46110329_Tsinghua_final_02.pptx

Regionalism: toward a more perfect European UnionChap.12

International Political Economy

8

123456

Simon Hix. What’s Wrong with the European Union and How to Fix It. London: Polity Press,2008.

Harold James. Europe Reborn: A History, 1994-2000. New York: Pearson/Longman,2003.

Neill Nugent. The Government and Politics of the European Union, 6th rev.ed. Basingstoke: Palgrave Macmillan,2006.

William Wallace, Helen Wallace, and Mark A. Pollack. Policy-Making in the European Union,5th ed. Oxford: Oxford University Press,2005.

Antje Wiener and Thomas Diez. European Integration Theory, 2nd rev. Ed. Oxford: Oxford University Press,2009.

Steve Wood and Wolfgang Quaisser. The New European Union: Confronting the Challenges of Integration. Boulder,CO: Lynne Rienner Publishers, 2008.

Suggested ReadingsChpt.12

Sector 1

Sector 2

Sector 3

Sector 4

Sector 5

Content

The Economics and Political of Regionalism

The Development of Political Institutions

Three Challenges For The European Union

The Bicycle Theory: Broader, Deeper, Ever Closer

Introduction

1. Introduction Chpt.12

The EU can be thought of as the world’s largest science experiment, testing the hypothesis that nations with a long history of conflict can solve the puzzles of peace and prosperity more successfully as a groupe than as separate autonomous nation-states.

ECSC-----1952 EEC (Common Market)----1957 EC-----1967 EU (European Union)----1993

EU------On one hand, is the largest and richest united market in the world;On the other hand, is a rather weak political alliance.

A fundamental question that the EU seek to answer today is whether it is possible to combine economic regional integration with a substantial level of political integration.

We are living in an era, when the international political economy seems to be pulled in to directions at once.

• On one hand, security concerns and financial crisis make the state as important now as it has ever been from a political standpoint.

• At the same time, however, the forces of economic globalization are blurring the distinction between home and abroad.

2. Economics and Political of RegionalismChpt.12

> Regionalism in IPE refers to the process by which groups of nation-states, usually in the same geographic region, agree to cooperate and share responsibility to achieve common goals.

2.1 Economic integration

2.2 Effects of Economic Integration

2.3 Political Regionalism

2.1 Economic integrationChpt.12

A. Free Trade Area (FTA)------------- eg. NAFTA.

B. The next level of economic integration is called a customs union. This movement is an important step in terms of economic integration, because of the greater degree of political cooperation that is required.

C. The final stage of economic integration is an economic union.

①Economic integration ---------------------------------------------------------------------FAC, CU, EU.②Freedoms for goods --------------------------------------------------------------sources, people, capital.③Relationship between Economy and politics should be harmonized -------------------------------------------------------------------political integration.

Economic integration is the process by which a group of nation-states agrees to ignore their national boundaries for some economic purposes, creating a larger and more tightly connected system of markets.

2.2 Effects of Economic IntegrationChpt.12

Effects of Economic Integration -------------------------

A. Static Efficiency B. Dynamic Efficiency -------diversion ------larger and more competitive -------economics scale

2.3 Political regionalismChpt.12

At some point, each member states risks being forced to ignore national interests as a consequence of maintaining its regional obligation. This tension between national interests and international obligation is fundamental to multinational institutions and poses a severe dilemma for states, which tend to value security autonomy above all else.

The fundamental political problem posed by regionalism is the loss of sovereignty that occurs when nations form regional blocs.

This raise a question that, why would a nation sacrifices its sovereignty and risks “democracy deficit” to join a regional organization, especially an economic one? Several arguments stand out:

------As global market become more important, the nation-state has been caught in a dilemma. States are too limited to manage many economic forces and to regulate transnational cooperations.

------Although deadlock seems to characterize many global negotiations, agreement on at least some regional issues may be easier to reach. Regional political discussions have greater flexibility and, although it is not a guarantee that compromise can be reached on every issue, this does perhaps speed agreement on those points about which compromise is possible.

------Another school of thought holds that regionalism is appealing because it presents a way of controlling domestic special-interest groups. A nation might choose to join a regional group in part to break the hold of special interests on domestic political policies.

------There is also a realist view that regionalism can actually be sovereignty-enhancing and that some individual nations may gain political power, especially in relations with other nations, by being members of a powerful alliance.

3. The Bicycle Theory : Broader, Deeper, Ever Closer

Chpt.12

3.1 Background and Definition

--------Background

--------What is the Bicycle Theory?

3.2 The Case of EU

3.1 The Background and DefinitionChpt.12

Background--------------------------

In 1967,the EEC,the ECSC,and EURATOM (an organization for European cooperation in the use of nuclear energy)merged and became the European Community(EC).the change in name signaled the intention to move Beyond purely economic issues.

What is the bicycle theory-------------------

This move to expand the political agenda reflected the bicycle theory of European regionalism. A bicycle is stable so long as it keeps moving, but once it stops, its stability disappears and it tends to fall over.

“European unity could be sustained only if European nations constantly strived for an ‘ever closer union’ ”.

---------Walter Hallstein(First president of the European Commission)

3.2 Case of EU ----------(1)Chpt.12

EC membership was in part a reward for the triumph of democratic institutions over authoritarian governments. Free trade and closer economic ties were intended to solidify democracy and protect it from potential communist influences.

The broader market was not in all respects a better market. Such as the poor four: Greece, Spain, Ireland and Portugal magnified a variety of tensions within EC.The broader market was surely in the long run interest of EC, but it imposed great stress on cooperative relationships in the short term.

These economic and political stresses reached a peak in the mid-1980s.In 1985, Delors issued a “white paper” proposing the creation of a single integrated market by 1992. The Single European Act (SEA) which came into effect in 1987, formalized this grand experiment in market deepening and kept the bicycle upright.

3.3 Case of EU ----------(2) Chpt.12

The goals of Europe in 1992 might be characterized as “four freedoms”. Free movement of goods,services,capital and people.Each of these freedoms is much harder to achieve in practice than to imagine in theory. Achieving free movement of services,such as financial and insurance services, is a tricky task.

However, the SEA went beyond improvement of economic freedom in the EC.It also strengthened the political integration and prepared in many respects the big step forward that was made in the early 1990s with the Treaty of Maastricht.

One of the major changes is: change the requirement of a unanimous vote to approve most legislative decisions concern

ing the single market.

National sovereignty and economic growth were often in conflict.----------------------------------------------------------------Case: Environmentalism in Germany.

3.4 Case of EU ----------(3)Chpt.12

In 1989-1990.with the fall of the Berlin Wall and the collapse of socialist regimes in Central and Eastern Europe.

The Western European countries faced a double challenge:

--------German reunification --------Applications for membership from most of the Central and Eastern European countries.

In 1992, The treaty of Maastricht was established, which was mainly a result of negotiations during the process of German reunification.

But, both Great Britain and France were reluctant to accept a unified Germany.

So, two plans were proposed by German and France:

(1) France proposed monetary union-a single currency. (2) the second plan proposed by Germany and France together,was to move further in European regionalism by promoting political integration.

3.5 Case of EU ----------(4)Chpt.12

The heads of state and government of the twelve member states decided to establish a monetary union at the latest on January1,1999.

Two decisions were made in Maastricht to strengthen the new currency.

(1) European Central Bank was to be independent in its monetary policies from other European institutions and from national governments, it was committed only to the objective of price stability.

(2) Only those countries that were fulfilling the so-called convergence criteria-a low inflation rate,interest rates,government debt--were meant to join the “Eurozone”.

(3) Strengthen the euro,to expect a certain discipline in government spending.

The second plan was finally make step from an economic community to a political union.

The union brings together three areas of cooperation into one legal and institutional structure.

The Single Market

Cooperation in “Foreign and Security Policy”

Cooperation in “Justice and Home Affairs”

Political decision making differs considerably in these three areas, which are called “three pillars”of the EU.

3.6 Case of EU ----------(5)Chpt.12

The process of “deepening”the European way of regionalism was followed by “broadening”: the big enlargements of 2004 and 2007.

In June 2007,officials decided to draft a new Treaty that would realize large parts of the Constitutional Treaty without using the symbolism of a constitution.

In December 2009,The Treaty of Lisbon came into effect. And the most important changes stipulated by the treaty are:

The EU will have a president elected for two and a half years.

High Representative of the Union for Foreign Affairs and Security Policy try to resolve frequent disagreement among European on foreign policy.

The European Parliament will have equal standing with Council of the EU in most social,economic,and environmental policies.

After November 2014,qualified majority voting will apply a double majority rule.

4. The Development of Political InstitutionsChpt.12

4.1 Introduction: -----introduction -----department and institution

4.2 Problem

4.3 The Economic and Monetary Union

4.1 IntroductionChpt.12

Department and institutions ：

The European Council: is the meeting of heads of state and government of all member states. The President of the European Council. The Council of the EU (Council of Ministers):the main lawmaking body of the EU. The European Commission: acts as the EU’s executive cabinet. The European Parliament (EP): has taken on over the years many of the functions of traditional parliaments. The European Court of Justice (ECJ). European Central Bank (ECB): responsible for monetary policy and price stability in European.

European regionalism always political, even if its appearance is economic.

The most important political institutions of the EU today are :

-----The European Council; -----The Council of the EU; -----The president of the European Councils; -----The European Court of Justice.

Each of them plays specific role.

(1) Setting the delicate balance between national interests of member nations. (2) In balancing power and interests on the European level.

4.2 ProblemsChpt.12

Deepening necessarily forced each member state to cede some economic and political powers to EU institutions,as more and more policies and regulations became EU-wide, not national in scope.

This has led over time to a very complex relationship between European and national legislation, which is confusing even for specialists.

4.3 The Economic and Monetary Union Chpt.12

On January 1,1999, eleven of the fifteen members of the EU gave up their national currencies and entered into a monetary union with a single currency,the euro.The euro is so far a success story:10 years after being introduced, it is the second most commonly held reserve currency in the world.

The stated goal of monetary union was to give the EU’s bicycle the ultimate economic push---a huge single market with a single currency to drive it.

Ironically, although the euro itself is politically neutral, its implications are politically explosive.

The euro is economic “superglue”, it binds together the nations of the Eurozone and gives them good reason to try to work out national differences as the EU expand. However the cost is that domestic political differences and disagreements are magnified.

5. Three Challenges For The EUChpt.12

5.1 The Challenge of the Financial and Economic Crisis

5.2 The Challenge of the Democratic Deficit and “finalité”

5.3 Challenges in World Politics

5.1 Challenge of Financial and Economic CrisisChpt.12

How European countries responded?common: Drafted emergency legislation Economic stimulus packages Try to reform global financial crisis through the G20

National divergency: disagreement about when the public debt needs to be reduced?--------------------Germany vs France. Whether the EU needed strong foreign safeguards on financial market?------Germany, France vs UK. However, the financial crisis seems to be also strengthening the EU.

In 2009, a new legislation to transform three already-existing EU committees with advisory powers over banks.

Two lessons about regionalism in IPE from the EU’s reaction to the financial crisis:

It is much easier to reduce trade barriers than to agree on common policies that involve spending substantial amounts of tax money.

Crisis can reinforce the nation-state rather then strengthen regionalism.

5.2 The Challenge of the Democratic Deficit and “finalité” ----(1)

Chpt.12

The democratic deficit of the decision-making processes in the EU is because of a lack of transparency of EU institutions and of the distribution of the responsibilities between EU and national institutions.

The “democratic deficit” is aggravated by the fact that the European Parliament does not work like national parliaments.

The EP doesn’t work like national parliaments.

The EP is mainly involved in decisions like tariffs, technical standards, competition policy, and agriculture policy—topics which are important but which hardly attract popular attention.

In EP elections the people do not vote as Europeans.

Two dominant issues: the democratic deficit & the need to decide about political “finalité”.

5.2 The Challenge of the Democratic Deficit and “finalité” ----(2)

Chpt.12

The question of “finalité politique” is essentially this: --------------What should be the final design of the EU’s institutions?

The Treaty of Maastricht-------the door was open for establishing a close political union.

The Treaty of Lisbon------------the EU will remain a compromise between diverging interests.

The founding members, especially France, Germany, and Italy, favor a strong political union which guarantees peace and freedom in Europe and serves as a model of regionalism for other parts of the world.

The southern countries Greece, Spain, and Portugal, who joined in the 1980s, receive significant financial aid from the EU to support their comparatively weak economies and to promote political stability. For them, one major task of the EU is the redistribution of wealth.

Great Britain perceives the EU as a means to realize a free-trade area in Europe and is opposed to creation of a political union. The Scandinavian countries (Sweden, Denmark, and Finland), who joined the EU in order to benefit from the Single Market, share this perspective in many respects.

The Eastern countries like Poland, Hungary, and the Czech Republic joined the EU to reorient themselves toward the West after 40 years of Soviet domination. They are interested in promoting the Single Market, but they fear a strong political union.

5.3 Challenges in World PoliticsChpt.12

• Often the EU is criticized for being too slow or too weak in its reactions to new economic or security challenges that it faces in world politics.

What are the main foreign policy challenges of the EU today?

The financial crisis which by early 2010 was threatening to send Greece into default on its public debt.

Growing economic competition from countries like India and China

Energy policies

Threat from Russia and Putin administration which has turned into an authoritarian regime.

The war against international terrorism.

Its relations with Islamic countries and with its own Muslim populations.

The debate over Turkey’s potential membership in the EU. 　

110329_Tsinghua_final_02.pptx

Thanks !2013 . 6