Europe as an actor on the global stage will be achieved by bringing together Europe's external policy tools, both when developing and deciding new policies. The Treaty of Lisbon will give Europe a clear voice in relations with its partners worldwide. It will harness Europe's economic, humanitarian, political and diplomatic strengths to promote European interests and values worldwide, while respecting the particular interests of the Member States in Foreign Affairs.

• A new High Representative for the Union in Foreign Affairs and Security Policy, also Vice-President of the Commission, will increase the impact, the coherence and the visibility of the EU's external action.

• A new European External Action Service will provide back up and support to the High Representative.

• A single legal personality for the Union will strengthen the Union's negotiating power, making it more effective on the world stage and a more visible partner for third countries and international organisations.

• Progress in European Security and Defence Policy will preserve special decision-making arrangements but also pave the way towards reinforced cooperation amongst a smaller group of Member States.

Accession treaties

Main article: Enlargement of the European Union

The founding treaties have also been amended (in a more limited fashion) whenever new member states acceded:

• 1973: Acts of Accession of Denmark, Ireland, Norway and the United Kingdom, signed in Brussels on 22 January 1972. (Norway refused to ratify and did not join the EU.)

• 1981: Act of Accession of Greece, signed in Athens on 28 May 1979.

• 1986: Acts of Accession of Spain and Portugal, signed in Madrid and Lisbon on 12 June 1985.

• 1995: Acts of Accession of Austria, Sweden, Finland and Norway, signed in Corfu on 24 June 1994. (Norway again failed to ratify.)

• 2004: Treaty of Accession 2003 signed in Athens on 16 April 2003 (Cyprus, Czech Republic, Estonia, Hungary, Lithuania, Latvia, Malta, Poland, Slovenia, Slovakia).

• 2007: Treaty of Accession 2005 signed in Luxembourg on 13 April 2005 (Bulgaria, Romania).

18/09/2012

Budgetary treaties

Lastly there have been two budgetary treaties:

• The Budgetary Treaty of 1970 (more fully the "Treaty amending Certain Budgetary Provisions of the Treaties establishing the European Communities and of the Treaty establishing a Single Council and a Single Commission of the European Communities"), signed in Luxembourg on 22 April 1970, gave the European Parliament the last word on what is known as "non-compulsory expenditure". It came into force on 1 January 1971.

• The Budgetary Treaty of 1975 (more fully the "Treaty amending Certain Financial Provisions of the Treaty establishing the European Communities and of the Treaty establishing a Single Council and a Single Commission of the European Communities"), signed in Brussels on 22 July 1975, gave the European Parliament the power to reject the budget as a whole, and created the European Court of Auditors. It came into force on 1 June 1977.

Unratified treaties

The Treaty instituting a European Defence Community sought to create a pan-European defence force, combining the national armies under a supranational structure. It was signed on 27 May 1952 but the French National Assembly refused to ratify it. It was to lead to a European Political Community Treaty, which was drafted but abandoned after the failed ratification of the EDC Treaty.

The Treaty establishing a Constitution for Europe sought to consolidate, simplify and replace the existing set of overlapping treaties. It was signed on 29 October 2004 and was due to come into force on 1 November 2006, conditional on its ratification by all member states. During the process of ratification, The French (on 29 May 2005) and then the Dutch (on 1 June 2005) rejected the treaty in referendums.

Following the failed ratification of the Constitution, the Lisbon Treaty was agreed on 19 October 2007 at an informal meeting of European leaders in Lisbon. It was signed on 13 December 2007 and, following ratification during 2008, came into force in 2009.

1) The Treaty of Rome, signed by France, West Germany, Italy and Benelux (Belgium, the Netherlands and Luxembourg) on March 25, 1957, established the European Economic Community (EEC) and came into force on 1 January 1958.

Another treaty was signed the same day establishing the European Atomic Energy Community (Euratom), which came into effect on the same day as the Treaty of Rome, 1 January 1958.

Both treaties, in conjunction with the Treaty establishing the European Coal and Steel Community (the Treaty of Paris, which expired in 2001-2002), have become known as the Treaties of Rome.

To date, the original Treaty of Rome has been amended by all subsequent treaties of the European Union. The Treaty of Nice consolidated all treaties into one document, but within this the EC Treaty (the amended form of the Treaty of Rome) remains a single section with its own article numbering.

Despite subsequent treaties, especially the Treaty of Maastricht, the EC Treaty is still the legal basis for most decisions taken by the institutions of the European Union and it remains the main source of communitary legislation.

2) Maastricht Treaty

The Maastricht Treaty (formally, the Treaty on European Union, TEU) was signed on February 7, 1992 in Maastricht, the Netherlands after final negotiations on December 9, 1991 between the members of the European Community and entered into force on November 1, 1993 during the Delors Commission. It led to the creation of the European Union and was the result of separate negotiations on monetary union and on political union. The Maastricht Treaty has been amended to a degree by later treaties.

Content

A separate protocol linked to the treaty led to the creation of the euro, and introduced the Three pillars of the European Union (the European Communities pillar, the Common Foreign and Security Policy or CFSP pillar, and the Justice and Home Affairs pillar). The CFSP pillar was built on the foundation of European Political Cooperation (EPC), but brought it under a treaty and extended it. The JHA pillar introduced cooperation in law enforcement, criminal justice, civil judicial matters, and asylum and immigration. Originally, the European Community (EC) dealt mainly with economic, social and trade matters. The European Commission and the European Court of Justice, both operationally independent from the national governments, although appointed by them, had a lot of power within the system. The European Parliament, which was directly elected by the citizens of the EC member states, also had some power. The Governments retained the most power in the Council of Ministers, but since the mid-1980s had increasingly been taking decisions through qualified majority votes (about 71% of the votes). This system was called the Community method, or supranationalism, as institutions not directly controlled by the governments wielded significant power, and members could have decisions they disagreed with imposed upon them through majority votes.

It was desired to add competencies in foreign policy, military and criminal matters to the European Community. However, many member states considered that these areas were too sensitive to be managed by the mechanisms of the European Community, and that the power of governments in relation to these areas had to be stronger than the powers of governments in the European Community. That is, an intergovernmental, as opposed to supranational, system would have to be used. Other member states feared that this might threaten the power of the independent supranational institutions (the European Commission, European Court of Justice and European Parliament) in relation to the economic matters then dealt with by the European Community. The three pillar structure was then developed to isolate the traditional Community responsibilities in the area of the economy (the Community Pillar) from the new competencies in the areas of foreign policy and military matters (the CFSP pillar) and criminal matters (the JHA pillar). The Maastricht treaty created also the position of the Ombudsman.

Ratification

The process of ratifying the treaty was fraught with difficulties in three states. Denmark first rejected the treaty on 2 June 1992 by fewer than 50,000 votes. This sparked a referendum in France which only narrowly supported it, with 51.05% in favour. The treaty was ratified by Denmark on 18 May 1993 with the addition of the Edinburgh Treaty which lists four Danish exceptions. In the United Kingdom, an opt-out from the treaty's social provisions was opposed in Parliament by the opposition Labour and Liberal Democrat MPs and the treaty itself by the Maastricht Rebels within the governing Conservative Party. The number of rebels exceeded the Conservative majority in the House of Commons, and thus the government of John Major came close to losing the confidence of the House.

3) Amsterdam Treaty

The Treaty of Amsterdam amending the Treaty of the European Union, the Treaties establishing the European Communities and certain related acts, commonly known as the Amsterdam Treaty, was signed on October 2, 1997, and entered into force on May 1, 1999; it made substantial changes to the Treaty on European Union, which had been signed at Maastricht in 1992.

The Amsterdam Treaty meant a greater emphasis on citizenship and the rights of individuals, more democracy in the shape of increased powers for the European Parliament, a new title on employment, a Community area of freedom, security and justice, the beginnings of a common foreign and security policy (CFSP) and the reform of the institutions in the run-up to enlargement.

Background

The Treaty was the result of very long negotiations, which began in Messina, Sicily, on June 2, 1995, forty years after the signing of the Treaties of Rome and reached completion on the night of June 17-18, 1997, in Amsterdam. Following the formal signing of the Treaty on October 2, 1997, the Member States engaged in an equally long and complex ratification process. The European Parliament endorsed the Treaty on November 19, 1997, and after two referenda and 13 decisions by national parliaments, the Member States finally concluded the procedure.

Contents

Amsterdam comprises 13 Protocols, 51 Declarations adopted by the Conference and 8 Declarations by Member States plus amendments to the existing Treaties set out in 15 Articles. Article 1 (containing 16 paragraphs) amends the general provisions of the Treaty on European Union and covers the CFSP and cooperation in criminal and police matters. The next four Articles (70 paragraphs) amend the EC Treaty, the European Coal and Steel Community Treaty (which expired in 2002), the Euratom Treaty and the Act concerning the election of the European Parliament. The final provisions contain four Articles. The new Treaty also set out to simplify the Community Treaties, deleting more than 56 obsolete articles and renumbering the rest in order to make the whole more legible. By way of example, Article 189b on the codecision procedure became Article 251.

The most pressing concerns of ordinary Europeans, such as their legal and personal security, immigration and fraud prevention, were all dealt with in other chapters of the Treaty. In particular, the EU will now be able to legislate on immigration, civil law or civil procedure, insofar as this is necessary for the free movement of persons within the EU. At the same time, intergovernmental cooperation was intensified in the police and criminal justice field so that Member States will be able to coordinate their activities more effectively. The Union aims to establish an area of freedom, security and justice for its citizens. The Schengen Treatys have now been incorporated into the legal system of the EU. (Ireland and the UK remained outside the Schengen Treaty, see Common Travel Area for details)

The Treaty lays down new principles and responsibilities in the field of the common foreign and security policy, with the emphasis on projecting the EU's values to the outside world, protecting its interests and reforming its modes of action. The European Council will lay down common strategies, which will then be put into effect by the Council acting by a qualified majority, subject to certain conditions. In other cases, some States may choose to abstain "constructively", i.e. without actually preventing decisions being taken.

The treaty introduced a High Representative for EU Foreign Policy who, together with the Presidents of the Council and the European Commission, puts a "name and a face" on EU policy in the outside world. Although the Amsterdam Treaty did not provide for a common defence, it did increase the EU's responsibilities for peacekeeping and humanitarian work, in particular by forging closer links with Western European Union.

As for the institutions, there were two major reforms concerning the codecision procedure (the legislative procedure involving the European Parliament and the Council), affecting its scope - most legislation was adopted by the codecision procedure - and its detailed procedures, with Parliament playing a much stronger role. The President of the Commission will also have to earn the personal trust of Parliament, which will give him the authority to lay down the Commission's policy guidelines and play an active part in choosing the Members of the Commission by deciding on their appointment by common accord with the national governments. These provisions make the Commission more politically accountable, particularly vis-à-vis the European Parliament. Finally, the new Treaty opens the door, under very strict conditions, to closer cooperation between Member States which so wish. Closer cooperation may be established, on a proposal from the Commission, in cases where it is not possible to take joint action, provided that such steps do not undermine the coherence of the EU or the rights and equality of its citizens.

Challenges

The Amsterdam Treaty did not settle all institutional questions once and for all. Work is still in progress on reforming the institutions to make them capable of operating effectively and democratically in a much enlarged EU. The most pressing issues here are the composition of the Commission, the weighting of Member States' votes, and qualified majority voting. These questions are addressed in the drafting of the European constitution.

4) Treaty of Nice

The Treaty of Nice is a treaty adopted in Nice by the European Council to amend the two founding treaties of the European Union:

• the Treaty on European Union, or Maastricht Treaty, which introduced the euro and the three-pillar structure of the EU;

• the Treaty of Rome, which established the European Economic Community and the European Atomic Energy Community.

• It was agreed by the Heads of State or Government at the Nice European Council on 11 December 2000

• It was signed 26 February 2001

• It came into force on 1 February 2003.

Provisions of the Treaty

The primary purpose of the Treaty of Nice was to reform the institutional structure to withstand the Enlargement of the European Union, a task which was supposed to have been carried out at the Amsterdam Inter-Governmental Conference (IGC), but the Treaty of Amsterdam failed to address most of the issues.

The Treaty adopted by the Nice European Council was attacked by many. Germany had demanded that its greater population be reflected in a higher vote weighting in the Council; this was opposed by France, who insisted that the symbolic parity between France and Germany be maintained. One proposal made by many, which would have greatly simplified the current system, was to introduce a double majority of both member states and population, to replace the current Qualified Majority Voting (QMV) system. This was also rejected by France for similar reasons. A compromise was reached, which provided for a double majority of Member States and votes cast, and in which a Member State could optionally request verification that the countries voting in favour represented a sufficient proportion of the Union's population.

The Treaty provided for an increase after enlargement of the number of seats in the European Parliament to 732, which exceeded the cap established by the Treaty of Amsterdam.

The question of a reduction in the size of the European Commission after enlargement was resolved to a degree — the Treaty providing that once the number of Member States reached 27, the number of Commissioners appointed in the subsequent Commission would be reduced by the Council to below 27, but without actually specifying the target of that reduction. As a transitional measure it specified that after 1 January 2005, Germany, France, the UK, Italy and Spain would each give up their second Commissioner.

The Treaty provided for the creation of subsidiary courts below the European Court of Justice and the Court of First Instance to deal with special areas of law such as patents.

The Treaty of Nice provides for new rules on closer co-operation, the rules introduced in the Treaty of Amsterdam being viewed as unworkable, and hence these rules have not yet been used.

In response to the failed sanctions against Austria following a coalition including Jörg Haider's party having come to power, and fears about possible future threats to the stability of the new member states to be admitted in enlargement, the Treaty of Nice for the first time adopted formal rules for the application of sanctions against a Member State.

The Treaty also contained provisions to deal with the financial consequences of the expiry of the European Coal and Steel Community (ECSC) treaty (Treaty of Paris (1951)).

It was widely accepted that the Treaty of Nice has failed to deal with the basic question of wide-ranging institutional reform, the European Union institutions being widely viewed as overly complicated, and hence the establishment of the European Convention, leading to a new IGC in 2004, was agreed at Nice.

The Commission and the European Parliament were disappointed that the Nice IGC did not adopt many of their proposals for reform of the institutional structure or introduction of new Community powers, such as the appointment of a European Public Prosecutor. The European Parliament threatened to pass a resolution against the Treaty; although it has no formal power of veto, the Italian Parliament threatened that it would not ratify without the European Parliament's support. However, in the end this did not come to pass and the European Parliament approved the Treaty.

Many argue that the pillar structure, which was maintained by the Treaty, is overly complicated, that the separate Treaties should be merged into one Treaty, and that the three (now two) separate legal personalities of the Communities should be merged, and that the European Community and the European Union should be merged with the European Union being endowed with legal personality. The German regions were also demanding a clearer separation of the powers of the Union from the Member States.

Nor did the Treaty of Nice deal with the question of the incorporation of the Charter of Fundamental Rights into the Treaty; that was also left for the 2004 IGC after the opposition of the United Kingdom.

Ratification process

Under the current rules for the amendment of the Treaties, the Treaties can only be amended by a new Treaty, which must be ratified by each of the Member States to enter into force.

In all the EU member states the Treaty of Nice was ratified by parliamentary procedure, except in Ireland, where the Irish Supreme Court in an earlier judgement on the Single European Act had ruled that fundamental changes to European Treaties, which alter the Irish Constitution's recognition of sovereignty as being ultimately derived from the People, require an amendment to the Irish constitution. Ireland's constitution can only be amended by a referendum of the people.

To the surprise of Europe's political classes, the voters in Ireland rejected the Treaty of Nice in June 2001. The turnout itself was low (34%), partly a result of the failure of the major Irish political parties to mount a strong campaign on the issue, presuming that the Irish electorate would pass the Treaty as all previous such Treaties had been passed by big majorities. However many Irish voters were critical of the Treaty contents, believing that it marginalised smaller states. Others questioned the impact of the Treaty on Irish neutrality. Other sections viewed the leadership of the Union as out of touch and arrogant, with the Treaty offering a perceived chance to 'shock' the European leadership into a greater willingness to listen to its critics. (A similar argument was made when Denmark initially voted down the Treaty of Maastricht.) In large measure, the Treaty of Nice was lost because pro-treaty supporters simply never bothered to vote, while the 'Vote No' campaigns were effective in raising serious questions as to the value of the Treaty.

The Irish government, having obtained the Seville Declaration on Ireland's policy of military neutrality from the European Council, decided to have another referendum on the Treaty of Nice on Saturday, 19 October 2002. Two significant qualifications were included in the second proposed amendment, one requiring the consent of the Dáil for "enhanced cooperation" under the treaty, and another preventing Ireland from joining any EU common defence policy. A 'Yes' vote was urged by a massive campaign by the main parties and – for the first time in European referendums in Ireland – by civil society and the social partners, including campaigning through canvassing and all forms of media by respected pro-European figures like then EP president Pat Cox, former Czech president Václav Havel, former President of Ireland Patrick Hillery and former Taoiseach (prime minister) Dr. Garret Fitzgerald. Prominent civil society campaigns on the Yes side included Fianna Fáil, Fine Gael, the Labour Party, the Progressive Democrats, the Irish Alliance for Europe led by Professor Brigid Laffan and Adrian Langan, and Ireland for Europe led by Ciarán Toland. On the No Side, the principal campaigns were those of the Green Party, Sinn Féin, Anthony Coughlan's National Platform, Justin Barrett's No to Nice campaign, and Roger Cole's Peace and Neutrality Alliance. The result was a 60% "Yes" vote on almost 150% of the turn-out of the previous referendum.

By then all other EU member states had ratified the Treaty. Ratification by all parties was required by the end of the year, or else the Treaty would have expired.

Views of the Treaty

Proponents of the Treaty claim it is a utilitarian adjustment to cumbersome EU governing mechanisms and a required streamlining of decision-making processes, necessary to facilitate enlargement of the EU into Central Europe. They claim that consequently is vitally important for the integration and future progress of these former communist countries. Many who are in favour of greater scope and power of the EU project, feel that it does not go far enough in fact, and that it may in any case be superseded by future treaties and Treatys (such as the possible ratification of the Treaty of Lisbon/Reform Treaty). Proponents differ in the extent to which enlargement may proceed without it, some claiming the very future of the Union's growth – if not existence – to be at stake, while others saying that enlargement can legally proceed – albeit at a slower pace – without it.

Opponents of the Treaty claim that it is a "technocratic" rather than "democratic" treaty, which further diminishes the sovereignty of national/local parliaments, and further concentrating power into centralised and unaccountable bureaucracy - "deepening but not widening" political power. They also claim that five applicants may join at once under the current system, and that all others may negotiate on an individual basis - which they believe will be advantageous to the applicants. It is also claimed that the Treaty of Nice will create a two-class and two-tier EU, specifically to enable an "inner-club" of powerful states (e.g. France and Germany) to effectively co-opt EU institutions for their own purposes. Opponents point out that leading pro-treaty politicians have admitted, that were referendums to be held in countries other than Ireland, it would probably be defeated there as well.

5) Lisbon Treaty

The Lisbon Treaty is the name of the new Treaty covering the European cooperation from 1 December 2009.

- A new voting system moving powers from small to bigger member states will enter into force from 2014.

-The Barroso II Commission was appointed in February 2010 according to the new rules which give much more power to the Commission President. The power to decide is now effectively with the new Commission President, whose appointment must in turn have the support of 18 of the 27 prime ministers and presidents, representing at least 255 out of 345 weighted votes in the Council. In addition he must obtain the support of an absolute majority of the European Parliament for the full college of commissioners.

A special summit in November 2009 nominated a permanent President of the European Council and a new foreign minister who is also be a Vice-President of the European Commission.

From 1 December 2009 many new laws can be decided by qualified majority in the Council of Ministers. A list of the 68 new areas which will be decided by qualified majority vote can be downloaded from the front page of this euabc.

A new foreign and defence office employing 7000 diplomats is now being recruited and installed in the Charlemagne building in Brussels and in the 130 EU delegations to other countries. There may now be more official EU embassies.

The new post-Lisbon EU has legal personality, allowing the EU to negotiate and enter into international Treatys with other states and international organisations in all areas of its powers.

500 million citizens has been endowed with an additional citizenship as EU citizens on top of their national citizenship. 

The Charter of Fundamental Rights is now legally binding and offer the citizens competing rights and duties to their national constitutions and the European Convention of Human Rights.

A simple majority requires one more than half of the given votes.

An absolute majority requires more than 50% of all members, irrespective of the number of those voting.

Qualified majority voting means that The votes of the member states are weighted.  From 1 November 2014 the Lisbon Treaty imposes a new system, where member states also vote according to their population. Then e.g. Ireland will vote with 4.4 million citizens and Gerany with 82 millions. The system require a „double majority” - as today where laws shall also have a majority of member states voting in favour.

Including the population factor mainly benefits the bigger countries while the "one country one vote" element benefits the smaller countries. The new system makes it much easier to take decisions. Today qualified majority requires 74 % of the weighted votes in the Council.

The Lisbon system requires 72 % of the  member states and 65 % of the populationfor the few cases where a proposal does not need a Commission initiative. In this lexicon we call it super-qualified majority. It is used when a new Commission shall be assembled and when the European Council shall elect its new permanent President.    

History

The Lisbon Treaty was rejected in a referendum in Ireland on 12 June 2008 by a 53.4% No votes.

Many Czechs feared that the Lisbon Treaty could be used by some Germans to lay claim  to property which they or their  relations had lost  when they were expelled from Czechoslovakia after World War 2.

The British Conservatives wanted a referendum on the Lisbon Treaty in the UK. This had been promised to British voters before the last UK general election by Prime Minister Tony Blair. The next British general election must be held by June 2010.

After the Lisbon Treaty is ratified by the 27 member states, there is no scope for further referendums on it.  Any renegotiation of the Lisbon Treaty requires unanimity amongst all 27 member states.

The Lisbon Treaty includes all operational articles from the rejected EU Constitution, but it alters their presentation radically. Instead of one comprehensive document that would replace all the existing European Treaties, the Lisbon Treaty amends the existing 17 basic EU treaties and many accompanying  protocols and declarations.

It thereby gives the EU a constitution indirectly rather than directly. The EU's constitutional law will thus continue to consist of a plethora of treaties amending the founding treaties.

By amending the existing Treaties the Lisbon Treaty gives the EU a Constitution of more than 3000 pages compared to the 560 pages in the formally titled "Constitution for Europe" of 2004, which the French and Dutch rejected in 2005. 

Although it changes the name from "EU Constitution" to "Lisbon Treaty" - strictly speaking the Consolidated European Treaties as Amended by Lisbon -  it does not alter the jurispridence of the European Court, which has already characterised the treaties as "the Constitutional Charter of a Community of Law, a new legal order for the sake of which the States have limited their sovereign rights" (Opinion 1/91).

The Lisbon Treaty deletes the constitution's article on the European symbols, such as the flag, Europe Day, the motto and the common EU anthem, which had been in the original "Treaty Establishing a Constitution for Europe". 

However, it was also stated that this deletion does not change the status of  any of the European symbols, which have been in existence for years anyway without any formal basis in the European Treaties.

The Lisbon Treaty moves Article I-6 of the Constitution referring to the primacy of Community law to Declaration No 17 attached to Lisbon. This Declaration recalls the existing case law of the European Court, which states, for example,  that EU law cannot "be overridden by domestic legal provisions, however framed" .

The Lisbon Treaty contains the same number of new policy areas that are made subject to voting by qualified majority. They number 68 in all.  

The revised constitution now embodied in the Lisbon Treaty  abolishes the existing "three-pillar" structure of the European Treaties - the area  of the European Community, in which supranational Community law prevails, and the two areas of foreign and security policy on the one hand and crime, justice and home affairs policy on the other, where member states cooperated on the basis of retained sovereignty.

The Lisbon Treaty abolishes the European Community and transfers all of its powers and institutions to the constitutionally  new post-Lisbon European Union. To enable this to be done it gives legal personality to the European Union in Article 47 TEU. This makes it possible for the Union to legislate internally as the European Community had previously done and for the entire Union to act on the international scene as a constitutionally integrated entity. 

It also establishes a common permanent President of the European Council and an EU Foreign Minister who will now be titled "The High Representative of the Union for Foreign Affairs and Security Policy". This High Representative - formerly a post held by Javier Solana, now by Lady Ashton - is also a Vice-President of the European Commission.

The term European Community disappeared from all treaty texts and is replaced by the term "Union". The Community itself legally disappeared.

The Treaty confers on the citizens of the 27 member states an "additional" citizenship of the Union on top of their national citizenship. This is similar to the internal dual citizenships possessed by citizens of  such classical federations  as the USA and Federal Germany.

The EU Charter of Fundamental Rights is made legally binding, allowing the EU Court to further develop the legal principles and fundamental rights of the Union and its citizens. See Art. 6 TEU.

2.2. Institutions and bodies|viscus| of the eu

The EU has five main institutions (bodies of authority):

the European Parliament,

the Council of Ministers of the EU,

the European Commission,

the European Court of Justice,

the European Court of Auditors

Other institutions have particular roles to play in the decision making process.

They are:

the Economic and Social Committee,

the Committee of the Regions,

the European Central Bank,

the European Investment Bank,

the Ombudsmen of the EU.

There are other structures in the institutional structure of the EU. Various tasks have been devolved to special agencies, which are set up across the European Union such as Consultative bodies, Financial bodies, Interinstitutional bodies, Decentralised bodies (Agencies) and other specialised bodies.

1) European Parliament

The European Parliament (formerly European Parliamentary Assembly) is the parliamentary body of the European Union (EU), directly elected by EU citizens once every five years. Together with the Council of Ministers, it composes the legislative branch of the institutions of the Union. It meets in two locations: Strasbourg and Brussels.

The Parliament has restricted legislative power. It cannot initiate legislation, but can amend or veto it in many policy areas. In certain other policy areas, it only has the right to be consulted. It also supervises the European Commission; it must approve all appointments to it, and can dismiss it with a vote of censure. It also has the right to control the EU budget. The European Parliament has no power to interfere directly with laws made in any member state country of the EU, though EU laws do supersede laws made at national level.

Other organisations of European countries, such as the Organization for Security and Co-operation in Europe, the Council of Europe, and the Western European Union, have parliamentary assemblies as well, but the members of these assemblies are appointed by national parliaments as opposed to direct election.

The European Parliament represents around 496 million citizens of the EU. Its members are known as Members of the European Parliament (MEPs). Since January 1, 2007, there are 785 MEPs. Since January 1, 2009, The European Parliament has a total of 736 members distributed between member states according to the size of their populations based on the principle of "degressive proportionality". The number will be increased to 754 when a Protocol is approved and ratified by all 27 member states. From 2014 it will be 751 - unless new enlargements may have altered the numbers.

Since 1979 the MEPs have been elected by direct universal voting every five years. There is no uniform voting system for the election of MEPs; rather, each member state is free to choose its own system, subject to three restrictions:

• The system must be a form of proportional representation, under either the party list or Single Transferable Vote system.

• The electoral area may be subdivided if this will not generally affect the proportional nature of the voting system.

• Any election threshold on the national level must not exceed five percent.

The allocation of seats to each member state is based on the principle of degressive proportionality, so that, while the size of the population of each country is taken into account, smaller states elect more MEPs than would be strictly justified by their populations alone. As the number of MEPs granted to each country has arisen from treaty negotiations, there is no precise formula for the apportionment of seats among member states. No change in this configuration can occur without the unanimous consent of all governments.

The Lisbon Treaty has removed the distinction between compulsory and non-compulsory expenditure, thus giving the European Parliament an influence on all budgetary categories. 

The European Parliament now also have greater influence in a greater number of areas as the co-decision procedure is applied in more areas - now called the "ordinary legislative procedure".

With the Lisbon Treaty the seats in the European Parliament are distributed according to the formalised principle of "degressive proportionality" securing each member state at least 6 seats and a maximum of 96 in a Parliament of 751 members - from 2014, where the numbers may have changed again because of new enlargements.  

Here is the table for the different member states.

Table 2.1.

Members of the European Parliament

In December 2008, Government leaders of the EU countries decided in a declaration on how to shift to new numbers of MEP’s. There will be a pause after the Lisbon Treaty enters into force. The number of MEP’s in the 2009-2014 election period will increase to 754, equal to that of the Lisbon Treaty + 3 Members from Germany (99 total).

Observers

It is conventional for countries acceding to the European Union to send a number of observers to Parliament in advance. The number of observers and their method of appointment (usually by national parliaments) is laid down in the joining countries' Treaties of Accession.

Observers may attend debates and take part by invitation, but they may not vote or exercise other official duties. When the countries then become full member states, these observers become full MEPs for the interim period between accession and the next European elections.

In this way, the agreed maximum of 750 parliamentary seats may temporarily be exceeded. For instance, in 2004, the number of seats in the European Parliament was temporarily raised to 788 to accommodate representatives from the ten states that joined the EU on 1 May, but it was subsequently reduced to 732 following the elections in June.

From September 26, 2005 to December 31, 2006, Bulgaria had 18 observers in Parliament and Romania 35. These were selected from government and opposition parties as agreed by the countries' national parliaments. On January 1, 2007, the observers became MEPs (with some personnel changes).

An upcoming European Parliament report is expected to recommend that North Cypriots be allowed to send observers to the Parliament in a speaking, but non-voting, capacity to represent Turkish Cypriots in an effort to open dialogue and ease their isolation. This could also involve making Turkish an official language. This is opposed by the EPP-ED however and has not been made an official proposal yet.^[1] Currently Cyprus is allocated MEPs based upon the population of the whole of the Island however only Greek Cypriots are sitting in Parliament.

Powers and functions

The debating chamber, or "hemicycle", in Strasbourg

In some respects, the European Parliament and the Council of Ministers resemble the upper and lower houses of a bicameral legislature. Neither the Parliament nor the Council may initiate EU legislation, only the Commission can do so, and in this respect the European Parliament is different from most national legislative assemblies.

However, once a proposal for an EU law or directive has been introduced by the Commission, it must usually be approved by both Parliament and Council in order to come into force. The Parliament may amend and block legislation in those policy areas that fall under the codecision procedure, which currently make up about three-quarters of EU legislative acts. Remaining policy areas fall under either the assent procedure or (in a very few cases) the consultation procedure; under the former Parliament may veto but not amend proposals, while under the latter it has only a formal right to be consulted. The Parliament controls the EU budget, which must be approved by the Council in order to become law.

The debating chamber of the European Parliament in Brussels. Translation booths are on the front-side walls.

The President of the European Commission is chosen by the European Council, but must be approved by Parliament before he or she can assume office. The remaining members of the Commission are then appointed by the President, subject to approval of Parliament. Parliament accepts or rejects the Commission (except the President) as a whole.

The European Parliament exerts a function of democratic supervision over all of the EU's activities, particularly those of the Commission. If the Parliament adopts a motion of censure, the entire Commission must resign (formally, Commissioners cannot be censored individually). However, a motion of censure must be approved by at least a two-thirds majority in order to have effect.

Parliament also appoints the European Ombudsman.

Under the proposed new Constitution for Europe, Parliament's powers would be enhanced, with almost all policy areas coming under co-decision, greater powers of democratic scrutiny for Parliament, and control over the whole EU budget.

Location

The European Parliament has monthly sessions in Strasbourg, as required by a protocol attached to the Treaty of Amsterdam. This is unlike the two institutions of the EU's executive, the European Commission and the Council of Ministers, which have their seats in Brussels, which is generally treated as the 'capital' of the EU.

Thus the Parliament is sometimes informally referred to as the 'Strasbourg Parliament', and Strasbourg as the democratic (opposed to bureaucratic) capital of Europe. But for practical reasons, preparatory legislative work and committee meetings take place in Brussels. Moreover, much of the Secretariat of the European Parliament (administration), which employs the majority of its staff, is located in Luxembourg, which itself used to host plenary sessions of the parliament.

The Parliament only spends four days each month in Strasbourg in order to take its final, plenary votes. Additional plenary meetings are held in Brussels. On several occasions, the Parliament has expressed a wish to have the right to choose for itself the location of its seat, and eliminate the two-seat system, but in the successive treaties, EU member state governments have continued to reserve this right for themselves. They abandoned the third seat of Parliament, Luxembourg, two decades ago, but the rival demands of Belgium (Brussels) and France (Strasbourg) to base parliament in their state has prevented a final Treaty as to which city would become the sole seat of parliament.

Moving various files and equipment between the two cities takes 10 large trucks and the costs for two locations are estimated at €200 million a year. A force of 30 people load the trucks for the 400 km journey between the two locations. Around 5,000 people attached to the Parliament, such as parliamentarians, advisors, clerks and journalists, also move between Brussels and Strasbourg. Most of the parliamentarians are against using Strasbourg and various initiatives have been taken over the years to have Brussels as the sole location. The latest of these initiatives was a EU-wide online petition, oneseat.eu. The petition was not accepted.

Organisation

The European Parliament has a number of governing bodies and committees, and a number of delegations to external bodies.

The main offices and governing bodies are:

• President

• Vice-Presidents

• Bureau

• Conference of Presidents

• Quaestors

• Conference of Committee Chairmen - description

• Conference of Delegation Chairmen - description

• Political Groups

List of committees

Internal affairs

External affairs

Political groups and parties

The political parties in the European Parliament are organised into a number of political groupings as well as a number of registered European political parties. However most continue to be members of separate national political parties and discipline within European parties and groupings is not rigid. The makeup of the parliament's groups is fluid, and both national delegations and individual MEPs are free to switch allegiances as they see fit.

European Parliament political groups are distinct from the corresponding European political parties, although they are intimately linked. Usually, the European parties also have member parties from European countries which are not members of the European Union. At the start of Parliament's sixth term in 2004 there were seven groups, as well as a number of non-aligned members, known as non-inscrits.

European Parliament seats by political groups, from 1979 to 2004

As of January 1, 2007 the composition of the European Parliament is:

FOR SELF PREPARATION – NUMBER OF SEATS OF THE EP NOW

2) The Council of Ministers of the eu

The Council of Ministers is a governing body that forms, along with the European Parliament, the legislative arm of the European Union (EU).

The Council of the European Union contains ministers of the governments of each of the European Union member states. It is sometimes referred to in official European Union documents simply as the Council or the Council of Ministers.

The Council is based in Brussels, housed in the Justus Lipsius building and its Working languages are English, French and German. The Council of Ministers meets in Brussels and Luxembourg.

The Council has a President and a Secretary-General. The President of the Council is a Minister of the state currently holding the Presidency of the Council of the European Union; while the Secretary-General is the head of the Council Secretariat, chosen by the member states by unanimity. The Secretary-General also serves as the High Representative for the Common Foreign and Security Policy (CFSP). The Council is assisted by the Committee of Permanent Representatives (COREPER) , which consists of the ambassadors or their deputies from the diplomatic representations of the Member States to the European Communities. COREPER generally prepares the Council agenda, and negotiates minor and non-controversial matters, leaving controversial issues for discussion, and other issues for formal Treaty, by the Council. Below COREPER, civil servants from the member states negotiate in Council working groups, often reaching de facto Treaty which is formalised through COREPER and the Council of Ministers. The Council and its preparatory bodies are supported by European career civil servants (approximately three thousand as of July 2005) providing general advice, qualified legal advice, translation services and impartial negotiation assistance.

The Council of the European Union should be distinguished from the European Council, which meets four times a year in what is informally known as the 'European Summit' (EU summit), and is a closely related but separate body, made up with the heads of state and government of the member states, whose mission is to provide guidance and high level policy to the Council. It is also to be distinguished from the Council of Europe which is a completely separate international organisation (at present 46 states), not a European Union institution.

Role

The Council of the European Union is the main legislative institution of the EU. According to Article 202 of the Maastricht Treaty: to ensure that the objectives set out in this Treaty are attained the Council shall, in accordance with the provisions of this Treaty:.

• ensure coordination of the general economic policies of the Member States,

• have power to take decisions,

• confer on the Commission, in the acts which the Council adopts, powers for the implementation of the rules which the Council lays down. The Council may impose certain requirements in respect of the exercise of these powers. The Council may also reserve the right, in specific cases, to exercise directly implementing powers itself. The procedures referred to above must be consonant with principles and rules to be laid down in advance by the Council, acting unanimously on a proposal from the Commission and after obtaining the opinion of the European Parliament.

In effect, the Council performs the following functions:

• Legislation - the Council passes EU law on the recommendations of the European Commission together with the European Parliament using the Co-Decision Procedure.

• Approval of the EU budget - the Council and the Parliament must agree on the budget.

• Foreign and defence policy - while each member state is free to develop its own foreign and defence policy, the Council seeks to achieve a common foreign and defence policy for the member states.

• Economic policy - the Council also seeks to achieve a common economic policy for the member states.

• Justice - the Council seeks to co-ordinate the justice system of the member states, especially in areas such as terrorism.

Formations

Legally speaking, the Council is a single entity, but it is in practice divided into several different councils that meet in Brussels, each dealing with a different functional area. Each council is attended by a different type of minister. Thus, for example, meetings of the Council in its Agriculture and Fisheries formation are attended by the agriculture ministers of each member state. There are currently nine formations:

• General Affairs and External Relations (GAERC): The most important of the formations, GAERC is composed of ministers for foreign affairs and meets once a month. Since June 2002 it has held separate meetings on general affairs and external relations.

  • The GAERC also coordinates preparation for and follow-up to meetings of the European Council.

  • At its sessions on External Relations, under the context of the Common Foreign and Security Policy, the High Representative for Common Foreign and Security Policy also takes part.

• Economic and Financial Affairs (Ecofin): Composed of economics and finance ministers of the member states.

• Agriculture and Fisheries: One of the oldest configurations, this brings together once a month the ministers for agriculture and fisheries, and the commissioners responsible for agriculture, fisheries, food safety, veterinary questions and public health matters.

• Justice and Home Affairs Council (JHA): This configuration brings together Justice ministers and Interior Ministers of the Member States.

• Employment, Social Policy, Health and Consumer Affairs Council (EPSCO): Composed of employment, social protection, consumer protection, health and equal opportunities ministers.

• Competitiveness: Created in June 2002 through the merging of three previous configurations (Internal Market, Industry and Research). Depending on the items on the agenda, this formation is composed of ministers responsible for areas such as European affairs, industry and scientific research.

• Transport, Telecommunications and Energy: Also created in June 2002, through the merging of three policies under one configuration, and with a composition also varying according to the specific items on its agenda. This formation meets approximately once every two months.

• Environment: Composed of environment ministers, who meet about four times a year.

• Education, Youth and Culture (EYC): Composed of education, culture, youth and communications ministers, who meet around three or four times a year.

Political parties

Almost all of the leaders and ministers of each member state belong to political parties at the national level. Many of these national parties belong to pan-European political parties. However there are no formal political groups or alliances in the Council, and countries led by similar political parties are often not in Treaty on questions that come before the body.

Nonetheless the table below describes the current breakdown of party affiliations in the European Council in terms of the European political alliances with which the leader of each member state is indirectly associated.

3) The European Commission

The Commission is independent of national governments. Its job is to represent and uphold the interests of the EU as a whole. It drafts proposals for new European laws, which it presents to the European Parliament and the Council.

The Commission is the only body in the EU that can propose a new law. This is called the monopoly of the right of initiative. No other organisation or country has established a body with similar competences. The Council can only change a law proposal from the Commission if all member states agree.

It is also the EU’s executive arm – in other words, it is responsible for implementing the decisions of Parliament and the Council. That means managing the day-to-day business of the European Union: implementing its policies, running its programmes and spending its funds.

Like the Parliament and Council, the European Commission was set up in the 1950s under the EU’s founding treaties. The European Commission is based in Brussels.

The term ‘Commission’ is used in two senses. First, it refers to the team of men and women – one from each EU country – appointed to run the institution and take its decisions. Secondly, the term ‘Commission’ refers to the institution itself and to its staff.

Informally, the appointed Members of the Commission are known as ‘commissioners’. They have all held political positions in their countries of origin and many have been government ministers, but as Members of the Commission they are committed to acting in the interests of the Union as a whole and not taking instructions from national governments.

A new Commission is appointed every five years, within six months of the elections to the European Parliament.

The procedure is as follows:

First, a European summit of Prime Ministers appoint a candidate for Commission President. From 2014 the decision will be adopted by 72% of the Prime Ministers also representing 65% of all EU citizens. The candidate must then be approved by the European Parliament by absolute majority in the European Parliament.

Then every member state "suggest" possible names as its commisisoner for the Commission President. The President then consult the prime ministers and the political groups to compose a Commission which shall be adopted by 72% of the member states representing 65% of all EU citizens.

In the end the full college must be elected by an absolute majority of members - MEPs - in the European Parliament. See Art. 17.7 TEU in the Lisbon Treaty.

Art. 214.2.2 TEC in the Nice Treaty can be consulted for the previous procedures where the Commission was formally appointed by a qualified majority - 255 of 345 weigted votes from at least 18 of the 27 Prime Ministers in the European Council and then approved by a simple majority in the European Parliament.

The Lisbon Treaty changed the requirement from simple to absolute majority of MEPs.

The Lisbon Treaty has changed the appointment procedure of Commissioners. Under the Nice Treaty member states "propose" their national commissioners and have an effective right of veto in deciding them.  Under Lisbon the member states will only "suggest" names for decision to the already appointed Commission President.

The Lisbon Treaty provided for a rotation system for Commissioners so that only 2/3 of the member states could be represented  on the Commission at any one  time. This proposal was given up after the Irish referendum on 12 June 2008 rejecting the Lisbon Treaty.

See Art. 17-18 TEU and 244 - 250 TFEU of the Lisbon Treaty. The rules in the Nice Treaty shall be found in the special protocol on enlargement, Art. 4 - page 348 in the reader friendly edition of the Nice Treaty. Here it is mentioned that the following Commission shall be smaller than one from each member state when the EU has reached 27 members. A rotation system shall be adopted unanimously. 

"The number of Members of the Commission shall be set by the Council, acting unanimously". The new system shall replace Art. 213 TEC stating: "The Commission must include at least one national of each of the Member States".

The Commission can be sacked by a two-thirds majority of the European Parliament.

The Commission has a General Secretariat headed by a secretary general and 23 standing Directorates General.

The Commission President is José Manuel Barroso, from Portugal.

The Commission remains politically accountable to Parliament, which has the power to dismiss the whole Commission by adopting a motion of censure. Individual members of the Commission must resign if asked to do so by the President, provided the other commissioners approve.

The Commission attends all the sessions of Parliament, where it must clarify and justify its policies. It also replies regularly to written and oral questions posed by MEPs.

The day-to-day running of the Commission is done by its administrative officials, experts, translators, interpreters and secretarial staff. There are approximately 25 000 of these European civil servants. That may sound a lot, but in fact it is fewer than the number of staff employed by a typical medium-sized city council in Europe. The ‘seat’ of the Commission is in Brussels (Belgium), but it also has offices in Luxembourg, representations in all EU countries and delegations in many capital cities around the world.

The ‘seat’ of the Commission is in Brussels (Belgium), but it also has offices in Luxembourg, representations in all EU countries and delegations in many capital cities around the world.

The European Commission has four main roles:

1. to propose legislation to Parliament and the Council;

2. to manage and implement EU policies and the budget;

3. to enforce European law (jointly with the Court of Justice);

4. to represent the European Union on the international stage, for example by negotiating Treatys between the EU and other countries.

1. Proposing new legislation

The Commission has the ‘right of initiative’. In other words, the Commission alone is responsible for drawing up proposals for new European legislation, which it presents to Parliament and the Council. These proposals must aim to defend the interests of the Union and its citizens, not those of specific countries or industries.

Before making any proposals, the Commission must be aware of new situations and problems developing in Europe and it must consider whether EU legislation is the best way to deal with them. That is why the Commission is in constant touch with a wide range of interest groups and with two advisory bodies – the Economic and Social Committee and the Committee of the Regions. It also seeks the opinions of national parliaments and governments.

The Commission will propose action at EU level only if it considers that a problem cannot be solved more efficiently by national, regional or local action. This principle of dealing with things at the lowest possible level is called the ‘subsidiarity principle’.

If, however, the Commission concludes that EU legislation is needed, then it drafts a proposal that it believes will deal with the problem effectively and satisfy the widest possible range of interests. To get the technical details right the Commission consults experts, via its various committees and groups.

2. Implementing eu policies and the budget

As the European Union's executive body, the Commission is responsible for managing and implementing the EU budget. Most of the actual spending is done by national and local authorities, but the Commission is responsible for supervising it – under the watchful eye of the Court of Auditors. Both institutions aim to ensure good financial management. Only if it satisfied with the Court of Auditors' annual report does the European Parliament grant the Commission discharge for implementing the budget.

The Commission also has to manage the policies adopted by Parliament and the Council, such as the Common Agricultural Policy. Another example is competition policy, where the Commission has the power to authorise or prohibit mergers between companies. The Commission also has to make sure that EU countries do not subsidise their industries in such a way as to distort competition.

Examples of EU programmes managed by the Commission range from the ‘Interreg’ and ‘Urban’ programmes (creating cross-border partnerships between regions and helping regenerate declining urban areas) to the ‘Erasmus’ programme of Europe-wide student exchanges.

3. Enforcing European law

The Commission acts as ‘guardian of the Treaties’. This means that the Commission, together with the Court of Justice, is responsible for making sure EU law is properly applied in all the member states.

If it finds that an EU country is not applying an EU law, and therefore not meeting its legal obligations, the Commission takes steps to put the situation right.

First it launches a process called the ‘infringement procedure’. This involves sending the government an official letter, saying why the Commission considers this country is infringing EU law and setting it a deadline for sending the Commission a detailed reply.

If this procedure fails to put things right, the Commission must then refer the matter to the Court of Justice, which has the power to impose penalties. The Court’s judgments are binding on the member states and the EU institutions.

4. Representing the eu on the international stage

The European Commission is an important mouthpiece for the European Union on the international stage. It enables the member states to speak ‘with one voice’ in international forums such as the World Trade Organisation.

The Commission also has the responsibility of negotiating international Treatys on behalf of the EU. One example is the Cotonou Treaty, which sets out the terms of an important aid and trade partnership between the EU and developing countries in Africa, the Caribbean and the Pacific.

Commission's work organising

It is up to the Commission President to decide which commissioner will be responsible for which policy area, and to reshuffle these responsibilities (if necessary) during the Commission’s term of office.

The Commission meets once a week, usually on Wednesdays in Brussels. Each item on the agenda is presented by the commissioner responsible for that policy area, and the whole team then takes a collective decision on it.

The Commission’s staff is organised in departments, known as ‘Directorates-General’ (DGs) and ‘services’ (such as the Legal Service). Each DG is responsible for a particular policy area and is headed by a Director-General who is answerable to one of the commissioners. Overall coordination is provided by the Secretariat-General, which also manages the weekly Commission meetings. It is headed by the Secretary-General, who is answerable directly to the President.

It is the DGs that actually devise and draft legislative proposals, but these proposals become official only when ‘adopted’ by the Commission at its weekly meeting. The procedure is roughly as follows.

Suppose, for example, that the Commission sees a need for EU legislation to prevent pollution of Europe’s rivers. The Directorate-General for the Environment will draw up a proposal, based on extensive consultations with European industry and farmers, with environment ministries in the member states and with environmental organisations. The draft will also be discussed with other Commission departments and checked by the Legal Service and the Secretariat-General.

Once the proposal is fully ready, it will be put on the agenda of the next Commission meeting. If at least 14 of the 27 commissioners approve the proposal, the Commission will ‘adopt’ it and it will have the whole team’s unconditional support. The document will then be sent to Council and the European Parliament for their consideration.

Limiting the size of the Commission

A Commission with too many members will not work properly and, at present, there is one commissioner from each EU country. Since Bulgaria and Romania joined the European Union, the number has grown to 27 commissioners. This number was fixed by the Council by unanimous decision. But from the next Commission (i.e. in principle as of November 2009), following the accession of the 27th member state, the number of commissionners should be reduced. The final figure remains to be determined by a Council decision. Commissionners will then be appointed by rotation with care being taken to ensure that countries are represented fairly. The aim will be to ensure a clear reflection of the demographic and geographical range of all the Member States.

4) European Court of Justice

The Court of Justice of the EU, usually called the European Court of Justice (ECJ), is the highest court of the European Union (EU). It is based in Luxembourg City, unlike most of the rest of the European Union institutions, which are based in Brussels and Strasbourg.

The ECJ is the highest court of the European Union in matters over which it has competency (below), but no others - EU member states' supreme courts, or equivalent, are the highest courts in their respective jurisdictions in all other matters, as each nation state has its own sovereign and different legal and jurisprudence systems.

The European Court is not a normal court deciding on verdicts on the basis of laws from a parliament. The EU-Court also develops the law. The Court  has established EU law as a constitutional system which has primacy over national laws.

A verdict from the Court may have effects which cannot be changed even if all members of the European Parliament should unanimously desire such chages. An interpretation of the treaties by the Court can only be changed by a new treaty agreed by all 27 governments and then ratified with the support of the 27 national parliaments or by referendums in some countries.

It adjudicates on matters of interpretation of European Union law, most commonly:

• Claims by the European Commission that a member state has not implemented a European Union Directive or other legal requirement.

• Claims by member states that the European Commission has exceeded its authority.

• References from national courts in the EU member states asking the ECJ questions about the meaning or validity of a particular piece of EU law. The Union has many languages and competing political interests, and so local courts often have difficulty deciding what a particular piece of legislation means in a given context. The ECJ will then give its ruling which is binding on the national court, to which the case will be returned to be disposed of. The ECJ is only permitted to aid in interpretation of the law, not decide the facts of the case itself.

Individuals cannot bring cases to the ECJ directly. An individual who is sufficiently concerned by an act of one of the institutions of the European Union can challenge that act in a lower court, called the Court of First Instance. An appeal on points of law lies against the decisions of the Court of First Instance to the ECJ. Employees of the European Commission and other EU institutions currently sue their employer in the Court of First Instance. However, a specialist European Union Civil Service Tribunal was set up in 2005 to deal with these matters. In addition, the creation of a European Union Patent Tribunal is currently being examined.

The Court is only responsible for first pillar (supra-national) issues, where supranational Community law applies,  and is therefore officially called the European Community Court. Under the Treaty of Nice the Court gained competence in some Justice and Home Affairs and consequently may now be called the EU Court.

Organization of the Court of Justice

As of January 2007, the Court of Justice is made up of 27 Judges and 8 Advocates General. Should the Court so request, the Council of the European Union may, acting unanimously, increase the number of Advocates General. The Judges and Advocates General are appointed by common accord of the governments of the member states and hold office for a renewable term of six years. They are chosen from legal experts whose independence is 'beyond doubt' and who possess the qualifications required for appointment to the highest judicial offices in their respective countries or who are of recognised competence.

President

The Judges select one of their number to be President of the Court for a renewable term of three years. He or she may be re-elected. The President directs the judicial business and the administration of the Court; he presides at hearings and deliberations in chambers. He or she assigns the cases to one of the chambers for any preparatory inquiries and appoints a Judge from the chamber to act as rapporteur. He or she sets the dates and timetable for the sessions of the Grand Chamber and of the full Court. The President also personally takes a decision on requests for the application of interim measures.

Judges

Each member state of the European Union has the power to nominate one judge, so their number coincides most of the time with the number of member states. However, as the ECJ can only sit with an uneven number of judges, additional judges have been appointed at times when there was an even number of member states.

Advocates General

Advocates General play a special role within the Court of Justice. They are neither judge nor prosecutor, yet they assist with each case and deliver their opinions on questions.

The Advocates-General assist the Court in its task. They deliver, in open court and with complete impartiality and independence, opinions in all cases, save as otherwise decided by the Court where a case does not raise any new points of law. Their duties should not be confused with those of a public prosecutor or similar body.

Although the Advocates General are full members of the ECJ, it is important to note that they are not judges and they do not take part in the court's deliberations. It is the role of the Advocates General to propose to the Court, in complete independence, a legal solution to the cases for which they are responsible. The Advocate General’s Opinion, although often in fact followed, is not binding on the Court.

5 of the 8 Advocates General are nominated as of right by the 5 big member states of the European Union: Germany, France, the United Kingdom, Italy and Spain. The other 3 positions rotate in alphabetical order between the 20 smaller member states; currently (2007), Slovenia, Slovakia and Portugal are thus represented. However, being only a little smaller than Spain, Poland has repeatedly requested a permanent Advocate General.

Registry

The Court appoints the Registrar for a period of six years, after which he may be reappointed. He or she has the same court duties as the registrar or clerk of a national court, but also acts as secretary-general of the institution. The Court may also appoint one or more Assistant Registrars. He or she helps the Court, the Chambers, the President and the Judges in all their official functions. He or she is responsible for the Registry as well as for the receipt, transmission and custody of documents and pleadings which have been entered in a register initialled by the President. He or she is Guardian of the Seals and is responsible for the Court's archives and publications. The Registrar is responsible for the administration of the Court, its financial management and its accounts, and he is helped by an administrator.

The operation of the Court is in the hands of officials and other servants who are responsible to the Registrar under the authority of the President. The Court administers its own infrastructure; this includes the language service, which plays a particularly important role.

Assistant Rapporteurs

Assistant Rapporteurs may be appointed by the Council, on a proposal from the Court, particularly to assist the President in applications for the adoption of interim measures and to assist Judge-Rapporteurs in the performance of their duties.

Plenary sessions and chambers

The Court of Justice may sit as a full Court, in a Grand Chamber (13 Judges) or in chambers of three or five Judges. It sits in a Grand Chamber when a Member State or a Community institution that is a party to the proceedings so requests, or in particularly complex or important cases. Other cases are heard by a chamber of three or five Judges. The Presidents of the chambers of five Judges are elected for three years, the Presidents of the chambers of three Judges for one year. The Court sits as a full Court in the very exceptional cases exhaustively provided for by the Treaty (for instance, where it must compulsorily retire the European Ombudsman or a Member of the European Commission who has failed to fulfil his obligations) and where the Court considers that a case is of exceptional importance. The quorum for the full Court is 15.

Jurisdiction

It is the responsibility of the Court of Justice to ensure that the law is observed in the interpretation and application of the Treaties of the European Union and of the provisions laid down by the competent Community institutions. To enable it to carry out that task, the Court has wide jurisdiction to hear various types of action. The Court has competence, inter alia, to rule on applications for annulment or actions for failure to act brought by a Member State or an institution, actions against Member States for failure to fulfil obligations, references for a preliminary ruling and appeals against decisions of the Court of First Instance.

Forms of action Actions for failure to fulfil obligations

Such proceedings enable the Court of Justice to determine whether a Member State has fulfilled its obligations under Community law. The commencement of proceedings before the Court of Justice is preceded by a preliminary procedure conducted by the Commission, which gives the Member State the opportunity to reply to the complaints against it. If that procedure does not result in termination of the failure by the Member State, an action for breach of Community law may be brought before the Court of Justice. That action may be brought by the Commission – as is practically always the case – or by another Member State. If the Court finds that an obligation has not been fulfilled, the Member State concerned must terminate the breach without delay. If, after new proceedings are initiated by the Commission, the Court of Justice finds that the Member State concerned has not complied with its judgment, it may, upon the request of the Commission, impose on the Member State a fixed or a periodic financial penalty.

Actions for annulment

By an action for annulment, the applicant seeks the annulment of a measure adopted by an institution (regulations, directives, decisions). An action for annulment may be brought by a Member State, by the Community institutions (Parliament, Council, Commission) or by individuals to whom a measure is addressed or which is of direct and individual concern to them.

Actions for failure to act

The Court of Justice and the Court of First Instance may also review the legality of a failure to act on the part of a Community institution. However, such an action may be brought only after the institution has been called on to act. Where the failure to act is held to be unlawful, it is for the institution concerned to put an end to the failure by appropriate measures.

Application for compensation

In applications for compensation, based on non-contractual liability, the Court of First Instance rules on the liability of the Community for damage caused to citizens and to undertakings by its institutions or servants in the performance of their duties.

Appeals

Lastly, appeals on points of law only may be brought before the Court of Justice against judgments given by the Court of First Instance. If the appeal is admissible and well founded, the Court of Justice sets aside the judgment of the Court of First Instance. Where the state of the proceedings so permits, the Court may itself decide the case. Otherwise, the Court must refer the case back to the Court of First Instance, which is bound by the decision given on appeal.

References for a preliminary ruling

References for a preliminary ruling are specific to Community law. Whilst the Court of Justice is, by its very nature, the supreme guardian of Community legality, it is not the only judicial body empowered to apply Community law.

That task also falls to national courts, in as much as they retain jurisdiction to review the administrative implementation of Community law, for which the authorities of the Member States are essentially responsible; many provisions of the Treaties and of secondary legislation - regulations, directives and decisions - directly confer individual rights on nationals of Member States, which national courts must uphold. National courts are thus by their nature the first guarantors of Community law. To ensure the effective and uniform application of Community legislation and to prevent divergent interpretations, national courts may, and sometimes must, turn to the Court of Justice and ask that it clarify a point concerning the interpretation of Community law, in order, for example, to ascertain whether their national legislation complies with that law.

A reference for a preliminary ruling may also seek review of the legality of an act of Community law. The Court of Justice’s reply is not merely an opinion, but takes the form of a judgment or a reasoned order. The national court to which that is addressed is bound by the interpretation given. The Court’s judgment also binds other national courts before which a problem of the same nature is raised. References for a preliminary ruling also serve to enable any European citizen to seek clarification of the Community rules which concern him. Although such a reference may be made only by a national court, which alone has the power to decide that it is appropriate do so, all the parties involved – that is to say, the Member States, the parties in the proceedings before national courts and, in particular, the Commission – may take part in proceedings before the Court of Justice. In this way, a number of important principles of Community law have been laid down in preliminary rulings, sometimes in answer to questions referred by national courts of first instance.

Both the Court of Justice and the Court of First Instance have their seats in Luxembourg.

At the conference of July 23, 1952 involving the founder Members of the European Coal and Steel Community, Luxembourg was chosen as the provisional seat for the Court of Justice. Its first hearing was held on October 28, 1954.

The Decision taken by the representatives of the governments of the Member States on April 8, 1965 (relating to the provisional location of certain Community institutions and services) provided for the Court to remain in Luxembourg. That Treaty was confirmed by the Decision by common accord of the representatives of governments of the Member States at the Edinburgh European Council on 12 December 1992 (relating to the seats of the institutions and certain bodies and departments of the European Communities). Pursuant to Article 1, the Court of Justice and the Court of First Instance have their seats in Luxembourg.

The 1965 Decision stated that future jurisdictional and quasi-jurisdictional bodies would be located in Luxembourg, although that paragraph was not included in the 1992 Decision. Accordingly, in a unilateral declaration, Luxembourg did not renounce the provisions and potentialities of the Decision of 1965. A Protocol on the seats of the institutions was annexed to the treaties by the Treaty of Amsterdam of 2 October 1997. It confirmed the Edinburgh Decision. In a Luxembourg Government Declaration appended to the Treaty of Nice of February 26, 2001, the Grand Duchy undertook not to claim the Seat of the Boards of Appeal of the Office for Harmonisation in the Internal Market, even if such boards were to become judicial panels.

Legacy

The ECJ is feared by some Eurosceptics, due to its ruling in 2001 that parts of the German Constitution were illegal as being incompatible with the EU treaties. The ECJ has ruled, several times, that the law of the European Communities (consisting of regulations, directives, treaties) is supreme to any member state laws.

Within the procedure for infringement proceedings initiated by the European Commission, the ECJ has the power to declare any national law or rule as inconsistent with a law of the European Community, or the Treaty itself, which as a consequence means that the national rule is inapplicable. This practice remained relatively unnoticed since the inception of the European Communities, and has only in recent years attracted scrutiny.

The Lisbon Treaty makes the Charter of Fundamental Rights legally binding. Therefore the EU Court has the potential of becoming a rival to the Human Rights Court in Strasbourg -  both being courts which will be dealing with human rights issues. It also provides for the EU Court to accede to the European Convention on Human Rights, which is currently interpreted by the Court of Human Rights in Strasbourg.

The Lisbon Treaty increases the competences of the EU Court and make it possible to establish new specialised courts with qualified majority.

5) The European Court of Auditors

The European Court of Auditors is one of five institutions of the European Union. Its "mission is to audit independently the collection and spending of European Union funds and, through this, assess the way that the European institutions discharge these functions".

Overview

The Court of Auditors checks that all the Union's revenue has been received and all its expenditure incurred in a lawful and regular manner and that the EU budget has been managed soundly. The Court was established on 22 July 1975 by the Budgetary Treaty of 1975. The Court started operating as an external Community audit body in October 1977 in Luxembourg. Since the Treaty of Maastricht the European Court of Auditors has been recognised as one of the institutions of the European Communities.

The Court has one member from each EU country, appointed by the Council for a renewable term of six years. Even after enlargement there will still be one member per EU country but, for the sake of efficiency, the Court can set up "chambers" (with only a few members each) to adopt certain types of report or opinion.

In their countries of origin, the members of the Court have all worked for an auditing institution or are specifically qualified for that work. They are chosen for their competence and independence, and they work full-time for the Court.

The members elect one of their number as President for a term of three years.

Function

The Court's main role is to check that the EU budget is correctly implemented — in other words, that EU income and expenditure is legal and above board and to ensure sound financial management. So its work helps guarantee that the EU system operates efficiently and openly.

To carry out its tasks, the Court investigates the paperwork of any organisation handling EU income or expenditure. If need be, it carries out on-the-spot checks. Its findings are written up in reports which draw the attention of the Commission and the member states to any problems.

To do its job effectively, the Court of Auditors must remain independent of the other institutions but at the same time stay in constant touch with them.

One of its key functions is to help the budgetary authority (the European Parliament and the Council) by presenting them every year with a report on the previous financial year. The comments it makes in this annual report play a very important role in Parliament's decision whether or not to approve the Commission's handling of the budget. If satisfied, the Court of Auditors also sends the Council and Parliament a statement of assurance that European taxpayers' money has been properly used.

Finally, the Court of Auditors gives an opinion before the EU's financial regulations are adopted. It can comment at any time on specific issues, or it can give an opinion at the request of one of the EU institutions.

Organization of work

The Court of Auditors works independently, and is free to decide how to schedule its auditing activities, how and when to present its observations, and what publicity to give to its reports and opinions.

It has approximately 760 qualified staff, of whom about 250 are auditors. The auditors are divided into "audit groups". They prepare draft reports on which the Court takes decisions.

The auditors frequently go on tours of inspection to the other EU institutions, the member states and any country that receives aid from the EU. Indeed, although the Court's work largely concerns money for which the Commission is responsible, in practice 90% of this income and expenditure is managed by the national authorities.

The Court of Auditors has no legal powers of its own. If auditors discover fraud or irregularities they pass the information as quickly as possible to the EU bodies responsible, so they can take the appropriate action. For twelve years in a row the European Court of Auditors has refused to sign off the EU accounts,[1] stating that they cannot verify the location of 65% of EU funds, although independent financial experts place the figure at 93.4%. A large amount of the endemic fraud in the EU comes from CAP with funds disappearing in the Balkans and Russia.The court suggested that EU staff were abusing the disability system on a large scale, costing taxpayers £54 million a year. Half the claimants had psychological or stress-related complaints. A court official said: "These are not coal miners or deep-sea fishermen. It's not normal for so many to retire for ill-health."

6) European Economic and Social Committee

Founded in 1957 under the Treaty of Rome, the European Economic and Social Committee (EESC) is an advisory body representing employers, trade unions, farmers, consumers and the other interest groups that collectively make up ‘organised civil society’. It presents their views and defends their interests in policy discussions with the Commission, the Council and the European Parliament.

So the EESC is a bridge between the Union and its citizens, promoting a more participatory, more inclusive and therefore more democratic society in Europe.

The Committee is an integral part of the EU’s decision-making process: it must be consulted before decisions are taken on economic and social policy. On its own initiative, or at the request of another EU institution, it may also give its opinion on other matters.

The EESC has 344 members – the number from each EU country roughly reflecting the size of its population. The numbers per country are as follows:

The members are nominated by the EU governments but they work in complete political independence. They are appointed for four years, and may be re-appointed.

The Committee meets in Plenary Assembly, and its discussions are prepared by six subcommittees known as ‘sections’, each dealing with particular policy areas. It elects its President and two Vice-Presidents for a two-year term. Dimitris Dimitriadis, from Greece, became President of the EESC in October 2006.

The European Economic and Social Committee has three main roles:

• to advise the Council, Commission and European Parliament, either at their request or on the Committee’s own initiative;

• to encourage civil society to become more involved in EU policymaking;

• to bolster the role of civil society in non-EU countries and to help set up advisory structures.

Working mostly in their countries of origin, the members of the Committee form three groups that represent employers, workers and various economic and social interests.

The Employers' Group has members from private and public sectors of industry, small and medium-sized businesses, chambers of commerce, wholesale and retail trade, banking and insurance, transport and agriculture.

The Workers’ Group represents all categories of employees, from manual to executive. Its members come from national trade union organisations.

The third group represents a wide range of interests: NGOs, farmers' organisations, small businesses, crafts and professions, cooperatives and non-profit Communitys, consumer and environmental organisations, the scientific and academic communities and Communitys that represent the family, women, persons with disabilities, etc.

7) Committee of the Regions

Set up in 1994 under the Treaty on European Union, the Committee of the Regions (CoR) is an advisory body composed of representatives of Europe’s regional and local authorities. The CoR has to be consulted before EU decisions are taken on matters such as regional policy, the environment, education and transport – all of which concern local and regional government.

The Committee has 344 members. The number from each member state approximately reflects its population size, as follows:

The members of the Committee are elected municipal or regional politicians, often leaders of regional governments or mayors of cities.

They are nominated by the EU governments but they work in complete political independence. The Council of the European Union appoints them for four years, and they may be reappointed. They must also have a mandate from the authorities they represent, or must be politically accountable to them.

The Committee of the Regions chooses a President from among its members, for a term of two years. Luc Van den Brande, from Belgium, was elected President in February 2008.

The role of the Committee of the Regions is to put forward the local and regional points of view on EU legislation. It does so by issuing opinions on Commission proposals.

The Commission and the Council must consult the Committee of the Regions on topics of direct relevance to local and regional authorities, but they can also consult the Committee whenever they wish. For its part, the Committee can adopt opinions on its own initiative and present them to the Commission, Council and Parliament.

Each year the Committee of the Regions holds five plenary sessions, during which its general policy is defined and opinions are adopted.

The members of the Committee are assigned to specialist ‘commissions’ whose job is to prepare the plenary sessions. There are six commissions:

• Commission for Territorial Cohesion Policy (COTER)

• Commission for Economic and Social Policy (ECOS)

• Commission for Sustainable Development (DEVE)

• Commission for Culture and Education (EDUC)

• Commission for Constitutional Affairs and European Governance (CONST)

• Commission for External Relations (RELEX).

8) The European Central Bank

The European Central Bank (ECB) was set up in 1998, under the Treaty on European Union, and it is based in Frankfurt (Germany). Its job is to manage the euro – the EU’s single currency. The ECB is also responsible for framing and implementing the EU’s economic and monetary policy.

To carry out its role, the ECB works with the European System of Central Banks (ESCB), which covers all 27 EU countries. However, only 13 of these countries have so far adopted the euro. The 13 collectively make up the ‘euro area’ and their central banks, together with the European Central Bank, make up what is called the ‘Eurosystem’.

The ECB works in complete independence. Neither the ECB, the national central banks of the Eurosystem, nor any member of their decision-making bodies can ask for or accept instructions from any other body. The EU institutions and member state governments must respect this principle and must not seek to influence the ECB or the national central banks.

The ECB, working closely with the national central banks, prepares and implements the decisions taken by the Eurosystem’s decision-making bodies - the Governing Council, the Executive Board and the General Council.

One of the ECB’s main tasks is to maintain price stability in the euro area, so that the euro’s purchasing power is not eroded by inflation. The ECB aims to ensure that the year-on-year increase in consumer prices is less than 2%.

It does this in two ways:

• First, by controlling the money supply. If the money supply is excessive compared to the supply of goods and services, inflation will result.

• Second, by monitoring price trends and assessing the risk they pose to price stability in the euro area

Controlling the money supply involves, amongst other things, setting interest rates throughout the euro area. This is perhaps the Bank’s best-known activity.

The European Central Bank’s work is organised via the following decision-making bodies.

The Executive Board

This comprises the President of the ECB, the Vice-President and four other members, all appointed by common Treaty of the presidents or prime ministers of the euro area countries. The Executive Board members are appointed for a non-renewable term of eight years.

The Executive Board is responsible for implementing monetary policy, as defined by the Governing Council (see below), and for giving instructions to the national central banks. It also prepares the Governing Council meetings and is responsible for the day-to-day management of the ECB.

The Governing Council

The Governing Council is the European Central Bank's highest decision-making body. It comprises the six members of the Executive Board and the governors of the 12 central banks of the euro zone. It is chaired by the President of the ECB. Its primary mission is to define the monetary policy of the euro zone, and, in particular, to fix the interest rates at which the commercial banks can obtain money from the Central Bank.

The General Council

The General Council is the ECB’s third decision-making body. It comprises the ECB’s President and the Vice-President and the governors of the national central banks of all 27 EU member states. The General Council contributes to the ECB's advisory and coordination work and helps prepare for the future enlargement of the euro zone.

9) European Investment Bank

The European Investment Bank (EIB) was set up in 1958 by the Treaty of Rome as the long-term lending Bank of the European Union. The EIB lends money to the public and private sectors for projects of European interest, such as:

• Cohesion and convergence of EU regions

• Support for small and medium-sized enterprises

• Environmental schemes

• Research, development and innovation

• Transport

• Energy

The EIB is active in the EU and in some 140 countries worldwide with which the EU has a Cooperation Treaty.

Philippe Maystadt, from Belgium, became President of the EIB on 1 January 2000.

The EIB is a non-profit, policy driven bank. Unlike commercial banks, the EIB does not manage personal bank accounts, conduct over-the-counter transactions or provide private investment advice. The EIB makes long-term loans for capital investment projects (mainly fixed assets) but does not provide grants.

The EIB is owned by the Member States of the European Union. They subscribe jointly to its capital, each country’s contribution reflecting its economic weight within the Union. The EIB does not use any funds from the EU budget. Instead, it is self-financing, borrowing on the financial markets

Because the EU Member States are the EIB’s shareholders, it carries the highest possible credit rating (AAA) on the money markets. As a result, the EIB can raise large amounts of capital on very competitive terms. As the EIB is not-for –profit, its lending conditions are equally favourable. The EIB cannot however lend anymore than 50% of the total cost of an individual project.

The projects the Bank invests in are carefully selected according to the following criteria:

• they must help achieve EU objectives;

• they must be economically, financially, technically and environmentally sound;

• they should help attract other sources of funding.

The EIB also supports sustainable development in the candidate and potential candidate countries, in EU neighbour countries to the south and to the east, and in partner countries elsewhere.

The EIB is the majority shareholder in the European Investment Fund.

The EIB is an autonomous institution. It makes its own borrowing and lending decisions purely on the merits of each project and the opportunities offered by the financial markets. As a transparent institution, the Bank reports widely on all its activities.

The EIB maintains close working ties with the family of EU institutions in pursuit of the Community’s objectives. Most notably, the Bank is represented at a number of committees of the European Parliament, and the Ecofin Council of Ministers.

The Bank’s decisions are taken by the following statutory bodies:

• The Board of Governors consists of ministers (normally the Finance Ministers) from all the EU Member States. It defines the Bank’s general lending policy, approves the balance sheet and annual report, authorises the Bank to fund projects outside the EU and decides on capital increases.

• The Board of Directors approves lending and borrowing operations and ensures the proper management of the EIB. It consists of 28 Directors – one nominated by each EU Member State and one by the European Commission.

• The Management Committee is the Bank’s full-time executive. It handles the EIB’s day-to-day business and it has nine members.

• The Audit Committee is an independent body answerable directly to the Board of Governors and responsible for verifying that the operations of the Bank have been conducted and its books kept in a proper manner.

10) The European Ombudsman

The position of European Ombudsman was created by the Treaty on European Union (Maastricht, 1992). An ombudsman is a civil servant who considers complaints from ordinary citizens against the public authorities. He is entitled to receive and investigate complaints from EU citizens, businesses and organsations, and from anyone residing or having their registered office in an EU country.

The Ombudsman is elected by the European Parliament for a renewable term of five years, which corresponds to Parliament's legislative term. Nikiforos Diamandouros, the former national ombudsman of Greece, took up the post of European Ombudsman in April 2003 and was re-elected in January 2005 for a five-year term.

He helps to uncover ‘maladministration’ in the European Union institutions and bodies. ‘Maladministration’ means poor or failed administration – in other words, when an institution fails to act in accordance with the law, or fails to respect the principles of good administration, or violates human rights. Some examples of unfairnessare:

• unfairness,

• discrimination,

• abuse of power,

• lack or refusal of information,

• unnecessary delay,

• incorrect procedures.

The Ombudsman carries out investigations following a complaint or on his own initiative. He operates completely independently and impartially. He does not request or accept instructions from any government or organisation.

Other structures

Interinstitutional bodies of the eu

The Publications Office

The full name of this body is the Office for Official Publications of the European Communities. It acts as the publishing house for the EU institutions, producing and distributing all official European Union publications, on paper and in digital form.

European Personnel Selection Office

The European Personnel Selection Office (EPSO) became operational in January 2003. Its task is to set competitive examinations for recruiting staff to work in all the EU institutions. This is more efficient than having each institution organise its own recruitment competitions. EPSO’s annual budget of roughly €21 million is 11% less than what the EU institutions used to spend on recruitment.

European Administrative School

The European Administrative School (EAS) was set up on 10 February 2005. Its task is to provide training in specific areas for members of EU staff. Its courses are open to staff of all the EU institutions, thereby helping spread common values, promoting better understanding among EU staff and achieving economies of scale. It works in close cooperation with the training departments of all the institutions to avoid any duplication of effort.

Agencies of the eu

A number of specialised and decentralised EU agencies have been established to support the EU Member States and their citizens. These agencies are an answer to a desire for geographical devolution and the need to cope with new tasks of a legal, technical and/or scientific nature.The EU’s agencies are grouped into 4 different categories:

1) Community agencies A Community agency is a body governed by European public law; it is distinct from the Community Institutions (Council, Parliament, Commission, etc.) and has its own legal personality. It is set up by an act of secondary legislation in order to accomplish a very specific technical, scientific or managerial task, in the framework of the European Union’s “first pillar”.

At present, the European Community agencies are:

Community Fisheries Control Agency (CFCA)

Community Plant Variety Office (CPVO)

European Agency for Reconstruction (EAR)

European Agency for Safety and Health at Work (EU-OSHA)

European Agency for the Management of Operational Cooperation at the External Borders (FRONTEX)

European Aviation Safety Agency (EASA)

European Centre for Disease Prevention and Control (ECDC)

European Centre for the Development of Vocational Training (Cedefop)

European Chemicals Agency (ECHA)

European Environment Agency (EEA)

European Food Safety Authority (EFSA)

European Foundation for the Improvement of Living and Working Conditions (EUROFOUND)

European Fundamental Rights Agency (FRA) - previously EUMC

European GNSS Supervisory Authority (GSA)

European Institute for Gender Equality (under preparation)

European Joint Undertaking for ITER and the Development of Fusion Energy (Fusion for Energy)

European Maritime Safety Agency (EMSA)

European Medicines Agency (EMEA)

European Monitoring Centre for Drugs and Drug Addiction (EMCDDA)

European Network and Information Security Agency (ENISA)

European Railway Agency (ERA)

European Training Foundation (ETF)

Office for Harmonisation in the Internal Market (Trade Marks and Designs) (OHIM)

Translation Centre for the Bodies of the European Union (CdT)

2) Common Foreign and Security Policy agencies Agencies have been set up to carry out very specific technical, scientific and management tasks within the framework of European Union’s Common Foreign and Security Policy (CFSP) – the "second pillar" of the EU.

At present, these agencies are:

European Defence Agency (EDA)

European Union Institute for Security Studies (ISS)

European Union Satellite Centre (EUSC)

3) Police and judicial cooperation in criminal matters agencies Another group of agencies has been set up to help the EU Member States co-operate in the fight against organised international crime. This co-operation in criminal matters is the "third pillar" of the EU.

At present, these agencies are:

European Police College (CEPOL)

European Police Office (EUROPOL)

The European Union’s Judicial Cooperation Unit ( EUROJUST )

4) Executive agencies Executive agencies are organisations established in accordance with Council Regulation (EC) No 58/2003 (OJ L 11, 16.1.2003) with a view to being entrusted with certain tasks relating to the management of one or more Community programmes. These agencies are set up for a fixed period. Their location has to be at the seat of the European Commission (Brussels or Luxembourg).

At present, these agencies are:

Education, Audiovisual and Culture Executive Agency (EACEA)

European Research Council Executive Agency (ERC) (under preparation)

Executive Agency for Competitiveness and Innovation (EACI)

Executive Agency for the Public Health Programme (PHEA)

Research Executive Agency (REA)

Trans-European Transport Network Executive Agency (TEN-TEA)

The European Data Protection Supervisor

The position of European Data Protection Supervisor (EDPS) was created in 2001. The responsibility of the EDPS is to make sure that all EU institutions and bodies respect people’s right to privacy when processing their personal data.

When EU institutions or bodies process personal data about an identifiable person, they must respect that person’s right to privacy. The EDPS makes sure they do so, and advises them on all aspects of personal data processing.

‘Processing’ covers activities such as collecting information, recording and storing it, retrieving it for consultation, sending it or making it available to other people, and also blocking, erasing or destroying data.

There are strict privacy rules governing these activities. For example, EU institutions and bodies are not allowed to process personal data that reveals your racial or ethnic origin, political opinions, religious or philosophical beliefs or trade-union membership. Nor may they process data on your health or sex life, unless the data is needed for health care purposes. Even then, the data must be processed by a health professional or other person who is sworn to professional secrecy.

The EDPS works with the Data Protection Officers in each EU institution or body to ensure that the date privacy rules are applied.

The articles are European Parliament; Advice of European Union; European Commission; Court of European Union; The court of public accountants is considered in reference Book from European Union (Donetsk: DONNUET, in 2010).

Separate consideration of additional bodies of the EU is presented|represent| in reference Book from European Union|conjunction| (Donetsk: DONNUET, in 2010).

2.3. Principles of the eu legal system construction

The Law of the European Union is the unique legal system which operates alongside the laws of Member States of the European Union (EU). EU law has direct effect within the legal systems of its Member States, and overrides national law in many areas, especially in terms of economic and social policy. The EU is not a federal government, nor is it an intergovernmental organization. It constitutes a new legal order in international law for the mutual social and economic benefit of the Member States. It is sometimes classified as supranational law.

European Union law has evolved gradually over the last 56 years. When the Treaty of Paris was signed in 1951, it established the European Coal and Steel Community, and comprised just six Member States. Five years later the European Economic Community was founded by the same six Member States. As of 2007, there are around 500 million EU citizens in 27 Member States subject to EU law, making it one of the most encompassing modern legal systems in the world.

EU law has what is known as a three pillar structure. The first, oldest and most important 'pillar' deals with law concerning economic and social rights and how European institutions are set up. This is found in the Treaty of the European Communities, signed in Rome 1957 and subsequently amended by other Treaties concluded between the Member States. The second and third pillars were established under the Treaty of the European Union, signed in Maastricht 1992. The second pillar concerns the European Union Common Foreign and Security Policy (CFSP). The third pillar concerns Police and Judicial Co-operation in Criminal Matters (formerly 'Justice and Home Affairs'). Technically speaking, "EC law" denotes anything to do with the first pillar and "EU law" denotes the law regarding all three pillars.

History and development

Initially, the Consultation procedure was the primary interplay of the institutions. Under it, Council must wait (unless it initiates an emergency procedure) for the EP’s opinion before adopting the legislation. This possibility for delay was in the early days the EP’s only weapon.

The role of the European Parliament in this institutional triangle has been gradually strengthened. Major landmarks in this gradual strengthening process have been

• the transferral of budget responsibilities during the early 70s,

• the first direct elections in 1979,

• the introduction of the Cooperation procedure with the Single European Act (1986/87) and

• the codecision procedure with the Maastricht Treaty (1993/93), whose scope was expanded considerably by the Treaty of Amsterdam (1997/99) and the Treaty of Nice (2001).

The development of law of the European Community has been largely moulded by the European Court of Justice (ECJ). In the landmark case of Van Gend en Loos in 1963, the ECJ ruled that the European Community, through the will of Member States expressed in the Treaty of Rome, "constitutes a new legal order of international law for the benefit of which the states have limited their sovereign rights albeit within limited fields."

The distinction between European Community (EC) law and European Union law is that based on the Treaty structure of the European Union. The European Community constitutes one of the 'three pillars' of the European Union and concerns the social and economic foundations of the single market. The second and the third pillars were created by the Treaty of the European Union (the Maastricht Treaty) and involve Common Security and Defence Policy and Internal Security. Decision-making under the second and third pillars is not subject to majority voting at present. The Maastricht Treaty created the Justice and Home Affairs pillar as the third pillar. Subsequently, the Treaty of Amsterdam transferred the areas of illegal immigration, visas, asylum, and judicial co-operation to the European Community (the first pillar). Now Police and Judicial Co-operation in Criminal Matters is the third pillar. Justice and Home Affairs now refers both to the fields that have been transferred to the EC and the third pillar.

Several principles such as subsidiarity, proportionality, the principle of conferral, and the precautionary principle have become prominent in the development of European Union law. Scholars such as Catherine Barnard argue that the Four Freedoms form the substantive law of the EU: free movement of goods, services, capital, and labour within the internal market of the EU.

Criminal law

In 2006, a toxic waste spill off the coast of Côte d'Ivoire, from a European ship, prompted the Commission to look into legislation against toxic waste. Environment Commissioner Stavros Dimas stated that "Such highly toxic waste should never have left the European Union". With countries such as Spain not even having a crime against shipping toxic waste Franco Frattini, the Justice, Freedom and Security Commissioner, proposed with Dimas to create criminal sentences for "ecological crimes". His right to do this was contested in 2005 at the Court of Justice resulting in a victory for the Commission. That ruling set a precedent that the Commission, on a supranational basis, may legislate in criminal law - something never done before to outlined in treaties. So far though, the only other use has been the intellectual property rights directive.^[2] Motions were tabled in the European Parliament against that legislation on the basis that criminal law should not be an EU competence, but was rejected at vote.^[3] However in October 2007 the Court of Justice ruled the Commission could not propose what the criminal sanctions could be, only that there must be some.^[4]

Treaties

The primary legislation, or treaties, are effectively the constitutional law of the European Union. They are created by governments from all EU Member States acting by consensus. They lay down the basic policies of the Union, establish its institutional structure, legislative procedures, and the powers of the Union. The Treaties that make up the primary legislation include:

The various annexes and protocols attached to these Treaties are also considered a source of primary legislation. The heads of State and government of the member states of European Union signed a constitution in 2004, but it has not yet been ratified by the Member States and as of March 2007 it was unclear if it would be ratified.

Passing of laws

European laws are passed by the EU institutions through a number of procedures. In nearly all cases the European Commission (the executive branch) has a monopoly on legislative initiative. In such situation the Commission sends draft legislation to the Council of the European Union and European Parliament for amendments and approval. The former body is composed of national government ministers and the latter by directly elected politicians.

There are three main legislative procedures in the EU, with the main difference between them being how the European Parliament interacts with the Council of the European Union. These are the Codecision procedure, Assent procedure and the Consultation procedure.

Institutional acts

The European Parliament, the Commission and the Council of Ministers are empowered by the Treaties to legislate on all matters within the EU's competence.^[6] Examples of this secondary legislation are regulations, directives, decisions, recommendations and opinions. Secondary legislation also includes inter-institutional Treaties, which are Treaties made between European Union institutions clarifying their respective powers, especially in budgetary matters. The Parliament, Commission and Council are capable of entering into such Treaties.

The classification of legislative acts varies among the First, Second and Third Pillars. In the case of the first pillar: Secondary legislation is classified based on to whom it is directed, and how it is to be implemented. Regulations and directives bind everyone, while decisions only affect the parties to whom they are addressed (which can be individuals, corporations, or member states). Regulations have direct effect, i.e. they are binding in and of themselves as part of national law, while directives require implementation by national legislation to be effective. However, states that fail or refuse to implement directives as part of national law can be fined by the European Court of Justice.

Directives and regulations can comprise of a mixture of maximum harmonisation and minimum harmonisation clauses, and can be enforced on either a home state or a host state basis. All EU legislation must be based on a specific Treaty article, which is referred to as the "legal basis" of the legislation. The European Constitution would have codified EU law and reduced secondary legislation to six clear types: EU laws, EU framework laws, decisions, regulations, recommendations and opinions.

Courts

The European Court of Justice (ECJ), has jurisdiction in various specific matters, conferred on it by the Treaties. In particular Article 220 EC charges the ECJ (and the Court of First Instance) with ensuring that the law is observed "in the interpretation and application of this Treaty", and this provision has been used by the Court to extend its powers beyond those otherwise expressly granted. Since the Maastricht Treaty, the Court has been empowered to impose pecuniary penalties on Member States who disobey.^[9] The Court has been instrumental in shaping law in the EU, and its approach is generally described as purposive or teleological. The jurisprudence of the Court, together with that of the courts of the member states, has established and defined a number of principles of European Union law, which bind EU institutions and member states, including direct effect, the supremacy of European Union law over that of Member states, and state liabilty for damages.

According to the Treaty, the Court comprises one judge per member state; as of 2007 it has 27 judges. The judges are appointed "by common accord of the Governments of the Member states". The judges are appointed for a (renewable) period of six years.^[13] The Court is assisted by eight Advocates General. The Court usually sits in Chambers of three or five, but in some cases as a single judge, in especially important cases as a Grand Chamber of thirteen judges or as a full court.

The Court of First Instance (CFI) was established on the basis of the Single European Act in 1988 and was originally "attached to" the ECJ in a subsidiary role. Following the Treaty of Nice it was given greater independence and its own jurisdiction. The jurisdiction of the CFI includes direct actions by natural or legal persons against Community institutions for their acts (or failure to act), actions by Member states against the Commission, and actions relating to Community trade marks.

According to the Treaty, the court comprises at least one judge per member state; as of 2007 it has 27 judges. The judges are appointed for a (renewable) period of six years. ^[19] Like the ECJ, the CFI usually sits in Chambers of three or five, but in some cases as a single judge, as a Grand Chamber of thirteen judges, or as a full court.^[20] Decisions of the CTI can be appealed to the ECJ on matters of law.^[21] To reduce the workload of the ECJ and the CFI, the Treaty of Nice (Article 225a) introduced "judicial panels" to be used in some areas, with appeal to the CFI.

Eu legal principles Supremacy

It has been ruled several times by the European Court of Justice that EU law is superior to national laws, and even Member States' constitutions. Where a conflict arises between EU law and the law of a Member State, EU law takes precedence, so that the law of a Member State must be disapplied. This doctrine, known as the supremacy of EU law, emerged from the European Court of Justice in Costa v. ENEL.^[23] Mr Costa was an Italian citizen opposed to nationalising the Italian energy company ENEL, because he had shares in it. He refused to pay his electricity bill in protest, and argued that nationalisation infringed EC law on the State distorting the market.^[24] The Italian government believed that this was not even an issue that could be complained about by a private individual, since it was a national law decision to make. The Court ruled in favour of the government, because the relevant Treaty rule on an undistorted market was one on which the Commission alone could challenge the Italian government. As an individual, Mr Costa had no standing to challenge the decision, because that Treaty provision had no direct effect.^[25] But on the logically prior issue of Mr Costa's ability to raise a point of EC law against a national government in legal proceeding before the courts in that Member State the ECJ disagreed with the Italian government. It ruled that EC law would not be effective if Mr Costa could not challenge national law on the basis of its alleged incompatibility with EC law.

It follows from all these observations that the law stemming from the treaty, an independent source of law, could not, because of its special and original nature, be overridden by domestic legal provisions, however framed, without being deprived of its character as community law and without the legal basis of the community itself being called into question.

However, while Community law is accepted as taking precedence to the law of Member States, not all Member States share the analysis used by the European institutions about why EU law overrides national law, when a conflict appears.

Many countries' highest courts have stated that Community law takes precedence provided that it continues to respect fundamental constitutional principles of the Member State, the ultimate judge of which will be the Member State (more exactly, the court of that Member State), rather than the European Union institutions themselves^. This reflects the idea that Member States remain the "Master of the Treaties", and the basis for EU law's effect. In other cases, countries write the precedence of Community law into their constitutions. For example, the Constitution of Ireland contains a clause that, '"No provision of this Constitution invalidates laws enacted, acts done or measures adopted by the State which are necessitated by the obligations of membership of the European Union or of the Communities..."

Direct effect

EU law covers a broad range which is comparable to that of the legal systems of the Member States themselves. Both the provisions of the Treaties, and EU regulations are said to have "direct effect" horizontally. This means private citizens can rely on the rights granted to them (and the duties created for them) against one another. For instance, an air hostess could sue her airline employer for sexual discrimination. The other main legal instrument of the EU, "directives", have direct effect, but only "vertically". Private citizens may not sue one another on the basis of an EU directive, since these are addressed to the Member States. Directives allow some choice for Member States in the way they translate (or 'transpose') a directive into national law - usually this is done by passing one or more legislative acts, such as an Act of Parliament or statutory instrument in the UK. Once this has happened citizens may rely on the law that has been implemented. They may only sue the government "vertically" for failing to implement a directive correctly. An example of a directive is the Product liability Directive, which makes companies liable for dangerous and defective products that harm consumers.

Eur-Lex is the legal database of the EU. In Eur-Lex you can find 455,800 references in total. It amounts to 3,650,000 different documents if one includes the different language editions from 1951 onwards. Every year the stock of acts in Eur-Lex increases by around 15,000 on average They are to be found here: http://eur-lex.europa.eu/en/tools/faq.htm

  Consideration of the articles of Acquis of communautaire and Legislation of the EU is presented in reference Book from European Union (Donetsk: DONNUET, in 2010).

Theme 3. Essence of the eu common policies

3.1. Essence and classification of the EU common policies

3.2. European internal|inlying| market and unification of economic|economical| policy|politics|

3.3. The EU budget as a basis|foundation| of common policies

3.4. The EU Policies for citizens

3.1. Essence and classification of the eu common policies

Common policies of the EU are common actions of countries-members which are held for the EU aims achievement within the limits of jurisdictions and under an aegis of the EU (has a leading role). They are directed on the solution of common social and political, economic issues in the concrete spheres of life. Common policies are developed by the EU institutes, which assert their purpose, task, measures and mechanisms of realization in the proper program papers. Realization of common policies is based on the European law system, legislation of the EU and principles of European integration. The list of common policies meets the specific of institutional forms of international integration (customs union, common market, economic and currency union), and also principles of democracy and defence of human rights.

On the basis of customs union creation|making| the policy|politics| on forming and development of common internal|inlying| market of the EU and trade adjusting|adjustment| development with the third|third-| countries (including common customs policy) are held. Common market creation includes|switch| the policy|politics| in the field of free movement of goods and services (including common policy|politics| on standardization and certification|sertification|, policy on defence|protection| of intellectual property, policy bank|banking| and financial|cost| services |politics|on market), in the field of labour market and free movement of labour development, in the field of free movement of capitals. Formation of economic|economical| and currency union|conjunction| foresees the single|common| monetary policy|politics| and standardization|unitization| of economic|economical| policy|politics|, in particular|including| providing|ADM| budgetary|on-budget| discipline and financial|cost| solidarity.

Common policies for citizens include|switch|: 1) providing|ADM| of citizens rights and their defence|protection|; 2) information, A.V. and cultural|gracious| policy|politics|; 3) common|common| policy|politics| on defence|protection| of customers rights|consumer|.

Economy regulation is based on horizontal policies and sectoral policies (policies in the different|diverse| sectors of economy). Horizontal common policies are such policies, which|what| aims, tasks|task| and measures|step| are spread on all spheres or sectors of the European economy. They are: 1) policy|politics| of regional development (regional policy|politics|); 2) policy|politics| of social development (social policy|politics|); 3) tax policy|politics|; 4) competition policy|politics||concerning|; 5) environment policy|politics|.

Sectoral policies are such policies, which aims, tasks|task| and measures|step| concern certain|definite| spheres or sectors of economy. They are: 1) industrial and enterprise policy|politics|; 2) policy for research and technological development; 3) energy policy|politics|; 4) transport|cargo-carrying| policy|politics|; 5) agricultural|farin| policy|politics|; 6) fisheries policy |piscary|. All of horizontal and sectoral policies have an international aspect, that is why|that is why| their measures|step| are supported|underprop| by external|outward| policies of the EU.

The external policies of the EU are|behave|: 1) common foreign and security policy (CFSP); 2) external trade and economic policy; 3) relations with certain countries or region; 4) common development aid policy.

(See http://www.europarl.europa.eu/factsheets/default_en.htm).

Common policies holding is related|ties| to formation of economic|economical|, informative, research and development|, policy spaces at the EU|space|, and also to the use of conception and by creation|making| of Trans-European networks|net| (in particular|including| transport|cargo-carrying|, energy, A.V. etc.).

All common policies are|appear| interconnected|. Their separate aims, tasks|task| and measures|step| are integrated into concrete directions of common social and economic policy,|politics| which foresees use|utillizing| of special institutional mechanisms (programs, projects, networks|net| etc.). In accordance|homology| with Lisbon strategy common policies of the EU must be directed|ducted| on the increasing|rise| of competitiveness of the European economy (mainly|par excellence| due to stimulation of innovations), providing|ADM| of employment and steady development.

3.2. European internal|inlying| market and unification of economic|economical| policy

Common internal market is the space of the European Union, within the limits of which free movement of goods, persons, services and capital is guaranteed. It also can be a certain territory of countries which form the European Union, together with their economic and social potential, or as a difficult form of economic integration of the European Union countries, which meets the stage of "common market" in accordance with the stages of integration process. 

There are such stages of common internal market creation.

1. The uncompleted common market of 1958 - 1980.

The common market, as the Treaty of Rome's main objective, was intended to liberalise exchanges of goods and services between Member States as far as possible by:

• a customs union, i.e. removing customs duties between Member States and establishing a common external tariff;

• eliminating quantitative restrictions (quotas) and measures having equivalent effect, to ensure completely free movement of goods;

• free movement of persons, especially employed persons, services and, to a certain extent, capital.

The programme was not fully completed.

2. The launching of the internal market 1980-1992

This was a return to the ambitions of 1958, and sought to add the common market components that were still outstanding. However, it went further by pushing this ambition to the limit: totally removing the frontier concept to create an area where human and material resources can move freely to ensure optimum use.

- The idea of the internal market was supported immediately by the Member State governments: their support was affirmed in 1982 and regularly confirmed thereafter until the green light was given in Brussels in March 1985, when the European Council:

• set the end of 1992 as the completion date, and

• asked the Commission to prepare a programme and timetable for implementation.

- The Commission responded with its celebrated White Paper, approved in June 1985 by the European Council in Milan. This listed about 300 legislative measures to be taken, grouping them under three main objectives:

• the elimination of physical frontiers, by abolishing checks on goods and persons at internal frontiers,

• the elimination of technical frontiers: breaking down the barriers of national regulations on products and services, by harmonisation or mutual recognition,

• elimination of tax frontiers: overcoming the obstacles created by differences in indirect taxes, by harmonisation or approximation of VAT rates and excise duty.

The timetable for adoption was spread out to the end of 1992. The new approach proposed was to get away from the systematic harmonisation of national rules, which would be reserved for essential requirements (such as security and health) and to settle for mutual recognition.

The Single European Act (which was signed in February 1986 and came into force on 1 July 1987) was a revision of the Treaty of Rome. It had two objectives:

• incorporation of the specific concept of the internal market in the Treaty defining it as ‘an area without internal frontiers in which the free movement of goods, persons, services and capital is ensured’ and setting a precise deadline for its completion: 31 December 1992 [Article 18 (8a)];

• giving the completed internal market effective decision-making machinery, by introducing qualified majority voting for most subjects concerned, instead of the unanimity that had hitherto been required, such as

  • amendment of the common customs tariff [Article 26(28)],

  • free provision of services [Article 49 (59), second paragraph],

  • free movement of capital (Article 70, repealed subsequently),

  • approximation of national legislation [Articles 94 and 95 (100 and 100a)].

3. Completion of the internal market 1993-2000

By the deadline, most of the 1992 target had been met. Over 90 % of the legislative projects listed in the 1985 White Paper had been adopted, largely by using the majority rule. They included:

• full liberalisation of capital movements,

• total abolition of checks on goods at internal frontiers,

• abolition of routine checks on people at internal frontiers,

• major progress in the practical aspects of introducing freedom of establishment and freedom to provide services, through harmonisation and mutual recognition of rules in vital industries such as banking and insurance, mutual recognition of diplomas for access to the regulated professions, and by opening up public markets.

- Though generally successful, there were some serious failures:

• legislative omissions: the 10% or so measures not adopted included some very important ones, such as total abolition of controls on persons, the statute for the European company, full liberalisation of transport services, and tax harmonisation; in addition, some proposals not contained in the 1985 programme but added later as necessary for completion of the internal market, such as liberalisation of public service sectors, telecommunications, electricity, gas, postal services and the establishment of trans-European networks,

• failures to transpose legislation: a significant part of the adopted directives that formed the backbone of legislation on the internal market were not transposed into national law, or were badly transposed,

• failures in implementation (highlighted by the Sutherland report in October 1992, drawn up at the Commission's request): acts that had been properly transposed as scheduled were sometimes badly implemented by national administrations, either because some of their provisions were overlooked in administrative practice, or were differently interpreted from one country to another; moreover operators and consumers affected by these failures did not always have access to rapid and effective means of redress.

After 1992 the Commission stepped up its efforts to secure full completion of the internal market.

- It regularly submitted reports reviewing the results obtained and launched action programmes to complete projects that were still pending. Apart from the annual reports on the state of progress and operation of the single market, it is worth mentioning:

• the Communication of 2 December 1992 on operation of the Community single market after 1992,,

• the Communication of 2 June 1993 on improving the effectiveness of the single market, which formed the basis of the strategic programme of 22 December 1993 on making the most of the single market,

• the Communication of 30 October 1996 entitled The impact and effectiveness of the single market, which served as the basis for the Action plan for the single market of 4 June 1997.

The latter set out to make good all the failings in completion of the internal market, whether in legislation or national transposition and implementation of the law, by the date for launching the single currency, 1 January 1999. To do so it proposes a series of 62 ‘actions’, to be carried out on a calendar with precise deadlines monitored every six months on a progress chart. This method proved to be effective and many of the objectives were achieved. The progress chart continues to be published twice a year, most recently in November 2000.

• The most recent action plan to date, entitled 'The strategy for Europe's internal market', was launched on 24 November 1999 in the form of a communication to the European Parliament and the Council. This action plan combines medium and short-term perspectives, laying down strategic objectives to be achieved over the next five years (up to 2004) by means of 'targeted measures' to be taken over 18-month periods and reviewed annually.

- While providing this impetus the Commission also took repressive action by stepping up its powers under Article 226 (169) of the EC Treaty for prosecuting infringements by the Member States which were

• delaying transposition of directives,

• transposing them incorrectly, or

• implementing them badly.

As a result, the number of ‘default notices’, the first stage of infringement proceedings, leading to a reasoned opinion and then referral to the Court of Justice, has consistently exceeded an annual figure of 200 since 1995 peaking to almost 400 in 1997 (276 for the period from March 1999 to March 2000).

02.10.2012

4. 2000 – Till now

The European internal market, the world's largest in terms of the purchasing power of its 370 million consumers, has become a reality, strongly contributing to the prosperity and integration of the European economy: increasing intra-Community trade (by about 10% a year over ten years), increasing productivity and reducing costs (through the abolition of customs formalities, harmonisation or mutual recognition of technical rules, and lower prices as a result of competition): this has generated extra growth of between 1.1 and 1.5%, while bringing the income levels of different countries closer together.

- Particularly worth noting are:

• substantial progress in completing the legislative programme: texts adopted have brought about the complete opening up of transport and telecommunications services, a significant opening up of other ‘public service’ sectors (electricity, gas and postal services), supervision of mergers and the protection of biotechnological inventions,

• progress in the rate of transposition, measured by the percentage of directives transposed in all the Member States, which has risen in two years (1997-1998) from 65% to over 85% but has subsequently remained static.

- Some serious gaps remain:

• essential legislative projects are still pending, such as the statute for the European company, full freedom of movement for persons, and tax harmonisation,

• certain directives not yet transposed in all Member States include public contracts, transport and intellectual property,

• the protection of business people from misapplication (or even infringement) of the rules still has room for improvement.

The requirements of European integration suggest that the internal market should eventually culminate in a fully integrated market on national lines: what might be termed the ‘European home market'. Its features would comprise:

• a single currency;

• a harmonised tax system;

• integrated infrastructure;

• complete freedom of movement for persons;

• legal instruments to enable businesses to operate effectively throughout the market.

As the introduction of monetary union is now in sight, completion of the European home market would require:

• the harmonisation of indirect taxation, especially the establishment of an integrated VAT system based on adjacent rates from one country to another and the principle of payment instead of origin;

• completion of the trans-European transport, energy and telecommunications networks;

• adoption of the statute for the European company.

This culmination of the internal market could be carried out during the phase introducing the single currency, by 2002.

Free movement of goods

Objectives:

- Freedom of movement applies to products originating in the Member States and products from third countries which are in free circulation in the Member States [Article 23(9), second subparagraph ECT].

- To start with, free movement of goods was seen as part of a customs union of the Member States, involving the abolition of customs duties, quantitative restrictions on trade and equivalent measures, and the establishment of a common external tariff for the Community.

- Later, the emphasis was laid on eliminating all remaining obstacles to free movement with a view to creating the internal market – an area without internal frontiers, in which goods (among other things) could move as freely as on a national market.

The elimination of customs duties and quantitative restrictions (quotas) between Member States, which was due to be completed by the end of the transitional period, was in fact accomplished by 1 July 1968, i.e. one and a half years early.

On the other hand, this deadline was not met in the case of the supplementary objectives – the prohibition of measures having an effect equivalent to that of customs duties and of quantitative restrictions, and harmonisation of the relevant national laws. These came to be the central objectives of an ongoing effort to achieve freedom of movement, to which the plans for a single market gave a new impetus.

The creation of the single market implies the elimination of all remaining obstacles to free movement. The Commission White Paper of June 1985 set out the physical and technical obstacles to be removed and the measures to be taken by the Community to this end. Most of these measures have now been taken.

a. Elimination of checks at internal borders (physical barriers)

- Customs formalities were simplified during the period 1985-1992 (single administrative document, common border posts, simplification of Community transit procedures) before being abolished on 1 January 1993. - Border controls were abolished on 1 January 1993. Checks, particularly in connection with animal and plant health, may be carried out inside Member States, in the same way as such checks are made on domestic products moving within the States, i.e. without discrimination based on the origin of the goods or the mode of transport.

b. Elimination of technical barriers

After the removal of customs formalities and border controls, technical barriers are the chief remaining obstacle to complete freedom of movement. They are numerous, highly diverse and constantly changing. There are two main ways in which they can be eliminated:

- monitoring of compliance with the principle of mutual recognition of national rules by means of Article 28 (30) ECT;

- legislative harmonisation, facilitated not only the qualified majority requirement for most directives relating the completion of the single market [Article 95 (100a)] but by the adoption of a new approach to avoid an onerous total harmonisation. This approach, set out in the Commission White Paper of June 1985, has the following implications in practice:

• Since the guiding principle is that of mutual recognition of national rules, Community harmonisation is only justified when these rules cannot be considered equivalent.

• Harmonisation must be restricted to essential requirements of health, safety and environmental protection, rather than covering detailed technical specifications. For technical specifications, harmonisation directives refer to the industrial standards. However, such standards must not be national ones, because the latter's diversity obstructs manufacturers and impedes the freedom of movement, without leading to mutual recognition because they are not mandatory since they are not laid down by the national governments. Manufacturers will thus refer to European standards, laid down by European standardisation bodies. As with the other standards, they will not be mandatory but manufacturers who comply with them will automatically comply with the legal requirements.

Many directives have been adopted following the new approach. They include those dealing with simple pressure vessels, toys, building materials, machines, gas appliances and telecommunications terminal equipment.

Freedom of movement for workers

Objectives

• Increasing the Community's workers' chances of finding work and adding to their professional experience;

• encouraging the mobility of workers, as a way of stimulating the human resource response to the requirements of the employment market;

• developing contacts between workers throughout the Member States as a way of promoting mutual understanding, creating a Community social fabric and hence "an ever closer union among the peoples of Europe", the main aim of the Treaties.

Measures to encourage freedom of movement include:

a. Mutual recognition of training

Freedom of movement is often hampered by differences in training from one Member State to another.

This is true particularly in the case of regulated professions for which states have prescribed purely national certificates and diplomas which they require the citizens of other states to possess, thus restricting considerably the practical significance of the freedom to take up employment without formally contravening the rule of non-discrimination on the basis of nationality. Not being able to harmonise the training concerned, the Community has followed the course of mutual recognition of certificates and diplomas:

• firstly for specific professions;

• then on the basis of general systems of equivalence.

Such mutual recognition was introduced primarily so that the professions covered could be practised on a self-employed basis but it also applies, of course, to employed persons.

The problem also exists in the non-regulated professions where failure to possess national professional qualifications, which are often the only ones known to employers, may hamper chances of finding work. Here the Community has introduced comparability of vocational qualifications: on the basis of a Council decision of 16 July 1985, comparability has been ensured for skilled workers in 19 vocational sectors; the result was published in the form of tables in the Official Journal. (The work was carried out by a specialised body, Cedefop, and completed in 1993.)

b. Exchanges between young workers

To encourage freedom of movement, the EC Treaty [Article 41 (50)] stipulated that Member States should encourage the exchange of young workers within the framework of a joint programme. This was first carried out through the PETRA programme , which lasted from 1988 to 1994: it was aimed at young people between 16 and 28 undergoing non-university vocational training, and provides grants to enable them to spend from three weeks to three months doing vocational training in another Community country. Some 45 000 young people benefited. After 1994 the PETRA machinery was integrated in the wider framework of the Leonardo da Vinci programme.

c. The EURES (European Employment Services) network

This was set up by Commission Decision 93/569/EEC of 22 October 1993 implementing Regulation 1612/68 mentioned above, to facilitate access to information by workers seeking a job in a Member State other than their own. This network is a data bank of job vacancies and applications (incorporating data from national administrations) and on living and working conditions in the Member States.

Freedom of establishment and provision of services and mutual recognition of diplomas

Objectives: The intention is to ensure that the self-employed (whether working in commercial, industrial or craft occupations or the liberal professions) are free to exercise their profession throughout the Community, in terms of both freedom of establishment and freedom to provide services, especially with regard to the best economic location. This implies eliminating discrimination on the grounds of nationality and, if these freedoms are to be used effectively, measures to make it easier to exercise them, especially harmonisation of national access rules or their mutual recognition.

The EC Treaty lays down the principle that the self-employed may freely exercise an activity in two ways: the person or firm may set up in another Member State (freedom of establishment: Art. 43 (52)) or offer their services across frontiers in other Member States while remaining in their country of origin (freedom to provide services: Art. 49 (59)). Any new restrictive measures have been prohibited since the Treaty came into force, and existing restrictions were to be abolished by Council directives before the end of the transition period under a general stage-by-stage programme (Arts. 44 and 52 (54 and 63)).

Drafting of legislation for mutual recognition sector by sector, sometimes with more extensive harmonisation of national rules, is always a long and tedious procedure. The resulting difficulties have led to consideration of a general system of recognition of the equivalence of diplomas, by level, which is valid for all regulated professions that have not been the subject of specific Community legislation.

The system has been set up in three stages:

• 1990, recognition of higher education diplomas awarded on completion of professional education and training of at least three years’ duration (Directive 89/48 of 21 December 1988).

• 1992, expansion of the system to diplomas, certificates and qualifications that are not part of long-term higher education, with two levels:

  • shorter post-secondary or professional courses,

  • secondary courses (Directive 92/51 of 18 June 1992).

• In 1999 a system was introduced for the mutual recognition of qualifications for access to certain commercial, industrial or craft occupations that are not yet covered by the previous directives (textiles, clothing, leather, wood etc.) (Directive 99/42 of 7 June 1999).

In all three cases, the host Member State may not refuse access to the occupation in question if applicants have the qualifications required in their country of origin. However, it may demand a certain length of professional experience if the training they received was of a shorter duration than in the host country. If the training differs substantially, it may require an adaptation period or aptitude test, at the discretion of the applicant unless the occupation requires a knowledge of the national law.

The free movement of capital

Objectives

• Removing all restrictions on capital movements between Member States, then between Member States and third countries (in the latter case with the option of safeguard measures in exceptional circumstances).

• Liberalisation should help to establish the single market by encouraging other freedoms (the movement of persons, goods and services).

• It should also encourage economic progress by enabling capital to be invested efficiently.

The first Community measures were limited in scope.

A 1960 Directive amended in 1962 unconditionally liberalised

• direct investment;

• short- or medium-term lending for commercial transactions;

• purchases of securities dealt in on the stock exchange.

It was not until the single market was launched, almost 20 years later, that the progress begun in 1960-62 was resumed. Two directives, in 1985 and 1986, extended unconditional liberalisation to

• long-term lending for commercial transactions;

• purchases of securities not dealt in on the stock exchange.

• - Liberalisation was completed by Directive 88/361 of 24 June 1988 ^[1], which scrapped all remaining restrictions on capital movements between residents of the Member States on 1 July 1990. As a result, liberalisation was extended to monetary or quasi-monetary transactions, which were likely to have the greatest impact on national monetary policies, such as loans, foreign currency deposits or security transactions.

• - The directive did include a safeguard clause enabling Member States to take protective measures when short-term capital movements of exceptional size seriously disrupted the conduct of monetary policy. But such measures only applied to restrictively identified transactions and could not last for more than six months.

• - It also allowed some countries to maintain permanent restrictions, mainly on short-term movements, but only for a specific period: Ireland, Portugal and Spain until 31 December 1992, and Greece until 30 June 1994.

The articles are Principles of the common internal market, Lisbon strategy, EU internal commercial policy are considered in Reference Book on the European Union (Donetsk: DONNUET, 2010).

3.3. The eu budget as a basis|foundation| of common policies

A wide range of activities are funded in the Member States, for example in agriculture, fisheries, infrastructure (construction of roads, bridges and railways), education and training, culture, employment and social policy, environmental policy, health and consumer protection, research, to mention a few. Initiatives are also underway to offer EU citizens an area of freedom, security and justice without internal borders. Part of the EU budget is also spent on funding economic development around the world and on humanitarian aid to help non-EU countries afflicted by natural disasters and other crisis situations.

The exercise of budgetary powers consists firstly in determining the nature of the expenditure, then establishing the annual amount of such expenditure and the revenue necessary to cover it, and finally exercising control over the implementation of the budget. The budgetary procedure itself involves the preparation and adoption of the budget.

Before 1970, budgetary powers were vested in the Council alone; Parliament had only a consultative role. After having adopted the draft budget, the Council forwarded it to Parliament for its opinion. If Parliament's opinion contained proposed modifications, the Council gave the budget a second reading and adopted the final version.

b.  The Treaties of 22 April 1970 and 22 July 1975 increased Parliament’s budgetary powers:

• the 1970 Treaty, which followed on from the introduction of the Community’s own resources, gave Parliament the last word on what is known as ‘non-compulsory expenditure’;

• the 1975 Treaty gave it the right to reject the budget as a whole.

The budgetary procedure contains 5 stages:

1. The Commission draws up the preliminary draft budget, taking into account the guidelines laid down by Parliament and the Council in the course of a trialogue on the priorities for the budget and an ad hoc conciliation procedure on compulsory expenditure. It then forwards the preliminary draft to the Council by 1 September at the latest.

2. At first reading, and after conciliation with a Parliament delegation, the Council, acting by a qualified majority, adopts the draft budget and forwards it to Parliament by 5 October at the latest.

3. Parliament has 45 days in which to state its position. Within that period, it may adopt the draft or decline to state a position, in both of which cases the budget is deemed finally adopted.  It may, on the other hand, call for changes.

4. The Council has 15 days in which to conduct its second reading.  Within that period, it may accept all of Parliament's amendments and proposed modifications, in which case the budget will be deemed adopted. It may, on the other hand, not accept them.

5. Parliament has 15 days in which to conduct the second and last reading.

EU budget revenue and expenditure

EU spending is limited by the Treaties. The Union budget is not allowed to be in deficit, which means that revenue has to cover the whole cost of all the different activities. This revenue, or income, comes from three main sources:

• customs duties,

• a share of the harmonised value added tax (VAT) base of each Member State,

• and a further contribution from the Member States based on the size of their gross national income (GNI).

The amount of money which can be made available to the Union is limited by Treaty of the Member States and parliaments. This ceiling is currently set at 1.23% of the Union's gross national income for payments made from the EU budget. As a comparison, about 45% of the Union's gross national income goes to national, regional and local public expenditure in the Member States.

EU spending is further limited by a multi-annual Treaty between Members of the European Parliament, the Council of Ministers, and the European Commission. This Treaty contains a "multi-annual financial framework". The recent ones cover spending plans for the seven-year periods from 2000 to 2006 and 2007 to 2013.

3. The distinction between compulsory expenditure and non-compulsory expenditure

This determines the respective budgetary powers of Parliament and the Council.

a.  Compulsory expenditure (CE)

Compulsory expenditure is expenditure necessarily resulting from the Treaties or from acts adopted in accordance with them. As far as this type of expenditure is concerned, Parliament may only propose modifications, on which the Council has the last word. However, as we saw above, if Parliament's proposals would not increase the overall expenditure of any of the Institutions, the Council must act by a qualified majority in rejecting them, failing which they will be deemed accepted. This arrangement enables Parliament to exert influence even over compulsory expenditure.

Compulsory expenditure, currently approximately 45% of the budget, consists mainly of:

• agricultural price support expenditure (EAGGF-Guarantee Section);

• various items of expenditure connected with structural agricultural policy (EAGGF-Guidance Section) and the common fisheries policy;

• flat-rate refunds to the Member States, in particular of costs incurred in collecting own resources;

• part of development aid expenditure.

b.  Non-compulsory expenditure (NCE)

Parliament has the last word on this type of expenditure, in that it takes the final decision at last reading on the amendments which it adopted previously. However, its powers are restricted by the maximum rate of increase in expenditure. As a result, Parliament cannot add to the draft budget adopted by the Council a volume of non-compulsory expenditure equivalent to more than half this rate. Nonetheless, if the Council has already increased expenditure by more than half the rate, Parliament may still make use of the remaining half.

Principles of the EU budget spending – for self preparation.

The articles are Mechanism of forming of budget of the EU, Implementation of budget of the EU, Financial policy of the EU, Economic and Monetary union, Currency integration of the EU, Currency policy of the EU, Currency system (European), Currency union (European), Currency backlogs of the EU are considered in Reference Book on the European Union (Donetsk: DONNUET, 2010).

3.4. The eu Policies for citizens

3.1. Consumer Policy

Under the consumer protection section of the European Union Treaty, the EU aims are to contribute to safeguarding the health, safety and economic interests of consumers. In addition to ensuring a high level of protection through legislation, information and education initiatives have also been undertaken. Consumer interests are also taken into account in a wide range of other EU policies. The most important legislative measures are those adopted as part of the single market. Among the measures already in force are directives covering:

• price indications on foodstuffs and non-food products,

• misleading advertising, distance selling and consumer credit,

• unfair terms in consumer contracts,

• specific measures protecting purchasers of package tours and time shares.

Other EU initiatives supplement measures taken by national Governments. There are also several non-binding recommendations and resolutions made by the Council. These cover a wide range of consumer issues - from credit card systems to education.

Other EU policies also have an important impact on consumer policy. Perhaps the most significant example of this is the Common Agricultural Policy through price support but also quality control of the agricultural produce (i.e. BSE crisis).

The Commission adopted a strategy for taking consumer policy into the new millennium. This set three targets:

• a more effective voice for the consumer in the EU will be particularly important as policy decisions become technically more complex. Consultation procedures are being honed to ensure that consumer interests are more consistently taken into account. Better coordination among local/national consumer groups will be promoted through networking and information activities and a hotline to the Commission for these groups is in place,

• a high level of health and safety is in the interests of business as well as consumers. Both benefit from a more systematic approach to risk analysis. Application of the precautionary principle in food and product safety is being developed and consumer concerns about the labelling, hygiene and inspection of food need to be tackled,

• safeguarding the economic interests of EU consumers means dealing with concerns about "miracle products", misleading health claims and pyramid selling. Further goals include boosting confidence in electronic payment means and encouraging low-cost cross-border retail payments and a consumer-friendly market in financial services.

3.2. Education and Cultural Policy

Education was not formally integrated into the EU policy portfolio until the 1993 Maastricht Treaty. Despite this, the first Community legislation having an impact in the education sector was adopted in the sixties. These early directives dealt with mutual recognition of qualifications. Achieving recognition by one Member State of a qualification obtained in another was a fundamental building block in establishing the freedom to provide services and a pre-condition for implementing the free movement of workers in the single market.

Fundamental to the implementation of the freedom to provide services across borders and to the free movement of workers in the single market. Provisions already in force cover the legal profession, the medical profession (doctors, dentists, vets, nurses, midwives, pharmacists), architecture, commerce and industry, the transport sector, agriculture, the film industry and the self employed. Furthermore, in 1989, a general system was introduced for the recognition of higher education degrees and diplomas and this has since been extended to cover professional education and training.

Widely regarded as being among the most visible and beneficial initiatives, the EU has develop wide number of initiatives to promote student mobility.

The most famous of these is the 1987 Erasmus programme. Built on a system of recognition of course credits, Erasmus allows university students to study for one year in a different Member State.

In its post-Maastricht form, and under the banner of Socrates (euro 920 million for the period 1995-99) Erasmus has been supplemented by Comenius (partnerships between schools and colleges in different Member States), Lingua (promotion of language training), Minerva (open and distance learning - Information and Communication Technologies in the field of education) and Arion (cooperation in education theory).

A separate programme - Leonardo (euro 620 million, 1995-1999) - was also put in place for vocational training exchanges. This gives young school leavers, students and graduates the chance to receive vocational training. It is also open to adults seeking similar qualifications. In addition to education and training, there are 2 EU programmes for young people – the 1995 "Youth for Europe" scheme (euro 126 million 1995-99) and the "European Voluntary Service", formally established in 1998 after a 2-year pilot phase.

There is an increasing tendency for these programmes to be extended beyond the borders of the EU. All apply to the EFTA States participating in the EEA (Norway, Iceland and Liechtenstein) and are being extended to the countries pursuing accession negotiations to join the EU.

A separate initiative, Tempus, funds exchanges with other countries in Central and Eastern Europe and the former Soviet Union. The EU also has separate education cooperation programmes with the developing countries of Asia, Latin America, the USA, Canada and 71 States in Africa, the Caribbean and the Pacific.

Under both Socrates and the European Social Fund, a growing number of initiatives target ethnic minorities, the disabled and women returning to work.

Among the many EU agencies in the education sector, the oldest is the European Centre for the Development of Vocational Training (known by its French acronym CEDEFOP) which was established in 1975 and now has its seat in Thessaloniki. Others include the European Training Foundation (Turin), the European University Institute (Florence) and an information network on education in Europe - EURYDICE. National Academic Recognition Information Centres (NARICs) have also been created in all Member States.

3.3. Employment Policy

Since 1997, unemployment in Europe has been on the retreat. Despite this improvement, job creation remains one of the Union's key objectives. A high level of employment is a prerequisite for social justice and social cohesion.

According to Eurostat, average unemployment in the European Union was 9% in January 2000. An estimated 15.5 million persons were unemployed, as opposed to almost 18 million in 1997.The improvement in the job situation in Europe is partly due to faster growth since 1997 (2.5% growth in 1997, as opposed to 1.8% in 1996, which was confirmed in 1998 (2.6%), in spite of a slowdown in 1999 (2.1%)), and partly to the various actions taken in the framework of the European employment strategy.

The Community employment strategy was worked out at the Luxembourg, Cardiff and Cologne European Councils. During these summits the Heads of State and Government of the 15 Member States stressed their commitment to combating unemployment.

A new employment title was introduced by the Amsterdam Treaty, according to which promotion of employment is a "matter of common concern" of the Member States and one of the Community's goals. In order to make the most of these new provisions, the Heads of State and Government decided to immediately apply the new provisions introduced by the Amsterdam Treaty in support of the coordinated employment strategy, without awaiting their entry into force on 1 May 1999. This strategy is based on:

• the consideration of employment in the formulation and implementation of Community policies and activities,

• the introduction at Community level of coordination mechanisms comprising:

1. an annual joint report on employment by the Council and Commission, on the basis of which the European Council adopts conclusions,

2. adoption by the Council, acting by a qualified majority on a proposal from the Commission, of guidelines on employment which must be consistent with the broad guidelines on economic policy,

3. a system of monitoring implementation of the guidelines, similar to that for economic policies, and that may result in recommendations to the Member States in the area of employment policy,

4. creation of an Employment Committee to promote coordination of Member States' employment and labour market policies and to formulate pertinent opinions,

5. possible adoption by the Council, acting by a qualified majority, of incentive measures, particularly in the form of pilot projects.

3.4. Common Foreign and Security Policy (cfsp)

European Political Cooperation began in the 1970s and aimed to give a political dimension to the EU's growing international role. Over time, the added value of Member States speaking with one voice has become increasingly evident. Eventually, the Maastricht Treaty in 1992 set up a formal Common Foreign and Security Policy (CFSP, French acronym PESC). This is an inter-governmental area, legally separate from the European Community, although the Commission is fully associated with CFSP. EU governments now exchange views on an hour-by-hour basis, and the EU reaches common positions on all key foreign policy issues.

When the Amsterdam Treaty came into force in May 1999, it included measures to strengthen CFSP. In particular, a new post was created of High Representative for CFSP, to coordinate CFSP and act as a public face for EU foreign policy worldwide.

The first High Representative is Javier Solana, formerly Secretary-General of NATO. The European Union is emerging as a major political player on the world stage. Dialogue on political issues takes place at all levels. Regular summit meetings at head of state level are held with key partners such as the United States, Japan, Russia and, most recently, China. The President of the Council of Ministers and the President of the Commission represent the EU in these meetings, now joined by the High Representative.

Under the CFSP, Member States co-ordinate an EU position on a range of pressing foreign policy issues. Respect for human rights is an EU priority across the globe - frequent formal protests are made to express concerns to third countries.

09.10.2012

Theme 4. Horizontal policies of the eu

4.1. Policy|politics| on|concerning| regional development

4.2. Policy|politics| on social development

4.3. Tax policy|politics| of the EU

4.4. Competition policy

4.5. Environmental policy

4.1. Policy|politics| on|concerning| regional development

Policy|politics| on|concerning| regional development (regional policy) is a component of economic policy of countries-members of the European Union, which contains the complex of various legislative, administrative and economic measures which are conducted both central and local authorities and directed on the processes of productive forces distribution directed.

In 1957, when the European Community was established, the Treaty of Rome mentioned the need for "harmonious development", but no specific common policy was set up to that end apart from the removal of customs barriers and the gradual opening-up of markets. In the 1970s, following the first waves of industrial restructuring, the Member States established the European Regional Development Fund (ERDF). However, it was mainly in the 1980s, once countries such as Greece, Portugal and Spain had joined the Community, that the economic need and political will to reduce disparities in development and living standards clearly emerged. Budget resources allocated to European cohesion policy have grown steadily since 1989, and today, economic and social cohesion is enshrined in the Maastricht Treaty, alongside monetary union, as one of the priorities of the European Union.

The main purpose of regional policy|politics| of the EU is|appear| reduction of regional imbalances and prevention of subsequent|consequent| regional disbalances|unbalance| in the EU by distribution of the EU resources in the problem regions.

The aim is not just to transfer financial resources to poorer regions but to give them the assets they need to speed up their development and improve the living standards of their inhabitants. These assets include basic amenities, workforce skills, technological capabilities, an attractive environment for inward investment, etc.

It is worth bearing in mind that, besides affecting the less favoured regions and less privileged population groups, imbalances in development also slow growth throughout the Union as a whole and prevent it from making the most of its economic, technological and human potential.

The main|head| principles of regional policy|politics| of the EU are|appear|:

1. Subsidiarity means that higher|excelsior| public units have a right and obligation to solve only the problems which the lower|subzero| units are not able to solve|settle|.

2. Partnership is|appear| a collaboration between the subjects of different|diverse| levels|Y-level| (the EU, states, region) of territorial administrative units from the moment of decision of purpose before completion of realization of concrete project.

3. Decentralization is a redistribution of plenary powers to the regions with a purpose them the effective use|utillizing| and encouragement|encouragingly| of regional initiatives, optimization of practical decision of questions, exactly|preeminently| at regional level, and also distributing|division| of functions and plenary powers between the different|diverse| levels|Y-level| of management the EU.

4. Programming determines priority|precedency| of investing to not separate projects or actions|act|, but programs which|what| have a deep influence on development of all of region. Strategy of the territorial programming is based on the expressly developed system of aims of, which takes into account interests of societies|community| in relation to|concerning| an assistance|contributory| spatial efficiency and development of national economy.

5. Concentration | means that financial|cost| resources which|what| are given|provide| by the EU must be complemented by certain countries-members|limb| or subjects of territorial, regional development due to local sourcing|source|. Effective realization of principles of concentration in the regional policy|politics| of the European Union|conjunction| has a double goal: 1) strengthening and concentration of present resources for assistance|contributory| to realization of certain goals of regional development; 2) finding out such territorial units which|what| have identical or similar|like| problems (low level of profits|acuests|, large|great| unemployment rate and others like that), that it is important|influentially| for creation|making| of statistical|collation| base|baseline| of the most backward regions.

The basic|main| elements of regional policy|politics| of the European Union|conjunction| are|appear|:

• tax policy|politics| is tax payments|paymant| and privileges which determine the tax system of region and mode|regime| of taxation of entrepreneurial activity;

• fiscal policy is a mechanism of forming and use of state|domainal| financial|cost| resources and their redistribution between regions;

• price policy|politics| is government control of prices|shedrod| and tariffs|rate|, facilities and forms|form| of this adjusting|adjustment|;

• investment policy|politics| is a measure|step| on support of investment activity of being|manages| in a charge subjects, distributing|division| of budgetary|on-budget| capital investments;

• structural|structure| policy|politics| is the system of measures|step| on support and restructuring of enterprises;

• social policy|politics| – decision of terms and requirements to|by| enterprises for making non-economic relations;

• institutional policy|politics| is state|domainal| measures|step| on forming of new|firsttime|, liquidation of old and transformation of existent own, labour, financial|cost|, social and other economic|economical| institutes|institution|.

Priority directions of regional policy|politics| of the EU are|appear|:

• assistance|contributory| to structural|structure| re-construction and development of the depressed regions (this purpose concerns those regions only, where level|Y-level| of GDP per capita during|for| three years|Hecht| was below 75% than in average |AV|in the EU);

• granting of financial|cost| resources to the regions, where industrial stagnation takes place;

• fight against the continuous unemployment and supporting of employment initiatives;

• adaptation|accomodation| of businessmen, industrial workers to|by| the system changes|changing|;

• financing of agricultural|farin| territories development and acceleration of structural|structure| re-construction of agriculture;

• giving help to the North countries with extremely|completely| low|subzero| closeness of population.

As a general rule, European assistance should complement that of the Member States, not replace it. The Community share of financing varies from 25% to 85% of the total cost, depending on circumstances. Naturally, it is highest in the Member States and regions whose public sector is unable to shoulder the financial burden of development alone. Whenever possible, public-sector assistance (both national and European) is also supplemented by private-sector finance.

The Structural Funds and Cohesion Fund provide grants, while the European Investment Bank supplies loans for development projects. The Cohesion Fund puts up direct financial assistance for large transport - and environment-related infrastructure projects. The Structural Funds, on the other hand, tend to finance programmes which provide a wide range of measures to promote development in a given area. These development programmes are drawn up by the Member States and, whenever possible, in collaboration with the regional and local authorities and the relevant social and economic partners.

For self preparation: financial resources distribution on regional development in recent years; European Regional Growth Fund; Structural Funds, Cohesion Fund.

4.2. Policy|politics| on social development

Policy on social development (social policy) is one of the horizontal policies of the EU, which in accordance with the Treaty on European Community foundation (article 136), is directed on the increasing of employment level, improvement of living and working conditions, providing proper social defence, dialog maintenance between employers and employees, management of human capital for employment level increasing and fight against social injustice. The EU supports and complements activity of countries-members in the field of improvement of terms of labour, informing and consultations of workers, in relation to social questions, to market of labour, smoothing of rights for men and women, development in the questions of employment for these aims achievement (article 137 of the Treaty on European Community foundation).

Social policy is carried out in four basic directions:

1) social grouping in the EU;

2) common employment policy;

3) policy on education, professional training and young people affairs;

4) common measures on living and working conditions improvement.

While fully recognising that the main political responsibility in these areas rests with the national, regional or even local authorities, the EU wants to can play a valuable role in promoting cooperation or even joint action, given that most of the problems faced are common to all the Member States.

Social security systems in the EU countries are not all based on the same model. They reflect a history, traditions, social advances and a cultural heritage that are specific to each country and which cannot be changed. Any harmonisation of existing systems is therefore out of the question.

The Social Charter contains the following provision: "According to the arrangements applying in each country, every worker of the European Community shall have a right to adequate social protection and shall, whatever his status or whatever the size of the undertaking in which he is employed, enjoy an adequate level of social security benefits; persons who have been unable either to enter or re-enter the labour market and have no means of subsistence must be able to receive sufficient resources and social assistance in keeping with their particular situation".

On 23 April 1998, the Commission published a report on social protection in Europe (1997), in which it analyses recent trends in Member States' social protection systems and reviews the various measures adopted by Member States to control expenditure and increase efficiency.

The fight against social exclusion features in the Amsterdam Treaty, in conjunction with the possibility of appropriate measures being adopted on a qualified majority basis. With this new development in mind, the Commission is considering re-launching the dialogue on social exclusion with the Member States, the social partners and representatives of civil society (NGOs, foundations, etc.).

To facilitate the economic and social integration of elderly persons and the disabled, the Community has also launched the TIDE initiative, which is designed to promote the creation of an internal market for rehabilitation technologies in Europe.

As regards disabled people, the HELIOS II (1993-97) Community action programme came to an end on 31 December 1996. On the basis of its communication on equality of opportunity for people with disabilities, in which attention is drawn to the insufficiency of policies aimed at accommodating people to their disabilities with resultant marginalisation from society (the approach advocated entails identifying and removing the barriers to the full integration of disabled people in society, particularly as regards their active participation on the labour market), the Commission is preparing a new policy in favour of people with disabilities, geared more to equality of opportunity and cooperation with the relevant Communities.

The Commission also promotes schemes designed to reinforce policies for the integration of migrants who are nationals of third countries residing legally on EU territory. To give a new impetus to the overall strategy at EU level, the Commission adopted a communication on racism, xenophobia and anti-Semitism. Moreover, 1997 was designated as "European Year Against Racism". This has led to the establishment of the European Monitoring Centre on Racism and Xenophobia, whose task is to study the extent and development of these phenomena, to analyse the causes and to disseminate examples of good practice. On the basis of the results of the European Year Against Racism (1997) and new Treaty provisions against discrimination, the Commission has adopted an action plan aimed at establishing a partnership among all the players involved in the fight against racism in the European Union (Member States, NGOs, social partners, local authorities, media, etc.).

The Amsterdam Treaty contains a general provision aimed at combating discrimination based on sex, racial or ethnic origin, religion or belief, disability, age or sexual orientation, whereby secondary legislation may be adopted unanimously (new Article 6a).

In 2006 Council of the EU made a decision on|concerning| creation|making| of the special Fund of adaptation|accomodation| to|by| the changes|changing| caused|call| by globalization. A fund was created to help the citizens of countries-members|limb| of the EU, which|what| have lose their job as a result of globalization, structural|structure| changes|changing| in world trade and their negative influence on the economy of region or industry|branch|. In 2007 European Commission (EC) accepted|take| five-year strategy (2007-2012) on health and safety|crashworthiness| providing|ADM| in workplaces for the EU citizens. New|firsttime| strategy of the EU must result quarter reduction |abbreviation|of work accidents amount|quantity| to 2012.

Also in 2007 the new|firsttime| program of grouping policy|politics| on the nearest|next| years (2007-2013) was published. For|after| these years the EU is planned to give approximately 347 bln. euro on the program realization. The main priorities|precedency| are|call| investments to the science and technology sphere|technicology|, development of information and computer technologies|technicology|, small|mini| and middle|AV| enterprises, and also general|common| and professional training|teaching|.

In 2010 the strategy of the EU further development «Europe 2020. Strategy of smart, stable and inclusive growth|height|» was accepted. According to the Strategy, one of the EU main directions is overall development, which includes: high level|Y-level| of employment, increasing|rise| level|Y-level| of investments into education|formation| and in-plant training, fight against poverty and modernization of labour-market, training of personnel and improvement of the social defence system|protection|, social unity promotion|raise|).

EC has implemented two basic|main| initiatives, called to accelerate progress from these priority directions: 1) «New|firsttime| skills and new|firsttime| workplaces|job|» assumes modernization of labour-markets and enhancement of people by their life-long skills improvement, to improve|bootstrap| the labour market with help of labour force mobility; 2) «European platform|stillage| on fight against poverty» means providing|ADM| social and territorial solidarity, providing|ADM| of working places for population, which lives in the conditions of poverty and social isolation|insulant|.

For self preparation: the European Social Fund

4.3. Tax policy|politics| of the eu

The tax policy of the EU is a totality of different forms and types of taxes (obligatory payments which are tightened official authorities), methods of their collection, distributing and use. The tax policy is the major element of the tax system.

The tax policy|politics| is one of economic|economical| policy directions|politics|, containing the complex of aims and measures|step| of the state|what| and intergovernmental (integration) institutions|formation|, directed|ducted| on the effective functioning of the tax system in accordance with|according to| the social and economic aims of society. A tax policy|politics| has different|diverse| functions, the main which|what| are fiscal, regulative and stimulant.

Tax policy|politics| forming and realization is necessary for:

1. achievement of financial|cost| independence of the EU from national treasuries|treasure-house|;

2. forming of common market, common economic|economical| and political space which requires abolition of foreign trade tax duties;

3. overcoming of differences in social and economic position|rule| and development of the EU countries-members|limb|, which requires the coordinated fiscal policy|politics| realization, directed|ducted| on the helping the less developed countries and regions, on stimulation of certain|definite| spheres and industries|branch| of national economies;

4. holding of common coordinated|common| customs policy to|in regard to| the third|third-| countries (not members|limb| of the EU);

5. forming of tax policy|politics| of the EU, which|what| provides fiscal neutrality and tax harmonization.

Fiscal neutrality is related|ties| to the ratio of domestic production and import|imp.| of the EU countries-members|limb|. The task|tsk| of the EU is to achieve equal taxation of internal|inlying| goods and goods imported from the countries-members|limb| of the EU. It was carried out by replacement of the combined|joint| multi-stage taxes (what do not guarantee such neutrality) by the new|firsttime| circulating|convertible| tax – value-added tax (VAT). The structures of VAT were harmonized in all countries-members|limb| of the EU.

Tax harmonization consists in simplification of structure of taxes, replacement of the multi-stage system of taxes by the unique|single| norm|standard| of taxes; harmonisation of tax rates in the EU; harmonization policy realization according to the certain|definite| categories of taxes, namely: non-direct and direct taxes.

4.4. Competition policy|politics|

Competition policy of the EU is one of the horizontal common policies of the EU countries, which is realized on the basis of the EU institutions within the limits of their jurisdictions, includes the antimonopoly policy and directed on supporting and stimulation of competition in all of spheres and sectors of economy (and in the whole public life). The competition policy is an exclusive power of the EU and is examined as a central area of cooperation in the context of common internal market creation (has a goal to liquidate all barriers between national markets and promote integration). The competition policy is co-ordinated by the special Commission on Competition.

The competition policy|politics| assumes making legislative, infrastructural and other conditions |first and foremost|for free market competition and prevention of their curvature. The antimonopoly policy as a part of competition policy|politics| is as a system of measures|step| on prevention, limitation|limination| and stopping of monopolistic activity of economic|economical| agents on goods and financial|cost| markets. The competition policy|politics| is directed|ducted| on the active discover of the spheres, where competition mechanisms can be weak for prevention of these phenomena|phenomen|. In that time the antimonopoly policy|adjustment| reacts on a situation which|what| was already folded|is| at the market, when there is a fact of monopolistic tendencies and/or their negative effects.

The main objective of competition policy of the EU is providing free competition between companies by creation of effective mechanism of supranational control after restrictive business practice, flexible and successive overstate governing. The proper institutional principles are created for this purpose.

EU Competition Policy aims to guarantee an undistorted Single Market. The Treaty of Rome recognized that a common competition policy was essential if the consumer was to enjoy the benefits of European economic liberalisation.

The rules apply to all companies operating in the Single Market, irrespective of their ownership. While Member States have their own bodies to enforce national competition laws, the European Commission investigates breaches of the competition rules. The Commission has significant powers including imposing fines, forcing changes in merger Treaties and blocking state aid. Decisions can always be challenged in the European Court of Justice.

EU competition policy covers the following situations:

• Abuse of a dominant position: this principle is laid down in Article 91 of the EU Treaty. Enjoying a large share of the market does not, in itself, bring an economic operator into conflict with competition rules. However, there are many examples of ways in which companies abuse a dominant position. These include making customers pay unfairly high prices or squeezing out smaller competitors through predatory pricing. Equally, dominant positions can be abused through distribution arrangements such as exclusive dealerships or imposed customer "loyalty" contracts.

• Anti-competitive Treaties between companies: this principle is laid down in Article 92 of the EU Treaty. Companies in a given sector may choose to co-operate rather than compete with their rivals. They may collude in cartels to try to fix prices or carve up markets. Selective distribution systems are also potentially anti-competitive - although Treaties between manufacturers and dealers can be justified in the interests of efficiency or through the provision of high quality after-sales service. They should not prevent consumers in one EU Member State buying a product in another where the price is cheaper. Certain industries rely on co-operation between competitors and the Commission has the power to lay down the conditions for such Treaties to be considered compatible with the competition rules automatically (so-called "Block exemptions").

• Mergers and takeovers: the most recent addition to the EU competition policy came in 1990. The Commission was entrusted with the role of controlling mergers and takeovers which could restrict competition in the Single Market. This is limited to companies over a certain turnover size – though this is irrespective of ownership, and can even cover mergers between two non-EU companies. The Commission has the power to block mergers, or to impose conditions such as the sale of assets to prevent creation of a dominant position.

• State aids: decisions by Member States' Governments can also restrict or distort competition in several ways. Member States may be tempted to subsidise national firms to help them face competition from other parts of the Single Market. In most cases, state aid is deemed justifiable. This includes promoting the economic development of disadvantaged areas, culture and heritage conservation and projects of common European interest. But the Commission has the power to block, or to enforce the repayment, of aid. Particular emphasis has been placed on state owned companies subsidised to compete with private sector rivals.

4.5. Environmental policy

A common environmental policy of the EU is the ecological program of the EU, directed on stable development which takes into account modern necessities, not risking possibilities of development for next generations. The ecological policy of the EU develops on such directions:

1. Creation|making| and support of organizational and economic|economical| mechanisms of environment saving

2. Defence|protection| of eco-laws:

   • right of judicial|judical| defence from the actions|act| of ecological|ecofriendly| violators|penetrator|, right to deny|contest| in the court of action|act| governments, procedural rights (access to|by| information, right on participating in making a decision from the environment saving);

   • right of judicial|judical| defence at a direct|immediate| damnification to the plaintiff|libelant| and right for application of positions|rule| of restrictive legal norms|standard|;

   • right on favourable|auspicious| environment or right on information about an environment.

Environment was only formally incorporated into the EU policy portfolio in 1985 through the Single European Act. The broad objective for action at the Community level was to preserve, protect and improve the quality of the environment. This extended from promoting more rational utilisation of natural resources to measures contributing to the protection of human health.

The "polluter pays" principle was enshrined in the policy from the outset, along with the ideas that preventive action was preferable and that environmental damage should be rectified at source wherever possible. Furthermore, the concept of "subsidiarity" was born - EU level action should be taken only to the extent that the objectives could be better attained than at the level of Member States. Later additions included the pursuit of sustainable development and, with the influence of new Scandinavian Member States, the idea that more stringent national protective measures could be taken, provided other trade principles were respected.

In addition to the adoption of common rules in key policy areas, cooperation projects are funded through a financial instrument for the environment (LIFE).

Research and technological development in the environment is also a key theme under the R&D Framework Programme. Specific initiatives in the energy sector are funded through the "SAVE" and "ALTENER" initiatives.

Closer institutional collaboration takes place through the European environmental information & observation network, and the European Environment Agency was created in 1990 with its seat in Copenhagen.

Over a relatively short period, environment has emerged as one of the most important and heavily loaded areas of EU activity. The policy area in which the principle of subsidiarity was developed has seen rapid expansion of activities at the EU level.

Policy Areas

• Water quality

Trans-boundary effects of pollution have already led to the development of common standards at the EU level for drinking water and urban waste water. These measures set out a framework which is then implemented through national laws in the Member States. Similar arrangements are in place to protect against pollution of ground water and the marine environment by dangerous chemicals including agricultural fertilisers.

• Air quality

Binding limits for the levels of sulphur dioxide, lead, nitrogen dioxide, asbestos and other suspended particles in the air are already in force. Measures have also been agreed to limit emissions of pollutants from municipal waste incinerators and other forms of industrial complexes. The protection of the ozone layer (under the Montreal Protocol) and curbs on green house gas emissions (in the follow-up to the Kyoto summit) are examples of broader international Treaties negotiated by the Community.

• Dangerous substances

At the outset, EU policy focused on developing a common classification system for dangerous substances. More recently, biotechnology has emerged as a key area of concern for the future. An EU regime for agreeing experimental and commercial releases of genetically modified organisms into the environment has been in place since the early 1990s and is currently being reviewed.

• Waste disposal

The EU has been at the forefront of world-wide efforts to supervise and closely control shipments of dangerous waste material. Within the EU, general rules already exist on landfill and incineration of rubbish and specific sectoral arrangements are in force for disposal of oils, waste from the paper industry and agricultural sludge.

A key priority for many years has been to ensure that the environmental impact of major public and private sector projects is properly assessed. Within the single market, common rules are also in place for eco-labelling of products. The Commission has been working to take environmental factors more fully into account in all its policies: agriculture, fisheries, transport and energy will be particularly important over the coming years.

Among the important results of the Kyoto climate change summit in December 1998 was the Community-level commitment to reduce emissions of a basket of 6 greenhouse gases by 8%. EU Environment Ministers have already agreed how this should be split among the Member States ("burden sharing") by cooperation rather than legislation. Furthermore, specific sectoral negotiations have taken place with the European car manufacturers' Community to agree future limits on exhaust emissions.

The European Commission in the suggestions|sentence| to|by| the Sixth program of actions|act| on environment of the EU (in 2001-2010) defined ecological|ecofriendly| aims and actions|act| for their achievement for the followings|downstream| 10 years:|Hecht|

• reduction of extras on 8% from 2008 to|by| 2012 and from 20 to 40% to 2020, implementing structural|structure| changes|changing|, especially|in particular case| in power and transport|cargo-carrying| industries|branch|;

• formation of the network|net| "Nature| 2000" for the distraction of threats to the survival|survivable| of many kinds|appearance| and their natural habitats in Europe through|from| the system of sector plans of actions|act| in relation to|concerning| a bio variety;

• revision of system of risks control, related|ties| to the chemical|chinagraph| elements, strategy on risks reduction from pesticides, defence|protection| of quality of water in the Union|conjunction|, reduction of noise and thematical strategy for air quality|aer|;

• stable|high-stability| use of natural resources through|from| increasing of re-cycling of garbage and prevention of contamination.

On the modern stage (beginning from 2003 for a present tense) ecological|ecofriendly| activity of the EU is carried out on the basis of ecological|ecofriendly| jurisdiction|conusance|, foreseen Treaty|contract| about European Union|conjunction|. Ecological|ecofriendly| activity is related|ties| to other directions of activity of the EU. Perfection|triming| of the legal governing of environment saving is conducted in the EU. The acts, which make the legal base|baseline| of collection and analyzing of ecological|ecofriendly| information, monitoring of environment, ecological|ecofriendly| certification|sertification|, estimation|appraisal| of influence on environment and the mechanism of financing of ecological|ecofriendly| measures were renewed.|reduction-oxidation|.....|

The EU gradually grows into a «ecological|ecofriendly| union|conjunction|». Countries-members|limb| of the EU have the obligation to integrate the task|tsk| of environment saving and directives|instruction| of the EU to their national legal acts in appropriate sphere.

European Agency on Environment Saving and European network on ecological information and supervisions (EMEIN) solve the problems of environment saving at the level of the EU. The purpose of these organizations is providing the EU, countries-participants and countries-not members with reliable information, and also realization of measures on defence of environment, proper informing of public.

The common environmental policy|politics| of the EU is based on the followings|downstream| principles:

• preventive principle;

• principles of use of preventive measures|step|;

• principle «politer must pay» for indemnification|compensation| of harm|diseconomy| an environment.

The EU environmental work|wrk| is characterized be integrated|intergrable| preventive approach which|what| takes into account human activity and its consequences |all in all|. The pro-active policy|politics| of the voluntary prevention is reflected in the Directive|instruction| on evaluation|evaluating| of influence of certain|definite| state|domainal| and private projects to|concerning| environment and natural resources, which|what| take into account an obligation|commitment| in accordance with|according to| international Convention of "Espoo|" on evaluation|evaluating| of influence on environment in a transnational context.

Prevention also is|appear| the purpose of Regulation on "Eco-audit|", which|what| allows|permit| the voluntarily participating of companies|Co.| of industrial sector in the chart of eco-management and audit|. This chart is based on three elements:

• development|elaboration| and realization the mentioned companies|Co.| of ecological|ecofriendly| policies, programs and control the system for places|seat| production;

• systematic, objective and periodic evaluation|evaluating| of efficiency of these programs and systems independent controllers;|

• annual informing of public in the form of companies|Co.| presentation, which|what| take part in the system "ecological|ecofriendly| declarations". The logotype of the EU must improve|bootstrap| the image of organizations which|what| take the care of reduction of their influence on an environment, taking part in a chart.

The general|common| direction of environmental policy|politics| of the EU is in the last program of actions|act| "Environment 2010: our future, our choice", which |her| is concentrated on 4 main areas|domain|: change|changing| of climate, nature and bio variety, environment and health saving, and also natural resources and waste products.

The Lisbon Treaty gives|return| priority|precedency| to the EU for the purpose of steady development providing|ADM| in Europe on the basis of high level|Y-level| of environment saving. It makes "assistance|contributory| of making measures at an international level for the decision of regional or world ecological|ecofriendly| problems and, in particular|including|, to the fight against the change|changing| of climate" one of aims of ecological|ecofriendly| policy”|politics|. The energy policy|politics| of the EU must be conducted "taking into account the necessity of maintenance|safety| and improvement of environment".

Theme 5. Common policies of the eu in different|diverse| sectors of economy

5.1. Enterprise policy

5.2. Research and development policy|politics| of the EU

5.3. Energy policy|politics|

5.4. Transport|cargo-carrying| policy|politics|

5.5. Fisheries policy|politics| |piscary

5.1. Enterprise Policy

The main objectives of the enterprise policy, which result from the Commission's Report presented to the Madrid European Council of 1995 and which are specified in terms of concrete actions in the 1996 Integrated Programme and the Third Multiannual Programme for SMEs in the European Union, are as follows:

• to simplify and improve the administrative and regulatory business environment, in particular by the following actions:

1. ensure consideration of the interests of SMEs in the various Community initiatives and policies,

2. simplify and improve Community legislation,

3. increase transparency and spread of best practices on simplifying and improving the administrative and regulatory environment,

4. improve the framework for transnational operations of SMEs.

• Improve the financial environment for enterprises, particularly in the following aspects:

1. improve access to loan financing,

2. intensify efforts to reduce late payment problems,

3. facilitate the development of specific financial instruments,

4. stimulate the development of capital markets for fast-growing SMEs.

• Help enterprises to Europeanise and internationalise their strategies, in particular through better information services, through the following initiatives:

1. develop information services (Euro-Info-Centres),

2. improve the promotion of SME policy actions,

3. promote co-operation through business search networks (BC-NET/BRE),

4. promote direct contacts through partnership programmes,

5. develop subcontracting partnerships;

6. promote access to new markets and internationalisation of SMEs.

• Enhance SME competitiveness and improve access to research, innovation and training, with a particular focus on the following aspects:

1. increase the innovative potential of SMEs,

2. stimulate management training,

3. adaptation to environmental requirements.

• Promote entrepreneurship and support special target groups, with particular emphasis on the following aims/groups:

1. business culture and entrepreneurship,

2. craft and small enterprises,

3. enterprises in commerce and distributive trades,

4. women and young entrepreneurs and enterprises owned by minorities.

For self preparation: 1) The legal bases of the enterprise and SMEs policies in the EU.

2) Statute for European companies.

3) European Economic Interest Groups (EEIG).

4) Loans for SMEs in the EU.

5.2. Research and Development Programmes in the eu

The European Union promotes scientific research and technological development by funding collaboration between universities and research establishments across Europe. The broad aim of strengthening the technology base of European industry was set out at the same time as the idea of creating the single market in 1986.

Since that time, EU research and development policy has been set out in multi-annual "Framework Programmes", each of which have had the following elements:

• thematic programmes - outlining the key priority areas eligible for funding;

• international cooperation - with institutions in countries outside the European Union;

• improving mobility and training of the EU's researchers; and

• disseminating results to maximise industry's use of pre-competitive research.

Over the period 1994-1998, the 4th Framework Programme's priority themes were information and telecommunications technologies, environmental research, biotechnology and health, transport systems and the impact of technology on society. It accounted for around 4% of publicly funded research in the EU. Small and medium-sized enterprises (SMEs) were identified as a key target for the dissemination process.

In addition to collaborative research, the EU's Joint Research Centre (JRC) carries out basic research in the fields of nuclear safety, remote sensing (by satellite), materials research, environment, information technology and systems engineering. Formally reporting to the European Commission, this research is carried out in Geel (Belgium), Karlsruhe (Germany), Seville (Spain), Ispra (Northern Italy) and Petten (the Netherlands). In addition, the Joint European Torus in Culham, Oxfordshire employs some 300 EU and Swiss scientists engaged in developing nuclear fusion technology.

In 1998, the 5th Framework Programme was adopted for the four-year period 1999-2002 with a budget of euro 15 billion. The thematic programmes are:

• quality of life and management of living resources (euro 2.4 billion),

• the user-friendly information society (euro 3.6 billion),

• competitive and sustainable growth (euro 2.7 billion),

• energy, Environment and sustainable development (euro 3.1billion).

For self preparation: Framework Programmes (table – number, period, thematic programmes (priorities), financing)

Information Society

The main aim of information society policy in Europe is to support Europe enter the digital era by accelerating the development of the Information Society in Europe in order to stimulate the creation of new services and economic activities. EU policies in the IT sector also aim at organizing and managing the EU Internet domain and combating illegal and harmful content on the Internet.

The EU also wants to enhance competition in communication services in Europe, through the revision of the regulatory framework for liberalisation of communication services, the monitoring of the execution of the regulatory framework in practice, and by supporting of the liberalisation process and the development of new services at global level.

The EU also wants to strengthen research and technical development (RTD) potential in the area of Information Society technologies in Europe, through its specific RTD programme "Information Society Technologies" and increase public awareness of the impact of the information society through its programme PROMISE.

For self preparation: 1) EU supranational bodies on support of RTD. 2) European Research Area (ERA). 3) “Eurostars”.

5.3. Energy policy

One of the objectives of the single market in energy, as set out in a Commission's 1988 working document is to introduce competition between the suppliers of energy products, in particular to bring down production costs. The need to take account of the distinctive nature of the energy sector (to ensure security of supply, to protect the environment and to defend consumer interests) means that this is more complex than in other sectors.

The direct application of the Treaties of Paris and Rome have made it possible to create a single market in coal and petroleum products. However, the situation is more complex for gas and electricity which have to be transported and distributed in networks.

In order to do this, the Commission has opted for an approach in stages.

The first stage consisted of improving the transparency of gas and electricity prices charged to end-users and arrangements for the transit of gas and electricity between the main networks of the European Union.

The second stage, which began in 1992, consisted of eliminating a number of restrictions on equal access for undertakings in the area of hydrocarbons prospecting, exploration and production and laying down common rules for the gas and electricity markets which recommend, among other things, third-party access to the network.

The third stage, which has not yet begun, should enable the internal market to be completed in all of its component parts.

The implementation of the second stage regarding third-party access to the electricity network has given rise to a lively debate. Even though the Member States were not opposed to the principle of liberalising the transport and distribution system, two conflicting concepts persisted: the argument in favour of a single buyer and the argument extolling negotiated third-party access.

Finally, in December 1996, a compromise was reached which resulted in the adoption of the Directive laying down common rules for the production, transport and distribution of electricity. As for the discussions on gas, which had been bogged down since 1994 pending the outcome of the electricity deliberations, these were resumed recently. An Treaty on liberalisation in the gas supply sector, which is one of several objectives under the Action Plan on the single market, was reached on 8 December 1997.

The completion of the internal market for energy is accompanied by measures aimed as strengthening economic and social cohesion such as the creation of trans-European energy networks.

Legislation on Community guidelines in this area and on measures to create a favourable context for the trans-European networks was adopted during 1996. The decisions on the guidelines contain the list of projects of common interest in the trans-European electricity and natural gas networks.

The introduction of the trans-European energy networks also has an impact on relations with third countries. Interconnections have been made with certain Mediterranean countries, the

In its White Paper of 13 December 1995 on an energy policy for the European Union, the Commission put forward an energy framework based on the common objectives on which energy policies must be focused.

Similarly, on 8 December 1997, the Commission presented to the Council a proposal for a multi-annual framework programme grouping together all the various actions and the means whereby they are financed in the context of an overall Community energy policy.

With a view to achieving these strategic objectives, the Commission has taken a series of initiatives in the following areas:

• promotion of renewable energy sources,

• improvement of energy efficiency,

• promotion of the production of combined heat and power (CHP),

• the restructuring of the Community framework with regard to the taxation of energy products.

For self preparation: Hague European energy chart (1991)

5.4 Transport Policy

EU transport policy strives to achieve greater coordination between national transport policies; more competition between transport suppliers; an integrated approach to infrastructure development and firm constraints on state aids to national operators. It also seeks to enhance the safety, efficiency and environmental compatibility of transport in order to achieve sustainable mobility.

In order to exploit the full potential of the Single Market, Trans-European networks (TENs) (which include energy, telecommunications and the environment as well as transport) are being established to transform 15 individual networks into a single network on a European dimension.

• Priority projects: In 1994 it was agreed to support 14 priority transport projects across the EU to build new and upgrade current transport networks.

• Funding: Huge investment is needed. There are various sources of funding for TEN projects. The European Investment Bank provides low interest loans for large TENs projects while loan guarantees are available from the European Investment Fund. Investment is also available through Public/Private financing and development Partnerships (PPPs). Structural Funds: the European Regional Development Fund for the least favoured regions, the Cohesion Funds and Community initiatives such as INTERREG (for cross border cooperation) are also available.

Liberalisation of transport networks has brought substantial consumer benefits in terms of choice and price. Companies are free to operate services in other Member States.

The energy consumption of the transport sector makes up 30% of the total final energy consumption of the EU. Road transport is responsible for 84% of this and contributes over three quarters of the total carbon dioxide output. More environmentally friendly alternatives such as high-speed trains, inland waterways and new technologies for traffic management are being found. In response both to customer demand and EU legislation, automobile manufacturers are making progress in reducing emissions.

The information society is transforming travel and transport. In the last 5 years, it is estimated that Euro 900 million from the EU budget was invested more than in transport related research and technical developments. Programmes focus on applying new digital technologies to road, rail, air and sea traffic management to make travel safer, easier and less environmentally polluting.

The Agenda 2000 proposals treat the construction and modernisation of transport networks of common interest in applicant countries as one of the central challenges to the accession process. All applicant countries are involved in TEN discussions to establish a coherent transport network for an extended EU.

5.5. Fisheries Policy

Over-fishing is a global problem. But the combination of a large traditional fishing industry in the EU, the fact that fish know no frontiers, and the proximity of EU countries to each other has made an EU fishing policy inevitable. The fact that many traditional fishing communities have few if any alternative sources of employment makes the issue particularly sensitive. Over half a million people are employed in fisheries across the EU. Fishing is also a historic industry, and disputes between fishermen have been a traditional source of international conflict. The Common Fisheries Policy (CFP) exists to help manage EU fish stocks and to balance the interests of those Member States with fishing industries.

The key rationale behind the CFP is that fish stocks need to be protected. The alternative is a downward spiral to the point where an economic fishing industry is no longer viable. The CFP sets conservation measures aiming to avoid catching too much fish and catching fish too young. Two core mechanisms are used to avoid too much fishing. Firstly, each year Member States agree on total allowable catches (TACs) which impose a limit on the output of the fleets. These TACs are shared out according to a key based on "relative stability" which is a commitment to stability in the allocation of fishing rights (quotas) among Member States. Secondly, the CFP imposes a limit on input by restricting the capacity of the fleet and/or its fishing effort. Technical measures including minimum net mesh sizes, closed areas, and seasons and minimum landing sizes are set by the Council to avoid catches of immature fish.

Multi-annual Guidance Programmes (MAGPs) are set for each Member State fixing objectives to ensure that the fishing effort expended by the EU fleets match the available resources. This is being achieved by reducing fishing capacity and/or activity through scrapping vessels or by reducing fishing effort (measured by multiplying the capacity of a vessel by the number of days spent at sea). EU funds have been set aside to help the sector in this necessary restructuring process. At the end of 1997, almost all Member States had met their overall objectives though efforts were still required in some fleet segments.

Discards have become the subject of considerable debate recently. Studies have shown that discards occur for a variety of reasons from compliance with conservation measures to lack of marketing opportunities. The new Regulation on technical measures and the current Commission proposal on the combination of nets on board should help to reduce the level of discards.

In some areas, pollution may adversely affect fish resources but there is little if any evidence that problems associated with pollution are widespread. There are claims that fishing gear and activities can have an adverse impact on the marine environment. Although evidence is difficult to find, these real or potential problems need to be taken into consideration.

Around a quarter of the EU fishing catches come from international waters or from the waters of third countries with which the Community has concluded fisheries Treatys. These Treatys are an integral part of the CFP.

The 2002 review is being used as an opportunity for a general appraisal of the CFP. This has involved a detailed questionnaire sent to the fisheries industry, environmental organisations, consumer organisations and others across the EU, as well as public meetings from the Aegean to Aberdeen. It covers issues such as how to improve conservation, how to involve fishermen themselves in decisions, and how to improve quality for consumers.

Content module II. Industrial and agricultural|farin| policy|politics| of the eu as basic sectoral policies Theme|object-matter| 6. Industrial policy|politics| of the eu

6.1. Necessity of common industrial policy realization |politics|

6.2. Legal bases and organizational elements of industrial policy|politics| of the EU

6.3. Basic|main| directions and measures|step| of industrial policy|politics| of the EU

6.4. The EU policy|politics| in different|diverse| industries|branch| of economy

6.1. Necessity of common industrial policy realization|politics|

Industrial and enterprise policy|politics| of the EU is one of the sectoral policies of the EU, which|what| is implemented on the basis of institutions|institution| of the EU and within the limits of its jurisdictions|conusance|, includes|switch| stimulation of industry and enterprise development in the context of the European economy competitiveness increasing|ri. In some|certain| cases|accident| the terms|term| «industrial policy|politics|» |and «enterprise| policy|» have different meaning. In wide sense industrial policy|politics| |politics| is the area|domain| of industrial sector development, its structural|structure|, organizational and technological modernization for providing|ADM| steady economic development. In narrow|narrow-width| sense industrial policy|politics| is a complex of interconnected directions and measures|step| of direct and indirect governing|adjustment|, which|what| provides|secure| stable development and industry competitiveness increasing |rise| and also solution of specific problems of certain industries|branch|. The industrial policy|politics| is closely related|ties| to development of enterprises.

The spirit of enterprise is the lifeblood of a modern market economy. Creating a positive climate in which entrepreneurs and businesses can flourish a key to generating the growth and jobs that Europe needs. What is more, in today’s global economy – where many businesses can choose where to operate and produce their goods – it is essential that the EU and its Member States devise rules and regulations that promote rather than hinder the enterprise culture.

The EU is committed through its treaties to create the best conditions for industrial competitiveness and to nurture the growth of businesses, especially SMEs. These objectives are more important than ever as Europe seeks to compete in a globalised economy, not only with established economic superpowers such as the USA and Japan, but also with emerging nations like India, China and Brazil.

Through the Lisbon Strategy, the Community aims to foster economic dynamism and help create more and better jobs. This objective was reiterated and strengthened in 2005, when the EU approved a new strategy for growth and jobs.

Enterprise policy will also play a central role in improving Europe’s economic standing by ensuring that businesses can compete openly and fairly. The aim is to make Europe an attractive place to invest and work in.

Current priorities for enterprise policy:

• promoting entrepreneurship, by encouraging business creation, and supporting companies, especially SMEs, during their start-up and development phase.

• contributing to design, implementation and improvement of a flexible regulatory framework providing access to the single market.

• opening-up of and guaranteeing obstacle-free, fair access to the markets of non-EU countries.

• promoting European competitive performance (encouraging businesses to adapt to structural change and maintaining a high and consistent level of productivity growth).

• ensuring a proper coordination between industrial, energy and environmental policies in order to foster consistency in policy and legislative initiatives.

• taking into account specific characteristics and needs of the different industrial sectors.

• promoting innovation – following up technological developments, new product designs and developing new ways of marketing products (e.g. e-business).

• promoting better access to funding, support networks and programmes.

• promoting simplification of the regulatory and administrative environment.

There are three types|typestyle| of the EU industrial policy by scope|politics|:

1. macroeconomic|macroeconomical|, directed|ducted| on creation|making| of favourable|auspicious| economic|economical| climate for functioning of industry (due to management macroeconomic|macroeconomical| categories and proportions of recreation|reproducing|);

2. sectoral, directed|ducted| on overcoming of market failure in certain industries|branch| of economy;

3. microeconomic|, directed|ducted| on activity |Co.|regulation of certain company or group of companies.

There are followings|downstream| types of the EU industrial policy|politics| by mechanism of action|act|:

• market-oriented|orientable| policy|politics| directed|ducted| on supporting of competition and market freedom|liberty|;

• interventional policy|politics|, which|what| is holding in forms|form| and due to methods of centralized planned economic|economical| systems;

• mixed policy|politics| which|what| assumes certain|definite| combination|petticoat| of market-oriented and interventional policies.

The industrial policy|politics| of the EU does not replace|changes|, but complements national industrial policies: it|her| is used only in those cases|accident|, when its influence is|appear| more effective, than at the level of national governing|adjustment|, and conforms to the actions|act| of national governments (general|common| co-ordination).

6.2. Legal bases and organizational elements of industrial policy|politics| of the eu

As the EU is|appear| a special political, legal and economic|economical| association of the countries, its powers in the field of industrial policy|politics| are set by intergovernmental Treaties|contract|.

The purpose of the EU was defined in Treaty|contract| on European Union|conjunction| (from 7.02.1992 with changes|changing| by Amsterdam Treaty|contract| of 2.10 1997 and by Nice Treaty|contract| of 26.02.2001) in the article 2|definite|: «... to promote economic|economical| and social progress, and also high level|Y-level| of employment, to attain balanced|depthbalanced| and permanent|withstand| development, especially|in particular case| by creation|making| of the space without|senza| internal|inlying| borders, by strengthening|boostering| of economic|economical| and social grouping and by formation of economic|economical| and currency union|conjunction|;...». This purpose determines the general|common| tasks|task| of industrial policy|politics| of the EU.

Treaty|contract| on European Community (taking into account Nice of changes|changing|):

Article 3

For achievement of certain|definite| in the article of 2 aims activity of Community, which|what| is carried out in accordance|homology| with terms, foreseen this Treaty, includes|switch|:

...

m) increase|rise| of competitiveness of industry of Community;

n) assistance|contributory| to research|work-up| and technological development;

....

Section|division| I «Free movement of goods|primage|», article 27

During realization of tasks|task| which|what| are incumbent Commission.., it|her| follows: .

...

b) by the evolution of terms of competition into Community, there are degrees in that, in which|what| it will be instrumental|assist| in the increase|rise| of competitiveness of enterprises;

c) by the requirements of Community in providing|ADM| raw material and ready-to-cook foods; in this connection|as a result| Commission will worry about that the terms of competition were not violated|excite| between the states-members|limb| in relation to|in regard to| the prepared products|production|;

d) by a necessity to avoid serious shocks|fallout| in the economy of the states-members|limb| and provide|secure| rational development of production and growth|height| of consumption|comsumption| in Communities.

Section|division| XVI «Industry», article 157

1. An Community and states-members|limb| provide|secure| terms, necessary for stimulation of competitiveness of industry of Community.

To that end, in accordance with|according to| the system of open market economy, their action|act|, directed|ducted| on:

– an acceleration of adaptation|accomodation| of industry is to|by| the structural|structure| changes|changing|;

– assistance|contributory| creation|making| of favourable|auspicious| environment|Wednesday| for development of enterprise everywhere in Communities, especially|in particular case| small|mini| and middle|AV|;

– creation|making| of favourable|auspicious| terms is for a collaboration between enterprises;

– assistance|contributory| the best use|utillizing| of industrial potential of innovative policy|politics|, development of researches|work-up| and technologies|technicology|.

2. The states-members|limb| conduct conferences with each other, in touch with Commission and, if it is necessary, co-ordinate the actions|act|.

3. An Community is instrumental|assists| in achievement of aims, contained|, in a paragraph 1, through|from| a policy|politics| and activity, that conducted in accordance with|according to| other provisions of the real|this| Contract. Advice, which operates|act| in accordance with|according to| procedure|proc|, foreseen in the article 261, and after consultations|advisory| with the Economic|economical| and social committee, a decision can decree|assert| unanimously about the special measures|step| in support actions|act|, which|what| are carried out the states-members|limb| for achievement of aims, contained |, in a paragraph 1.

This section|division| does not contain|maintain| grounds for introduction|introducting| of some|any| measures|step|, which|what| would result in|to| violation of competition or that contain|maintain| tax positions|rule| or that behave to the rights interests of persons|personality| which|what| work by hiring |, Community.

Lisbon strategy:

A chapter 17 «Industry», article 173

1. An union|conjunction| and states-members|limb| must guarantee terms which|what| are needed for the competitiveness of industry of Union|conjunction|. To that end, in accordance|homology| from system of the opened|reveal| and competition markets, must be aimed on their action|act|:

• an acceleration of adaptation of industry is to the structural changes;

• encouragement of external environment, favourable to initiative, in relation to development of duties on Union on the whole, especially that touches the enterprises of small and middle business;

• encouragement|encouragingly| of external|outward| environment|Wednesday|, favourable|auspicious| to|by| the collaboration between enterprises;

• more complete use|utillizing| of industrial potential of innovative policy|politics|, researches|work-up| and technological development.

2. The states-members|limb| must advise each other jointly|together| with Commission and, where it is necessary, must co-ordinate the actions|act|. A commission can undertake any|some| useful|benefit| initiative for advancement of such co-ordination, in specific initiatives, which|what| conduce to formation of leading principles and indicators, organization of exchange|transput| front-rank|foremost| experience|tentative|, and preparation of necessary elements, for periodic control and estimations|estimation|. European parliament it must be good informed.

3. The Union|conjunction| must be instrumental|assist| in achievement of aims, contained|, in a paragraph 1 through|from| a policy|politics| and actions|act| which|what| pursue the proper other terms of Treaties|contract|. European parliament and Advice, which|what| operate|act| in accordance|homology| with ordinary|usual| parliamentary procedure and after consultations|advisory| with the Economic|economical| and social committee, can define certain|definite| measures|step| in support of actions|act| which|what| will be realized in the states-members|limb|, to attain aims, contained in a paragraph 1, inclusive with any|some| harmonization of laws and decisions|regulation| of the states-members|limb|.

This section|division| must not provide|secure| foundation for introduction|introducting| of any|some| measure|sunset|, which|what| would result in|to| curvature of competition or contain|maintain| tax terms or terms which|what| touch|concern| rights and interests of the hired workers, Union|conjunction|.

Institutional provision|ADM| of industrial policy|politics| foresees not only establishment of legal bases but also functional|function| system of institutions which|what| are engaged into its development|elaboration| and implementation.

The basic|main| institutions of the EU which carry out industrial policy|politics| of the EU are|Carbro|:

1. Council of the EU is a main|head| legislative body of the EU, expert groups are involved in activity of which|what| (for preparation of projects of decisions);

2. European Council is a body of strategic planning and co-ordination of countries of the EU;

3. European Parliament as a legislative body of the EU, within the limits of which|what| is engaged in the questions of industrial policy|politics| Committee on Industry, Researches|work-up| and Energy|power| (ITRE|), Committee on Environment, Social Health and Consumers Protection|consumer|, Committee on Economic|economical| and Payment Issues etc.|;

4. European Commission (EC) as a main|head| executive institution of the EU, initiator|pioneer| of policy|politics| of the EU in all spheres of economy, which|what| has a right for initiation of bill. Within the limits of EC such directorates are engaged into the industrial policy|politics| sphere|immediately|:

• General Directorate on enterprise and industry (before|earlier| is Directorate in matters of industry, afterwards is Directorate from an enterprise), in particular|including| Directorate from issues of small and middle|AV| business;

• General Directorate on competition policy|politics|;

• General Directorate on SciTech (scientific|science| researches|);

• General Directorate on environment;

• General Directorate on energy|power|;

• General Directorate on regional policy|politics|;

• General Directorate on transport;

• General Directorate on taxation and customs union;

• General Directorate on internal|inlying| market and market of services;

• General Directorate on consumers |protection|rights protection|consumer|;

• General Directorate on trade (common market);

• General Directorate on labour employment, public welfare, creation|making| of equal possibilities|potentialitie|;

• General Directorate on programs of financing and budget;

• General Directorate on health protection;

• General Directorate on biotechnology|biogeotechnologies|, agriculture and food stuffs (agriculture and development of rural districts|region|);

• General Directorate is from an economy and currency policy|politics|.

In development|elaboration| of measures|step| of industrial policy|politics| within the framework of the plenary powers take part Directorates from: administrative questions|, internal|inlying| audit, fight against financial|cost| abuses and swindle|swintling| in the system the EU; facilities of communication and mass information; fishing|fishing| and seaworthiness’s; education|formation|, professional preparation and culture; expansion|amplification| of the EU; to development and humanitarian help; international relations, relationships with countries-neighbours.

As consultant bodies on development|elaboration| of industrial policy|politics| are also involved: A group is from areas realization of Lisbon strategy; Advice is on questions of competitiveness; European Advice is on questions of industry; Council of ministers of industry; Advice is from an economic|economical| competitiveness; Advice from future priorities|precedency| for the increased|anti-collision| collaboration in the field of trade education and preparation; European advice of chemical|chinagraph| industry but|yes| other.

5. European Investment bank as a financial and credit institute|institution|, created for investment support of realization of political aims of the EU, financing of projects which|what| have the European value|importance|, financial|cost| help to small|mini| and middle|AV| enterprises;

6. Committee of Regions – co-ordinates support for regions of the EU in accordance with|according to| the tasks|task| of regional policy|politics|;

7. Economic|economical| and Social Committee is a main|head| consultant body on economic|economical| and social policy|politics|;

8. Committee on Employment is a consultant body on realization of policy|politics| in the field of employment;

9. European Court is a main|head| judicial body of the EU, which|what| provides|secure| judicial|judical| control on implementation of legislation of the EU;

10. Council on Economic|economical| and Financial|cost| questions (Ecofin|) is a main|head| consultant body on financial|cost| policy|politics|;

11. European Court of Auditors is a main|head| body of financial|cost| control of the EU;

12. European Central|center| Bank|banque| is an emission centre|heartland| and subject of monetary policy|politics| of the EU.

6/11/2012

Additional institutions of the EU and special establishments which|what| operate|act| within the limits of the EU and in co-operating with his|its| bodies take part in development|elaboration| and realization of certain measures|step| of industrial and enterprise policy|politics| of the EU. They are:

• European statistical|collation| agency (Eurostat|);

• European patent department (EPO|);

• European advice of chemical|chinagraph| industry (CEFIC|)

• Scientific and technical|scitech| committee on science (CREST|);

• European institute|institution| of innovations and technologies|technicology| (EIT|)

• European scientifically technological assembly (ESTA|);

• Consultative committee of industrial research-and-developments (IRDAC|);

• European defensive agency (EOA);

• European service of employment (EURES|);

• European chemical|chinagraph| agency (EXA|);

• European defensive agency (EDA|);

• European Communities of research and technological organizations (EARTO|);

• European centre|heartland| of development of trade education (Cedefop|);

• Agency on harmonization of internal|inlying| market (OHIM|);

• Bodies of European Community on atomic|nuclear-powered| energy – Euratom (Commission of Euratom, Advice of Euratom);

• Research fund of Coal|chaircoal| and Steel (RFCS|);

• European committee on standardization (CEN|);

• European committee of electrical engineering standardization (CENELEC|);

• European confederation of postal and telecommunication managements (SERT);

• European institute|institution| of telecommunication standards|standart| (ETSI);

• European marketing confederation (EMC|), in particular|including| Committee on development|elaboration| of professional standards|standart| (CERCOM|);

• European organization of quality (EOQ|);

• European fund of quality management (EFQM|);

• European organization is from tests|assay| and certification|sertification| (EOTS|).

Interests of industrial enterprises in the process of the EU industrial policy measures|step| development|elaboration| |politics|are represented by|represent| the following|downstream| organizations:

1. Union|conjunction| of businessmen association of the EU countries (BusinessEurope|) – represents interests of employers, mainly|par excellence|, from the sectors of industry, trade and services (usually does not interfere in questions which|what| touch|concern| the concrete sectors of industry); operates|act| both on official|formal| and on unofficial|informal| levels|Y-level|; presented|represent| in official|formal| consultative structures and bodies of the EU (advisory commissions of EC and EP). The special committee which|what| is engaged in the problems of small|mini| and middle|AV| enterprises operates|act| in BusinessEurope|;

2. Enterprise| Strategy| Group|, European| Enterprise| Group| – carries|performs| out monitoring of markets, conducts analytics of industry trends, develops the measures|step| of informative management and informative safety|crashworthiness|;

3. Council| of European| Employers| of| the| Metal|, Engineering| and| Technology-Based| Industries|, CEEMET| – presents interest of enterprises of metallurgy and engineer at co-operating with the bodies of national authorities of countries and by the institutes|institution| of the EU; is presented|represent| in official|formal| consultative structures and bodies of the EU (advisory commissions of EC and EP);

4. European| Confederation| of| Iron| and| Steel| Industries|, Eurofer| – protects|non-load-bearing| interests of enterprises-producers of metal production at development|elaboration| of measures|step| of industrial and trade policy|politics| of the EU;

5. European| Metalworkers| Federation|, EMF| – protects|non-load-bearing| interest of workers of metallurgical industry and their associations|unification|, comes forward the opponent of Communities of employers, in particular|including| Eurofer|;

6. European| Trade| Union| Confederation|, ETUC| – protects|non-load-bearing| interests of trade unions, has status of «social partner», comes forward as an opponent of BusinessEurope| (UNICE|) in the process of «social dialog|dialoque|»; presented|represent| in official|formal| consultative structures and organs|viscus| of the EU (advisory commissions of EC and EP);

7. European| Centre| of| Employers| and| Enterprises| providing| Public| services|, CEEP| – protects|non-load-bearing| interests of state|domainal| enterprises and producers of services of common interest, has status of «social partner», focuses attention|attn.| on the questions of help enterprises, rules of competition, taxation, industrial policy|politics| etc|.; presented|represent| in official|formal| consultative structures and organs|viscus| of the EU (advisory commissions of EC and EP);

8. Association of European Professional Chambers of Commerce and Industry, EUROCHAMBERS| – protects|non-load-bearing| interest of national unions|conjunction| (commercial and industrial chambers and industrial enterprises), has status of «social partner», presented|represent| in official|formal| consultative structures and bodies of the EU (advisory commissions of EC and EP);

9. European| Round| Table|, ERT| or European| Roundtable| of| Industrialists| – protects interests of the biggest European companies|Co.| and business concerns; its working-groups act on such directions: policy|politics| in the field of competition, labour-market, information systems, export control, relations between the EU and the USA, reform of taxation system, introduction|introducting| of common quality standards|standart| and others.

10. EU| Committee| of| American| Chambers| |of Commerce| - AMCHAM-EU – protects interests of American producers on the common internal|inlying| market of the EU, its activity is directed|ducted| on the decision of concrete problems of the European market functioning (for example|eg|, question of monotony of units of measures and scales), after which|what| lectures|report| prepare for EK.

6.3. Basic|main| directions and measures|step| of industrial policy|politics| of the eu

An industrial policy|politics| comes forward direct|immediate| one of constituents of socio-economic policy|politics| of the EU. ITS development|elaboration| and realization is based on the account of conformities to the law of development of economy of the EU, and|but| a basic|main| object is|appear| an industrial sector of the EU, which|what| unites|combine| the industrial sectors of entire countries-members|limb|. The industrial and enterprise policy|politics| of the EU is called instrumental|assist| in achievement of aims of Community, that is why|that is why| the EU co-ordinates within the limits of the prerogatives, regulates and complements such the policy|politics| at the level of separate countries-members|limb|.

Directions and tasks of industrial and enterprise policy the EU are certainly in Treaty about foundation of European Community (see Treaty on of European Community creation) and Treaty about European Union (see Treaty on European Union), and also in other strategic documents, in particular in Lisbon strategy. In accordance with Lisbon strategy of the EU and countries-members must guarantee terms, necessary for providing of competitiveness industrial a sector. Must be aimed on their action: an acceleration of adaptation of industry is to the structural changes; encouragement of external environment, favourable to initiative, in relation to development of duties for the EU on the whole, especially that touches the enterprises of small and middle business; encouragement of external environment, favourable to the collaboration between enterprises; more complete use of industrial potential of innovative policy, researches and technological development.

By development of strategic tasks of industrial and enterprise policy of the EU the basic institutes of the EU (see Institutes of the EU). In composition European Commission the specialized subsection – General Directorate operates from an enterprise and industry, and also consultative organs: A group is on questions of realization of Lisbon strategy; Advice is on questions of competitiveness; European Advice is on questions of industry; Council of ministers of industry, European advice of chemical industry and others like that. The agencies of the EU (see Agencies of European Union) and public organizations are also involved (see Confederation of European business).

The table of contents of industrial and enterprise policy of the EU is related to the institutional forms integrations (customs union, common market, economic and currency union) becoming of which influenced on the methods of support of industry. The modern industrial and enterprise policy of the EU is closely related to the general politicians (see Common policies) in other spheres, integrates them separate measures which touch the certain problems of development of industry and enterprise. The special influence on an industrial policy carries out policy in the field of competition, which denies state support of industry which violates the terms of competition. Consequently the modern industrial policy of the EU utilizes the indirect measures of horizontal character above all things. It is directed on the increase of competitiveness (in the context of stimulation of competition) and providing of steady development of industry on the basis of innovations. The special attention is spared the increase of energy efficiency, change of pattern of consumption of energy resources, introduction ecologically of clean technologies and reduction of harmful extras, in an atmosphere and others like that. Thus, the main measures of support of industry will be realized within the framework of scientific and technical (innovative), power, ecological policy, politicians in the field of standardization and certification. Structural transformations industrial a sector in the EU provided at the level of regions, that predetermines connection with the regional policy of the EU. Stimulation of development of industry is foreseen in the context of social policy, where the problems of creation of workplaces decide.

On occasion within the limits of industrial policy of the EU sectoral measures are utilized. They touch above all things strategically important enterprises and industries of industry, which have specific problems and structural difficulties. The most ponderable sectoral measures are developed at the level of the EU or, at least, realized at co-ordinating support of Community, as can violate the terms of competition at the internal market. Such measures are different enough, because called to improve a situation in different industries, but an important tendency in this sphere is the overwhelming use of indirect methods. On the modern stage in the EU sectoral measures are carried out concerning: steel-making industry; shipbuilding industry; textile and sewing industry; informative industry; to the sector of telecommunications; chemical industry (see Regulation of REACH is «Registration, estimation, permission and limitation of chemical matters»). Often enough sectoral measures are continuation of horizontal measures which are adapted to the specific concrete a sector.

For the modern industrial policy|politics| of the EU characteristic|character| absence of hard of|sectorial| a particular branch priorities|precedency| is as a result of|because of| the diversified structure of business and industrial sector. Therefore large|great| attention|attn.| is spared a policy|politics| in relation to|concerning| an enterprise, which|what| is directed|ducted| on forming of favourable|auspicious| and just legal environment|Wednesday| for development of business. Priority direction of this policy|politics| is|appear| support of small and middle|AV| business.

The legal environment of business in the EU is formed on the basis of removal of contradictions and divergences between the national systems of legislation in relation to companies, facilitation of transfrontal foundation of enterprises and investing (on the base of fundamental Treaties of the EU). These processes are co-ordinated by the Special commission on questions of simplification of business legislation (BEST). For the improvement of the legal mode of activity of companies of countries of the EU statuses were inculcated the «European company» (see European company) and «European private company» (see European private company), the no spread legal function of collaboration – European grouping of economic interests (see European grouping of economic interests) is created, the European charter of small enterprises is signed (see European charter of small enterprises). For an assistance development of collaboration of small and middle enterprises at the level of the EU the row of the special organizations and networks is created, in particular: Europartnership (see Europartnership), Euroinfocenters (see Evroinfocentri), European network of collaboration of business (see European network of collaboration of business), European network of support of enterprise (see European network of support of enterprise) and others like that. A few programs will be realized of sponsorship of small and middle enterprises, for example, of the program of the European investment bank (see European investment bank) that program «Eurostars» (see Program «Eurostars»).

6.4. The eu policy|politics| in different|diverse| industries|branch| of economy

Measures|step| of adjusting|adjustment| of development of industry, partly stimuli|stimulus-response| in relation to|concerning| progressive transformations|transformation| (for example|, realization of modernization and introduction|introducting| of innovations) more frequent|narrow-meshed| all will be realized at the level of separate sectors of economy (to industry). At national level control is saved|kept| above|over| such direct measures|step|, as a help as underbacks|grant-element|, loans|lend|, decline|lowering| of interest rates and others like that. Such measures|step| are used for support strategically of important enterprises. Besides|over and above| a sectoral help and terms of its grant substantially differ in the different|diverse| countries-members|limb| of the EU which can be negatively represented on functioning of unique|single| economic space. Taking into account it, most ponderable|weighable| measures|step| of sectoral support, developed at the level of the EU or, at least, realized at co-ordinating|coordination| support of Community, as can violate|excite| the terms of competition at the internal|inlying| market.

General|common| approach in relation to|concerning| development of enterprise and industrial a sector, that is realized at the level of the EU (consists in the increase|rise| of competitiveness in the conditions of free competition and unique|single| social standards|standart|), complemented measures|step| from sectoral support. A help separate industries|branch| of production is needed through|from| existence of certain|definite| specific problems which|what| do not allow them to adapt oneself to|by| the new|firsttime| terms and stably|high-stability| to develop.

Sectoral support within the limits of industrial policy|politics| is closely related|ties| to the foreign trade policy|politics|, because its measures|step| have a most deep|plunge| influence on industry through|from| the change|changing| of customs tariffs, anti-dumping measures|step|, trade Treaties and stimulations of export. Taking into account existence of customs union of countries of Community most measures|step| of trade policy are in capacity of supranational institutions|, that is why|that is why| national measures|step| on adjusting|adjustment| of trade are harmonized or co-ordinated at the level of the EU. It is under act of competition policy|politics| of the EU, in particular|including| that touches|concern| general|common| Treaties|accord| in relation to|concerning| an export and co-operation from GATT/WTO. Principles of general|common| point-of-sale and competition politician create certain|definite| scopes|frame| for sectoral support both at the level of the EU and at the level of countries-members|limb|.

Traditional directions of sectoral support is|appear| a help industries|branch| which|what| feel substantial socio-economic and structural|structure| difficulties|fan|, and new|firsttime| industries|branch| of industry, which|what| are only engendered or are on the initial|primary| stages of functioning. In these cases|accident| a help must improve|bootstrap| position|rule| of separate industries|branch| in the context of decision of fundamental|basic| tasks|task| of policy|politics| (creation|making| of workplaces|job|, regional development and providing|ADM| of economic|economical| security). Measures|step| of support of industries|branch| are|appear| different|diverse| enough, but an important tendency in this sphere is|appear| the overwhelming use|utillizing| of indirect methods (underbacks|grant-element| on the applied|canalside| scientific|science| researches|work-up|, informative providing|ADM|, consultative services, measures|step| on the increase|rise| of the productivity, favour, in the field of professional studies|teaching| but|yes| other) which|what| have a more «soft|mild|» influence on a market.

Taking into account that sectoral support can negatively influence on trade between countries-members|limb| and to worsen the terms of competition, the important task|tsk| of industrial policy|politics| is become|stands| by creation|making| of pre-conditions|pre-requisite| of effective control after the grant of such help at the level of separate countries-members|limb|. Item 87 and about foundation of European Community the terms of grant of state|domainal| help are set|establish| a 88 Treaty|contract| and give|provide| EK right for control after support which|what| countries-members|limb| straight or indirectly give|provide| certain|definite| enterprises or industries|branch|. In obedience to|according to| the set rules (By an Treaty|contract| or second|secondary| documents|paper|), can allow|permit| EK or forbid such measures|step|.

For illustration of approaches of the EU to|by| the sectoral help will consider examples in support of separate industries|branch|.

A policy of the EU in steel-making industry. For providing of normal functioning of steel-making industry at the level of the EU the common rules of Community on state help to this industry are implemented. They set the scopes of state influence which would not worsen the terms of competition at the common market of steel. Except for it, the market of steel is overcame the careful monitoring through the obligatory informing of EC from the side of steel-making companies about: 1) investment activity; 2) half-year previous programs which touch mastering of new markets and future prospects. Consequently any changes at the market of steel fall under supranational co-ordination.

A place|seat| is important in sectoral support of steel-making industry occupies|borrow| the foreign trade adjusting|adjustment|. This aspect of a particular branch help foresees the use|utillizing| of a few|a little| tariff quotas|cailing| and leadthrough of the previous|preliminary| statistical|collation| monitoring in relation to|concerning| importation of steel from the countries of Central|center| and East Europe. These measures|step| are called at the level of guarantees|warrantly| to warn negative influence of import|imp.| on the producers of steel from the countries of Community.

It follows to mean that in July in 2002 Treaty|contract| lost an action|act| about EOVS. After it the regulator system was deprived the sectoral character|nature| and operates|act| in obedience to|according to| the European policy|politics| in relation to|concerning| all of industrial production. At the same time|simultaneously| instability of market of steel, oscillation|weggling| of his|its| volumes|CU| and prices|shedrod| development, attracts additional attention|attn.| to|by| support of industry|branch| at the level of foreign trade and competition politician.

Shipbuilding industry. In 1989 multilateral negotiations are begun under an aegis Organization of Economic Cooperation and Development (OECD) between the basic countries-producers of ships (countries of the EU, Japan, South Korea, Norway, the USA). Together these countries make over 70 % new ships. In 1994 an Treaty was signed about abolition of all of barriers to the normal terms of competition in this sector. An Treaty must was go into effect on January, 1, 1998. In accordance with it Advice of the EU is develop Regulation about a help shipbuilding industry which executes the provision of Treaty OECD about the observance of normal terms of competition in commercial shipbuilding industry. However much Treaty still did not go into effect through a refuse the USA of it to ratify. In any case Regulation of Community, which operates, forbade to give a help for contract (operating help) execution, beginning from December, 31, 2000 (in accordance with the measures of competition policy of the EU).

In the statement|jiling| of EC it is marked|note| about the European marine|naval| future, that marine|naval| industry matters very much and plays an important role in the economy of Community. Together with a shipbuilding sector industry|branch| is presented|represent| the wide spectrum of commodities|primage| and enterprises, namely: editing of ships, port services, exploitation|maintainance| of marine|naval| resources, in particular|including| and fishing and booty|extraction| of energy. In this context EK suggested to inculcate|introduct| the special policy|politics| of the EU for the enterprises of this industry. The measures|step| of Community must stimulate the immaterial|non-material| investing, in particular|including|, in the field of research activity, information and telecommunication technologies, development of industrial collaboration (co-operations) between the countries of the EU and with the third|third-| countries. Large|great| attention|attn.| is spared the questions of implementation of Treaty OECD about the observance of normal terms of competition and removal|sublation| of obstacles for the free movement of the European commodities|primage| in the third|third-| countries and on the improvement of port infrastructure within the framework of Trans-European| networks|net|. EK through|from| the proper options of Community aims|seek| to harmonize the mechanisms of state|domainal| help a marine|naval| transport, to do possible|possibly| tax support and instrumental|assist| in transparency of mechanisms of help at national level. EK, aiming|seek| to create favourable|auspicious| terms for stable|high-stability| development of shipbuilding industry, concentrates|focusing| effort on protecting|protection| of the proper of|sectorial| a particular branch market from dishonest point-of-sale practice of shipbuilding enterprises of the third|third-| states. In the same context for strengthening of competitiveness research activity and development of industrial collaboration is stimulated a sector.

Textile and sewing industry. This sector has substantial social and economic difficulties and limited reserves of growth, that is why to him the special attention is brought over. At the level of the common internal market of Community EC carries out monitoring of state help and use measures on prevention curvature of competition or to employment and structural disproportions problems transference from one country to another, that can arise up as a result of uncoordinated help on national levels. In accordance with principles of support of competition a few traditional mechanisms of help textile and sewing industry were forbidden. In addition at the level of the EU got encouragement program in relation to systematic reduction of production capacities, restructuring and reorganization of productions, and also support of scientific researches which must provide growth of competitiveness.

For support of production of soft goods the measures|step| of foreign trade policy|politics| are directed|ducted| on providing|ADM| of necessary space for industry of Community and organization of the international trading in Text. with the third|third-| countries. In the field of tasks|task| of foreign trade policy|politics| there is also support of course of countries which develop, on industrialization. Within the framework of the General Treaty from tariffs|rate| and trade (GATT) by|by means of| an Treaty about the international trading in Text. (known as «Treaty about poly-fiber materials|fabric|») bases|foundation| of organization of market are created to Text.. An Treaty, celled within the framework of the Uruguayan round, is directed|ducted| on gradual liberalization of trading in Text. and clothes|CLO| between the countries of WTO. Consequently the general|common| trade policy of the EU is directed|ducted| on opening of the non-European markets and encouragement|encouragingly| of export Text. from the countries of Community, optimization of the use|utillizing| of anti-dumping measures|step|, fight|wrestling|, with subsidies, prevention of knavish|antifraud| declarations of origin of commodity|primage|, and also on the guard|protecting| of design and models. These tasks|task| decide|settle| in the field of general|common| defence|protection| of trade.

Information industry. The increase of competitiveness of the European economy depends on use of information and knowledge. Taking into account it the special value is acquired by advancement in the field of information and of communication technologies (ICT) which give large possibilities in all of spheres of vital functions and change quite a bit aspects of industrial production (methods of labour and organization of business-processes, organization of enterprises, directions and accents of professional preparation, but other). Becoming of informative society which is examined as priority of socio-economic policy of the EU foresees penetration of information technologies in all of spheres of economic and social life. Terms of access to information, to the informative networks and to services which facilitate the use of information, at the level of the EU examined as components of permanent competitiveness. Except for that, ICT stimulate development of many sectors in the field of social services: health protection, education, transport, entertainments, cultural exchange, but other Their use has large potential of increase of level of education and creation of new workplaces, that it is also related to growth of qualification of workers. It answers priorities of industrial policy of the EU.

In 1997 under an aegis|eagis| WTO Treaty was celled about information technologies. In obedience to|according to| it|her| tariffs|rate| on information technologies of countries which|what| present|represent| 92% world trade were finally anniented to January, 1 in 2000 (this process|Carbro| is co-ordinated within the framework of foreign trade policy|politics| of the EU).

Taking into account a scale and importance of problem, the EU defined 4 priorities|precedency| of industrial and enterprise policy|politics| in relation to|concerning| becoming of informative society:

1. improvement of business environment|Wednesday| by complete liberalization of telecommunication market and co-ordination of activity of different regulation bodies|viscus|;

2. investing into the future by intensification of experimental|experienced| activity, directed|ducted| on research|work-up| of problems of informative society and professional studies|teaching|;

3. definition of a person as central|center| value through|from| access granting to|by| a wide set of services with simultaneous defence|protection| of users interests|consumer|;

4. reacting on global|worldwide| challenges through|from| the community|unification| of networks|net|, expansion|amplification| of possibility|potentialitie| of co-operation between the systems of services, improvement of guard|protecting| of intellectual property (in the context of providing|ADM| of free motion|movement| of commodities|primage|) and private life.

Sector of telecommunications. IKT, that utilized informative industry, enable complex to pass a sound, text and image, in one of communication system. It radically changes the operating mechanisms of co-operation in the field of production and consumption. ICT and proper services is necessary for industry and market from the point of view providing of the necessary mode of communications of all of participants. Consequently, they are necessary for consolidation of internal market, stimulation of industrial competition, conditioning, for economic and social unity at the level of the EU.

Beginning from 1990th, the common policy|politics| of the EU in the field of telecommunications has developed after 4 basic|main| directions:

1. common market of telecommunication equipment|EQP| creation by unification of standards|standart|;

2. liberalization of market of telecommunication services;

3. technological development of the sector in assistance|contributory| with research activity of the Community;

4. balanced|depthbalanced| development of EU regions due to introduction|enters| of Trans-European telecommunication network|net|.

At the level of Community regulator mechanisms are perfected in relation to|concerning| the equipment|EQP| of telecommunication terminals|terminal|, the new|firsttime| going is inculcated|introduct| near|to| standardization, tests|assay| and certification|sertification|, that became|becomes| one of measures|step| at forming of common market. The decisions of Advice of the EU about standardization in the field of information technologies and telecommunications resulted in|to| the European market of telecommunication equipment|EQP| creation. It should be noted that standardization of information technologies and telecommunications prevents curvature of competition and provides|secure| an exchange|transput|, rapprochement|closing-in| of industrial, information strategy, stimulates creation|making| and exploitation|maintainance| of the wide European market of information technologies and telecommunications (ITT). The European standards are used in many politicians of the EU, above all things those which are related|ties| to the effective functioning of the unique|single| market. A shove|push| for their subsequent|consequent| development was become|becomes| by the project of electronic Europe (eEurope|), which|what| has for an object to build electronic society, improve electronic culture and to spread positive|staid| experience|tentative| of the use|utillizing| of ITT.

In that time of unique|single| market of telecommunication equipment|EQP| creation needs gradual opening of telecommunication markets which|what| traditionally were government monopolies. A sector of telecommunication services must was be liberalized. At the same time there was a necessity to define the terms of free grant of telecommunication services. To that end EK, leaning on the item of a 86 Treaty|contract| about foundation of European Community, accepted|take| Directive|instruction|, which|what| requires from countries-members|limb| introduction|enters| of measures|step| which|what| would provide|secure| a free competition at the market of equipment|EQP| of telecommunication terminals|terminal| (modems, terminals|terminal| of telexes, station of acceptance of satellite signals, and others like that). Such measures|step| must were be co-ordinated within the framework of competition policy|politics| in relation to activity of state enterprises. This Directive|instruction| enabled users to unite|ally| with the equipment|EQP| of terminal|trlm|, which|what| they can freely|rubato| purchase without|senza| an address to the unique|single| public organ on questions of telecommunications. After bringing|payment| of a few|a little| amendments|corrective| Directive|instruction| gave|provide| a right the providers of telecommunication services to utilize|use| the capacity|capaciousness| of network|net| of cable television for all of telecommunication services, except for vocal telephony, – above all things for communication of data|information|, creation|making| of the «closed|veiling|» corporate networks|net| and grant of multimedia services. Also this document requires from countries-members|limb| to abolish absolute and special titles in the field of telecommunications, limitation|limination| in relation to|concerning| supplies|delivery| for mobile communication and barrier of direct connection|compound| networks between such networks|net|. Except for that of 1998 Provided|secure| EU the proper Directive|instruction| complete liberalization of infrastructure of vocal telephony and telecommunications.

Chemical industry. In the conditions of globalization, functioning of chemical industry of the EU, which runs into new calls, was complicated. In this time the EU remains a region which leads after production of chemical goods volumes. There is an about 32% world production on his particle. Becomes obvious, that chemical industry of the EU loses the competition positions gradually, and the high particle of the EU in the world production of chemicals was saved only due to expansion of the EU.

The experts of European advice of chemical|chinagraph| industry (CEFIC|) developed 4 possible|possibly| base the scenario of the state|figure| of industry|branch| in the future:

1. «Sun» is a revival of chemical|chinagraph| industry of the EU with growing content of innovative decisions and strengthening of orientation|orintation| on an user|consumer| in the conditions of positive|staid| market situation. Producers add|apply| large|great| efforts to|by| optimization of collaboration with the eventual|end| users|consumer| of products|production| and increase|rise| of competitiveness;

2. «Cloudy» is an increase of competitiveness and profitability of productions due to development, in the first|first-run| turn, productions of goods of the special setting|purpose|. In this scenario the EU runs into an unfavourable|adverse| market situation. It encourages chemical|chinagraph| industry to|by| the initiative actions|act|. In spite of|regardless of| unfavourable|adverse| a situation chemical|chinagraph| industry have backlogs of growth|height| and efficiency;

3. «Rain|rainfall|» is chemical|chinagraph| industry of the EU in the unstable|decomposable| state|figure|, the attractiveness of the European market goes down. The starting|go-off| market situation of scenario is comparatively favourable|auspicious|. However unable a production already is to utilize|use| the potential, and|but| producers become|stand| lacking initiative;

4. «Stormy|storm|» is a decline in the chemical|chinagraph| production of the EU as a result of insolvency to resist an import|imp.|. A scenario is characterized|describe| a very bad market situation. In the total|as a result| there will be catastrophic weakening of competitiveness of chemical|chinagraph| industry.

Main|head| reason|cause| of decline|lowering| of competitiveness of European chemical|chinagraph| industry are|appear| high production charges. The critical factors of profitability are|appear| prices|shedrod| on initial|primary| raw material and energy. From other side|de autre part|, on the competitiveness of chemical|chinagraph| industry of the EU, lately, the unfavourable|adverse| enough influences legislative adjusting|adjustment|. the EU continues the policy|politics| of strengthening of ecological|ecofriendly| norms|standard| which|what| negatively influence on the state|figure| of the European producers. European initiations (REACH|, SCALE|, IPP| but|yes| other) of bill, in opinion of experts, not enough harmonized between itself, and|but| their implementation at national level is substantially complicated. On competition positions of chemical|chinagraph| industry the EU negatively influences decline|lowering| of intensity of research activity. Diminishing|tickle-off| of charges on R&D in the sector of chemical|chinagraph| industry of the EU is caused|call| the decline|lowering| of level|Y-level| of profitability of chemical|chinagraph| productions in Europe and reduction|abbreviation| of amount|quantity| of skilled|skillful| shots.

In 2003 CEFIC| came forward with severe criticism of large-scale plans of the EU, which|what| foresaw registration and verification 30 000 chemicals, declaring|jile|, that realization of this program can bring industries|branch| over to|by| the substantial losses. EK offered the system in accordance with|according to| which|what| both present and new|firsttime| chemicals must pass|reeve| registration and procedure|proc| of estimation|appraisal|.

Trying|attempt| forecast the future of European chemical|chinagraph| industry, CEFIC| conducted scale research|work-up| «Chemical|chinagraph| industry – 2015». In obedience to|according to| prognoses leadership|lead| of the EU in a world chemical|chinagraph| production is under threat. As a result of research|work-up| previous|preliminary| recommendations among which|what| were developed: support of innovations; an improvement of relation|referring| of society is to|by| this sector; providing|ADM| of free trade is with the third|third-| countries; perfection|triming| of legislation|; increase|rise| of energy efficiency|; perfection|triming| of logistic.

In 2001 EK asserted|claim| the «white-book» of strategy of the EU in industry|branch| of the use|utillizing| of products of chemistry. Its primary|basic| purpose is an increase|rise| of level|Y-level| of defence|protection| of health of people and environment of countries of the EU, and also stimulation of innovations and competition in chemical|chinagraph| industry. In 2003 in Brussels at conference of commission of the EU the «Industrial policy|politics| in Europe which broadens», European advice of chemical|chinagraph| industry suggested to create the European consultative group from chemicals. A consultative group, which|what| consists of members|limb| of EK, members of parliament and leaders of industry|branch|, is called to analyse|assaid| efficiency of the existent European scope|frame| policy|politics| in industry|branch| of chemical|chinagraph| industry, and also to develop suggestions|sentence|, directed|ducted| on the decision of structural|structure| problems of sector. In obedience to|according to| the offered project, a consultative group got|receive| the name|appelation| of CHANGE| (Chemical| Advisory| Network| Group| for| of Europe|) and was provided|presents| with possibilities|potentialitie| of realization of exact and long-term|long term| analysis of European chemical|chinagraph| industry with the purpose of subsequent|consequent| development|elaboration| of measures|step| on the revival of more profitable|profit-making| sectors of European chemical|chinagraph| industry with the proper orientation|orintation| on innovations and requirements|claiming| of users|consumer| of products|production|. The members|limb| of type|profile| advices must were become the members|limb| of group from EK, representatives of committees from EP, ministers of industry of large|great| countries-members|limb|, representatives of trade unions, and also some|certain| leaders of large|great|, middle|AV| and small|mini| companies|Co.| which|what| present|represent| all of segments of industry. Activity of CHANGE| must optimize sectoral support of chemical|chinagraph| industry at the level of the EU in the context of realization of Lisbon strategy.

For the decision of complex problems of development of chemical industry, in particular those which touch the questions of stimulation of competition and increase of safety, Regulation of REACH is developed is «Registration, estimation, permission and limitation of chemical matters» (Registration, Evaluation, Authorisation of and restriction of Chemicals). A document went into effect on June, 1 in 2007

Aims of REACH|: 1) providing|ADM| of high level|Y-level| of defence|protection| of health of man and environment; 2) increase|rise| of competitiveness of industry of countries of the EU; 3) integration in international activity from a management and control above|over| chemicals; 4) driving|coersion| of legislation of the EU to accordance|homology| to the requirements|claiming| of SOT.

Industries|branch| which get under the action|act| of REACH|: chemical|chinagraph| industry (production of organic|organo| and inorganic matters, varnishes|polish| and paints, but|yes| other); petrochemical industry; black and coloured|pigmented| metallurgy; industry of build materials|fabric|; textile|Text.| industry; electronic industry; paper industry; motor industry and others like that.

For the management of the system REACH technical, scientific and administrative aspects European Chemical Agency is created (EXA).

REACH inculcates the unique system of registration, estimation and delivery of permissions, on chemicals. In accordance with the requirements of REACH chemical matters must will be get through identical procedures of estimation of risks. Except for that, basic responsibility for a management possible risks, which arise up as a result of production, placing at the market and use of chemical matters, and also for a grant information about foxiness and indexes of danger of connections and estimation of risks from their negative action will be fixed on industry.

Regulation is directed|ducted| on adjusting|adjustment| of production of placing and use|utillizing| of chemical|chinagraph| matters into the EU. He directly|immediately| touches|concern| the wide circle|circumference| of producers in different|diverse| industries|branch| of industry, importers, distributors and users|consumer| of chemical|chinagraph| industry, in the countries of Community. Substantial influence will be done and on the company|Co.| of countries for|after| the EU, which|what| carry|perform| out export supplies|delivery| to the European market and consume chemical|chinagraph| matters, mined-out in the EU. Without|senza| registration a concrete chemical|chinagraph| matter will not be settled for a production, import|imp.|, sale and use|utillizing| on territory of the EU.

The unique|single| system of adjusting|adjustment| of sphere of production and use|utillizing| of chemical|chinagraph| matters is directed|ducted| on achievement of three basic|main| tasks|task|:

– economic|economical| (an increase|rise| of competitiveness and introduction|introducting| of new|firsttime| technologies|technicology| is in chemical|chinagraph| industry of countries of the EU);

– social (defence|protection| of health and labours of population);

– nature protection (an increase|rise| of safety|crashworthiness| of production and use|utillizing| of chemical|chinagraph| matters is for an environment).

Theme 7. Agricultural|farin| policy|politics| of the eu

7.1. Necessity and special approach to agricultural|farin| policy of the EU

7.2. Principles and mechanism of agricultural|farin| policy|politics| of the EU

7.3. Basic|main| directions and measures|step| of agricultural|farin| policy|politics| of the EU

7.4. Structural|structure| policy|politics| and rural development|local|

7.1. Necessity and special approach to agricultural|farin| policy of the eu

Agriculture and forestry, as major land users, play a key role in determining the health of rural economies as well as the rural landscape. Though agriculture may be less important to the economies of rural areas than it used to be, it still has a valuable contribution to make to their economic growth and environmental sustainability.

Farmers perform many different functions ranging from food and fibre production to countryside management, nature conservation, and tourism. Farming can thus be described as having multiple functions.

• Europe has a modern and competitive farming sector occupying a leading position on world markets, both as a major exporter and the world’s largest importer of food, mainly from developing countries;

• it has a sustainable, efficient farming sector, which uses safe, clean, environmentally-friendly production methods providing quality products to meet consumers’ demands;

• the EU farming sector serves rural communities, reflecting their rich tradition and diversity; its role is not only to produce food but also to guarantee the survival of the countryside as a place to live, work and visit;

• Europe’s agricultural policy is determined at EU level by the governments of Member States and operated by the Member States. It involves support for farmers’ incomes while also encouraging them to produce high quality products demanded by the market and encouraging them to develop additional ways of improving their businesses in harmony with the environment.

The EU has a particular model of agriculture that responds to the requirements of civil society – in terms of their expectations on food production, food safety, environmental standards and conservation of the rural environment, relations with the developing world (agricultural trade) and value for money for their taxes.

The CAP is the vehicle that delivers this. It has been a long march from support for over-production to a market-oriented, environmentally-friendly system. But this ‘green evolution’ will continue.

Today's CAP is a policy choice of the European society. Few can imagine what the EU’s countryside and food heritage would be like without it. The support of consumers, taxpayers and society is needed to prevent the risk of land abandonment, degradation of the rural environment, loss of employment and even the decline of the social fabric of many of our rural areas. In addition, the CAP and other EU policies have led to the creation of a large single market in agricultural goods in the EU and have helped the EU to become a major world player in agriculture and food terms.

Agriculture sat high on the agenda of European policymakers, especially at the time when the Treaty of Rome was being negotiated. The memory of post-war food shortages was still vivid and thus agriculture constituted a key element from the outset of the European Community.

The Treaty of Rome defined the general objectives of a common agricultural policy. The principles of the Common Agricultural Policy (CAP) were set out at the Stresa Conference in July 1958. In 1960, the CAP mechanisms were adopted by the six founding Member States and two years later, in 1962, the CAP came into force.

The Common Agricultural Policy (CAP) is comprised of a set of rules and mechanisms, which regulate the production, trade and processing of agricultural products in the European Union (EU), with attention being focused increasingly on rural development.

Among the European Union's policies, the CAP is regarded as one of the most important policy areas. Not only because of its share of the EU budget (almost 50%, decreasing over the years), the vast number of people and the extent of the territory directly affected, but also because of its symbolic significance, and the extent of sovereignty transferred from the national to the European level. The significance of the CAP, nowadays, is also portrayed by the fact that it is directly related to the Single Market and the EMU, two key areas in achieving the European integration.

The objectives of the CAP accordingly to the EC Treaty are:

• to increase agricultural productivity by promoting technical progress and by ensuring the rational development of agricultural production and the optimum utilisation of the factors of production, in particular labour;

• to ensure a fair standard of living for the agricultural community, in particular by increasing the individual earnings of persons engaged in agriculture;

• to stabilise markets;

• to assure the availability of supplies;

• to ensure that supplies reach consumers at reasonable prices.

In order to attain these objectives, the EC Treaty provides for the creation of the common organisation of the agricultural markets (COM) which, depending on the product, shall take one of the following forms:

• common rules on competition;

• compulsory co-ordination of the various national market organisations;

• a European market organisation.

The COMs were introduced gradually and now exist for most EU agricultural products. They are the basic instruments of the common agricultural market in as far as they eliminate the obstacles to the intra-Union trade of agricultural products and maintain a common customs barrier with respect to third countries.

7.2. Principles and mechanism of agricultural|farin| policy|politics| of the EU

Three main principles, defined in 1962, characterise the common agricultural market and thus the COMs:

• a unified market: this denotes the free movement of agricultural products within the area of the Member States; for the organisation of the unified market, common means and mechanisms should be used throughout the EU;

• Community preference: this means that EU agricultural products are given preference and a price advantage over imported products; also, the protection of the internal market from products imported from third countries at low prices and from considerable fluctuations in the world market;

• financial solidarity: all expenses and spending which result from the application of the CAP are borne by the Community budget.

The institutional providing of common agricultural policy of the EU means legislative bases of general agricultural policy of the EU, which are fastened in EC Treaty.

Article 2

An Community has the task|tsk|, by|by means of| common market and economic|economical| and currency union|conjunction| creation, and also by|by means of| realization of general|common| policy|politics| ... to promote|assist| everywhere in Community to the harmonic, balanced|depthbalanced| and proof|firm| development of economic|economical| activity, high level|Y-level| of employment and social defence|protection|, equality of rights of men|husband| and women|wife|, to proof|firm| and to non-inflator growth|height|, high level|Y-level| of competitiveness and rapprochement|closing-in| of economic|economical| indicators, high level|Y-level| of defence|protection| and improvement of quality of environment, increase|rise| of level|Y-level| and quality of life, economic|economical| and social closing and solidarity of countries-members|limb|.

Article 3

For achievement of proclaimed in the article of 2 aims activity of Community, carried out in accordance with|according to| terms and includes|switch| terms which|what| are foreseen this Treaty|contract|:

.....

å) common policy|politics| in the spheres of agriculture and fishing|piscary|;

..

Section|division| 2. Agriculture and fishing|piscary|

Article 32

1) A common market engulfs|wrap-round| agriculture and trading in agricultural|farin| products. Under agricultural|farin| products there are|mean| products of agriculture, stock-raising and fishing|piscary|, and also which have products of the primary processing|waste-handling| of, direct relation to|by| these products.

2) Except for|unless| those cases|accident|, when the articles from 33 to 38 inclusive foresee other, positions|rule| which touch|concern| common market creation will be used also to|by| the agricultural|farin| products.

3) Products which fall under position|rule| of the articles from 33 to 38 inclusive are transferred|enumerate| in Appendix of I to this Treaty|contract|.

4) Activity and common market of agricultural|farin| products development must be accompanied establishments of general|common| agricultural|farin| policy|politics|.

Article 33

1. A general|common| agricultural|farin| policy|politics| pursues the followings|downstream| aims:

à) to increase the productivity of agriculture, stimulating technical progress and providing|secure| rational development of agricultural|farin| production, and also optimum|quality-controlled| use|utillizing| of production factors, especially|in particular case| labour force;

á) to provide|secure| the sufficient|suffite| standard of life of rural population by such method|heliochrome|, in particular|including|, by the increase|rise| of individual|first-aid| profit|acuests| of persons|personality| busy in agriculture;

â) to stabilize markets;

ã) to provide|secure| the presence of food;

ä) to provide|secure| clever consumer prices|shedrod| on food.

2. At making of general|common| agricultural|farin| policy|politics| and specific methods which|what| it|her| is carried out by|by means of|, will be taken into account:

à) special character|nature| of agricultural|farin| activity, conditioned the social structure of agriculture, and also structural|structure| and natural|real-life| inequality|unevenness|, between different|diverse| agricultural|farin| districts|region|;

á) necessity of gradual realization of the proper changes|changing|;

â) close intercommunication|relationship| of agriculture is with all of economy of countries-members|limb|.

Article 34

1. For achievement of aims, contained in the article 33, the general|common| organizational mechanism of agricultural|farin| markets will be created.

2. Joint organization in one of forms|form|, foreseen in a paragraph 1, can include|switch| all of measures|step|, necessary for achievement of aims, contained in the article 33, in particular|including|, adjusting|adjustment| of prices|shedrod|, help a production and sale of different|diverse| products, storage|economy| of supplies, and general|common| mechanism of stabilizing of import|imp.| or export.

3. For that, to enable joint organization, to foreseen in a paragraph 1, to attain the aims, one or a few|a little| funds of management and guarantees|warrantly| of agriculture can be created.

Article 35

1. For that, to provide|secure| achievement of aims, contained in the article 33, within the framework of general|common| agricultural|farin| policy|politics| it can be accepted the followings|downstream| measures:

a) operating co-ordination of efforts, which are used in the area|domain| of professional preparation, researches|work-up| and distribution of agronomical knowledge; this co-ordination can include|switch| projects or establishments are jointly|together| financed;

b) general|common| actions|act| which stimulate the consumption|comsumption| of some|certain| products.

Article 36

Positions|rule| of section|division| which behaves to the rules of competition are used to|by| the production and trading in agricultural|farin| products only in a that measure, in which|what| it is certain|definite| Advice within the framework of the article 37 (2) and (3) and in accordance with|according to| foreseen in it|her| procedure|proc|, taking into account aims, contained in the article 33. Advice can, in particular|including|, allow|permit| the grant of help:

a) for defence|protection| of economies which are|been| in unprofitable position|rule| by virtue of|because of| structural|structure| or natural|real-life| terms;

b) within the framework of the programs of economic|economical| development.

Article 37

3. In decision of Advice, to accepted skilled|skillful| majority and in accordance with|according to| a paragraph 2, can be substituted for national organizations of market joint organization, foreseen in the article 34(1), if:

a) joint organization gives|provide| countries-members|limb| have in the order national organization for the considered production, equivalent|equivalence| job and standard of life of the interested producers securities, having regard to the rates|tempo| of possible|possibly| adaptation|device| and necessary specialization;

b) such organization provides|secure| term-of-trades into Community, analogical|similar| to those which|what| exist at the national market.

Article 38

If in some|any| country-member|limb| products|production| are|appear| the article of adjusting|adjustment| of national organization of market or any|some| internal|inlying| regulation of equivalent value|importance|, which touches|affects| competition positions of similar|like| production in other countries-members|limb|, last will tighten|raise| compensative collection at the import|importation| of such products|production|, made in a country-member|limb|, where such organization or regulation is, if only this state does not tighten|raises| compensative collection at an export|outbound|.

The European Commission will set the size|dimension| of these collections|collection| at level, to the necessity for proceeding|renewal| in balance; it|her| can also allow|permit| acceptance of other measures, condition|COND|, and methods|heliochrome| of realization of which|what| it|her| will define.

7.3. Basic|main| directions and measures|step| of agricultural|farin| policy|politics| of the eu

The system of support of prices|shedrod| at the market of agricultural product of the EU

System of support of prices at the market of agricultural product of the EU is a supranational (state) policy on adjusting of market of agricultural product, which, as a rule, assumes using of a number of mechanisms and instruments. Consolidation of limits is on a production as a result of existent tailings, greater openness of markets and reduction of subsidizing of export in obedience to the Treaty of Uruguayan of round resulted in the origin of antihunt mechanisms in a sector after a sector.

Setting down of the assured price (also indicative price; to 1995 - target price; basic price, guide price) is a price which according to the COM get agricultural producers at  the volume of produced products under certain limits and certain quality, is used for adjusting of volumes of commodity at the market and to prevention of its overproduction by decreasing or removal of help at the exceeded quotas.

A council-board ministers on questions of agriculture and fishing|piscary| of the EU, operating|act| on the basis of suggestion|sentence| of European Commission, at the beginning of|in the beginning of| every marketing year sets|establish| the «assured prices|shedrod|» on an agricultural product.

The main sense of the assured price is to be orient for producers and a base for calculation of all of other parameters. Market prices on grain hesitate between intervention (lower limit) and assured (top limit).

The starting|output| point of mechanism of decision of prices|shedrod| on grain-crops to 1995 a having a special purpose price|shedrod| which was set|establish| as an asking|desirable| price in the most scarce grain consumption area|zone| was. By such area|zone| a city|town| Duysburg was select in Germany. By a basic|main| grain production area|zone| a city|town| Orme was select on Nord-Western France.

Below level of the assured price an intervention price is set. Its setting consists in that, to retain a price at the internal market higher certain level. At first having a special purpose and intervention prices differed on the size of transport charges deliveries of grain from Orme in Duysburg. As soon as a price on grain on the markets of the EU falls below intervention, on all of territory of European Union intervention agencies which obtain the products of farmers at price of intervention are opened. Farther these agencies keep the accumulated supplies or with a loss export to the oversea markets. Thus, an intervention price becomes the lower limit of market price variations at the European market. In relation to fruit and green-stuffs which can not be kept long, there are costs of exception, below which the groups of producers, operating as intervention organizations, halt a sale and send superfluous products to the production of alcohol, eleemosynary necessities, or on elimination, while diminishing of suggestion will not promote a price on this products.

However for support of internal price at desired level one this mechanism not enough. In an order to shut out brought in to the internal market of more cheap imported products, another mechanism - limit price (threshold price) (on grain-growing, sugar, milk products, olive oil) is inculcated, sometimes it is named also the minimum imported price; or sluice price (sluice-gate price) on pork, eggs and meat of poultries; or a price (reference price) is set down - for fruit, green-stuffs and wine. These price are determined as prices assured except for charges on transportation from basic port of import of product to the basic place of its consumption. For grain Duysburg is select a basic consuming area, and basic port of import is consider Rotterdam (Netherlands).

Setting of limit price - to serve as a base for the calculation of the variable imported tariff which settles accounts as a difference between a limit price and world price. In same queue, a world price is determined as the minimum imported price (including charges on insurance and freight, that cost of SIR) which a product was supplied on through the limits of the EU in port of Rotterdam during set time. A world price is one of the most difficult elements of these calculations, it is determined after six basic categories of grain twice on a month and corrected on quality and port of delivery. Accordingly, a limit price and imported tariff also settled accounts twice on a month.

For commodities in relation to which exists the assured price is certain, the maximum is determined in a method, that the cost of sale of the imported commodity (taking into account transport charges) equalled this assured price. For commodities which the assured price does not exist (fruit and green-stuffs, table wine) for, minimum is the made to order price after which commodities can be imported from the third countries. In the case of failure to observe of requirements about the made to order price the imported commodities are assessed a tax.

Export subsidies (export restitutions) are directed on increasing of competitiveness of products of the EU on world markets. For their account due to a budget a difference is compensated producers between the internal prices of the European Union and prices of world market.

Common organization of markets of agricultural product

Common organization of markets of agricultural product have a legal framework identified in EC Treaty. Within the framework CAP legal framework of policy of adjusting of markets is fastened the Article 32(38), where regulative bases of joint organization of markets of agricultural product are stopped up.

Policy|politics| of adjusting|adjustment| of markets oldest and major among instruments|tool| CAP. It|her| pursues the aims of support of agriculture production and stabilizing of markets, providing|ADM| the farmers of the proper standard of living, and operates|act| by moving|transition| of certain|definite| commodities|primage| or groups of commodities|primage| under the concrete mode|regime|, joint organization of market, thus|on this grow| a production and trade is managed by general|common| rules.

Common organization of markets the based on three main|head| principles:

Market unity (and unified market) means that agricultural commodities move within the limits of the EU on those terms which exist on national markets, that quantitative limitations of trade, duty, taxes and other measures which have an equivalent action, are anniented. Market unity foresees forming of the unique prices on an agricultural product in all of the EU (see The system of support of prices is at the market of agricultural product of the EU).

Giving of advantage the commodities of Community (community preference) means that, advantage gives oneself up commodities, to mined-out in Community before imported. It is done for protecting of common market from a cheap import and from oscillation of world prices. This principle will be realized by the imported and export measures. the EU tries to approach prices on the imported commodities to the level those which operate at the common market. A difference between a world and assured in the EU price was before covered the variable imported collections, which, after the Uruguayan round of GATT, were gradually transferable the fixed custom collections. Through collections from an import, prices on the imported commodities arrive at the standard of internal prices, and that is why it is not advantageous to buy commodities the European point-of-sale enterprises for the EU, consequently, they give advantage the commodities of Community.

Financial solidarity (financial solidarity) is arrived at by the European fund of agricultural guarantees and European agricultural growth of rural territories which were created after disbandment in 2007 fund European agricultural fund of management and guarantees (See the European agricultural fund of management and guarantees). Principle means that entire countries-members carry responsibility for the financial consequences of general agricultural policy. All of charges, necessary for joint organization of markets covered from the European fund of agricultural guarantees.

Joint organization of markets of agricultural product exists after 26 products or groups of products and engulfs|wrap-round| about 90 % general|common| production of agricultural|farin| goods in the EU (grain-growing, rice, olive and vegetable butter|oil|, sugar|Saccharum|, concentrated sterns|aft|, flowers, fruit and green-stuffs, bananas, wine, products of processing|waste-handling| of fruit and green-stuffs, tobacco, fibre|, hop|intoxication|, seed, beef and veal, pork|porkmeat|, mutton|, eggs and meat|flesh| of bird, suckling products|production|, other agricultural|farin| products which|what| specific rules of organization of market are not for; for a potato and alcohol the special mechanisms of organization of markets are not foreseen).

In a period reforms 1992-1999 CAP became|becomes| the «policy|politics| of profits|acuests|» due to a direct help during indemnification|compensation| for equalization of costs of the EU with world prices|shedrod|. In 1998 allocation|division| of charges is from Section of guaranteeing of European agricultural|farin| fund of management and guarantees|warrantly| was following|downstream|:

• 73 % for guaranteeing of profits|acuests| to the farmers (direct help);

• 12,5 % as measures|step|, for support of export (compensative payments to the exporters with the stably|high-stability| diminished|reduce| percents through|from| the tendencies of world prices|shedrod|, Uruguayan round and Treaties of GATT);

• 6,5 % as measures|step|, for stabilizing of markets;

• 4 % for a help users|consumer|;

• 4 % for a help in treatment and marketing;

• 1 % for other measures|step| without|senza| certain|definite| economic|economical| direction|directs|.

Changes|changing| in aims and value|importance| of organization of markets of agricultural product as a result of reforms 1992-1999 changed|change| the type of COMs|, which|what| are now divided into 5 categories, depending on the that mechanism of support, which|what| they utilize|use|.

COMs with the assured prices (guaranteed prices) and automatic intervention (automatic intervention). Behave to sugar and to the chhanas, and influence only on one fifth eventual production of the EU (Community of final production). Minimum or assured prices are paid farmers public intervention agencies in an exchange on supplying with their products, where market prices are too low. This type of COM, which to 1992 most characterized SSP, is consistently abbreviated

COMs with the assured prices (guaranteed prices) and conditional intervention (conditional intervention). Behave to wine, pork and some fresh fruit and green-stuffs, and influence approximately on one fifth eventual production of the EU. The chart of the assured prices is used, only in the cases of serious crisis at the market. European Commission decides or exists such crisis.

COMs is mixed with the assured prices and direct payments, for addition of production. Behave to the breadstuffs, rice, mutton, to the bananas, milk (from 2005-6) and beef (but from 2002 the chart of conditional intervention will be involved with the «system of support»). This category makes the one third eventual agricultural production of the EU and grew from the moment of acceptance of package of reforms of SSP in 1992-1999

COMs only with a direct help to the producers. Direct help producers get in obedience to a general tariff rate, whether proportionally mined-out amount of products or productivity. These COMs behave to the seed of oil-bearing cultures, albuminous cultures, forage, to the tobacco, Text., pea and bobs, products of processing from fruit and green-stuffs, some fresh fruit and green-stuffs (nuts), olive oil and olives, and cover about 10 % eventual production of the EU.

COMs without the line of production support. Behave to poultry, to the eggs, agricultural products of processing, flowers and plants, some fresh fruit and green-stuffs, potato and other products of exotic things (squeals, high-quality wines, coffees, tea, et cetera). These products get custom defence only.

In obedience to the last reforms SSP exists 4 coexisting|coexists| mechanism for control production volumes:

1. Production quotas as such (Production of quotas as such) Quotas which are set at national level for milk and sugar and appointed farmers or enterprises. Producers which exceed the set quotas in every country-member of are under penalty approvals.

2. Production quotas are nationally assured (National of guaranteed production quotas). These quotas (an amount is maximally assured, Maximum Guaranteed Quantities (MGQ), Maximum Guaranteed Areas - MGA - and premiums per head of cattle) are set on many products and is equivalent to direct payments of producers, abbreviated proportionally if threshold values (guaranteed threshold of production) are exceeded. Yes, if a production exceeded the maximally assured amount, economies were assessed fines in form additional tax of general responsibility in a size 1,5%, and also diminishing of the assured price was inculcated next year on 3%. An initial tax in 1,5% returned fully or partly, when an actual production was below the maximally assured amount on a certain percent.

3. Production quotas are assured at the level of the EU (Guaranteed of production quotas at of Community of level). These quotas which settle accounts on the basis of general production for the EU were anniented and on the modern stage they are utillized only for the products of processing from fruit and green-stuffs, bananas.

4. National quotas are for surpluses (National of quotas for surpluses). These quotas are set on the Mediterranean products (wine, using approved distillation volumes) and some fruit and green-stuffs (utillizing threshold values for the exception of products from a market).

European Agricultural Guidance and Guarantee Fund (EAGGF)

The CAP is financed from the European Agricultural Guidance and Guarantee Fund (EAGGF), which accounts for a substantial part of the Community budget. The EAGGF was set up in 1962 and separated in two sections in 1964:

• the Guidance Section, one of the structural funds, which contributes to the structural reforms in agriculture and the development of rural areas (e.g. investing in new equipment and technology);

• the Guarantee Section, which funds expenditure concerning the common organisation of the markets (e.g. to buy or store surplus and to encourage agricultural exports).

The Guarantee Section is by far the more important one and is classified as compulsory expenditure within the Community budget. The Guidance Section is one of the structural funds aimed at promoting regional development and reducing disparities between areas in Europe.

The Commission has proposed the simplification of the funding system through the creation of a single instrument for funding and programming: the European Agricultural Fund for Rural Development (EAFRD). This proposal would include increased Community funding.

7.4. Structural|structure| policy|politics| and rural development |local|

The CAP has evolved considerably since its creation, as has the rural development policy. From 2006, this policy will aim to:

• make agriculture more competitive through restructuring and measures such as investment aid for young farmers, more information, etc.;

• improve the environment and the countryside through support for land management, by including rural development in “Natura 2000” sites: agri-environment, forestry, etc.;

• improve quality of life in the countryside and diversify economic activity, e.g. by focusing on food quality.

The Common Agricultural Policy has been the biggest, the most contentious and the one with the largest budget of all the Union's policy areas. The EU has more power in agricultural policy than it has in any other policy area and it has passed more legislation on agriculture than in any other single policy area.

The number of farmers and the cultivated area of the EU has grown considerably with the accession of the ten new Member States. The EU now includes some 11 million farmers. With enlargement, farm land has increased by around 30%.

Rural Development policy 2007-2013

On 20 February 2006 the Agriculture Council adopted EU strategic guidelines for rural development - five months after the adoption of the Council Regulation on support for rural development by the new European Agricultural Fund for Rural Development (EAFRD).

These guidelines set out a strategic approach and a range of options which Member States could use in their national strategy plans and Rural Development programmes.

Since the reform of the Common Agricultural Policy, Rural Development is playing an increasingly important role in helping rural areas to meet the economic, social and environmental challenges of the 21^st century. Rural areas make up 90 percent of the territory of the enlarged EU and the new legal framework points more clearly to the direction of boosting growth and creating jobs in rural areas – in line with the Lisbon Strategy – and improving sustainability – in line with the Göteborg sustainability goals.

The future Rural Development policy 2007-2013 will focus on three areas in line with the three thematic axes laid down in the new rural development regulation: improving competitiveness for farming and forestry; environment and countryside; improving quality of life and diversification of the rural economy. A fourth axis called "Leader axis" based on experience with the Leader Community Initiatives introduces possibilities for locally based bottom-up approaches to rural development.

The new programming period provides a unique opportunity to refocus support from the new rural development fund on growth, jobs and sustainability.

The European legal framework being established Member States can now elaborate their national strategy plans and rural development programmes before submitting them to the European Commission.

For each set of priorities, the EU strategic guidelines are suggesting key actions. Member States shall prepare their national rural development strategies on the basis of six community strategic guidelines, which will help to:

• identify the areas where the use of EU support for rural development creates the most value added at EU level;

• make the link with the main EU priorities (Lisbon, Göteborg) 

• ensure consistency with other EU policies, in particular cohesion and environment; 

• accompany the implementation of the new market orientated CAP and the necessary restructuring it will entail in the old and new Member States.

The six strategic guidelines are:

1. Improving the competitiveness of the agricultural and forestry sectors

2. Improving the environment and the countryside

3. Improving the quality of life in rural areas and encouraging diversification

4. Building Local Capacity for Employment and Diversification

5. Translating priorities into programmes

6. Complementarity between Community Instruments

Contain module III. External|outward| relations development strategy of the eu Theme|object-matter| 8. Foreign|outward| policy of the eu

8.1. External|outward| relations of the EU at the modern stage

8.2. Foreign trade policy|politics| of the EU

8.3. Development aid policy|politics|

8.1. External|outward| relations of the eu at the modern stage

The great size of the European Union in economic, trade and financial terms makes it a world player. The biggest trader and home to the world’s second currency, the EU also spends over 7 billion euro a year on aid to developing countries. Its trade and partnership agreements cover most countries and regions.

The foreign relations of the European Union are primarily a domain of the member-states, although the Union as a whole is beginning to make some influence through its Common Foreign and Security Policy (CFSP). External representation is handled by the High Representative for the Common Foreign and Security Policy and the European Commissioner for External Relations. The Commission is gaining greater representation in bodies such as the United Nations and G8. EU High Representative for Foreign Affairs and Security Policy coordinates between EU countries to shape and implement foreign policy. The High Representative is assisted by civilian and military staff, the European External Action Service.

Policy is agreed on an inter-governmental basis however the general effect of the Union is also felt through Enlargement; the attraction of membership is taken as a major factor contributing to reform and stabilisation of the former Communist countries in Eastern Europe. The Union and its member states also contribute €43 billion in humanitarian aid; making it the largest humanitarian aid provider in the world. These factors influencing other countries are generally referred to as "soft power", as opposed to military "hard power".

On the world stage the Union is gaining greater influence and ability to speak as a bloc. All 27 member states are represented in the World Trade Organization (WTO) through its Trade Commissioner, Karel De Gucht (2009-2012). The latest WTO negotiation round has currently stalled, partly due to European refusal to curtail the agricultural subsidies unless other developed countries would also stop subsidising their agricultural producers.

Europe has had a long history with the United States, being particularly close during the Cold War. The USA initially supported the development of the European Community and ensured the defence of the continent through NATO. However recently there has been friction between the United States and the modern European Union, for example over the Iraq war. Some individual member state governments have backed the USA over the war revealing weaknesses in forming a coherent foreign policy.

External relations are a clear example of the added value which action at the EU level can bring. As the world's major trading partner, the EU is a prime mover in the future development of world trade.

The eu and its Mediterranean partners

After 20 years of increasingly intensive bilateral trade and development cooperation between the European Union, the 15 Member States and its 12 Mediterranean Partners, the Conference of EU and Mediterranean Foreign Ministers in Barcelona (27-28 November 1995) marked the start into a new "partnership" phase of the relationship including bilateral and multilateral or regional cooperation (hence called Barcelona Process or, in general, Euro-Mediterranean Partnership).

The 12 Mediterranean Partners are the countries situated in the Southern and Eastern Mediterranean (Morocco, Algeria, Tunisia (Maghreb); Egypt, Israel, Jordan, the Palestinian Authority, Lebanon, Syria (Mashrek); Turkey, Cyprus and Malta; Libya currently has observer status at certain meetings).

Key objectives of the Barcelona Process

The Barcelona Declaration adopted at the Barcelona Conference expresses the 27 partners’ intention to:

• Establish a common Euro-Mediterranean area of peace and stability based on fundamental principles including respect for human rights and democracy (political and security partnership),

• Create an area of shared prosperity through the progressive establishment of a free-trade area between the EU and its Partners and among the Mediterranean Partners themselves, accompanied by substantial EU financial support for economic transition in the Partners and for the social and economic consequences of this reform process (economic and financial partnership), and

• Develop human resources, promote understanding between cultures and rapprochement of the people in the Euro-Mediterranean region as well as to develop free and flourishing civil societies (social, cultural and human partnership).

For self preparation: Common strategy of the EU in the Mediterranean region (Fairy Conference, 2000, 19-20 June).

Turkey

Although the EU has decided that Turkey does not yet meet all the criteria for full membership of the Union, it has frequently reaffirmed Turkey's eligibility for EU membership. Turkey applied for full membership in 1988, but the Commission recommended an alternative path, including steadily closer economic relations, a strategy that both sides are implementing. Since 1995, the EU and Turkey are joined in a Customs Union that provides for enhanced economic cooperation. An accompanying financial protocol has not yet been implemented, but efforts are continuing to bring it into force. In 1998, the EU invited Turkey to participate in the launch of a high level European Conference on issues including transnational organized crime, foreign and security policy, regional cooperation and economic and social policy. In August 1999, following a devastating earthquake in Turkey, the EU immediately responded with humanitarian assistance and a few months later Turkey officially became an "applicant" to the EU accession.

EU - Asia relations

EU policy is embodied in a set of recommendations intended to stimulate a more coordinated, proactive strategy, published by the Commission under the title "Towards a New Asia Policy" and endorsed by the European Council at Essen in December 1994.

Priorities are to:

• strengthen Europe's economic presence in the Asian market, assist former state-trading Asian countries to embark on economic reforms, and promote scientific cooperation,

• generate political dialogue to bring the Asian countries into the international community, control the proliferation of nuclear and chemical weapons, and promote respect for human rights and,

• combat poverty and improve primary education, health care, and the environment.

The first 25-nation summit between EU and Asian leaders was held in Bangkok in 1996 to help implement the new strategy and broaden economic and political relations. Two other summits were held in London in 1998 and in the Republic of Korea in 2000.

The EU was at the forefront of international efforts to resolve the Asian financial crisis, and Europe's role has increased since the launch of the euro in 1999.

China

The EU's China strategy is laid out in Building a Comprehensive Partnership with China, a Commission proposal endorsed by the EU's fifteen governments in June 1998. It emphasizes the importance of engaging China further, through an upgraded political dialogue, and advocates the gradual integration of China into the world economy together with the promotion of democracy, the rule of law and human rights.

ASEAN

The EU is ASEAN's second largest export market and third largest trading partner after Japan and the US. Through the ASEAN Regional Forum established in 1994, the EU and other dialogue partners join the 10 members of the Association of South-East Asian Nations in constructive dialogue on political and security issues in the Asia-Pacific region.

Latin and Central America

The EU is a leading trading partner and source of development aid to Latin and Central America. Taking 20% of the region's exports, it has trade and economic cooperation agreements with several Latin and Central American countries and has instituted political dialogues to promote democracy, peace and economic development in Central and South America.

A "Global Agreement" for economic partnership and political coordination was signed with Mexico in December 1997, and an EU-Mexico free trade agreement is being negotiated.

In June 1999, the first Rio Summit brought together leaders from the EU, Latin America and the Caribbean for the creation of a new political dialogue, strengthening of economic and trade ties, and cooperation on cultural, education, and human rights issues within Latin America and the Caribbean.

Since its birth in the 1950s, the European Economic Community EEC (or "Common Market") has been developing relations with the rest of the world through a common policy on trade, development assistance and formal trade and cooperation agreements with individual countries or regional groups.

The creation of a customs union meant a common external tariff, and negotiations with partners outside the EEC. So the EU's responsibilities for external relations in the trade field date from its earliest years. From the first bilateral agreements drawn up in the 1960s covering textiles imports to the creation of the World Trade Organisation (WTO) in 1995, the EU has become a major force on the world economic stage. Supervised by the Member States, the Commission negotiates external trade issues for a Single Market of almost 400 million consumers representing one fifth of world trade.

The role of the European Union in providing assistance to developing countries has also expanded. The first European Development Fund was set up in 1960 to provide assistance to the developing countries of African, the Caribbean and the Pacific, many of which are former colonies or dependent territories of the Member States.

The EU began providing humanitarian aid to those in need around the world in the 1970s. Since 1993, under the Maastricht Treaty, it has been developing a common foreign and security policy (CSFP) to enable it to take joint action when the interests of the Union as a whole are at stake. Defence is becoming an important aspect of the CFSP as the EU seeks to promote and maintain stability around the world. As it deals with terror, international crime, drug trafficking, illegal immigration and global issues like the environment, the Union also works closely with other countries and international organisations.

The EU’s common trade policy operates at two levels. Firstly, within the World Trade Organisation (WTO), the European Union is actively involved in setting the rules for the multilateral system of global trade. Secondly, the EU negotiates its own bilateral trade agreements with countries or regional groups of countries.

Development assistance and cooperation, originally concentrated in Africa, was extended to Asia, Latin America and the southern and eastern Mediterranean countries in the mid-1970s. The underlying purpose is always to support sustainable growth and development in the partner countries, so that they have the resources to tackle and eradicate poverty. The Union has every interest in supporting its partners and encouraging them to be successful and prosperous.

The EU’s agreements with its partners around the globe cover not only trade and traditional financial and technical assistance but also economic and other reforms as well as support for infrastructure and health and education programmes. They also provide a framework for political dialogue and contain a clause which enables the Union to suspend or cancel trade or aid if the partner country violates human rights. Moreover, in 2003, the EU decided that all new agreements must include a clause in which its partners commit themselves to the non-proliferation of weapons of mass destruction.

The EU has to make sure that the different aspects of its external policies are consistent with each other and convey a clear overall message. To help achieve this, it appointed a High Representative for foreign and security policy in 1999. In June 2004, EU leaders agreed in principle to create the post of EU foreign minister.

For self preparation: relations between the EU and the CIS, relations between the EU and North American countries.

8.2. Foreign trade policy|politics| of the eu

The European Union is the world’s biggest trader, accounting for 20% of global imports and exports. Free trade among its members underpinned the launch of the EU 50 years ago. The Union is therefore keen to liberalize world trade for the benefit of rich and poor countries alike.

Foreign (external) trade policy of the EU is a set of institutional measures|step| in the field of foreign|outward| trade, which|what| is used by institutions of the EU as an entire political and economic formation for regulation of mutual relations between economic agents of the European Union|conjunction| and other countries or their groups. In the wide understanding the foreign trade policy of the EU is policy|politics| on goods, |primageservices, productive forces (labour, capital, intellectual property) trade. In narrow sense foreign trade policy covers just goods and services trade.

The common commercial policy is a pillar for the external relations of the European Union. It is based on a set of uniform rules under the Customs Union and the Common Customs Tariff (1968) and governs the commercial relations of the Member States with Non-EU Member Countries. The purpose of the instruments of trade defense and market access is mainly to protect European businesses from obstacles to trade. The EU has evolved during the process of globalisation by aiming for the harmonious development of world trade and fostering fairness and sustainability. It actively encourages the opening of the markets and the development of trade in the multilateral framework of the World Trade Organisation (WTO). At the same time, it supports developing countries and regions through bilateral relations with a view to involving them in world trade using preferential measures.

At the same time the EEC was engaged in the row|file| of multilateral trade negotiations (Kennedy-round|, Tokyo-round, Uruguayan round) the result of which|what| was considerable reduction|abbreviation| of tariffs|rate|, especially|in particular case| in relation to|concerning| the manufactured goods. However, neither EEC nor the USA, Australia, Canada and other developed countries, did not aspire to similar|like| reduction|abbreviation| tariffs|rate| in agricultural products, textile and clothes trading, which|what| made|fold| the substantial part of goods import|imp.| from developing countries. In these industries|branch| the EEC left the system of tariffs|rate| and subsidies which|what| protected|non-load-bearing| the European producers |production| from external|outward| competition.

According to|according to| the Treaty of Rome|contract|, the European Commission has powers on representation of EU countries-members|limb| interests in the field of foreign trade. Article 131 of the Treaty|contract| of Rome sets the purpose of common foreign policy|politics| of European communities, which|what| consists in aspiration to assist harmonious development of world trade, gradual abolition of foreign trade limitations|limination| and decline|lowering| of custom barriers|barri|definite|. Though, common foreign trade policy forming is complicated because of necessity of taking into attention interests of all countries-members|limb| of the EU, which|what| differ on level|Y-level| of economic|economical| and social development, structure of economy, traditional trade partners etc. The key|clue| purpose of adjusting|adjustment| of the EU foreign trade relations is achievement of the permanent|withstand| economy|economical| growing through|from| trade liberalization and such its consequences as welfare|well-being| growth|height| and unemployment reduction|abbreviation|. It’s also important to take into attention public opinion on introduction|introducting| or abolition of regulative measures..

The range and sophistication of the EU's external trade agreements has multiplied. Whilst several of the original product specific quota/tariff setting agreements are still in force, most agreements now cover all industrial goods. In addition to the WTO, multilateral arrangements are long established with groupings such as ASEAN and MERCOSUR. The most integrated of all these agreements is the European Economic Area, which extends the entire single market acquis to Iceland, Liechtenstein and Norway. Trade agreements are now pushing liberalisation into new areas, like the mutual recognition of conformity assessment for product standards. Safeguard measures operating at EU level include a well-developed anti-dumping mechanism.

The EU is firmly committed to the promotion of open and fair trade with all its trading partners. The EU has specific trade policies in place for all its partners and observes the global rules on international trade set out by the World Trade Organisation.  In addition to global-level negotiations within WTO known as the "Doha Development Agenda", the EU conducts a number of negotiations with countries and regions around the world.

The Doha Round of world trade negotiations was launched in Doha (Qatar) in November 2001. Named the Doha Development Agenda, this round of trade negotiations is much broader than past global trade negotiations and is specifically targeted at addressing the needs of developing countries. The focus of negotiations has been on

• reforming agricultural subsidies

• improving the access to global markets and

• ensuring that new liberalisation in the global economy respects the need for sustainable economic growth in developing countries.

The successful conclusion of the Doha negotiations would confirm the central role of multilateral liberalisation and rule-making. It would confirm the WTO as a powerful shield against protectionist backsliding.

The EU's objectives are as follows:

• In market access for the industrial goods sector, the EU wants to create significant new trade flows by cutting tariffs in both developed countries and the growing emerging economies such as China, Brazil and India. The goal is to create new trade between developed countries, but also between developing countries. This means lowering tariffs on industrial goods but also negotiating common rules on how to address obstacles to trade generated by a too complex and non-transparent regulatory system.

• The EU also wants to improve and clarify the WTO rulebook on subsides that distort the production of industrial goods. These include longstanding financial support made available to exporters on non-commercial terms as well as governments' provision of inputs to domestic producers at prices substantially more favourable than those available to foreign producers (so-called dual or discriminatory pricing).

• For the agriculture sector the EU is committed to an agreement that reforms farm subsidy programs throughout the rich world in line with the EU's wide-ranging 2003 reform of the Common Agricultural Policy. As part of the Doha Round, the EU has offered to cut farm tariffs by 60%, reduce trade distorting farm subsidies by 80% and eliminate farm export subsidies altogether. The EU also wants to see new market access opportunities for its own processed agricultural exports.

• In market access negotiations for the services trade, Doha should bring considerable and real market opportunities for business as well as benefits to consumers world-wide. However, the EU does not seek general deregulation or privatisation of sectors where principles of public interest are at stake, and the EU is also committed to defending the right of WTO members to promote cultural diversity.

• The EU wants the Doha Round to agree a package of development measures including: a special agreement to address trade distortions caused by subsidies to cotton farmers in developed countries; the extension of unlimited markets access to all Least Developed Countries by as many countries as possible; a new global package of 'aid for trade' assistance to help the poorest build the capacity to trade; special measures to help the poorest countries implement any Doha Agreement effectively and without long-term harm to their economies.

• The EU wants the Doha Round to agree a new set of rules to govern the use of trade defence instruments so that they are not abused, and a complete update of the WTO's rulebook for trade facilitation, the standard practice for customs and other border related procedures world wide – a potential source of huge savings for traders, especially in developing countries. The EU also wants to use the Doha Round to improve the protection of geographical indications – the special legal identity given to products like Parma Ham and Roquefort cheese that are closely linked to a particular place and tradition of production.

Presently|now| the foreign trade policy of the EU is based on principle of balancing between tendencies to|by| liberalization of trade and necessity of defence|protection| of the European producers. The tendencies of liberalization are caused both global|worldwide| tendencies on trade liberalization and expected positive|staid| consequences from trade liberalization between the EU and other countries of the world|peace|. In particular|including|, on European Commission experts estimations|estimation|, complete liberalization of world trade will cause growth|height| of GDP of the European Union|conjunction| on 2%. In addition, liberalization of the trade mode|regime| will improve|bootstrap| the life-standard of the poorest groups of population of the European Union, making chipper imported goods|primage|, first of all food. Trade liberalization of the EU must be positive|staid| for developing countries, which|what| hereupon must get|receive| access to|by| the European market. However, application of protective trade measures|step| is|appear| a necessary condition|COND| for development and providing|ADM| of sufficient|suffite| competitiveness at an international level for such industries|branch| of the European economy, as agriculture, new and perspective|long-range| industries|branch| as nano-technologies|, bioengineering and others.

For self preparation: 1) main clauses of “Millenium round”; 2) European Commission Communication to the Council and European Parliament over EU's stance in view of «Millenium round» of World Trade Organization; 3) Economic Partnership Agreements, (EPAs) (European commission web-site).

8.3. Development aid policy|politics|

The European development aid policy is a complex of methods, measures and instruments on providing aid to developing countries and collaboration for assistance of their economic and social development.

More than half the money spent to help poor countries comes from the European Union and its member states, making it the world's biggest aid donor. But development policy is about more than providing clean water and surfaced roads, important though these are. The Union also uses trade to drive development by opening its markets to exports from poor countries and by encouraging them to trade more with each other.

The European Union and its member countries paid out more than €49 billion in 2008 in public aid to developing countries. This was the equivalent of 0.40% of their GNP, and was higher than the per capita aid levels of the United States or Japan. The target for 2010 is 0.56% of GNP, rising to 0.7% in 2015.

Most of the EU’s aid is made in the form of non-repayable grants. A limited amount of soft loans and investment capital is made available by the European Investment Bank (EIB), the EU’s long-term funding body. In 2006 the EIB made loans worth €5.9 billion to partners outside Europe, mainly developing countries.

Development aid policy|politics| is|appear| a complementary one (Article 177 of Treaty on the European Union |conjunction|), though it must complement policies of the countries-members|limb|.

Development aid policy|politics| is called to promote|assist| (Article 177, Article 181a |of Treaty on the European Union |conjunction|):

• the sustainable economic and social development of the developing countries, and more particularly the most disadvantaged among them,

• the smooth and gradual integration of the developing countries into the world economy

• the campaign against poverty in the developing countries

• general objective of developing and consolidating democracy and the rule of law, and to that of respecting human rights and fundamental freedoms.

Within their respective spheres of competence, the Community and the Member States shall cooperate with third countries and with the competent international organisations (Article 180 Treaty|contract| on The European Union |conjunction|).

According to the 181а of Treaty on The European Union, the Community shall carry out, within its spheres of competence, economic, financial and technical cooperation measures with third countries. Such measures shall be complementary to those carried out by the Member States and consistent with the development policy of the Community.

The EU uses the followings|downstream| instruments|tool| of development aid:

• signing of Conventions with African, Caribbean and Pacific countries (ACP);

• special relations with former|quondam| colonies and overseas territories on aid granting for the countries which|what| do not have Treaties on association with the EU;

• introduction|enters| of Generalized System of Preferences |;

• participating in world trade treaties in some|certain| kinds|appearance| of goods and granting help through|from| non-state organizations;

• participating in initiatives realization of IMF and the World Bank on grant aid for the ACP countries with great national debt.

An Community has a right to take the necessary urgent measures (Article 301 Treaty|contract| on The European Union |conjunction|).

The EU can use a wide range of resources on development aid policy|politics|:

• cooperation in industrial and technological sectors before introduction|enters| of trade assistance|contributory| mode|regime|;

• substantial gender inequalities liquidation|unevenness|;

• ecological|ecofriendly| measures bringing into|by| the processes|Carbro| of development;

• food aid;

• financial|cost| help granting (loans|lend| and risk capital from the European investment bank (EIB) resources, subsidies of the European Development Fund (EFD), Financing instrument for development cooperation (DCI) and other kinds of subsidies.

The European Development Fund (EDF) is the main instrument for Community aid for development cooperation in the ACP countries and the Overseas Countries and Territories (OCT). Articles 131 and 136 of the 1957 Treaty of Rome provided for its creation with a view to granting technical and financial assistance to African countries that were still colonised at that time and with which certain countries had historical links.

Although, following a request by the European Parliament, a heading has been reserved for the Fund in the Community budget since 1993, the EDF does not come under the general Community budget. It is funded by the Member States, covered by its own financial rules and managed by a specific committee. The Member States set the EDF budget in the Council via agreements that are subsequently ratified by the national parliament of each MemberState. The European Commission and other institutions established under the partnership play a key role in the day-to-day management of the Fund. However, the aid allocated to OCTs will be integrated into the Community general budget from 1st January 2008 on, while the aid granted to the ACP countries will continue to be financed under the EDF (10th) at least for the period 2008-2013.

Each EDF is concluded for a period of around five years. Since the conclusion of the first partnership convention in 1964, the EDF cycles have generally followed that of the partnership agreements/conventions.

• First EDF: 1959-1964

• Second EDF: 1964-1970 (Yaoundé I Convention)

• Third EDF: 1970-1975 (Yaoundé II Convention)

• Fourth EDF: 1975-1980 (Lomé I Convention)

• Fifth EDF: 1980-1985 (Lomé II Convention)

• Sixth EDF: 1985-1990 (Lomé III Convention)

• Seventh EDF: 1990-1995 (Lomé IV Convention)

• Eighth EDF: 1995-2000 (Lomé IV Convention and the revised Lomé IV)

• Ninth EDF: 2000-2007 (Cotonou Agreement)

• Tenth EDF: 2008-2013 (Cotonou Agreement)

The previous EDFs (up to the Eighth) consisted of several instruments, including grants, risk capital and loans to the private sector. The STABEX and SYSMIN instruments designed to help the agricultural and mining industries respectively were abolished by the new Partnership Agreement signed in Cotonou in June 2000.

The instruments of the 9th EDF, concluded at the same time as the Cotonou Agreement , have been regrouped and rationalised in only two instruments: the EDF for support to long-term development and the Investment Facility for support to the private sector. The 9th EDF has been allocated € 13.5 billion over a period of five years. In addition, the unexpended balances from previous EDFs total € 9.9 billion.

Another change brought by the New Agreement is related to the resources allocation which is no longer automatic but based on an evaluation of needs and performance through a system of rolling programming. All allocations are therefore indicative and may be reduced or increased during the course of implementation of the programmes. This system will provide for greater flexibility and give the ACP countries greater responsibility.

The development aid provided by the EDF forms a part of a broader European framework. Within the European Union, the funds of the Community's general budget may be used for certain types of aid. Moreover, whilst managing part of the EDF's resources (loans and risk capital), the own resources contribution of the European Investment Bank comes to € 1.7 billion for the five-year period of the ninth EDF.

Added to this, the Member States have their own bilateral agreements and implement their own initiatives with developing countries that are not financed by the European Development Fund or other Community funds.

The future of EDF after 2007 was the subject of a long and complex debate, whether to keep the EDF separated from the EU’s general budget or to integrate it then we will talk about the budgetisation of the EDF. In December 2005, EU Member States finally decided to continue funding the ACP-EU cooperation through the 10th EDF which will cover the period 2008-2013 and represent a total amount of € 22.682 billion.

In line with the new Cotonou Agreement, the system for programming of resources has been fundamentally reformed. The programming process is more continuous and result-oriented than has been the case in the past. At the outset of the programming process, one single Country Strategy Paper (CSP) is established for each ACP country for a period of five years. At regional level, we talk about Regional Strategy Paper (RSP). The CSP/RSP covers the implementation of all operations financed from the entire resources available including unexpended resources from previous EDFs. The CSP/RSP identifies a limited number of sectors where the Community is deemed to have a comparative advantage. It is complemented by a National Indicative Programme (NIP)/Regional Indicative Programme (RIP) which sets out the concrete operations to be financed in the focal sector(s) and a timetable for their implementation.

The financing instrument for development cooperation DCI (2007-2013) approved by the Regulation (EC) No 1905/2006 of the European Parliament and of the Council of 18 December 2006 establishing a financing instrument for development cooperation improves the Community's previous development cooperation framework by merging the different geographic and thematic instruments into a single instrument.

Under this instrument, the European Communities finance measures aimed at supporting geographic cooperation with the developing countries included in the list of aid recipients of the Development Assistance Committee of the Organisation for Economic Cooperation and Development (OECD/DAC). These countries are listed in Annex 1 to the Regulation.

The Regulation (EC) No 1905/2006 emphasises that the Community's development cooperation policy is guided by the Millennium Development Goals (MDGs) and that the “European Consensus” provides the general framework for action by the Community on development matters. It also reaffirms that the objectives of this policy are poverty reduction, sustainable economic and social development and the smooth and gradual integration of developing countries into the world economy.

The Regulation provides that Community aid is implemented through geographic and thematic programmes and through the programme of accompanying measures for the African, Caribbean and Pacific (ACP) Sugar Protocol countries.

Geographic programmes encompass cooperation with partner countries and regions determined on a geographical basis. They cover five regions, namely Latin America, Asia, Central Asia, the Middle East and South Africa. Community assistance to these countries is aimed at supporting actions within the following areas of cooperation:

• supporting the implementation of policies aimed at poverty eradication and at the achievement of the MDGs;

• addressing the essential needs of the population, in particular primary education and health;

• promoting social cohesion and employment;

• promoting governance, democracy, human rights and support for institutional reforms;

• assisting partner countries and regions in the areas of trade and regional integration;

• promoting sustainable development through environmental protection and sustainable management of natural resources;

• supporting sustainable integrated water resource management and fostering greater use of sustainable energy technologies;

• assistance in post-crisis situations and fragile States.

The measures taken vary according to the specific needs of each country, taking into account the specific situation in Latin America, Asia, the Middle East or South Africa.

Thematic programmes complement geographic programmes. They cover a specific area of activity of interest to a group of partner countries not determined by geography, or cooperation activities focusing on various regions or groups of partner countries, or an international operation that is not geographically specific. In other words, their scope of application is wider than that of geographic cooperation programmes because they encompass not only the countries eligible for geographic cooperation under the DCI but also the countries and regions eligible under the European Development Fund (EDF) and under Regulation (EC) No 1638/2006.

The Regulation provides for five thematic programmes concerning:

• investing in people;

• the environment and the sustainable management of natural resources;

• non-state actors and Local Authorities;

• the improvement of food security;

• cooperation in the area of migration and asylum.

For self preparation: Yaoundé Conventions, Lomé Conventions, Cotonou Agreement, Millennium Development Goals (MDGs)

Theme 9. The eu strategy of external relations development

9.1. Strategy and programs of external relations development with neighbour countries

9.2. Criteria for accession to the EU

9.3. Relations between Ukraine and the EU at the modern stage: problems and prospects

9.1. Strategy and programs of external relations development with neighbour countries

The Commission launched the European Neighbourhood Policy (ENP) in its Communication on Wider Europe of March 2003 and complemented it with a Communication in July 2003 which introduced the concept of Neighbourhood Programmes and outlined a new financial instrument to support the policy for the period post-2006 (European Neighbourhood and Partnership Instrument). The ENP provides the framework for closer cooperation with the neighbouring countries of the newly enlarged Union. Following endorsement of these concepts by Council conclusions in March and October 2003 respectively, the Commission further elaborated the policy initiative in a May 2004 Strategy Paper. The Council and European Council welcomed and endorsed the Commission’s Strategy Paper in June 2004.

Without necessarily involving the creation of new institutional arrangements, the European Neighbourhood Policy aims at establishing at the pan-European level an open and integrated market functioning on the basis of similar or harmonised rules with the EU acquis which can bring significant economic and other benefits to the EU partner countries. Given that some of these countries are in the middle of their transition to full market economies and developing their regulatory framework, the European Neighbourhood Policy places great emphasis on regulatory approximation and maintains that the first trade priority for them is currently their accession to the WTO.

The European neighbourhood policy (ENP) is a policy of the EU, which is directed on providing of realization of the EU strategy of safety and stability, peace and welfare at the European region, by adjusting of strategic relationship with all countries which have common land or marine borders with the countries-members of the EU: Algeria, Armenia, Azerbaijan, Belorussia, Egypt, Georgia, Israel, Jordan, Lebanon, Libya, Moldova, Morocco, Palestinian autonomy, Syria, Tunis and Ukraine.

The European Neighbourhood Policy (ENP) was developed in 2004, with the objective of avoiding the emergence of new dividing lines between the enlarged EU and its neighbours and instead strengthening the prosperity, stability and security of all.

The policy was firstly outlined in the Commission Communication on Wider Europe in March 2003, followed by Strategy Paper on the European Neighbourhood Policy in May 2004. The strategy sets out in concrete terms how the EU proposes to work more closely with these countries. As part of its report on implementation of the ENP, in December 2006 and again in December 2007, the Commission also made proposals as to how the policy could be further strengthened.

The ENP, which is chiefly a bilateral policy between the EU and each partner country, is further enriched with regional and multilateral co-operation initiatives: the Eastern Partnership (launched in Prague in May 2009), the Union for the Mediterranean (the Euro-Mediterranean Partnership, formerly known as the Barcelona Process, re-launched in Paris in July 2008), and the Black Sea Synergy (launched in Kiev in February 2008).

Within the ENP the EU offers its neighbours a privileged relationship, building upon a mutual commitment to common values (democracy and human rights, rule of law, good governance, market economy principles and sustainable development). The ENP goes beyond existing relationships to offer political association and deeper economic integration, increased mobility and more people-to-people contacts. The level of ambition of the relationship depends on the extent to which these values are shared.

The ENP remains distinct from the process of enlargement although it does not prejudge, for European neighbours, how their relationship with the EU may develop in future, in accordance with Treaty provisions.

The central elements of the ENP are the bilateral Action Plans between the EU and each ENP partner (12 of them were agreed). These Action Plans set out an agenda of political and economic reforms with short and medium-term priorities of 3 to 5 years. Following the expiration of the first Action Plans succession documents are being adopted. The ENP is not yet fully ‘activated’ for Algeria, Belarus, Libya and Syria since those have not agreed Action Plans.

The ENP builds upon existing agreements between the EU and the partner in question: Partnership and Cooperation Agreements (PCA) or Association Agreements (AA). Implementation of the ENP is jointly promoted and monitored through the Committees and sub-Committees established in the frame of these agreements. The European Commission under its own responsibility publishes each year the ENP Progress Reports.

In order to realise the vision of building an increasingly closer relationship with our neighbours, and a zone of stability, security and prosperity for all, the EU and each ENP partner reach agreement on reform objectives across a wide range of fields within certain “common” areas such as cooperation on political and security issues, to economic and trade matters, mobility, environment, integration of transport and energy networks or scientific and cultural cooperation. The EU provides financial and technical assistance to support the implementation of these objectives, in support of partners’ own efforts.

Many of the instruments and methods used in the ENP are similar to those used to support transition processes elsewhere e.g.

• At the outset of the process, the Commission prepared Country Reports assessing the political and economic situation as well as institutional and sectoral aspects, to assess when and how it is possible to deepen relations with that country. Country Reports were published in May 2004 on the first seven of the ENP countries to have Agreements in force with the EU. A further five Country Reports were published in March 2005 on the next countries to be included in the policy (Southern Caucasus) or whose Agreements had come into force (Egypt and Lebanon). Country Reports are submitted to the Council which decides whether to proceed to the next stage of relations.

• That next stage was the development of ENP Action Plans with each country. These documents are negotiated with and tailor-made for each country, based on the country’s needs and capacities, as well as their and the EU’s interests. They jointly define an agenda of political and economic reforms by means of short and medium-term (3-5 years) priorities. They cover political dialogue and reform, economic and social cooperation and development, trade-related issues and market and regulatory reform, cooperation in justice and home affairs, sectors (such as transport, energy, information society, environment, research and development) and a human dimension (people-to-people contacts, civil society, education, public health …). The incentives on offer, in return for progress on relevant reforms, are greater integration into European programmes and networks, increased assistance and enhanced market access. 12 such ENP Action Plans are being implemented – with Israel, Jordan, Moldova, Morocco, Occupied Palestinian Territory, Tunisia and Ukraine since 2005 and with Armenia, Azerbaijan, Georgia, Lebanon and Egypt since end 2006/beginning 2007. Following the expiration of the first Action Plans succession documents are being adopted.

 The implementation of the mutual commitments and objectives contained in the Action Plans is regularly monitored through sub-committees with each country, dealing with those sectors or issues. On 4 December 2006, the Commission issued its first periodic report on progress and on areas requiring further progress. A second set of progress reports on implementation of the ENP in 2007, a communication drawing conclusions from the reports and a sectoral progress report , were adopted on 3 April 2008. The last set of progress reports on the implementation of ENP in 2008 was adopted on 23 April 2009. The third package of progress reports on the implementation of ENP in 2008 was adopted on 23 April 2009. The communication on stock-taking of the ENP (2004-2009), 12 progress reports on implementation of the ENP in 2009 and sectoral progress report, were adopted on 12 May 2009.

Implementation of the reforms is supported through various forms of EC-funded financial and technical assistance, including instruments which have proven successful in supporting reforms in Central, Eastern Europe and South-Eastern Europe but also new instruments, such as the Neighbourhood Investment Facility (NIF).

Funding

From 1 January 2007 the European Neighbourhood Policy and Strategic Partnership with Russian Federation are financed through a single instrument - the European Neighbourhood and Partnership Instrument (ENPI). It is designed to target sustainable development and approximation to EU policies and standards - supporting the agreed priorities in the ENP Action Plans, as well as the Strategic Partnership with Russia. For the Financial Framework 2007-2013, approximately €12 billion in EU funding are available to support these partners' reforms, an increase of 32% in real terms as compared to 2000-2006 Financial Framework. Until 31 December 2006, EU assistance to the countries of the ENP and to Russia was provided under various geographical programmes including TACIS (for Eastern neighbours and Russia) and MEDA (for Southern Mediterranean neighbours), as well as thematic programmes such as EIDHR (European Initiative for Democracy and Human Rights). For the budgetary period (2000-2006), the funds available were approximately €5.3 billion for MEDA and €3.1 billion for TACIS, as well as approximately €2 billion in European Investment Bank lending for MEDA beneficiary countries and €500 million for TACIS beneficiary countries.

Funds allocated to individual country programmes depend on their needs and absorption capacity as well as their implementation of agreed reforms. An important aspect of the ENP, and the strategic partnership with Russia, is to markedly improve cross-border cooperation with countries along the EU’s external land and maritime borders, thus giving substance to our aim of avoiding new dividing lines. The ENPI therefore supports cross-border contacts and co-operation between local and regional actors and civil society. The 15 ENPI cross-border cooperation (CBC) programmes, identified on the external borders of the EU, are receiving financial support of €1.18 billion for the period 2007-2013. The programmes are getting underway at the end of 2007/beginning of 2008 The Commission approach to CBC can be found in the ENPI Cross-Border Cooperation Strategy Paper.

New forms of technical assistance have been extended to ENP partners. Legislative approximation, regulatory convergence and institution-building are being supported through mechanisms which proved successful in transition countries that are now EU Member States i.e. targeted expert assistance (Technical Assistance and Information Exchange - TAIEX), long-term twinning  arrangements with EU Member States’ administrations – national, regional or local – and participation in relevant Community programmes and agencies.

The Neighbourhood Investment Facility was established at the end of 2007 and will start to support lending to ENP partners in 2008. The Commission will allocate to the Facility an amount of €700m (2007-2013) and asked Member States to gradually match the Community contribution, to maximise the leverage of loans. The Facility will fund projects of common interest focussing primarily on energy, environment and transport.

Under all these instruments, EU assistance priorities are identified, together with the countries concerned and other relevant actors, in general Country Strategy Papers (CSPs) covering 7 year periods, National Indicative Programmes (NIPs) covering 3 years and detailed annual programmes. The priorities identified in the Action Plans, agreed with the authorities of the country, are also useful in guiding the programming of assistance programmes – including for other donors and IFIs. Tenders under EC assistance programmes are open to companies from the 27 EU Member States, from the candidates (1) and potential candidates (2) and from ENP partners themselves, and are awarded in line with standard EC procurement rules.

For self preparation: Neighbourhood Investment Facility (NIF), European Commission Communication on Wider Europe, Strategy Paper on the European Neighbourhood Policy, ENPI Cross-Border Cooperation Strategy Paper.

9.2. Criteria for accession to the eu

In 1989, the European Community's Phare program was created. It aimed to provide financial support for potential accession countries so that they could expand and reform their economies. To join the EU an applicant country must meet the following Copenhagen criteria established by the European Council in 1993:

Political criteria: institutional stability which guarantees existence of the democratic and legal political system at the observance of fundamental human rights and defence of national minorities.

Economic criteria: normally functioning market economy and ability of country to maintain a hard competition in the European Union.

Property criteria: ability of national government to undertake obligations, which follow from membership in the EU and to arrive at the purpose of political, economic and currency Community which requires considerable material and financial charges.

In December, 1995 in Madrid the European Council revised the membership criteria to include conditions for member country integration through the appropriate adjustment of its administrative structures: since it is important that European Community legislation be reflected in national legislation, it is critical that the revised national legislation be implemented effectively through appropriate administrative and judicial structures.

In order to assess progress achieved by countries in preparing for accession to the European Union, the European Commission submits 'Regular Reports' to the European Council. These serve as the basis upon which the Council takes decisions on negotiations or their extension to other candidates. Since 1993, the Commission has presented a complete set of Regular Reports on a yearly basis, covering the 10 associated countries in Central and Eastern Europe (Bulgaria, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia, and Slovenia) as well as Cyprus, Malta and Turkey.

Table 1

Enlargement criteria of the EU

Potential candidate countries

The EU relations with the Western Balkans states (Albania, Bosnia and Herzegovina, Montenegro, and Serbia) were moved from the "External Relations" to the "Enlargement" policy segment. These states currently are not recognised as candidate countries, but only as "potential candidate countries". This is a consequence of the advancement of the Stabilisation and Association process.

The successor states of the Socialist Federal Republic of Yugoslavia (Bosnia and Herzegovina, Croatia, the former Yugoslav Republic of Macedonia, Montenegro, Serbia, and Slovenia) have all adopted EU integration as an aim of foreign policy. Slovenia joined the EU on May 1, 2004. Croatia is currently negotiating its entry. The former Yugoslav Republic of Macedonia is recognised as an EU candidate country.

The Republic of Albania in the Western Balkans was for a long period under one of the harshest communist governments in the world, which imposed on the people of Albania an international isolation similar to that of North Korea. The post communist Albanian governments have adopted EU integration as the strategic orientation of the country. The EU signed a bilateral agreement with Albania on 13 April 2007 which included visa facilitations for the Albanian citizens. The signing EU Commissioner Franco Frattini was quoted saying that this is the first step toward a full abolishment of the visa requirements and the free movement of the Albanians in EU.

The 2003 European Council summit in Thessaloniki set integration of the Western Balkans as a priority of EU expansion. A further meeting in Mamaia, Romania, concluded that "Albania, Bosnia-Herzegovina, Republic of Macedonia, and Serbia and Montenegro are considered likely to join the EU between 2010 and 2015" depending on their fulfilment of the adhesion criteria. This summit was attended by two EU members, seven countries now in the EU, and the eight EU hopefuls (Albania, Bosnia-Herzegovina, Croatia, the former Yugoslav Republic of Macedonia, Moldova, Montenegro, Serbia, and Ukraine). However, this summit was not linked to any EU institution, whatsoever, and the target dates and agreements presented there mainly aimed at encouraging the candidate and potential candidate countries on their way to eventual full membership into the EU.

On November 9, 2005, the European Commission has suggested in a new strategy paper that the current enlargement agenda (Croatia, Turkey and the Western Balkans) could potentially block the possibility of a future accession of Belarus, Moldova, Ukraine and Georgia. Olli Rehn has said on occasion that the EU should "avoid overstretching our capacity, and instead consolidate our enlargement agenda," adding, "this is already a challenging agenda for our accession process."

Progress of future enlargements

It was previously the norm for enlargements to take place in 'waves' of multiple entrants joining the Union at once. The only previous 'single-state' enlargement was the 1981 admission of Greece.

However, EC members and EU ministers have warned that, following the significant impact of the fifth enlargement in 2004, a more individual approach will be adopted in the future, although the entry of pairs or small groups of countries may yet coincide. Croatia may be expected to join first, possibly around 2010, with Albania, Bosnia and Herzegovina, Republic of Macedonia, Montenegro, Serbia, and Turkey following, either together or in smaller groups.

The timing of smaller-wave enlargements is subject to many variables and the dates given in the table below are the earliest possible ones - procedures do not allow speedier admission in most cases (for example, it takes at least two years to move from a membership application to the start of negotiations).

Future enlargement possibilities

In the Treaty of Maastricht (Article 49), it is stated that any European country that respects the principles of the European Union may apply to join. The Copenhagen European Council set out the conditions for EU membership in June 1993 in the so-called Copenhagen criteria. Whether a country is European or not is a subject to political assessment by the EU institutions, but countries in the Council of Europe that fall onto the border (between Europe and Asia) all have a significant claim for EU membership (as shown with the accession of geographically Asian, but culturally European, Cyprus).

The European Union has tended to enlarge along regional lines, adding groups of nearby nations. (A notable exception was the accession of Greece.) Currently, the EU is very interested in the integration of the Balkan states. Of Eastern Europe, Heather Grabbe of the Centre for European Reform has said, "Belarus is too authoritarian, Moldova too poor, Ukraine too large, and Russia too scary for the EU to contemplate offering membership any time soon." Due to the 2004 "Orange Revolution" in Ukraine, and the "Rose Revolution" in Georgia in 2003, both countries have started and already implemented extensive reform programs, and the perspectives for both countries have become more positive.

9.3. Relations Ukraine-eu at the modern stage: problems and prospects

EU relations with Ukraine are based on a variety of agreements, the most important of which are the Partnership and Co-operation Agreement (PCA), which entered into force in 1998, and the EU-Ukraine Action Plan, adopted in February 2005. Both sides have clarified their position towards each other in internal political strategies. On the EU side, the basic approach to relations with Ukraine was laid down in the Common Strategy of 1999. For Ukraine, the President’s Strategy for European Integration of 1998 has repeatedly been confirmed by former President Kuchma and received support from the Parliament. President Yushchenko declared European Integration a strategic priority of Ukraine, a course reflected by the creation of the post of Deputy Prime Minister for European Integration in the new government.

A number of specific agreements in the fields of trade, science and technology, and nuclear energy are also in place.

Technical assistance has been provided since the early 1990s in support of the transition process towards democracy and market economy, through the TACIS programme.

The Partnership and Cooperation Agreement (PCA)

Ukraine was the first country of the former Soviet Union to conclude a PCA with the European Union in June 1994. After ratification by Ukraine, the EU and its member states, the PCA came into force in March 1998. It highlights respect for shared fundamental values as an essential element for the relationship; provides an appropriate framework for political dialogue; sets the principal common objectives in terms of harmonious economic relations, sustainable development, co-operation in a number of areas, and support to Ukraine’s efforts towards democracy; as well as creating an institutional framework for pursuing these goals.

The PCA is an important instrument in bringing Ukraine in line with the legal framework of the single European market and of the WTO system. It also contains a number of evolutionary clauses, including the prospect of establishing a free trade area.

A Protocol to the PCA was signed by the EU and Ukraine on 30 March 2004 to extend the application of the agreement in full to the 10 new EU Member States from 1 May 2004.

The Institutional Framework

The PCA establishes a number of bilateral institutions and provides the basis for taking further decisions as necessary:

• Co-operation Council at ministerial level (EU-Presidency, European Commission, High Representative, Government of Ukraine)

• Co-operation Committee (senior civil servants level, chaired alternately by the European Commission and the Ukrainian side)

• Sub-Committees (experts level; supporting the work of the Co-operation Committee).

The political dialogue is conducted through yearly Summits, at the Co-operation Councils, and in Ministerial and Political Directors meetings in the Troika format. EU-Ukraine Summits: The Hague, 8 July 2004; Kiev, 1 December 2005; Helsinki, 27 October 2006.

The EU Common Strategy on Ukraine

The EU Common Strategy was adopted in December 1999 at the Helsinki European Council in response to the recognition that more coherence was needed between the EU and the Member States’ policies vis-à-vis certain partner countries. It covers a period of four years. The Strategy aims at developing a strategic partnership between the EU and Ukraine on the basis of the PCA, while acknowledging Ukraine’s European aspirations and welcoming the country’s European choice. It sets three principal objectives:

• to support the democratic and economic transition process in Ukraine;

• to meet common challenges on the European continent (stability and security in Europe, environment protection, energy and nuclear safety);

• to strengthen co-operation between the EU and Ukraine in the context of enlargement; assist Ukraine’s integration into the European and world economy; enhance co-operation in the field of Justice and Home Affairs.

Upon completion of Country Reports for seven ENP countries, including Ukraine, joint Action Plans were negotiated. Consultations with Ukraine on a European Neighbourhood Action Plan were launched in January 2004 and concluded in September 2004. The Action Plans will be the main tools for ENP implementation.

In December 2004, the Council, on the basis of a proposal from the Commission, agreed to the content of the Action Plan and decided to forward the Action Plan to the EU-Ukraine Cooperation Council as soon as developments in Ukraine, including the conduct of democratic presidential elections, would make it possible to envisage implementation of its provisions. The European Council, also in December 2004, stated that the EU aims to strengthen and enhance relations with Ukraine, making full use of the Action Plan.

The EU-Ukraine Action Plan was jointly adopted at a special Cooperation Council on 21 February 2005. The Action Plan provides a comprehensive and ambitious framework for work with Ukraine, identifying all the key areas of reform. The Action Plan is highly versatile. The quality and duration of implementation will depend on Ukraine’s continued commitment to common values, its capacity to implement jointly agreed priorities and effective bilateral cooperation and coordination. Moreover, in light of Ukraine’s new political circumstances, the High Representative/Secretary General Solana and Commissioner Ferrero-Waldner proposed efforts to maximise the ENP benefits for Ukraine in the course of implementation of the Action Plan. These proposals were confirmed in the 21 February 2005 Council Conclusions, which set out ten points for closer co-operation:

Ten Points for Closer Co-operation

Specifically, the Council has agreed on the following measures in support of a democratic and reform-oriented Ukraine:

1. to initiate early consultations on an enhanced agreement between EU and Ukraine, as soon as the political priorities of the ENP Action Plan have been addressed.

2. to explore possibilities for closer co-operation in the area of foreign and security policy, including European Security Defense policy, particularly with regard to Transnistria. Ukraine will also be invited, on a case by case basis, to align itself with EU positions on regional and international issues.

3. to deepen trade and economic relations between the EU and Ukraine. The review of the existing feasibility study on establishing a Free Trade Area between Ukraine and EU will be accelerated with a view to enable an early start to negotiations once Ukraine has joined the WTO. The EU is also moving quickly on agreements that will provide access to EU markets for Ukraine’s steel and textiles exports – which between them make up 30% of Ukraine’s exports to the EU. An EU-Ukraine steel agreement is under negotiation; an EU-Ukraine textile agreement was adopted by Council this week.

4. to lend further support to Ukraine’s WTO accession and to offer Ukraine continued assistance in meeting the necessary requirements. The EU was one of the first partners to conclude its bilateral protocol with Ukraine in March 2004, whereas negotiations with certain other key WTO members continue.

5. to intensify ongoing contacts with Ukraine to help it resolve the outstanding issues relating to the granting of “market economy status”.

6. to intensify negotiations regarding visa facilitation, taking into account security aspects, with a view to opening negotiations before the next EU-Ukraine summit in October. In this context, progress in the ongoing negotiations on an EC-Ukraine readmission agreement will remain essential.

7. to enhance co-operation in key sectors, including energy, transport, the environment, as well as private sector development. Preparations will be made for a high level dialogue on energy and related issues and the environmental dialogue will be upgraded. Ukraine will be treated as a priority country in the ongoing preparations for the extension of Trans-European Networks.

8. to step up support for Ukraine’s legislative approximation process, including with instruments borrowed from the Enlargement process such as TAIEX and Twinning.

9. efforts in the fields of democracy and rule of law will be an immediate imperative and further targeted assistance including support for strengthening of civil society is envisaged.

10. to maximise access to funding from the European Investment Bank (EIB), making up to 250 million of EIB lending available to Ukraine, and provide increased financial assistance to Ukraine through the relevant instruments in order to help Ukraine to pursue its reform process.

Ukraine-EU: Bilateral Trade Relations

Ukraine has decided on a European orientation in its economic and foreign policies which are expected to continue following the recent enlargements of the Union. The enlarged EU has already replaced Russia as Ukraine's foremost commercial partner and both the EU and Ukraine are interested in maintaining and strengthening solid, predictable, transparent and open trade relations.

The EU considers that a key element to integrate Ukraine into the European economic space is the successful completion of the ongoing domestic reforms. This will allow Ukraine to take full advantage of EU enlargement - as outlined in the Commission's Communication on the European Neighbourhood Policy. The EU also supports Ukraine's efforts to join the WTO as soon as possible on commercially viable terms. Furthermore, the EU and Ukraine have agreed to negotiate the establishment of a deep and comprehensive free trade area that will offer Ukraine a stake in the EU internal market.

Bilateral trade

In 2006, Ukraine's total trade with the 27 countries of the EU amounted to about 28 billion Eur (it represents 1.1% of total EU trade), a figure which has been growing steadily since the economic crisis in 1998. However, Ukraine's manufacturing and trade structures are unbalanced. Iron and steel, mineral products and chemicals accounted for 64% of the Ukrainian exports to the EU, whilst machinery and equipment, and chemicals appear prominently in EU exports to Ukraine (66%). EU-Ukraine trade in services is still very limited in value terms (1.5 billion Eur in 2003 according to Eurostat data), but it is also growing. According to the Statistics Committee of Ukraine, the EU25-Ukraine trade in services amounted to 2.4bn EUR in 2005 and 3.2 bn EUR in 2006.

EU imports from Ukraine are to a very large extent liberalised. The only exception is trade in certain steel sector products, the import of which is subject to quantitative restrictions in the EU (Ukraine, on its side, levies duties on metal scrap exports). The EU and Ukraine have negotiated an agreement on steel products that will remain in force until 31 December 2007. This Agreement shall be automatically renewed year by year provided that neither Party gives the other Party written notice of denunciation of the Agreement at least six months before it expires. With each early renewal, quantities in every product group shall be increased by 2.5%. In the event that Ukraine accedes to the World Trade Organisation (WTO) before the expiration of this Agreement, the Agreement shall be terminated and the quantitative limits shall be abolished as of the date of accession. This agreement provides for a quota of 1 320 000 tonnes in 2007.

Bilateral trade in textiles is subject to the Agreement on Trade in Textile Products, signed in May 1993. The agreement establishes a legal and administrative framework for trade in textiles and clothing, and fixes Ukrainian import tariffs at the same level as EC bound tariffs (with a clause of suspension of benefits in case of non-respect of commitments). The quantitative restrictions on imports of textiles and clothing from Ukraine have already been eliminated since early 2001. The last remaining restrictions to trade in textile and clothing products, i.e. import and export licensing requirements for all textiles and clothing products, were lifted in 2005. Since the textiles agreement was due to expire on 31 December 2006, the parties to the agreement took a decision to extend it until 31 Dec 2007, with the possibility for a tacit renewal until 31 Dec 2008. The agreement will lapse after Ukraine’s accession to WTO.

A significant proportion of Ukrainian goods entering the EU market benefit from the General System of Preferences (GSP).

Bilateral agreements

EU relations with Ukraine are to a large extent based on the Partnership and Co-operation Agreement (PCA) which entered into force in 1998. The agreement regulates the political, economic and cultural relations between the EU and Ukraine and is the current legal basis for the EU's bilateral trade with Ukraine. One of its main objectives is the promotion of trade and investment as well as the development of harmonious economic relations between the Parties.

The economic and trade provisions of the PCA are based on the most favoured nation (MFN) and national treatment principles; specific articles govern trade in steel products, conditions for establishment and operation of companies, approximation of legislation, intellectual property rights and trade defence instruments.

In addition, the EU has agreements with Ukraine governing trade in steel and textiles products (see above).

The PCA foresees the possibility of an EU-Ukraine Free Trade Area. As envisioned in the ENP Action Plan signed in February 2005, a review of the 1999 study on feasibility of the EU-Ukraine FTA was completed in early 2006 (Follow the link at the bottom of page to download the study).The review concluded that the option of deep FTA (i.e. ensuring not only tariff dismantling but also regulatory convergence) should be chosen for the negotiations of the future agreement. The negotiations of the FTA can be launched once Ukraine has joined WTO.

Ukraine and EU enlargement

The EU enlargements of May 2004 and January 2007 is beneficial for EU-Ukraine relations, through a general reduction of the external protection of new EU members as they aligned themselves on Community tariffs, and through the extension of the common Community trade regime and single market rules. The removal of internal frontiers and the harmonisation of regulations and standards between members of the EU mean free circulation of goods and services. Enlargement gives Ukraine economic operators direct access to one, larger, harmonised EU market of nearly 500 million people. Simplification and standardisation benefit particularly small and medium-size enterprises (SMEs), for whom the costs of compliance with trade procedures are proportionately higher.

Another major benefit for Ukraine is the substantial reduction in tariffs of most of the new Member States. EU enlargement simplifies and enhances access to the markets of the new Member States as well as to the EU as a whole. Ukrainian companies established in the new Member States are also able to open branches in other EU Member States. For investors, high standards of protection are applicable throughout the enlarged EU.

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