are designed to bring economic benefits through creating larger, more efficient markets.

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The power of the single market reaches beyond the EU borders, because to sell within the EU, it is beneficial to conform to its standards. Once a non-member country's factories, farmers and merchants conform to EU standards, much of the cost of joining the union has already been sunk. At that point, harmonising domestic laws in order to become a full member is relatively painless, and may create more wealth through eliminating the customs costs.

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The single market has both internal and external aspects:

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Internal policies

• Free trade of goods and services among member states (an aim further extended to three of the four EFTA states by the European Economic Area, EEA)
• A common EU competition law controlling anti-competitive activities of companies (through antitrust law and merger control) and member states (through the State Aids regime).
• The Schengen treaty allowed removal of internal border controls and harmonisation of external controls between its member states. This excludes the UK and Ireland, which have derogations, but includes the non-EU members Iceland and Norway. Switzerland also voted via referendum in 2005 to become part of the Schengen zone.
• Freedom for citizens of its member states to live and work anywhere within the EU, provided they can support themselves (also extended to the other EEA states).
• Free movement of capital between member states (and other EEA states).
• Harmonisation of government regulations, corporations law and trademark registrations.
• A single currency, the Euro (excluding the UK, and Denmark, which have derogations). Sweden, although not having a specific opt-out clause, has not joined the ERM II, voluntarily excluding itself from the monetary union.
• A large amount of environmental policy co-ordination throughout the Union.
• A Common Agricultural Policy and a Common Fisheries Policy.
• Common system of indirect taxation, the VAT, as well as common customs duties and excises on various products.
• Funding for the development of disadvantaged regions (structural and cohesion funds).

External policies

• A common external customs tariff, and a common position in international trade negotiations.
• Funding for programmes in candidate countries and other Eastern European countries, as well as aid to many developing countries, through its Phare and Tacis programmes.

Co-operation and harmonisation in other areas

• Freedom for citizens of the EU to vote in local government and European Parliament elections in any member state.
• Co-operation in criminal matters, including sharing of intelligence (through EUROPOL and the Schengen Information System), agreement on common definition of criminal offences and expedited extradition procedures.
• A common foreign policy as a future objective, however this has some way to go before being realised. The divisions between the member states (in the letter of eight) and then-future members (in the Vilnius letter) during the run up to the 2003 invasion of Iraq highlights just how far off this objective could be before it becomes a reality.
• A common security policy as an objective, including the creation of a 60,000-member European Rapid Reaction Force for peacekeeping purposes, an EU military staff and an EU satellite centre (for intelligence purposes).
• Common policy on asylum and immigration.
• Common funding of research and technological development, through four-year Framework Programmes for Research and Technological Development. The Sixth Framework Programme is running from 2002 to 2006.