CEE Transition and EU Accession

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CEE Transition and EU Accession

• The 8 Tracks
• Jorden Redford, Eric Neilan, Michael Chatterton,
  Josh Wangsgard, Mitzi Moore, and Melissa Todd

November 30, 2006
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History of the European Union

• 1951 The European Coal and Steel Community
• Integrated the coal and steel industries of
  Western Europe
  
• 1957 Treaties of Rome
• European Atomic Energy Community
• European Economic Community
• Moved towards removing trade barriers and forming
  a common market
  
• 1967 Institutions of three European communities
  merged
  
• Single Commission
• Single Council of Ministers
• European Parliament
• 1992 Treaty of Maastricht
• Introduced new forms of co-operation between the
  member state governments
  
• This additional inter-governmental co-operation
  created the European Union
  

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The Single Market

• Common Policies
• Economic/Political integration entails joint
  decisions on many matters
  
• 1992 marked the formal completion of a single
  market
  
• Goods, services, people and capital could move
  freely
  
• Financial services still not completely unified
• 1990sgreater mobility for EU citizens

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The growing family

• The EU has continued to grow
• Grown from six to twenty five nations, with two
  more likely to join in 2007, bring the EUs
  population to nearly half a billion.
  
• Treaty of NiceFebruary 1, 2003
• Governs the size of EU institutions and the way
  they work
  
• EU Constitution
• 2006 upon approval

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Cultural Cooperation

• Since the inclusion of culture in the Maastricht
  Treaty cultural cooperation has been a priority.
  
• Actions taken
• Culture 2000 7-year program
• European Capital of Culture program
• European cultural month event
• Media plus program
• Grants to 233 cultural programs in 2004

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The Euro

• Managed and administered by the Frankfurt-based
  European Central Bank (ECB) and the European
  System of Central Banks (ESCB)
  
• ESCB composed of the central banks of its
  member states

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History of the Euro

• February 7, 1992 Maastricht Treaty Established
  the Euro
  
• December 16, 1995 EU leaders meet in Madrid
• Adoption of the Madrid scenario
• Named the Euro
• January 1, 1999 Birth of the euro
• Exchange rates permanently fixed to euro
• Launched as accounting currency

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History (continued)

• September 2001Pre-circulation distribution of
  euro notes and coins
  
• Banks and post offices
• December 2001 Distribution of starter kits
• 4.6 billion coins
• Worth 1.6 billion Euros
• January 1, 2002 Euro notes and coins enter
  circulation
  
• February 28, 2002 Withdrawal of national
  currencies
  

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Transition to Euros

• Convert former national currencies
• Formally adopted
• Exchange rate
• Currency had to be exchanged for Euros
• Current Euro Area- 3 year transition
• 1 year for Greece
• Dual circulation- 6 month max.

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Current

• Current Euro Area
• 12 EU Member States
• Belgium
• Germany
• Greece
• Spain
• France
• Ireland

• Italy
• Luxembourg
• The Netherlands
• Austria
• Portugal
• Finland

Also Guadeloupe, French Guyana, Martinique and
Reunion, Madeira, and the Canary Islands
Monaco, the Vatican City and San Marino have
adopted the Euro as their national currency
through agreements. Non-participating EU countrie
sDenmark, the United Kingdom, and Sweden
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Future

• EU Economics and Finance Ministers adopted a
  decision allowing Slovenia to join the euro area
  as of January 1, 2007 at their Council meeting on
  July 11, 2006 in Brussels
• Post-2004 EU members- required by their accession
  treaty to join the euro
  
• January 2008- Cyprus, Estonia, Latvia, and Malta
• January 2009- Slovakia and Lithuania
• January 2010- Bulgaria and the Czech Republic
• January 2011- Hungary, Poland, Romania

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Benefits

• Traveling
• Inside and outside the Euro Area
• Do not have to exchange, widely accepted
• Political
• Symbol of common identity
• Stimulus for further integration

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More Benefits

• Elimination of some transaction costs
• Lower exchange costs
• Decreased exchange rate fluctuations
• More stable environment
• Reduced uncertainty
• Price transparency
• Compare prices
• Increased competition

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Disadvantages of the Euro

• Loss of monetary policy control
• Differing business cycles
• Requires contradictory monetary policy
• Central bank cannot set inflation at level
  appropriate for all countries
  
• Flexibility of labor market within member
  countries
  
• Limited primarily by language
• Loss of national sovereignty

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The European Union looks like what creature?
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European Union and scorpion comparison
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European Union Scorpion, Chinese Chicken, and
Russian Rabbit
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European Union Framework

• Not Just a Confederation new and historically
  unique structure
  
• Common Institutions treaties allow countries
  delegate some sovereignty so decisions are made
  at the European level
  
• Institutional Triangle
• Council of EU (represents member states)
• European Parliament (represents citizens)
• European Commission (represents EU interests)

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New Member Requirements

• Political stable democratic institutions
• Economic functioning market economy
• Capacity to take on obligations of membership,
  i.e. adherence to political and economic
  objectives
  
• Adoption of European legislation

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EU Current Events11/20-11/24
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Good Governance Crucial For Africa 11/20/05

• European Development Days conferences on 13-17
  November
  
• Poverty reduction and sustainable development in
  Africa will require major improvements in
  governance

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9bn Technology Boost For Europe11/21/05

• EU has announced a budget of 9bn for its new
  technology research program.
  
• The leading information society technology event
  IST2006, in Helsinki on Nov 21-23
  
• New technologies, the latest research results,
  workshops, robots, etc
  

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Trade Agreement To Spur On Iraqi Recovery11/22/05

• EU and Iraq set to intensify trade relations
• Boost economic stability and aid long-term
  recovery
  
• Trade agreement to integrate the country in the
  world economy

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AIDS-Remember Me? Campaign Gets
Underway11/23/05

• Awareness-raising initiative launched by the EU
• "Night of the HIV/AIDS TV commercials" in
  Brussels on 30 November.
  
• The message AIDS is still with us, so protect
  yourself.
  
• A prize will be awarded for the best HIV/AIDS
  infomercial.

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EU-Russia Summit Goes Ahead11/24/06

• Russia's year-old ban on Polish agricultural
  products
  
• Energy
• Economic integration
• External affairs.

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????????? ???????? (Bulgaria)
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Random Trivia Questions about Bulgaria for Points
in Heaven (but no candy)

Name the capital of Bulgaria? Sofia 2005 Per
Capita GDP? 9,600 (66th) Under King Teres,
Bulgaria was initally united in what year?
About 500 BC as Odrysia
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Bulgarias Economic Woes

• Bulgaria's economy suffered significantly after
  1989 with the loss of the market of the Council
  for Mutual Economic Assistance (COMECON) member
  states
• Standard of Living fell by 40 and didnt fully
  rebound until 2004.
  
• UN sanctions on Yugoslavia
• and Iraq 1992-1995
• 1994 Inflation 122
• 1995 Inflation 32.9
• 1996 Inflation 311
• 1996 Collapse of the LEV

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Economic Recovery

• Since 1997 the country has been on the path to
  recovery, with GDP growing at a 4 5 rate per
  year
  
• Accelerated Privatization
• Nuclear Power production (Kozloduy, Belene,
  Maritza Iztok)
  
• Agriculture

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România (Romania)
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România
Random Trivia Questions for charity (but still no
candy)

Name the capital of Romania? Bucharest 2005
Per Capita GDP? 8,785 (67th) The oldest hu
man fossil ever in Europe found was
found in Romania. How old do scientist think it
is? Between 34,000 and 36,000 years old (thats
before Adam Eve, I think)
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Romanias Economy Past and Present

• After the Communist regime was overthrown in late
  1989, the country experienced a decade of
  economic instability and decline, led in part by
  an obsolete industrial base and a lack of
  structural reform. (Wikipedia)
• 2004 GDP growth 8.4
• 2005 Flat tax of 16 (personal and corporate)
• Unemployment rate as of September 2006 5.0

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Bulgaria and Romanias Accession to the EU

• January 1, 2007 Bulgaria and Romania will
  officially become members of the European Union,
  but with heavy restrictions
  
• Organized crime and high-level government
  corruption
  
• Food export bans due to outbreaks of animal
  diseases
  
• Bulgarias planes are banned from flying into EU
  airspace until the country improves its air
  safety standards
  
• Migration restrictions for both countries will
  probably be three years.
  

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Future Enlargement Possibilities
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Near Future Candidates
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The European Free Trade Association

• Iceland
• Norway
• Switzerland
• Liechtenstein

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Eastern Europe

• Russia
• Belarus
• Ukraine
• Moldova
• Kazakhstan

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South Caucasus

• Georgia
• Armenia
• Azerbaijan

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Microstates

• Monaco
• Andorra
• San Marino
• Vatican

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Dependencies of EU Member States

• Greenland
• Faroe Islands
• UK Sovereign Base Areas
• Guadeloupe
• New Caledonia
• Netherlands Antilles and Aruba
• Cyprus

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Non-European States

• Israel
• Morocco
• Cape Verde

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Questions?

• Thank You