Economic Policy in the European Union (EU)

The European Union (EU) is already one of the largest and most formidable economic blocs in the world. According to its website (Europa.com) the European Union is actually a unique economic and political partnership(s) between 27 democratic European countries. In this case, the aim of the EU includes Peace, prosperity and freedom for its 498 million citizensin a fairer, safer world (Europa.com). Of course, the European Union, in accordance with its aim to have prosperity, has its own economic policies. This paper aims to describe the basis of the economic policy of the EU, given that Europe wishes to strengthen the multilateral trading system, which is the mainstay of world governance (The European Unions Economic Policy).

The main body of the EU that tackles its economic policies is the European Council which sets policy orientation. Then, the Economic and Financial Affairs of the European Commission would take up its legislation and on giving recommendations (Europa.com). According to its official website (Europa.com), the European Commission involves the Appointed Commissioners and functions as the EUs civil service. This commission actually proposes EU legislation and checks it properly applied across the EU (Europa.com). The main basis of the economic policies of the EU is the economic integration of its member-states, wherein the development of an economic and monetary union (Europa.com) is one of the major steps. This objective can be seen in the different economic policies of the EU, including free market trading zones and one currency, which is the euro (Europa.com).

1. Towards Economic Integration
The European Union views economic integration as one of the most viable and essential steps to achieve prosperity, stability and peace. According to the Treaty on European Union, the aim of the union was to promote economic and social progress and a high level of employment to achieve balanced and sustained developmentthrough the creation of an area without frontiersand through the establishment of economic and monetary union Also, according to its official website (Europa.com), economic integration can actually be divided into six steps. Such steps actually includes a. preferential trading areas, (characterized by reducing some custom tariffs between participating countries) b. free trade areas, (which includes the removal of tariff barriers on goods and services) c. customs union, (the existence of similar external custom tariffs for third party countries) d. single market, (common product regulations in addition to free flow of goods and services, capital and labour) e. economic and monetary union, (single monetary policy for a single market) and f. complete economic integration (harmonized economic policies). The cited noted that starting from the establishment of the European Economic Community in 1958, this limited common market has already expounded into covering the goods and the services in a single market, which was completed in 1993 (Europa.com). In addition, the website also noted that the decision to create the Euro, which signalled the complete economic and monetary union of the EU zone (Europa.com). Such policies were actually embodied in the laws enacted on the EU.

2. The Legal Basis of Economic Integration and Policy Making
Article 2 of the Treaty Establishing the European Community (the EU) actually states that the community shall actually be tasked to establish a common market and an economic and monetary union by implementing common policies or activities referred to in Articles 3 and 4 (Economic and Monetary Union 9) and that it shall all be done with the purpose to raise the standard of living and quality of life, and economic and social cohesion and solidarity (Economic and Monetary Union 10).  Meanwhile, Article 4 states that the activities to be done by the union will actually be in accordance with the timetable set out therein, the adoption of an economic policy which is basedand conducted in accordance with the principle of an open market economy with free competition (Economic and Monetary Union 10). In addition, article 99 of the said law states that Member states shall regard their economic policies as a matter of common concern (Economic and Monetary Union 11).  Such where the legal basis of the enactment of the economic policies of the EU, which culminated in a major free trade zone and a common market with a common currency, the Euro.

3. Economic Policies in a Time of Crisis
In this case, it is also true that the global financial crisis which has in fact started in the Untied States also have an adverse effect even in the market as strong as the EU zone. In this case, the EU has also adopted legislative measures to cope with this crisis, in line with its overall economic policies (Europa.com). According to the Economic and Financial Affairs of the European Commission, adopted in September 23, 2009, established the first EU wide system of supervision (Europa.com). Specifically, this legislation actually includes the establishment of the European Systemic Risk Board (ESRB) through a European System of Financial Supervisors (ESFS) (Europa.com). Such legislation required the establishment of the ESRB to monitor and address risks to the financial stability of the financial system as a whole as well as to address recommendations, and will be composed of national central banks and national supervisors (Europa.com). In addition, the ESFS will be established to bring together national supervisorsfor banking, securities and insurance and occupational pension sectors (Europa.com).  Such legislations are consistent with the provisions of the Article 2 of the Treaty on the European Union (EU), stating that the union has its aim to build on it with a view to considering to what extent the policies and forms of cooperation introduced by this treaty may need to be revised with the aim of ensuring the effectiveness of the mechanisms and the institutions in the body (Economic and Monetary Union 9). Definitely, the policies of economic integration, even in times of crisis, were upheld.

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