The newest titan on the world stage: How the EU came to be

Policy Brief By Manini Agarwal

Research & Publications Division

Formation of the European Union:

A Timeline

8th May, 1945: The Second World War comes to an end, leaving the stability of the European economy in jeopardy.

4th April, 1949: The North-Atlantic Treaty Organisation (NATO) was created.10 Western European countries joined.

5th May, 1949: The Council of Europe is created. It is the largest organisation to protect human rights in Europe.

9th May, 1950: The Schuman Declaration proposes the integration of coal and steel production within Europe. May 9th is then celebrated as “Europe Day” by the European Union. 

18th April, 1951: The European Coal and Steel Community (ECSC) was formed. 6 countries (Germany, France, Italy, the Netherlands, Belgium and Luxembourg) sign a treaty delegating the management of coal and steel production to a common body, therefore, no single country can make weapons and turn on another EU country. The European Coal and Steel Community came into being in 1952.

3 September 1953: The European Convention of Human Rights is formed.

25th March 1957: Treaties of Rome, formation of European Economic Community (EEC), European Atomic Energy Community (Euratom), 6 founding countries expand economic collaboration.

19th March 1958: European Parliament was established, European Parliamentary Assembly met in Strasbourg, France where Schuman was elected President.

1992: The Maastricht Treaty was signed and the European Union was officially formed. 

“Who do I call if I wanna call Europe?”- Henry Kissinger (Former US Secretary of State)

The European Union works in many complex ways, as it is without one single leader or authority. Instead, key functions have been divided uniformly so that every member state feels equitably represented. It operates with seven divisions (the European Council, the Council of the European Union, the European Commission, the European Parliament, the Court of Justice of the European Union, the Court of Auditors, and the European Central Bank) to ensure complete and well-managed integration. This article will explore the workings of the Council of the European Union, the European Commission and the European Parliament (the three main bodies) and analyse their formation and relevance. 

Formation:

After World War II came to an end, Europe was scrambling to stabilise its war-struck economy when there was a realisation that the best way to ensure long-term stability was to consolidate connections between the different countries in Europe.

In 1992, the Mastricht treaty was accepted and signed by all European Community (EC) members. This entailed greater economic and political integration through common citizenship rights, the creation of a single currency (the Euro) and a collaborative foreign and security policy. Regional funds and measures for financial equalisation for poorer member states have been utilised to increase the GDP per capita and the living conditions of poorer states. 

The Lisbon Treaty of 2009 implemented reforms to the functioning of the European Parliament, which meant greater structured collaboration among the members. The treaty aims to reflect the voters’ choice more strongly and create a kind of participatory democracy at the European level. The European Parliament now has greater political power, and MEPs have the power to agree or reject international agreements, to decide on the full budget, and most importantly, to elect the head of the European Commission. Greater executive and political power has changed the EU's trajectory by making its Parliament more relevant. 

The European Commission:

Located in the Belgian capital, Brussels, the European Commission is the main executive body within the EU, and it tackles executive decisions, manages the budget, issues regulations, represents the EU in negotiations and in international organisations, etc. Each member state has its own commissioner, tasked with prioritising the EU's collective interests while also retaining political independence. These members are approved by the European Council. The current commission is led by former German Defense Minister Ursula von der Leyen.

The European Parliament:

The European Parliament is the only directly-elected body of the EU, and its representatives are elected through proportional representation as per their country’s population. After the Lisbon Treaty, there has been a massive shift in the Parliament’s functioning as it can now approve/reject international agreements, manage the budget, and oversee the European Commission. The EU’s laws cannot pass without the approval of the Parliament. Before the Lisbon Treaty, the Parliament could not propose laws, but it can do so now under 40 new subjects (agriculture, commerce, security, etc.), making it just as legislatively integral as the Council. The Parliament is currently led by Maltese politician Roberta Metsola. 

The Council of the European Union:

The Council of the European Union, also known as the Council of Ministers, is a second legislative body that needs to approve legislation for it to pass. Ministers specialising in similar areas meet together to discuss and amend laws. The Council of Ministers, along with the European Parliament, are the main bodies responsible for legislation in the Eurozone.  

Recent Controversies:

Austerity Measures - 

The European Union was established as an economic agreement, but it has now evolved into a socio-political arrangement promoting intense collaboration among members. Austerity policies implemented by the Council have been a subject of controversy ever since its conception. After the 2008 financial crisis, the European Union introduced stricter austerity measures for greater financial scrutiny. The austerity policies aimed to reduce budget deficits and revive market confidence, leading to lower debt levels and eventually generating greater employment and economic growth. 
However, greater scrutiny and public budget cuts within debt-ridden member states have created a major roadblock in the European welfare state. Fiscal reductions were extremely uneven, even within the member states, creating an evident imbalance. Reduction of funds for generating youth employment, education, healthcare, etc. has had a regressive impact on poorer countries, which raises debates over ethical financial scrutiny. For example, while youth unemployment was 16.4 percent for the Eurozone as a whole; it was considerably higher in Greece at 38.8 percent and in Spain at 32.7 percent. Perhaps a more equitable implementation of the austerity policy would have generated more positive results instead of serving a massive blow to countries with greater social differences and economic dependence. 

Upon reevaluation, some representatives of the EU have begun to encourage softer approaches to austerity, recommending that impositions must be eased to alleviate the consequent damage. However, conservatives within the Union believe that austerity will guarantee greater economic growth and want to prevent burdening the central bank with qualitative measures. This has created tensions between Brussels and conservative-led governments, bringing the volatile structure of the Union into the limelight. 

Brexit: Britain leaving the EU - 

The UK, stuck with unstable political leadership and a disappointing row of prime ministerial candidates, had been struggling with the Brexit issue for more than half a decade. Britain had displayed hesitation regarding certain EU policies from the beginning, it had its own currency (the Pound Sterling) and it had attacked the EU for its weaknesses after the Eurozone crisis. Trade restrictions, the migrant crisis, and retaining other national freedoms drove former President David Cameron to put Brexit (Britain’s Exit from the EU) on the table and hold a referendum in 2016. Realising the dramatic shift in the economic and political climate that would follow Brexit, the sensitive issue had been a headache for several successive Prime Ministers who have had to confront the dangers of Brexit.

MPs in the UK Parliament had several disagreements over the possibility of “Hard Brexit” or a “Soft Brexit,” creating a wedge between the Labour and Conservative parties. Even after the UK actually left the EU in 2020, Brexit was still a formidable challenge the UK had to deal with, as Europe had been its biggest export market and source of foreign investment before the UK left. The Brexit deal  has resulted in checks on trade and shared borders, leading to economic disruption while also giving trade freedom to Britain; UK natives settled abroad now need a permit, and the formal restrictions on movement caused a severe blow to the fishing industry. The massive changes in security, foreign affairs, and the economy that took place have still not been addressed, as both sides are trying to make this new agreement work while minimising unnecessary clashes. Food shortages and the severe economic instability that Britain is currently facing are seen as a consequence of Brexit, leading to mass dissatisfaction within the British public. 

Bilateral relations between India and the EU -

India was the first Asian country to extend diplomatic relations with the European Economic Community (EEC) in 1962. Trade relations between India and the European Union began developing when India was assisted by the International Monetary Fund (IMF) in liberalising the economy. Ever since these capital markets within the country went through reformation, diplomatic ties with the EU evolved into a strategic partnership since the 21st century. In 1993, the Joint Political Statement was signed and was followed by the Cooperation Agreement in 1994. These agreements consolidated bilateral ties between India and the European Union. In 2020, there was a push for greater diplomatic penetration, and in 2021, the EU introduced its Indo-Pacific strategy, which made it clearer than ever that maintaining strategic linkages was a key priority for both sides. Many advances still need to be made for both sides to realise their strategic objectives and ensure further collaboration in green policy, digital data and security, etc., as mentioned in the Indo-Pacific Strategy. 

The EU has been recognised as an organisation promoting peace and stability over the years, but its relevance has been put to question recently as it grapples with unprecedented roadblocks. The global financial crisis of 2008, the influx of African and Middle Eastern immigrants that escalated after 2015, the COVID-19 pandemic, and Brexit have challenged further integration within the European Union. All things considered, it is admirable that the European Union has managed to retain its collaborative principles despite the natural conflicts that arise within its members. However, it is imperative that structural changes are carried out within the Union to ensure greater stability. For the European Union to last in the current geopolitical scenario with several conflicts breaking out, it needs to ensure greater political and social cohesion within its member states. 

References

1. “Austerity policies have made European citizens €3000 a year worse-off.” New Economics Foundation,https://neweconomics.org/2022/11/austerity-policies-have-made-european-citizens-3000-a-year-worse-off.
2. “Brexit: What you need to know about the UK leaving the EU.” BBC, 30 December 2020, https://www.bbc.com/news/uk-politics-32810887.
3. Eissel, Dieter. “THE EUROPEAN UNION’S ROLE IN REGIONAL, SOCIAL, AND ECONOMIC INTEGRATION.” ADBI Working Paper Series, 2020. https://www.adb.org/publications/european-union-role-regional-social-economic-integration.
4. Maizland, Lindsay, et al. “How Does the European Union Work?” Council on Foreign Relations, 2022, https://www.cfr.org/backgrounder/how-does-european-union-work.
5. Pavy, Eava. “The Lisbon Treaty.” European Parliament, March 2024, https://www.europarl.europa.eu/about-parliament/en/powers-and-procedures/the-lisbon-treaty.
6. Robins, Peter, and Benjamin Mueller. “What Is Brexit? Updates on Britain's Split From E.U.” The New York Times, 8 November 2021, https://www.nytimes.com/article/brexit-uk-eu-explained.html.
7. “History of the European Union – 1945-59.” European Union, https://european-union.europa.eu/principles-countries-history/history-eu/1945-59_en.
8. Kamath, B. Rahul. “India and the European Union: A relationship yet to achieve its true potential.” Observer Research Foundation, 8 February 2022, https://www.orfonline.org/expert-speak/india-and-the-european-union.