EUROPEANUNION

SiMUN 2017

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LetterfromtheChairs

DearDelegates,

WelcometotheEuropeanUnion(EU)atthe2017SinclairModelUnitedNationsConference(SiMUN).My

nameisAnthonyCarrozziandIwillbeservingaschairoftheEU.Iamagrade12studenthereatSinclairandthisis

myfourthyearintheModelUnitedNationsclub.Ihaveattendedsevenconferences,twoofwhichwerehereat

SiMUN,andthisismyfirsttimechairingacouncil.IamveryinvolvedinSinclairandcurrentlypossesstwo

leadershiproles,beinganeditoroftheschool’snewspaperandaco-chairofSinclair’sLeadershipCampExecutive

Committee.SomeotherclubsthatIbelongtoincludeDECA,Badminton,andAcademicOlympics.Outsideof

school,IvolunteerweeklyintheEmergencyDepartmentatthelocalhospitalandamveryinterestedintravel,

havingvisitedover10differentcountries(includingItaly,Greece,Croatia,Haiti,andMexico).Beyondhighschool,I

aminterestedinpursuingacareerasaphysician.

MynameisRubyTangandIwillalsobeservingaschairoftheEU.Iamagrade12studentaswellandthis

ismythirdyearintheModelUnitedNationsclub.Ihaveattendedmultipleconferencesand,likeAnthony,thisis

myfirsttimechairingacouncil.IserveakeypositioninStudentParliamenthereatSinclair,actingastheMinister

ofFinance.Asapartofmyrole,Iattendtwoweeklymeetingsandamresponsibleformanagingthefundsforall

clubsintheschool.Additionally,IaminvolvedinDECA,Badminton,andteachpianoandmusictheorylessons,

havingachievedtheARCTPianoPerformer’sDiplomain2015.Inthefuture,Iwouldliketopursueacareerin

Engineering,Medicine,Math,orCommerce–Ihavenotdecidedquiteyet!

MynameisSydniKellyandIwillbethefinalchairforEU.Iamagrade11studentatSinclairandthisismy

firstyearintheModelUnitedNationsclub,aswellasmyfirsttimechairinginacouncil.Additionally,Iaminvolved

inAcademicOlympics,DECA,ComputerScienceClub,Badminton,andSwimTeam,whichIamhopingtoonce

againgotoOFSAAfor.Afterhighschool,IaminterestedinpursuingacareerinComputerScience,Engineering,

Medicine,orCommerce–Iamstillundecided.

WeareallveryexcitedtobechairingtheEuropeanUnionandhopeyouhaveamemorabletimehereat

SiMUN2017.Wewishyouallgoodluckwithyourresearchandareextremelyexcitedforsomevaluable,

intellectualdebate!

Sincerely,

A. Carrozzi

Ruby Tang

Sydni Kelly

AnthonyCarrozzi,RubyTang,andSydniKelly

Chairs,EuropeanUnion

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CountryMatrix:1. Austria

2. Belgium

3. Bulgaria

4. Croatia

5. Cyprus

6. CzechRepublic

7. Denmark

8. Estonia

9. Finland

10. France

11. Germany

12. Greece

13. Hungary

14. Ireland

15. Italy

16. Latvia

17. Lithuania

18. Luxembourg

19. Malta

20. Netherlands

21. Poland

22. Portugal

23. Romania

24. Slovakia

25. Slovenia

26. Spain

27. Sweden

28. UnitedKingdom

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TopicA:Brexit(AnthonyCarrozzi)

Overview

ThetermBrexithasemergedinrecentyearsasashorthandwayofsayingthatthe

UnitedKingdom(ofGreatBritainandNorthernIreland;UK)isexitingtheEuropeanUnion.A

referendum(avoteinwhicheveryoneofvotingageisabletoparticipate)washeldon

Thursday,June23,2016todecidewhethertheUKshouldleaveorstayintheEuropeanUnion

(Wheeler).

TheEuropeanUnion(EU)isaneconomicandpoliticalpartnershipinvolving28major

Europeancountries.ItbeganafterWorldWarIItofostereconomiccooperation.Theultimate

goalwastopreventwarbycountriesdevelopingbetterandinterdependentrelationshipasa

resultoftrade.Sinceitsinception,theEUhasgrowntobecomea“singlemarket”,allowing

goodsandpeopletomovearoundmorefreely(asifeachofthememberstatesbelongedtoa

singlenation).Ithasitsowncurrency(theeuro,whichisusedby19ofthemembernations–

theUKnotbeingoneofthem),parliament,andestablishedrulesinawiderangeofareas,

includingtheenvironment,transportation,andconsumerrights(Wheeler).

TheresultoftheUK’sreferendumwasextremelyclose;52%votedtoexittheEU,while

48%votedtostay.Theturnoutforthereferendumwas71.8%oftheUK’spopulation,meaning

morethan30millionpeoplevoted(Wheeler).

History

In1975,theUnitedKingdomheldareferendumonaverysimilarquestiontotheone

posedtoday:“DoyouthinktheUKshouldstayintheEuropeanEconomicCommunity?”.The

EuropeanEconomicCommunity(EEC)wasthepredecessoroftoday’sEuropeanUnion,which

beganin1957withthenationsofFrance,WestGermany,Belgium,Italy,Luxembourg,andthe

NetherlandswiththesigningoftheTreatyofParis(theUnitedKingdomfirstappliedin1963,

butwasrejectedbyFrancewhofearedthattheEnglishlanguagewouldrobthemoftheir

languagedominance,andwaslatergrantedentrancein1973).Theresultofthisreferendum,

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heldonlytwoyearsaftergainingmembership,was67%votingtosayintheEEC,asignificantly

largerportionofthepopulationthantoday(Pruitt).

TensionbetweentheEECandtheUKcametoaclimaxin1984,whentheConservative

PrimeMinisterMargaretThatcherdiscussedreducingBritishpaymentstotheEECbudget.At

thetime,theUKwasthethird-poorestnationintheEECthoughitwaspayingsubstantially

moretowardthebudgetthanothernationsduetoitsrelativelackoffarms.Farmsubsidies

(sumsofmoneygrantedbygovernmentsororganizations,liketheEU,toassistinanindustryor

businesssothatthepriceofacommodityorserviceremainsloworcompetitive)madeup

about70%oftotalEECexpendituresatthistime.TheUK“rebate”originallynegotiatedbyMrs.

Thatcherstillremainsinplacetoday.IthasreducedtheUK’scontributiontothebudgefrom

morethan20%ofthetotalinthe1980sto12%(Pruitt).

In1993,theMaastrichtTreatycreatedtheEuropeanUnion(EU),basedinBrussels,

Belgium,ofwhichtheEEC(renamedtheEuropeanCommunity,EC)wasthemaincomponent.

ThisnewlydesignedunionhadtheegoalofintegratingEurope’snationspoliticallyand

economically,withaunitedforeignpolicy,commoncitizenshiprights,andasinglecurrency.

LabourPrimeMinisterTonyBlair,whowonbyalandslidein1997,stronglysupportedtheEU

andworkedtorebuildconnectionswiththerestofEuropewhileinoffice.Thiswasbyno

meansaneasytaskatthetimeasEuropeandtheUKhadmanyconflicts.Forexample,in2000,

aftera27-year-longbattle,BritishchocolatewasfinallyallowedtobesoldintherestofEurope,

whilemanynationswerestillnotpleasedastheydisagreedwiththeoilthattheBritishusedin

theirtreats(Pruitt).

In2011,withthegoalofprotectingBritain’sfinancialsector,DavidCameronbecame

thefirstUKprimeministertovetoanEUtreaty.Afewyearslaterhegaveahighly-anticipated

speechtooutlinethechallengesfacingEuropeandpromisedtorenegotiatemembershipinthe

EUifhisConservativePartywonamajorityinthenextgeneralelection.Thisoccurredatatime

whensupportamongBritishvoterswasgrowingfortheUKIndependenceParty,whichwas

heavilyagainsttheEU.Inrecentyears,UKIPandothersupportersofBrexithavegrown

significantly,whichalsoledtotheUK’ssuccessfuldeparturefromtheEUin2016,afterDavid

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Cameronwasre-electedandhedeliveredthepromisedreferendumtothepeople.This

separatistpopularitywasinfluencedbythecurrentbackdropofeconomicunrestinthe

Eurozone(theterritoryof19EUcountriesthatusetheeuroastheircurrency)andtheongoing

migrantcrisis(Pruitt).

Present-DaySituation

Sincethereferendumtookplace,thePrimeMinisterDavidCameronresignedand

formerhomesecretary,TheresaMay,tookhisplace.LikeMr.Cameron,Mrs.Maydidnot

supportBrexitbuttodayexplainsthatshewillrespectthewillofthepeople.Shehasmadethe

statement“BrexitmeansBrexit”,however,manydisagree,sayingthattheimplicationsof

Britain’sexitarenotasstraightforward.Twokeyissuesexists,involvingthewayBritishfirms

aretoconductbusinessintheEuropeanUnionandwhatrestraintsareplacedontherightsof

EuropeanUnionnationalswhowanttoliveandworkintheUK(Wheeler).

AsfortheeconomicconsequencesofBrexit,theUKeconomyseemstohavemanaged

theinitialshockofthevote,althoughthevalueofthepound(thenation’scurrency)remains

neara30-yearlow.Currentopinionissharplydividedoverthelong-termeffectsleavingtheEU

willhaveontheeconomy.Somemajorfirms,suchasEasyjetandJohnLewis,haveindicated

thattheslumpinsterling(anothernameforthepound,asitsofficialnameisthepound

sterling)hasincreasedtheircosts.TheUKhasalsolostitstopAAAcreditrating.Thismeansthat

thecostofgovernmentborrowingwillbehigher.Onthebrightside,sharepriceshave

recoveredfromadramaticdropinvalue,withboththeFTSE100andtheFTSE250index(which

includesmoreBritish-basedbusinesses),tradinghigherthanbeforethereferendum.TheBank

ofEnglandisalsohopingitsdecisiontocutinterestratesfrom0.5%to0.25%(arecordandthe

firstcutthathasbeenmadesince2009)willavoidrecessionandencourageinvestment

(Wheeler).

AsidefromtheimpactsBrexitwillhaveontheUnitedKingdom,manywonderwhenthe

nationwillactuallyleavetheEU.Thisisalongandcomplicatedprocess,whichisoutlinedinthe

graphicbelow.FortheUKtoleavetheEU,ithastoinvokeanagreementcalledArticle50ofthe

LisbonTreaty,whichgiveseachside(theUKandtheEU)twoyearstoagreetothetermsofthe

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split.PrimeMinisterTheresaMaysaidthatsheintendstostartthisprocessbytheendof

March2017,meaningtheUKwillbeexpectedtohavelefttheEUbythesummerof2019–

thoughthisdependsontheprecisetimetableagreeduponduringthenegotiations.Oncethe

negotiationsofficiallybegin,anideaofthenatureofthedealtheUKwillseekfromtheEUon

tradeandimmigrationwillbecomeclearer.TheUKgovernmentwillalsoenactaGreatRepeal

BillwhichwillendthepriorityofEUlawbeingusedintheUK.Itisexpectedtoincorporateall

EUlegislationintoUKlaw,afterwhichthegovernmentwilldecidethespecificregulationsto

keeporchange(Wheeler).

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PrimeMinisterTheresaMaysetupagovernmentdepartmenttotakeresponsibilityfor

Brexit,ledbyveteranConservativeMPand“Leave”campaigner,DavidDavis.LiamFox,former

defencesecretarywhoalsocampaignedtoleavetheEU,wasdesignatedasinternationaltrade

secretary,anewposition.Additionally,leaderoftheofficial“Leave”party,BorisJohnson,is

currentlyforeignsecretary.Thesemen,nicknamedthe“ThreeBrexiteers”,willplayacentral

roleinnegotiationswiththeEUandseekoutnewinternationalagreements,withMrs.May

havingthefinalsayasprimeminister.Asofrecently,Mrs.Mayhasrejectedcallswhohave

askedaboutwhathergoalsarefortheEUnegotiations(Wheeler).

QuestionstoConsiders

1. WhywillBrexittakesolong?

2. WhatshouldbethefocusofnegotiationsbetweentheUKandtheEU?

3. WhatwillhappentoEUcitizenslivingand/orworkingintheUK?

4. WhatwillhappentoEUnationalswhowanttoliveand/orworkintheUK?

5. Whatwillbetheshort-termandlong-termimpactsofBrexitontheUK’seconomy?

6. Howwillitmanageimmigration?

7. Isthereapossibilitytoholdasecondreferendum?

8. HowwilltravelthroughouttheEUbeimpactedforBritishcitizens,aswellasEUcitizens

travellingintheUK?

9. WilltheEU’scornerstone“singlemarket”remainintact?

10. WhathasbeentheoutcomeofseparationreferendumsheldoutsideoftheEUinthepast?

CouldthesemodelsprovidecluesastohowtheUKandotherEUnationswillbeaffectedby

Brexit?

WorksCited

Pruitt,Sarah."TheHistoryBehindBrexit."History.com.A&ETelevisionNetworks,24June2016.

Web.06Feb.2017.

Wheeler,AlexHunt&Brian."Brexit:AllYouNeedtoKnowabouttheUKLeavingtheEU."BBC

News.BBC,01Feb.2017.Web.06Feb.2017.

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HelpfulLinks

• http://www.economist.com/blogs/graphicdetail/2016/02/graphics-britain-s-referendum-

eu-membership

• https://europa.eu/european-union/about-eu/eu-in-brief_en

• https://www.youtube.com/watch?v=Zw-_a5pwqtI

• https://www.theguardian.com/politics/2017/jan/08/uks-brexit-approach-is-not-muddled-

at-all-says-theresa-may

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TopicB:GreekDebtCrisis(RubyTang)

Overview

IntheEuropeanUnion,28nationalgovernmentsholdtherealdecision-makingpower

onmattersrangingfrommoneytomigrants,andeachgovernmentisbeholdentoitsown

votersandtaxpayers.InJanuaryof1999,19ofthesenationsadoptedtheeuro,whichbinds

themintoasinglecurrencyzonewatchedoverbytheEuropeanCentralBank;however,budget

andtaxpolicywasleftinthehandsofeachcountry(Alderman).

Formanyyearsnow,Greecehasbeenatthevergeofbankruptcy.Ithasreceivedatotal

oftwobailoutsfromtheso-calledtroika—theInternationalMonetaryFund(IMF),the

EuropeanCentralBank(ECB)andtheEuropeanCommission,inhopesofbuyingGreecetimeto

stabilizeitsfinancesandquellmarketfearsthattheeurounionitselfcouldbreakup.Untilnow,

atotalof240billioneuroshavebeenissued,paidforbyothercountriesintheEU.Athird

bailoutof86billioneurosisunderway(Shaffield).

However,littlerealchangeisseenforlong-termstabilityintheGreekeconomy,asthe

bailoutshavebeenusedtopayoffpreviousGreekbondsandinterestratherthanstimulating

markets.Somenations,suchasGermanyandFrance,arebecomingconcernedwiththe

repaymentofbailoutsandfutureactionofGreece(Alderman).

History

ThedebtcrisisoriginatedfromtheGreekgovernment'sfiscalprofligacy("profligacy"is

definedaswastefulandexcessiveexpenditure).In1981,whenGreecebecamethe10th

memberoftheEU,itseconomyandfinanceswereingoodshape,withadebt-to-GDPratioof

28%andabudgetdeficitbelow3%ofGDP.Butthesituationdeteriorateddramaticallyoverthe

next30years(Alderman).

Forthreedecades,thetwomajorpartiesofGreece–thePanhellenicSocialist

Movement(PASOK)andtheNewDemocracyParty–havebeencompetingtokeeptheirvoters

happybylavishingliberalwelfarepoliciesontheirelectorates,creatinganinefficienteconomy

Shaffield).

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Asaresultoflowproductivity,erodingcompetitiveness,andrampanttaxevasion,the

governmenthadtoresorttoamassivedebtbingetokeepthepartygoing.Inaddition,Greece's

admissionintotheEurozoneinJanuary2001madeitmucheasierforthegovernmentto

borrow.However,thisgrowthcameatthesteeppriceofrisingdeficitsandburgeoningdebt.In

2009,whenGeorgePapandreoufromPASOKcameintopower,herevealedthatthefiscal

deficitwas12.7%,morethandoubleofthedisclosedfigureandoverfourtimestheEurozone

limitof3%.Thisleadtoloweredcreditratingsandscaredoffinvestors,anddroveupthecostof

futureloans(Alderman).

Present-DaySituation

InJulyof2015,theGreekgovernmenthadnochoicebuttopasstworoundsofausterity

measuresagainstvoter’swishessotheycanreceivethe86billioneuroloanfromtheEU.These

austeritymeasureswouldcauseinflation:increasetaxrates,reduceincentivesforearly

retirement,privatizationofmanybusinesses.TheECBandIMFagreedtolengthenthetermsof

Greekdebt,thereforereducingnetvalue(Shaffield).

InNovemberof2015,Greece'sfourbiggestbanksraisedthe€14.4billionrequiredby

theECB.Thefundswillcoverbadloansandreturnthebankstofullfunctionality.Bankinvestors

contributedthisamountinexchangeforthe€86billioninbailoutloans.Greekbankswere

losingmoney,butreluctanttocallinbaddebt,believingthatmoneywillberepayedwhenthe

economyimproves.Thislimitedfundsforpossiblenewventures(Shaffield).

InJuneof2016,theEU'sEuropeanStabilityMechanismdisbursed€7.5billiontoGreece,

whichwillusethefundstopayinterestonitsdebt.Greececontinuestoenactthereforms

requiredbytheEU.TheIMFsaysthatwithoutdebtrelief,Greece’sdebtcouldhit250%ofGDP

bythemiddleofthecentury.Manyeconomistsprospectthattoresolvethiscrisis,therearea

fewpossiblesolutions:Greecedefaultsofficially,dropstheeuro,raisestaxes,cutspending,and

liquidate.Eachsolutionhasitsownadvantagesanddisadvantages(Alderman).

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QuestionstoConsiders

1. ShouldmembersoftheEUcontinuetolendGreecebailoutstoprotectpartoftheUnion,or

letGreecedealwiththeconsequencesofexcessivespendingitself?

2. IftheEUchoosestosupportGreecefurther,whowillstillbewillingtolendmoneyinthe

pessimisticsituation?

3. IftheEUdecidestostopgivingloans,howcantheybeprotectedfromanotherfinancial

crisiswhenGreecegoesbankrupt?

4. WilltherebebenefitsforbothGreeceandtheEUifGreeceexitstheEurozone?

WorksCited

HazelShaffield.TheIndependent.IndependentDigitalNewsandMedia,6July2015.Web.06

Feb.2017.

Alderman,Liz."ExplainingGreece’sDebtCrisis."TheNewYorkTimes.N.p.,17June2016.Web.

6Feb.2017.

HelpfulLinks

• https://www.thebalance.com/what-is-the-greece-debt-crisis-3305525

• http://www.investopedia.com/articles/personal-finance/061115/origins-greeces-debt-

crisis.asp

• http://www.npr.org/2012/05/18/152990481/foreign-policy-5-easy-solutions-to-the-greek-

crisis