English for European Studies Students

In this context, the Euro-Mediterranean Partnership brings together the Member States of the Union and the Mediterranean countries under a large-scale programme with three strands: a political and security strand, an economic and financial strand and a social and cultural strand. Strengthening cooperation in the fields of justice, migration and social inclusion is also an important element of the Process.

The Partnership is put into effect both bilaterally and regionally. The bilateral arrangements are tailored to the individual partner country, an important aspect being the Euro-Mediterranean Association Agreements. The Process is also supported by Community funding, the MEDA programme and the European Investment Bank's Facility for EuroMediterranean Investment and Partnership (FEMIP).

Bilateral Intergovernmental Conference (EU-Applicant countries)

Negotiations on the accession of new Member States to the European Union take the form of bilateral intergovernmental conferences between the European Union and each of the applicant countries. They bring together ministers at six-monthly intervals and ambassadors every month. The Commission draws up common negotiating positions on each chapter for which the Community is competent.

Budget

All the European Union's revenue and expenditure is entered in the Community budget on the basis of annual forecasts. The budget is governed by several principles, including:

1)unity: all the revenue and expenditure is brought together in a single document;

2)annuality: budget operations relate to a given budget year;

3)equilibrium: expenditure must not exceed revenue.

The European Commission is responsible for submitting an annual preliminary draft budget to the Council, which shares budgetary authority with the European Parliament. The nature of the expenditure determines how power is shared between the two institutions, depending on whether the expenditure is compulsory (the Council has the last word) or non-compulsory (the Parliament takes the final decision). Ultimately, the European Parliament adopts or rejects the budget as a whole.

In order to stabilise the annual budgets, they have since 1988 been the subject of multiannual interinstitutional agreements between Parliament, the Council and the Commission on budgetary discipline. These multiannual "financial perspectives" govern the allocation of expenditure and seek to ensure a suitable level of funding and support the Union's priorities.

The European Constitution now being ratified provides for the financial perspectives to be institutionalised under the name of the "multiannual financial framework", to be respected by all the institutions. This is intended to ensure that expenditure develops in an orderly fashion within the limits of the Union's own resources.

The Constitution also does away with the current distinction under the budgetary procedure between compulsory expenditure and non-compulsory expenditure.

Citizenship of the Union

European citizenship was established by the Treaty on European Union (EU Treaty), signed in Maastricht in 1992. Citizenship of the Union is dependent on holding the nationality of one of the Member States. In other words, anyone who is a national of a Member State is considered to be a citizen of the Union. In addition to the rights and duties laid down in the Treaty establishing the European Community (EC Treaty), Union citizenship confers four special rights:

-the freedom to move and take up residence anywhere in the Union;

-the right to vote and stand in local government and European Parliament elections in the country of residence;

-diplomatic and consular protection from the authorities of any Member State where the country of which a person is a national is not represented in a non-Union country (Article 20 of the EC Treaty);

-the right of petition and appeal to the European Ombudsman.

Following the entry into force of the Treaty of Amsterdam (1999), the status of "European citizen" also confers the following rights:

-the right to address the European institutions in any one of the official languages and to receive a reply written in the same language;

-the right to access the documents of the European Parliament, the Council and the Commission, subject to certain conditions (Article 255 of the EC Treaty);

-the right to non-discrimination between EU citizens on the basis of nationality (Article 12 of the EC Treaty) and to non-discrimination on the basis of gender, race, religion, handicap, age or sexual orientation;

-equal access to the Community's civil service.

The introduction of the notion of Union citizenship does not replace national citizenship: it is an addition to it. This gives citizens a deeper and more tangible sense of belonging to the Union.

The European Constitution, currently being ratified, provides for a new legal basis allowing the EU to adopt laws establishing measures required to facilitate diplomatic and consular protection for European citizens. Under the terms of the current treaties, it is the task of the Member States to determine these measures.

Clarity of the Treaties (simplification of the Treaties)

The European Union has come into being gradually and its structure is the result of a succession of amendments to the various treaties. This has led to a situation where the lack of clarity and readability of the founding texts of the Union has created a gulf between the Union and the public.

The Treaty of Rome was followed by the Single European Act and the Treaty on European Union (the "Maastricht Treaty"). This Treaty created a new structure, the European Union, in addition to the European Communities, which has three pillars (the European Communities, common foreign and security policy and cooperation in the field of justice and home affairs). The Nice and Amsterdam Treaties contain amendments to the earlier treaties and a new article numbering system. Several protocols and declarations are also annexed to these treaties.

In December 2001 the Laeken Declaration launched a process of simplification of the treaties. The process culminated in the adoption of the Constitution currently being ratified, which substantially simplifies the Treaties.

Once it is in force, the Constitution will repeal all the existing primary legislation - preceding treaties, instruments amending or amplifying them, and treaties and acts of accession. The European Union will thus operate on the basis of a single instrument.

Codecision procedure

The codecision procedure (Article 251 of the EC Treaty) was introduced by the Treaty of Maastricht. It gives the European Parliament the power to adopt instruments jointly with the Council of the European Union. The procedure comprises one, two or three readings. It has the effect of increasing contacts between the Parliament and the Council, the co-legislators, and with the European Commission. In practice, it has strengthened Parliament's legislative powers in the following fields: the free movement of workers, right of establishment, services, the internal market, education (incentive measures), health (incentive measures), consumer policy, trans-European networks (guidelines), environment (general action programme), culture (incentive measures) and research (framework programme). The Treaty of Amsterdam has simplified the codecision procedure, making it quicker and more effective and strengthening the role of Parliament. In addition it has been extended to new areas such as social exclusion, public health and the fight against fraud affecting the European Community's financial interests.

Increasing the democratic nature of Community action requires Parliament to participate in exercising legislative power. Thus, any legislative instrument adopted by qualified majority is likely to fall within the scope of the codecision procedure. In most cases, therefore, codecision in Parliament goes hand in hand with qualified majority voting in the Council. For some provisions of the Treaty, however, codecision and unanimity still coexist.

The Treaty of Nice partially puts an end to this situation. The Intergovernmental Conference (IGC) launched in February 2000 called for an extension of the scope of codecision, in parallel with and as a supplement to the extension of qualified majority voting in the Council. Seven provisions for which the IGC planned to apply qualified majority voting are thus also subject to codecision. They are: incentives to combat discrimination, judicial cooperation in civil matters, specific industrial support measures, economic and social cohesion actions (outside the Structural Funds), the statute for European political parties and measures relating to visas, asylum and immigration.

Under the European Constitution, which is in the process of being ratified, this procedure will be extended so that it becomes the "ordinary legislative procedure". It will apply to the adoption of "European laws" and "European framework laws", the new terms for the legislative instruments provided for in the Constitution.

Collective defence

Collective defence refers to participation in the defence of Europe under the Treaties of Brussels (Article V) and Washington (Article 5), which stipulate that in the event of aggression, the signatory states are required to provide assistance for the restoration of security:

1)The Treaty of Brussels was signed in 1948 by France, the United Kingdom, Belgium, the Netherlands and Luxembourg. It was amended in 1954 by the Paris Agreements establishing the Western European Union (WEU). Article V of this Treaty sets out the principle of mutual assistance in the event of an armed attack against any of the High Contracting Parties, in accordance with Article 51 of the Charter of the United Nations (the right of self-defence).

2)The North Atlantic Treaty was signed in Washington in 1949 by ten Western European countries and the United States and Canada. Article 5, on the solidarity between its members in the event of an armed attack, forms the crux of the Treaty. If such an armed attack occurs, each of the parties will assist the Party attacked in the exercise of the right of individual or collective self-defence by taking any action deemed necessary to restore and maintain security, including the use of armed force. These measures are terminated once the Security Council has taken the measures necessary to restore and maintain international peace and security.

Since 1949, NATO has been the principal guarantor of security in Western Europe, whereas the Western European Union (WEU) has been dormant for nearly 30 years. However, the WEU is the only strictly European organisation to have established an automatic collective defence obligation. The development of a European security and defence identity (ESDP) in no way affects the principle that NATO continues to form the basis of Europe's collective defence.

Comitology

Under the Treaty establishing the European Community (EC Treaty, Article 202), it is for the Commission to implement legislation at Community level. In practice, each legislative instrument specifies the scope of the implementing powers conferred on the Commission by the Council of the European Union. In this context, the Treaty provides for the Commission to be assisted by a committee, in accordance with a procedure known as "comitology".

The committees are forums for discussion, consist of representatives from Member States and are chaired by the Commission. They enable the Commission to establish a dialogue with national administrations before adopting implementing measures. The Commission ensures that they reflect as far as possible the situation in each of the countries concerned.

Relations between the Commission and the committees are based on models set out in a Council Decision (the "Comitology Decision") adopted on 28 June 1999. This gives Parliament the right to monitor the implementation of legislative instruments adopted under the codecision procedure. Parliament can object to measures proposed by the Commission, or sometimes the Council, which it considers to be ultra vires.

The following categories of committee can be distinguished, according to how they operate:

-Advisory committees: they give their opinions to the Commission, which must take account of them. This procedure is generally used when the matters under discussion are not very sensitive politically.

-Management committees: if the measures adopted by the Commission are not in accordance with the committee's opinion, the Commission must refer them to the Council, which may take a different decision. This procedure is used e.g. for measures for managing the common agricultural policy, fisheries and the main Community programmes.

-Regulatory committees: if the measures envisaged by the Commission are not in accordance with the committee's opinion, the Commission must refer them to the Council and inform the European Parliament. If the Council opposes the Commission's proposal, the Commission must re-examine it. It may submit an amended proposal or a new proposal or may re-submit the same proposal. This procedure is used e.g. for measures relating to protection of the health or safety of persons, animals and plants and measures amending non-essential provisions of the basic legislative instruments.

The Council Decision of 28 June 1999 replaced that of 13 July 1987, simplifying the system and taking account of the new codecision procedure. The committee system is made more open to scrutiny by Parliament and the general public. Committee documents are more readily accessible to the citizen and are recorded in a public register. With the computerisation of decision-making procedures, the aim is for the full texts of non-confidential documents transmitted to Parliament to be posted on the Internet.

Committee of the Regions

Created in 1992 by the Treaty of Maastricht and established in 1994, the Committee of the Regions (CoR) is an advisory body that allows local and regional authorities to make their voices heard in the decision-making process of the European Union. It is composed of 317 representatives from local and regional authorities, appointed by the Council for four years.

The CoR is consulted by the Council, the Parliament and the Commission in areas that affect local or regional interests. Since the entry into force of the Treaty of Amsterdam in May 1999, the Committee of the Regions must be consulted in a large number of areas: economic and social cohesion, employment, social policy, trans-European transport networks, energy and telecommunications, education and youth, vocational training, culture, the environment, public health and transport.

The CoR may also draw up opinions on its own initiative.

The Treaty of Nice, adopted in December 2000, did not modify the number or distribution of seats by Member States within the CoR. It nonetheless stipulated that the number of its members could not exceed 350. These members should either hold a regional or local authority electoral mandate or be politically accountable to an elected assembly.

The European Constitution, currently being ratified, provides for extending the term of office of the CoR members from four to five years.

Committees and working parties

The committees, whose task it is to assist the Community institutions, are involved at all stages of the legislative process. The Commission regularly consults committees of experts before drawing up a new proposal for legislation. These committees, which are made up of representatives of the milieux involved, private sector or national government experts, ensure that the Commission remains open to the concerns of those who will be affected by the legislation. There are about 60 advisory committees covering all sectors, though about half of them deal with agricultural issues.

In the European Parliament, various permanent committees organise the work of the MEPs.

The Council is also assisted by committees and working parties which prepare its decisions. The existence of certain committees is provided for in the treaties (Article 36 Committee for justice and home affairs, for example), and others are ad hoc committees such as the Cultural Affairs Committee, which evaluates proposals on cultural cooperation, prepares the Council discussions and follows up action taken. These committees are made up of representatives of the Member States plus one member of the Commission. In parallel, various working parties do the preparatory work for Coreper. While some of them are set up on a temporary basis to deal with a particular dossier, about a hundred groups cover a given sector and meet regularly.

When a legislative text has been adopted, it lays down the general principles to be respected. More precise implementing measures may be necessary to apply these principles. In this case, the text provides that a committee is to be set up within the Commission in order to take the appropriate decisions. These committees are made up of experts nominated by the Member States and chaired by the Commission, and are generally governed by rules established by the 28 June 1999 Council decision known as the 'Comitology Decision'. There are about 300 of them, in the fields of

industry, social affairs, agriculture, the environment, the internal market, research and development, consumer protection and food safety.

Common agricultural policy (CAP)

The common agricultural policy is an area in which competence is shared between the European Union (EU) and the Member States. Under Article 33 of the Treaty establishing the European Community, its aims are to ensure reasonable prices for Europe's consumers and fair incomes for farmers, in particular through the common organisation of agricultural markets and by ensuring compliance with the principles adopted at the Stresa Conference in 1958, namely single prices, financial solidarity and Community preference.

The CAP is one of the most important EU policies (agricultural expenditure accounts for some 45% of the Community budget). Policy is decided by qualified majority voting in the Council and consultation of the European Parliament. The CAP has fulfilled its main objective, which was to achieve food self-sufficiency in the Community. Nevertheless, major changes to policy soon proved necessary, in order to correct imbalances and over-production resulting from the CAP. Its objectives have thus changed in the course of time, and the instruments used have also evolved as a result of successive reforms (principally the 1992 McSharry reform and Agenda 2000).

The most recent reform, in June 2003, constituted a major development in the CAP. It brought the following innovations:

-a single payment per holding for EU farmers, independent of production ("decoupling" of support);

-linking of these payments to compliance with standards relating to the environment, food safety, animal and plant health and animal welfare ("cross-compliance");

-a reinforced rural development policy, with reduction of direct payments to large farms in order to fund the new policy ("modulation");

-a financial discipline mechanism (placing a ceiling on market support expenditure and direct aid between 2007 and 2013).

The reform also includes a revamp of the policy of common organisation of markets under the CAP. Several sectors have already been reformed: tobacco, hops, cotton, olive oil and sugar.

Common commercial policy

The common commercial policy is one of the main pillars of the European Union's relations with the rest of the world. It is an area of exclusive Community responsibility (Article 133 of the Treaty establishing the European Community), and is the pendant to the creation of a customs union of the Member States.

The common commercial policy implies uniform conduct of trade relations with third countries, in particular by means of a common customs tariff and common import and export regimes.

The Community supports the abolition of trade restrictions and customs barriers. To defend the Community market, it has at its disposal tools such as antidumping and anti-subsidy measures, the Trade Barriers Regulation and safeguard measures.

The Commission negotiates and concludes international agreements on behalf of the Community at the bilateral and multilateral levels. It plays an active part in the World Trade Organisation.

The European Union supports harmonious, liberalised trade serving the interests of all the international players, and especially the most disadvantaged countries. In this spirit, general and specific preferences for such countries are a major aspect of the common commercial policy.

Common fisheries policy

Although a common fisheries policy (CFP) was already provided for in the Treaty of Rome in 1957, "Blue Europe" did not become a common policy in the full sense of the term until 1983.

The CFP has the same legal basis (Articles 32-38 of the EC Treaty) as the common agricultural policy (CAP) and shares the same objectives: to increase productivity, stabilise markets and ensure security of supply and reasonable prices to the consumer. Like the CAP, the CFP is an area of responsibility that is shared by the European Union and the Member States.

Successive reforms have added the following aims to the initial goals of the CFP: sustainable exploitation of resources, protection of the environment, safeguards for a high level of human health protection and a contribution to economic and social cohesion.

In particular, protection of fish stocks and the marine environment is a key issue, given the threat posed by resource depletion.

The CFP operates on four levels:

-conservation and sustainable management of fish stocks to protect fishery resources;

-market organisation to match supply and demand, in the interests of producers and consumers;

-structural policy to help the fishing and fish farming industries to adapt their plant and organisation to the constraints imposed by the market and by a shortage of resources; Community support in this area is mainly provided through the "financial instrument for fisheries guidance" (FIFG);

-relations with non-Community countries and international organisations, i.e. negotiation of international fisheries agreements and common conservation measures for deep-sea fishing.

The EU is today seeking to put in place a fully-fledged maritime policy encompassing the fisheries, environmental and marine industry policies.

Common foreign and security policy (CFSP)

The common foreign and security policy (CFSP) was established and is governed by Title V of the Treaty on European Union. It replaced European Political Cooperation (EPC) and provides for the eventual framing of a common defence policy which might in time lead to a common defence.

The objectives of this second pillar of the Union are set out in Article 11 of the EU Treaty and are to be attained through specific legal instruments (joint action, common position) which have to be adopted unanimously in the Council. With the entry into force of the Treaty of Amsterdam (1999), the European Union also has a new instrument at its disposal - the common strategy. The Treaty of Amsterdam also provided for qualified majority voting under certain conditions and, since it was signed, the CFSP field has been developing in practice at every European Council.

The Treaty of Nice (2001) introduced the possibility, under certain conditions, of establishing closer cooperation in the CFSP field for the implementation of joint actions and common positions. This closer cooperation may not be used for matters with military or defence implications.

The European Constitution, currently in the process of ratification, provides for the creation of the post of Foreign Affairs Minister whose role will consist in conducting the CFSP. The Minister will be assisted by a newly-created European External Action Service. The Constitution also provides for the transfer of the power of initiative in this area from the Commission to the new Minister. Unanimity will remain the rule but the bridging mechanism may be used to switch to qualified majority voting in certain areas which have no military or defence implications.

Once the Constitution has been ratified, the use of the legislative instruments under the CFSP will be excluded. The instruments of the CFSP will be restricted to European decisions and international agreements.

Enhanced cooperation may also be introduced in any area of the CFSP and no longer only for the implementation of a joint action or a common position. Unanimity will, however, always be required.

Common position (CFSP)

The common position in the context of the common foreign and security policy (CFSP) is designed to make cooperation more systematic and improve its coordination. The Member States are required to comply with and uphold such positions which have been adopted unanimously at the Council.

For reasons of simplification, the European Constitution which is in the process of being ratified restricts CFSP instruments to European decisions and international agreements. Once the Constitution enters into force, common positions and their implementation will be based on European decisions (non-legislative instruments) adopted by the Council of Ministers.

Common strategy (CFSP)

The common strategy is an instrument of the common foreign and security policy introduced by the Treaty of Amsterdam.

Under Article 13 of the EU Treaty, the European Council defines the principles and general guidelines for the CFSP and decides on common strategies to be implemented by the Union in fields where the Member States have important interests in common.

In concrete terms, a common strategy sets out the aims and length of time covered and the means to be made available by the Union and the Member States. Common strategies are implemented by the Council, in particular by adopting joint actions and common positions. The Council can recommend common strategies to the European Council.

The European Constitution, now being ratified, provides for common strategies, though they have been little used, in the form of general guidelines, including on issues with implications for defence. Their drafting and implementation will call for European decisions on joint actions or common positions.

Common transport policy

The goal of the common transport policy is to remove obstacles at the borders between Member States so as to facilitate the free movement of persons and goods.

To that end its prime objectives are to complete the internal market for transport, ensure sustainable development, manage funding programmes and spatial planning, improve safety and develop international cooperation. It is also concerned with laying down the conditions under which non-resident carriers may operate transport services within a Member State.

Since the Amsterdam Treaty entered into force, decisions have been taken under the codecision procedure, following consultation of the European Economic and Social Committee and the Committee of the Regions.

Community acquis

The Community acquis is the body of common rights and obligations which bind all the Member States together within the European Union. It is constantly evolving and comprises:

the content, principles and political objectives of the Treaties;

the legislation adopted in application of the treaties and the case law of the Court of Justice;

the declarations and resolutions adopted by the Union;

measures relating to the common foreign and security policy;

measures relating to justice and home affairs;

international agreements concluded by the Community and those concluded by the Member States between themselves in the field of the Union's activities.

Thus the Community acquis comprises not only Community law in the strict sense, but also all acts adopted under the second and third pillars of the European Union and the common objectives laid down in the Treaties. The Union has committed itself to maintaining the Community acquis in its entirety and developing it further. Applicant countries have to accept the Community acquis before they can join the Union. Derogations from the acquis are granted only in exceptional circumstances and are limited in scope. To integrate into the European Union, applicant countries will have to transpose the acquis into their national legislation and implement it from the moment of their accession.

Community law

Strictly speaking, Community law consists of the founding Treaties (primary legislation) and the provisions of instruments enacted by the Community institutions by virtue of them (secondary legislation - regulations, directives, etc.). Once the European Constitution has been adopted, it will replace the current set of founding Treaties. Primary Community law will consist of the Constitution and its Protocols - including the Charter of Fundamental Rights, which is incorporated in it - and the Euratom Treaty.

In a broader sense, Community law encompasses all the rules of the Community legal order, including general principles of law, the case law of the Court of Justice, law flowing from the Community's external relations and supplementary law contained in conventions and similar agreements concluded between the Member States to give effect to Treaty provisions.

All these rules of law form part of what is known as the Community acquis.

Community legal instruments

The term Community legal instruments refers to the instruments available to the Community institutions to carry out their tasks under the Treaty establishing the European Community with due respect for the subsidiarity principle. They are:

-regulations: these are binding in their entirety and directly applicable in all Member States;

-directives: these bind the Member States as to the results to be achieved; they have to be transposed into the national legal framework and thus leave margin for manoeuvre as to the form and means of implementation;

-decisions: these are fully binding on those to whom they are addressed;

-recommendations and opinions: these are non-binding, declaratory instruments.

In addition to these instruments listed in Article 249 of the EC Treaty, practice has led to the development of a whole series of sui generis documents: interinstitutional agreements, resolutions, conclusions, communications, green papers and white papers.

Moreover, under the second and third pillars, specific legal instruments are used, such as strategies, joint action and common positions in the area of the CFSP, and decisions, framework decisions, joint positions and conventions in the area of JHA. The Constitution, which is in the process of being ratified, provides for a simpler typology of Community instruments:

-legislative acts: European laws and framework laws. These correspond to the existing regulations (laws) and directives (framework laws). They are to be adopted by the current codecision procedure, which will become the "ordinary legislative procedure" in the Constitution;

-non-legislative acts: regulations and decisions. According to the Constitution, a regulation is a non-legislative act of general application for the implementation of legislative acts and of certain provisions of the Constitution. A decision is now defined as a non-legislative act, binding in its entirety. A decision which specifies those to whom it is addressed is binding only on them;

-non-mandatory instruments: opinions and recommendations;

-sui generis documents: conclusions of the European Council, Council guidelines and European Council strategic guidelines.

Community powers

Community powers are those that are conferred on the EU in specific areas by the Member States. There are three types of powers, which depend on how they are conferred:

-Explicit powers: these are clearly defined in the relevant articles of the Treaties.

-Implicit powers: according to the implicit powers theory, competence in external matters derives from explicit internal competence. Where the Treaties assign explicit powers to the Community in a particular area (e.g. transport), it must also have similar powers to conclude agreements with non-Community countries in the same field (the principle of parallelism between internal and external powers).

-Subsidiary powers: where the Community has no explicit or implicit powers to achieve a Treaty objective concerning the common market, Article 308 of the Treaty establishing the European Community allows the Council, acting unanimously, to take the measures it considers necessary.

One of the main innovations in the European Constitution now being ratified is that it clarifies the powers of the Union. It clearly specifies the areas in which the Member States have transferred their powers of action to the Union.

It also distinguishes the following categories of Union powers, or "competences":

-Exclusive competence: the Union acts alone on behalf of all its Member States. This category covers establishment of the competition rules necessary for the functioning of the internal market, monetary policy, the common commercial policy and the conservation of fishery resources.

-Shared competence: the Union acts because its action confers a substantial benefit additional to that resulting from action by the Member States. Among the areas concerned are: the internal market, economic, social and territorial cohesion, agriculture, fisheries, the environment, consumer protection, transport, energy and the area of freedom, security and justice.

-Competence to take supporting, coordinating or complementary action: the Union acts only to coordinate or complement the action undertaken by the Member States. This covers matters such as the protection and improvement of human health, industry, culture, tourism, education, youth, sport and vocational training.

Competition

A market where there is free competition is a market on which mutually independent businesses engage in the same activity and contend to attract consumers. In other words, each business is subject to competitive pressure from the others. Effective competition thus gives businesses a level playing field but also confers many benefits on consumers (lower prices, better quality, wider choice, etc.).

European competition policy is intended to ensure free and fair competition in the European Union. The Community rules on competition (Articles 81 to 89 of the EC Treaty) are based on five main principles:

-prohibition of concerted practices and agreements and abuse of a dominant position liable to affect competition within the common market (antitrust rules);

-preventive supervision of mergers with a European dimension, to determine whether they restrict competition;

-supervision of aid granted by the Member States which threatens to distort competition by favouring certain undertakings or the production of certain goods;

-liberalisation of sectors previously controlled by public monopolies, such as telecommunications, transport or energy;

-cooperation with competition authorities outside the Union.

The European Commission and the national competition authorities enforce the Community competition rules. Cooperation between them, within the European Competition Network (ECN), ensures effective and consistent application of the rules.

Competitiveness

A competitive economy is an economy with a sustained high rate of productivity growth.

Since the Lisbon Strategy set out to make Europe the most competitive and dynamic economy in the world, competitiveness has become one of the political priorities of the Union. European industry needs to be competitive if the Community is to achieve its economic, social and environmental goals and thus ensure an improving quality of life for Europe's citizens. In its efforts to promote competitiveness, the Union also seeks to adapt the European economy to structural change, relocation of industrial activity to emerging economies, redeployment of jobs and resources to new industrial sectors and the risk of a process of deindustrialisation.

The Union's competitiveness is determined by productivity growth and thus depends on the performance and the future of European industry, an especially on its capacity for structural adjustment. To be competitive, the Union must outperform in terms of research and innovation, information and communication technologies, entrepreneurship, competition, education and training.

Across-the-board economic analysis and detailed analysis of the different sectors are needed to support the Union's action to boost competitiveness.

Composition of the European Commission

From its earliest days, the Commission was always made up of two nationals of each of the Member States with the largest populations and one national of each of the others. In the enlarged Union, the Commission's make-up is the focus of considerable debate.

It is a key issue, since it involves deciding on the optimum number of Commissioners needed to guarantee the legitimacy, collective responsibility and effectiveness of an institution whose purpose is to represent the general interest in a fully independent way. The concept of collective responsibility is crucial. It is a feature of the Commission structure and means that positions adopted by the Commission reflect the views of the Commission as a whole, not those of individual members. With the prospect of future enlargements, it was feared that a large increase in the number of Commissioners would lead to nationalisation of their function to the detriment of collective responsibility. Conversely, should the number be limited, the fear was that some nationalities would not be represented among the Commissioners.

The Treaty of Nice, a product of the 2000 Intergovernmental Conference, offered a provisional solution by limiting the number of members to one Commissioner per Member State as from the start of the term of the 2004-09 Commission. The present European executive, chaired by the former Portuguese prime minister, José Manuel Barroso, thus consists of 25 Commissioners.

The protocol on enlargement annexed to the Treaty of Nice also stipulates that when the Union consists of 27 Member States the number of Members of the Commission shall be less than the number of Member States. The actual number will then be set by the Council, acting unanimously.

The future composition of the Commission was also one of the most sensitive topics during the negotiations on the European Constitution. The outcome is that the Constitution now being ratified provides for the composition of the Commission to be reduced to two thirds of the number of Member States as from 2014. The Commissioners will be chosen by a rotation system based on the principle of equality.

Conciliation Committee

Under the codecision procedure between Council and Parliament, a Conciliation Committee may be set up as provided for in Article 251(4) of the Treaty establishing the European Community. It comprises members of the Council or their representatives and an equal number of representatives of Parliament and is co-chaired by the President of the Parliament and the President of the Council.

Any disagreement between the two institutions following the second reading of a proposal is referred to the Committee. The aim is to reach agreement on a text acceptable to both parties. The Commission also plays a part in the Conciliation Committee to help the European Parliament and the Council to resolve their differences.

The draft of any joint text must then be adopted within six weeks (extendable by two weeks) by an absolute majority of the votes cast in Parliament and by a qualified majority in the Council. Should one of the two institutions reject the proposal, it is deemed not to have been adopted.

Confirmation of the European Commission

The confirmation procedure comprises two stages:

-nomination of the prospective President of the Commission;

-establishment of the list of Members of the Commission and nomination of the Commission as a whole.

Since the Treaty of Nice, responsibility for nominating the President has rested with the Council, meeting in the composition of Heads of State or Government and acting by qualified majority. This nomination must be approved by the European Parliament.

The Council, acting by qualified majority and by common accord with the nominee for President, then adopts the list of the other persons it intends to appoint as Members of the Commission, drawn up in accordance with the proposals made by each Member State.

Finally, the President and the Members of the Commission are appointed by the Council, acting by qualified majority, after the entire body has been approved by Parliament.

The current Commission, which will took office in November 2004, was appointed under this procedure.

Consultation procedure

The consultation procedure enables the European Parliament to give its opinion on a proposal from the Commission. In the cases laid down by the Treaty, the Council must consult the European Parliament before voting on the Commission proposal and take its views into account. However, it is not bound by the Parliament's position but only by the obligation to consult it. Parliament must be consulted again if the Council deviates too far from the initial proposal. The powers of Parliament are fairly limited under this procedure, in so far as it can only hope that the Commission takes its amendments into account in an amended proposal.

Apart from the cases laid down by the Treaties, the Council has also undertaken to consult Parliament on most important questions. The consultation is optional. In addition, this consultation procedure is used for the adoption of non-mandatory instruments, especially recommendations and opinions issued by the Council and the Commission.

The European Constitution, currently being ratified, will bring the consultation procedure under the heading of "special legislative procedures". The procedure will be applicable to Council laws and framework laws adopted after consulting (obtaining the opinion of) the European Parliament.

Consumer protection

Consumer protection is dealt with in Article 153 of the EC Treaty, which was inserted by the Treaty of Maastricht. It is intended to promote consumers' health, safety, economic and legal interests, and their right to information.

Article 153 explicitly refers to another legal basis for the attainment of its objectives, namely to Article 95, which requires the codecision procedure for all measures involving closer alignment of Member States' legislation on completion of the single market where consumer protection is concerned. At the same time, it stipulates that specific action supporting and supplementing the policy pursued by the Member States is to be adopted under the codecision procedure, after consultation of the Economic and Social Committee.

A Member State may keep or introduce stricter consumer protection measures than those laid down by the Community, as long as they are compatible with the Treaty and the Commission is notified of them.

Convergence criteria

In order to ensure the sustainable convergence required for the achievement of economic and monetary union (EMU), the Treaty sets five convergence criteria which must be met by each Member State before it can take part in the third

stage of EMU and hence before it can adopt the euro. Compliance is checked on the basis of reports produced by the Commission and the European Central Bank (ECB). The criteria are:

-the ratio of government deficit to gross domestic product must not exceed 3%;

-the ratio of government debt to gross domestic product must not exceed 60%;

-there must be a sustainable degree of price stability and an average inflation rate, observed over a period of one year before the examination, which does not exceed by more than one and a half percentage points that of the three best performing Member States in terms of price stability;

-there must be a long-term nominal interest rate which does not exceed by more than two percentage points that of the three best performing Member States in terms of price stability;

-the normal fluctuation margins provided for by the exchange-rate mechanism must be respected without severe tensions for at least the last two years before the examination.

The convergence criteria are meant to ensure that economic development within EMU is balanced and does not give rise to any tensions between the Member States. The criteria relating to government deficit and government debt must continue to be met after the start of the third stage of EMU (1 January 1999). To this end, a stability pact was adopted at the Amsterdam European Council in June 1997 and enables the members of the Euro-zone to coordinate national government budget policies and avoid excessive government budget deficits.

Cooperation procedure

The cooperation procedure (Article 252 of the EC Treaty) was introduced by the Single European Act (1986). It gave the European Parliament greater influence in the legislative process by allowing it two "readings". Initially, the scope of this procedure was considerably extended by the Treaty of Maastricht; the Treaty of Amsterdam then reversed the trend by encouraging the codecision procedure (Article 251 of the EC Treaty). The cooperation procedure will therefore now apply exclusively to the field of economic and monetary union.

The cooperation procedure is always initiated by a proposal from the Commission forwarded to the Council and the European Parliament. In the context of a first reading, Parliament issues an opinion on the Commission proposal. The Council, acting by a qualified majority, then draws up a common position, which is forwarded to Parliament together with all the necessary information and the reasons which led the Council to adopt this common position.

Parliament examines this common position at second reading, and within three months may adopt, amend or reject the common position. In the latter two cases, it must do so by an absolute majority of its members. If it rejects the proposal, unanimity is required for the Council to act on a second reading.

The Commission then re-examines, within one month, the proposal upon which the Council based its common position and forwards its proposal to the Council; at its discretion it can include or exclude the amendments proposed by Parliament.

Within three months, the Council may adopt the re-examined proposal by qualified majority, amend it unanimously or adopt the amendments not taken into consideration by the Commission, also unanimously.

In the cooperation procedure, the Council may still exercise a veto by refusing to express its opinion on the amendments proposed by the European Parliament or on the amended proposal from the Commission, thereby blocking the legislative procedure.

The European Constitution, which is in the process of being ratified, envisages abolishing this procedure and replacing it either by an ordinary legislative procedure (codecision procedure) or by non-legislative acts of the Council.

Coreper

The Permanent Representatives Committee or "Coreper" (Article 207 of the Treaty establishing the European Community) is responsible for preparing the work of the Council of the European Union. It consists of the Member States' ambassadors to the European Union ("Permanent Representatives") and is chaired by the Member State which holds the Council Presidency.

Coreper occupies a pivotal position in the Community decision-making system, in which it is both a forum for dialogue (among the Permanent Representatives and between them and their respective national capitals) and a means of political control (guidance and supervision of the work of the expert groups).

It thus carries out preliminary scrutiny of the dossiers on the Council agenda (proposals and drafts for acts tabled by the Commission). It seeks to reach agreement at its own level on each dossier, failing which it may suggest guidelines, options or suggested solutions to the Council.

The agendas for Council meetings reflect the progress made in Coreper. They consist of A items, to be approved without discussion following agreement within Coreper, and B items, for discussion.

Coreper works in two configurations:

-Coreper I, consisting of the deputy permanent representatives, deals with technical matters;

-Coreper II, consisting of the ambassadors, deals with political, commercial, economic or institutional matters. Coreper deals with all areas of the Council's work apart from agricultural issues, for which Agriculture Council dossiers are prepared by the Special Committee on Agriculture (SCA). When the Council sets up a special committee, such as the Political and Security Committee (PSC) for the CFSP or the Employment Committee for the field of employment, these operate with due regard for Coreper's prerogatives.

Council of the European Union

The Council of the European Union ("Council of Ministers" or "Council") is the Union's main decision-making body. Its meetings are attended by Member State ministers and it is thus the institution which represents the Member States. The Council's headquarters are in Brussels, but some of its meetings are held in Luxembourg. Sessions of the Council are convened by the Presidency, which sets the agenda.

The Council meets in different configurations (nine in all), bringing together the competent Member State ministers: General Affairs and External Relations; Economic and Financial Affairs; Employment, Social Policy, Health and Consumer Affairs; Competitiveness; Cooperation in the fields of Justice and Home Affairs (JHA); Transport, Telecommunications and Energy; Agriculture and Fisheries; Environment; Education, Youth and Culture.

Each country of the European Union presides over the Council for six months, by rotation. Decisions are prepared by the Committee of Permanent Representatives of the Member States (Coreper), assisted by working groups of national government officials.

The Council, together with the European Parliament, acts in a legislative and budgetary capacity. It is also the lead institution for decision-making on the common foreign and security policy (CFSP), and on the coordination of economic policies (intergovernmental approach), as well as being the holder of executive power, which it generally delegates to the Commission.

In most cases, the Council's decisions, based on proposals from the Commission, are taken jointly with the European Parliament under the codecision procedure. Depending on the subject, the Council takes decisions by simple majority, qualified majority or unanimity, although the qualified majority is more widely used (agriculture, single market, environment, transport, employment, health, etc.).

The European Constitution, currently being ratified, proposes a new system for holding Council Presidencies. The Council will be presided over, for 18 months, by a team of three Member States, each of which will hold the Presidency for a period of six months, assisted by the other two States on the basis of a common programme. In addition, the General Affairs Council will be chaired by the Minister for Foreign Affairs. Lastly, there will be a change to the qualified majority voting system within the Council (double majority of the States and of the population, applicable from 2009 onwards).

Court of First Instance of the European Communities (CFI)

Like the Court of Justice (ECJ), the Court of First Instance of the European Communities (CFI) ensures that the Community institutions and Member States comply with the law in interpreting and applying the founding treaties. The CFI was set up in 1989, creating a two-tier judicial authority to strengthen the protection of parties' interests by reducing the caseload of the ECJ and allowing cases to be dealt with more quickly.

The CFI is made up of at least one judge from each Member State (Article 224 of the Treaty establishing the European Community). They are appointed by agreement of the Member State governments for a renewable mandate of six years. They appoint their President, for a renewable period of three years, from amongst themselves. There are no permanent advocates-general, but the CFI judges may perform this task. The CFI sits in chambers of five or three judges or, in some cases, as a single judge.

To allow a further easing of the burden on the ECJ, the CFI is competent for all direct actions brought by persons and Member States (appeals against a decision, failure to act, damages, etc.), with the exception of those assigned to a judicial panel and those reserved for the Court of Justice (Article 225 of the EC Treaty). On the basis of a right of initiative shared by the Court of Justice and the Commission, judicial panels may be created to examine at first instance certain proceedings brought in specific areas. This option was used to create a European Civil Service Tribunal, which has been in place since February 2005. The CFI may also be empowered to deliver preliminary rulings in specific areas laid down by the Statute of the Court of Justice. Its decisions are subject to a right of appeal to the Court of Justice, in principle on points of law only.

The European Constitution now being ratified provides for the establishment of a two-division institution, the "Court of Justice of the European Union", comprising the supreme court (the "European Court of Justice") and the "High Court". Specialised courts may also be attached to the High Court, which will include at least one judge per Member State.

Court of Justice of the European Communities

The Court of Justice ensures compliance with the law in the interpretation and application of the founding Treaties. It is composed of the same number of judges as there are Member States (Article 221) and therefore at present has 25 judges. Partial replacement takes place every three years. The judges select one their number as President of the Court, for a renewable three-year term. The judges are assisted by eight advocates-general who are appointed for six years by agreement among the Member States.

The Court may sit in chambers (3-5 judges), as a Grand Chamber (13 judges) or as a Full Court.

The ECJ was created by the Treaty establishing the European Coal and Steel Community in 1952. It has two principal functions:

-to check whether instruments of the European institutions and of governments are compatible with the Treaties (infringement proceedings, proceedings for failure to act, actions for annulment;

-to give rulings, at the request of a national court, on the interpretation or the validity of provisions contained in Community law (references for a preliminary ruling).

The overloading of the ECJ and the increasing length of time taken to deal with cases led to the creation of the Court of First Instance (CFI) in 1989. The CFI represents a second tier of judicial authority and has relieved the ECJ of some of

its workload. Similarly, the Treaty of Nice made it possible to set up specialised judicial panels, such as the European Civil Service Tribunal, which has been operational since 2005.

With a view to simplifying and rationalising the operation of the Court, its Statute can now be amended by the Council, acting unanimously at the request of the Court or the Commission. Similarly, approval of the Court's Rules of Procedure by the Council is now done by qualified majority.

The European Constitution, which is currently being ratified, provides for the creation of a single two-division court, the Court of Justice of the European Union (CJEU), which will bring together the "European Court of Justice", the "High Court" and specialised courts. It will also be easier for citizens and companies to take legal action against European Union regulations even if they are not themselves affected by them.

Culture

Whilst the will to conduct cultural activities at European level was apparent as early as the 1970s, it was not until 1991 that culture was officially given a place in European integration, through Article 151 of the Maastricht Treaty, which states that "The Community shall contribute to the flowering of the cultures of the Member States, while respecting their national and regional diversity and at the same time bringing the common cultural heritage to the fore".

To create a real European cultural area, the Union is called upon to promote cooperation between the Member States and, if necessary, to support and complement their activities in the following areas:

-the dissemination of the culture and history of the European peoples;

-the conservation of cultural heritage of European significance;

-non-commercial cultural exchanges;

-artistic, literary and audiovisual creation;

-cooperation with third countries and the competent international organisations.

For ten years, the Commission supported cultural cooperation via three experimental programmes in this sector covering the performing, plastic and visual arts, heritage and books (Kaléïdoscope, Ariane and Raphaël). The European Community has also supported the Member States' initiative to designate a 'European City of Culture' each year since 1985.

In 2000, the Commission adopted the Culture 2000 framework programme, a new approach to cultural action. The aim of this programme is to create a common cultural area by promoting cultural dialogue, the creation and dissemination of culture and the mobility of artists and their works, European cultural heritage, new forms of cultural expression and the socio-economic role of culture.

Cultural cooperation in Europe is also promoted by specific activities funded by other European programmes than Culture 2000, in particular activities performed in the context of economic, research, education, training and regional development aid policies that also promote cultural cooperation. This cooperation in interpreted broadly, as most of the programmes are open to the member countries of the European Economic Area and the candidate countries, and third countries and international organisations are also involved.

Customs union

The customs union is the essential element of the internal market. Its introduction was the primary objective after the signature of the Treaty of Rome and continued until 1968. The most important measures included:

-the elimination of all customs duties and restrictions among the Member States;

-the introduction of a common customs tariff (CCT), applicable throughout the European Community to third country goods (the income obtained as a result forming part of the Community's own resources);

-the common commercial policy as an external dimension of the customs union (the Community speaks with one voice at international level).

Common procedures and rules were drawn up together with a Single Administrative Document (SAD) aimed at replacing the different documents previously used. With the entry into force of the single market in 1993, all routine checks at internal borders were abolished, as were customs formalities. Thus, the customs services of the Member States lost their responsibility for collecting excise duties, VAT and statistical data.

The Community has concluded special agreements to facilitate trade, for example the agreement with the European Economic Area (EEA), and to encourage development by providing preferential access to European markets, for example the Lomé Convention, signed with the African, Caribbean and Pacific countries (ACP).

Future challenges include promoting closer cooperation between the national administrations and combating fraud through the successive Customs 2002 and Customs 2007 programmes. A particular focus of Customs 2007 will be helping new Member States adapt their systems to open market conditions and implement customs controls at the new external borders of the European Union.

Decision and framework decision (Title VI of the EU Treaty)

With the entry into force of the Treaty of Amsterdam, these new instruments under Title VI of the EU Treaty (Police and judicial cooperation in criminal matters) have replaced joint action. More binding and more authoritative, they should serve to make action under the reorganised third pillar more effective.

Framework decisions are used to approximate (align) the laws and regulations of the Member States. Proposals are made on the initiative of the Commission or a Member State and they have to be adopted unanimously. They are

binding on the Member States as to the result to be achieved but leave the choice of form and methods to the national authorities.

Decisions are used for any purpose other than approximating the laws and regulations of the Member States. They are binding and any measures required to implement them at Union level are adopted by the Council, acting by a qualified majority.

With the abolition of the third pillar, which is provided for by the European Constitution currently being ratified, the decisions and framework decisions currently in use will disappear and be replaced by European laws and framework laws.

Democratic deficit

The democratic deficit is a concept invoked principally in the argument that the European Union and its various bodies suffer from a lack of democracy and seem inaccessible to the ordinary citizen because their method of operating is so complex. The view is that the Community institutional set-up is dominated by an institution combining legislative and government powers (the Council of the European Union) and an institution that lacks democratic legitimacy (the European Commission).

At every stage of the European integration process, the question of democratic legitimacy has become increasingly sensitive. The Maastricht, Amsterdam and Nice Treaties have triggered the inclusion of the principle of democratic legitimacy within the institutional system by reinforcing the powers of Parliament with regard to the appointment and control of the Commission and successively extending the scope of the codecision procedure.

In the meantime, two wider initiatives designed to bring Europe closer to its citizens have been launched. Following the Nice European Council (December 2000), a broad public debate on the future of the Union started, in which citizens could take part, and a European Convention was asked to examine various ways of improving democratic legitimacy. The Convention eventually came up with a draft European Constitution that was adopted in a compromise form by the Heads of State or Government in June 2004.

The European Constitution, currently being ratified, represents decisive progress towards a more democratic Europe. It boosts the Union's democratic legitimacy by means of the following:

-simplification of the Treaties - they are recast in a single instrument, the Constitutional Treaty - and of procedures to make them easier for the public to understand;

-affirmation for the first time of the democratic foundations for the Union (pluralism, liberty, human rights, justice, rule of law, solidarity, non-discrimination etc.) and stronger protection for fundamental rights with the incorporation of the Charter of Fundamental Rights in the Constitution;

-closer involvement of the national parliaments in the decision-making process (early-warning mechanism regarding compliance with the subsidiarity principle, offering direct involvement in the legislative process);

-stronger powers for the European Parliament (generalised use of the codecision procedure; equal rights with the Council in the budgetary procedure);

-clearer allocation of powers to the Union and its Member States, and as between the Union institutions;

-new obligations for the European institutions as regards consulting civil society, transparency and access to documents;

-stronger democratic participation with the possibility for members of the public, if they can assemble more than a million signatures in a significant number of Member States, to call on the Commission to propose a law (legislative petition).

Development aid

The beginnings of the European Community's development policy coincided with the signature of the Treaty of Rome in 1957, and the Member States' overseas countries and territories were its first beneficiaries. However, it is only since the entry into force of the Treaty on European Union (the Maastricht Treaty, 1993) that this policy has enjoyed a specific legal basis (Articles 177 to 181 of the EC Treaty). With the successive enlargements of the Union, cooperation has gradually extended to other countries, such as the African, Caribbean and Pacific countries (ACP) which have a particularly close and long-standing relationship with certain Member States. The Cotonou Agreement, signed in June 2000 and revised in June 2005, has strengthened this partnership, which is to a large extent based on the various Lomé Conventions, the first of which was signed in 1975.

In addition to these initial agreements, other countries also benefit from the Community's development policy, such as the countries of Latin America and Asia.

The main objective of the European Community's development policy is to eradicate poverty. This policy is implemented not only through bilateral and regional agreements but also through specific programmes in certain sectors such as health and education. The development policy also entails cooperation with international institutions and the participation of the Community and Member States in initiatives implemented at global level such as the Initiative for Highly Indebted Poor Countries.

Today, the Union is the main trading partner of developing countries and the main contributor to development aid. The European Community and its Member States together provide 55% of international development aid.

Double majority

In the light of enlargement, solutions have been put forward for maintaining the current balance between "large" and "small" countries in decision-making in the Council of Ministers. Maintaining the present system of weighting of votes in the Council after enlargement could produce a qualified majority representing only a minority of the population of the European Union. For this reason, the Member States with the highest populations wanted to see a reweighting or double majority system which would ensure that a majority in the Council represented a majority not only of Member States but also of the population of the Union.

The Treaty of Nice 2001, which set out to reform the operation of the Community institutions in the run-up to enlargement, redefines the qualified majority in terms of a double or even triple majority. While the reweighting of votes works in favour of the large Member States, the qualified majority must also be a majority of the Member States. This is combined with a system known as the "demographic safety net" which means that each Member State can request verification of whether the qualified majority represents at least 62% of the population of the Union. If this condition is not fulfilled, the decision cannot be adopted. These new rules entered into force on 1 November 2004.

The European Constitution currently being ratified provides for a new qualified majority system to enter into force from 1 November 2009, involving a majority both of the Member States and of the population. The qualified majority will be secured where there is a majority of 55% of the Member States (minimum 15) representing at least 65% of the Union's population.

Economic and Monetary Union (EMU)

Economic and monetary union (EMU) is the process of harmonising the economic and monetary policies of the Member States of the Union with a view to the introduction of a single currency, the euro. It was the subject of an Intergovernmental Conference (IGC), which concluded its deliberations in Maastricht in December 1991.

EMU was achieved in three stages.

First stage (1 July 1990 to 31 December 1993): free movement of capital between Member States, closer coordination of economic policies and closer cooperation between central banks.

Second stage (1 January 1994 to 31 December 1998): convergence of the economic and monetary policies of the Member States (to ensure stability of prices and sound public finances) and the establishment of the European Monetary Institute (EMI) and, in 1998, of the European Central Bank (ECB).

Third stage (from 1 January 1999): irrevocable fixing of exchange rates and introduction of the single currency on the foreign-exchange markets and for electronic payments. Introduction of euro notes and coins.

When the third stage of EMU was launched, eleven Member States adopted the euro as the single currency. They were joined two years later by Greece. Slovenia entered the euro zone on 1 January 2007.

Three Member States did not adopt the single currency: the United Kingdom and Denmark, both of which have an optout clause, and Sweden, following a referendum in September 2003. The States which joined the Union on 1 May 2004 and 1 January 2007 are required to adopt the euro as soon as they meet all the convergence criteria. They were not granted opt-out clauses during the accession negotiations.

The challenges facing the long-term success of EMU are continued budgetary consolidation and closer coordination of Member States' economic policies.

Economic policy

Economic and Monetary Union (EMU) implies close coordination of national economic policies, which have thus become a matter of common concern. In practical terms, the Council, acting by a qualified majority on a recommendation from the Commission, formulates draft guidelines that are sent to the European Council. In the light of the latter's conclusions, the Council, again acting by qualified majority, adopts a recommendation setting out the Broad Economic Policy Guidelines (BEPG) of the of the Member States and the Community and informs the European Parliament (Article 99 of the EC Treaty). These annual broad guidelines are the central element of coordination for the Union's economic policies.

In addition to these guidelines, the EC Treaty lays down other economic policy provisions in Title VII, including:

-multilateral surveillance: the Member States, meeting within the Council, monitor economic developments and the application of the broad economic policy guidelines; they may issue recommendations to the government of a Member State which is failing to comply with the guidelines;

-the excessive-deficit procedure: the Member States must avoid excessive government deficits, and it is up to the Commission to ensure that this principle is complied with;

-financial assistance: when a Member State is experiencing severe difficulties, the Council is able, under certain conditions, to grant it financial assistance;

-prohibition against assuming the commitments of other Member States: the Community or the Member States may not assume the commitments of other Member States;

-prohibition of privileged access: it is prohibited to grant public bodies, authorities or undertakings privileged access to finance.

The EC Treaty also lays down the institutional provisions applicable to the European Central Bank and the transitional provisions necessary for the implementation of the various stages of EMU.

The European Constitution, which is now in the process of ratification, gives Member States belonging to the euro area greater autonomy to settle certain issues amongst themselves. In addition, the Commission's role will be enhanced in the excessive-deficit procedure. Finally, the Constitution will simplify the existing texts significantly.

Economic, social and territorial cohesion

Economic and social cohesion is an expression of solidarity between the Member States and regions of the European Union. The aim is balanced development throughout the EU, reducing structural disparities between regions and promoting equal opportunities for all. In practical terms, this is achieved by means of a variety of financing operations, principally through the Structural Funds and the Cohesion Fund. Every three years the European Commission presents a report on progress made in achieving economic and social cohesion and on how Community policies have contributed to it.

At European level, the origins of economic and social cohesion go back to the Treaty of Rome (1957) where a reference is made in the preamble to reducing regional disparities. In the 1970s, Community action was taken to coordinate the national instruments and provide additional financial resources. Subsequently these measures proved inadequate given the situation in the Community, where the establishment of the internal market, contrary to forecasts, had failed to even out the differences between regions. With the adoption of the Single European Act in 1986, economic and social cohesion proper was made an objective alongside completing the single market. The Maastricht Treaty (1992), finally, incorporated the policy into the EC Treaty itself (Articles 158 to 162).

Economic and social cohesion is essentially implemented through the regional policy of the European Union. Besides the reform of the common agricultural policy and enlargement to the Central and East European countries in 2004, regional policy was one of the major issues discussed in Agenda 2000, which covers the period 2000-2006, largely because of the financial implications.

Regional policy is the European Union's second largest budget item, with an allocation of 348 billion euros (2006 prices) for the period 2007-2013. Enlargement to 27 Member States in January 2007 has meant an entirely new order. The surface area of the European Union has increased by over 25%, its population by over 20%, and its wealth by only 5% approximately. Average GDP per capita in the European Union has fallen by more than 10% and regional disparities have doubled. Since 60% of the regions whose development is lagging behind are in the 12 Member States which joined the EU In 2004, the centre of gravity of regional policy is shifting eastwards.

For the period 2007-2013, economic and social cohesion will have to concentrate more on crucial development concerns in the field of economic growth and employment while continuing to support regions which have not completed the process of convergence in real terms. Structural assistance also remains necessary in geographical areas facing specific structural problems (areas undergoing industrial restructuring, urban areas, rural areas, areas dependent on fishing, and areas suffering from natural or demographic handicaps). Finally, simplification and decentralisation of the management of regional policy financial instruments (Structural Funds and Cohesion Fund) will be the watchwords of the regional policy reform for the period 2007-2013.

The European Constitution, which is in the process of being ratified, provides for the objective of territorial cohesion to be added to the concept of economic and social cohesion. If ratified, it will definitively sanction the territorial dimension of regional policy and also reinforce the role of the local authorities. Furthermore, the Committee of the Regions will be more involved in monitoring compliance with the principle of subsidiarity.

Education

Each Member State is responsible for the organisation of its education and training systems and the content of teaching programmes. In accordance with Article 149 of the EC Treaty, the Community's role is to contribute to the development of quality education by encouraging cooperation between Member States and, if necessary, by supporting and supplementing their action. The Community aims specifically to develop the European dimension in education and the exchange of information on issues common to education systems in the Member States.

It also aims to stimulate mobility and to promote cooperation at European and international levels. The European Union has at its disposal a number of specific tools which also aim to foster mutual understanding, the learning of foreign languages and the use of new technologies, while promoting the recognition of skills and qualifications, namely:

-the Lifelong Learning Programme for action at EU level, comprising the following sectoral programmes: Comenius (pre-school and school education), Erasmus (higher education, higher vocational education and training), Leonardo da Vinci (vocational education and training other than at higher level), Grundtvig (adult education), the transversal programme (areas which fall outside of the four preceding programmes), and the Jean Monnet programme (European university integration and support for certain key institutions and associations active in education at European level);

-the programmes involving international cooperation in higher education, such as the Erasmus Mundus programme between the European Union and third countries, the objective of which is to improve the quality of higher education in Europe and to make it a centre of excellence. In addition, the regional programmes Tempus (Western Balkans, Eastern Europe, Central Asia and Mediterranean Partner Countries), Alfa (Latin America), and Asia-link (Asia) involve modernising higher education in the partner countries.

Education is part of the drive to achieve the goals of the Lisbon Strategy (to become the most competitive and dynamic knowledge-based economy in the world). In this context, the Commission has stepped up policy cooperation in the field of education, particularly through the open method of coordination.

Employment

Promoting a high level of employment has been one of the Community's objectives since the Treaty of Amsterdam came into force in May 1999 and added a Title VIII "Employment" to the Treaty establishing the European Community. The Union's responsibilities with regard to employment are complementary to those of the Member States, the main aim being to create a European Employment Strategy (EES). The EES is intended as the main instrument to provide direction and coordinate the employment policy priorities supported by the Member States at European level.

The new Title VIII "Employment" also requires an Employment Committee with advisory status to be established, to facilitate the Union's task of promoting the coordination of national employment and labour market policies.

The Lisbon European Council (March 2000) considered that the overall aim of these measures was to raise the overall employment rate in the European Union to 70% and the female employment rate to more than 60% by 2010. The Stockholm European Council (March 2001) added two intermediate targets and one additional target:

-the overall employment rate and the female employment rate to reach 67% and 57% respectively in 2005;

-the employment rate for older workers to reach 50% by 2010.

The Barcelona Council (March 2002) called for the reinforcement of the European Employment Strategy as an instrument of the Lisbon Strategy.

Financial support for employment policy is provided through various instruments:

-the future programme PROGRESS 2007-2013, the aim of which is to provide financial assistance for work towards the Union's employment and social affairs objectives;

-the priorities of the European Social Fund which are part of the EES objectives;

-the Mutual Learning Programme, launched at the beginning of 2005, as part of the incentive measures to promote employment. Its main objective is to enhance the transferability of the most effective policies within key areas of the EES.

At European level, the main structures in the field of employment are:

-the European Employment Observatory, an employment policy information system established in 1982 by the Commission in collaboration with the national authorities;

-the EURES network, which contributes to creating a European labour market accessible to all through the international, interregional and cross-border exchange of job vacancies and applications and the exchange of information on living conditions and gaining qualifications.

Employment Committee

As provided for by the Treaty of Amsterdam, and since a Council Decision of January 2000, the Employment Committee officially replaces the Employment and Labour Market Committee (ELMC) set up in 1996.

The Employment Committee takes over the tasks hitherto carried out by the ELMC on promoting the coordination of national employment and labour market policies.

The Committee's main task is to assist the Council in its work on the European Employment Strategy and its instruments (Employment Guidelines, recommendations on the implementation of national employment policies, etc.). The Committee also formulates opinions at the request of either the Council or the Commission or on its own initiative. It is made up of two representatives of each Member State and two representatives of the Commission. It consults the social partners at European level in order to carry out its work successfully.

Energy

The aim of European energy policy is to develop a low-energy economy which is safer, more sustainable and more competitive.

To achieve this, the European Union (EU) will have to deal with a number of difficult issues:

-climate change;

-guaranteeing a secure energy supply;

-investing in research and development in the field of energy efficiency, renewable energy and new technologies, in particular low-carbon technologies;

-achieving the internal market in energy.

The EU is aware of the importance of diversifying its range of energy sources, and is looking not only at fossil fuels (coal, gas and oil), but also at nuclear energy and renewable energy (solar, wind-power, biomass, geothermal, hydroelectric, tidal).

The presentation of a common energy policy in January 2007 placed energy back at the heart of the Community's action

— the treaties creating the European Coal and Steel Community (ECSC Treaty) and the European Atomic Energy Community (EURATOM) in 1951 and 1957 respectively formed the basis for subsequent European integration.

The Treating establishing the European Community did not provide a specific legal basis for Community energy policy, the underlying principles of which are still based on the Euratom Treaty and on a number of provisions contained in the chapters on the internal market and the environment.

The Intelligent Energy - Europe programme, which comes under the framework programme for innovation and competitiveness (2007-2013), provides Community funding to help achieve the Union's objectives in the field of sustainable energy.

Enhanced cooperation

Enhanced cooperation allows those countries of the Union that wish to continue to work more closely together to do so, while respecting the single institutional framework of the Union. The Member States concerned can thus move forward at different speeds and/or towards different goals. However, enhanced cooperation does not allow extension of the powers as laid down by the Treaties. Moreover it may be undertaken only as a last resort, when it has been established within the Council that the objectives of such cooperation cannot be attained within a reasonable period by applying the relevant provisions of the Treaties.

The general arrangements for enhanced cooperation are laid down by the Treaty on European Union (EU Treaty, Title VII) and relate to both the European Union and the European Community. In principle, at least eight States must be involved in enhanced cooperation, but it remains open to any State that wishes to participate. It may not constitute discrimination between the participating States and the others. Enhanced cooperation must also further the Treaty objectives and respect the whole of the acquis communautaire and the powers of the various parties. It may not apply to an area that falls within the exclusive competence of the Community.

In addition to the general regime, special arrangements may be made or added by individual Treaties, as in the case of the Treaty establishing the European Community (EC Treaty, Articles 11 and 11 A). Under the EC Treaty, for example, the initiative for enhanced cooperation is taken by the Commission at the request of the Member States concerned, whereas under the EU Treaty the initiative comes from the Member States. In either case, institution of enhanced cooperation is subject to a decision of the Council, acting by a qualified majority. Enhanced cooperation may also be pursued in relation to the common foreign and security policy (CFSP), except for military or defence matters.

The Treaty of Amsterdam incorporated the "enhanced cooperation" concept into the Treaty on European Union as regards judicial cooperation on criminal matters and into the Treaty establishing the European Community. The Treaty of Nice introduced major changes aimed at simplifying the mechanism. In particular, a Member State may not oppose the establishment of enhanced cooperation as originally allowed by the Treaty of Amsterdam.

The European Constitution now being ratified provides for easier recourse to this mechanism. In particular, the initial authorisation procedures and those concerning participation by other Member States at a later stage have been simplified. The minimum participation threshold has been set at one third of Member States. The restrictions concerning the CFSP are removed. The Constitution provides for a special mechanism in defence matters: permanent structured cooperation.

Enlargement

The European Union currently has 27 Member States. In addition to the first six Member States — Belgium, France, Germany, Italy, Luxembourg and the Netherlands — 21 countries have acceded to the Union.

1973: Denmark, Ireland and the United Kingdom; 1981: Greece;

1986: Spain and Portugal;

1995: Austria, Finland and Sweden;

the fifth enlargement of 2004 and 2007: Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia and Slovenia, then Bulgaria and Romania.

Croatia, the Former Yugoslav Republic of Macedonia and Turkey have the status of candidate countries. Accession negotiations with Croatia and Turkey opened on 3 October 2005.

The countries of the Western Balkans which are engaged in the stabilisation and association process have the status of potential candidate countries. Apart from Croatia and the Former Yugoslav Republic of Macedonia, which are candidate countries, these are Albania, Bosnia-Herzegovina, Montenegro and Serbia, including Kosovo, as defined by UN Security Council Resolution 1244.

Enterprise policy

The objective of enterprise policy is to produce an environment that is more conducive to the creation and development of businesses, especially small and medium-sized enterprises (SMEs), within the European Union.

The main focus of this policy is on:

-promoting entrepreneurship (encouraging business creation, and supporting companies, especially SMEs, during their start-up and development phase);

-promoting European performances in terms of competitiveness (encouraging businesses to adapt to structural change and maintaining a high and consistent level of productivity growth;

-taking account of the specific characteristics and needs of the different sectors of industry;

-promoting innovation (following up technological developments, new product designs, developing new ways of marketing products);

-better access to funding, support networks and programmes;

-simplification of the regulatory and administrative environment.

Enterprise policy thus contributes to sustainable growth and job creation. It is involved in achieving the objective set by the European Council in Lisbon on 23 and 24 March 2000 when the Heads of State and Government declared that the European Union was to become the most competitive and dynamic knowledge-based economy in the world by 2010.

EU enterprise policy helps to support and coordinate the Member States' activities. The Union can neither replace national competences nor harmonise national legislation and regulations.

Equal opportunities

The general principle of equal opportunities contains two key elements: one is the ban on discrimination on grounds of nationality, and the other is equality for men and women. It is intended to apply to all fields, particularly economic, social, cultural and family life.

The Treaty of Amsterdam added a new provision, reinforcing the principle of non-discrimination, which is closely linked to equal opportunities. Under this new provision, the Council has the power to take appropriate action to combat discrimination based on sex, racial or ethnic origin, religion or belief, disability, age or sexual orientation. Moreover, thanks to its programme to combat discrimination (2001-2006), the European Union has been encouraging and complementing the activities of the Member States to combat all forms of discrimination.

Adopted in December 2000, and due to be incorporated in the European Constitution, which is currently being ratified, the Charter of Fundamental Rights of the European Union includes a chapter entitled "Equality" which sets out the principles of non-discrimination, equality between men and women, and cultural, religious and linguistic diversity. It also covers the rights of the child, the elderly and persons with disabilities.

The Constitution explicitly adds the principles of equality and the ban on discrimination to the values on which the Union is founded. The text identifies them as general provisions that the Union must promote in the definition and implementation of its policies and actions.

Eurojust

Set up by a Council Decision in 2002, Eurojust is the body entrusted with reinforcing the fight against serious crime through closer judicial cooperation within the European Union.

This body for coordinating Member States' national public prosecution services comprises 27 national representatives: judges, prosecutors and police officers on secondment from each Member State. It can carry out its tasks through one or more of the national members or collectively. Moreover, each Member State may appoint one or more national correspondents, who may also act as contact points for the European Judicial Network.

Eurojust's competence covers investigations and prosecutions in relation to serious crime, particularly organised crime or cross-border crime. Its goals are to promote coordination between competent authorities in the Member States but also to facilitate international mutual legal assistance, and carry out extradition requests and European arrest warrants.

Eurojust also contributes to Member States' criminal investigations on the basis of analyses carried out by Europol. There is some overlap in the two bodies' competences with regard to: computer crime, fraud and corruption, laundering of the proceeds of crime, environmental crime, participation in a criminal organisation.

The European Constitution, which is in the process of ratification, expands and more closely defines Eurojust's operational competences. The Treaty of Nice entitles Eurojust to request Member States to open investigations, without this request being binding. In contrast, the constitutional treaty provides for Eurojust itself to:

-initiate criminal investigations, while taking account of national practices and rules;

-propose to national authorities that prosecutions be initiated;

-coordinate investigations and prosecutions being pursued by the competent authorities.

The European Constitution also provides that the Council may take a unanimous decision to establish a European Public Prosecutor's Office on the basis of Eurojust. This would be responsible for investigating, prosecuting and bringing to judgment the perpetrators of, and accomplices in, serious cross-border crime and illegal activities which harm the European Union's interests.

European Central Bank (ECB)

Founded on 30 June 1998 in Frankfurt, the European Central Bank (ECB) is responsible for monetary policy in the thirteen member countries of the Eurozone. Since 1 January 1999, its main tasks have been to maintain price stability in the Eurozone and to implement the European monetary policy defined by the European System of Central Banks (ESCB).

The decision-making bodies of the ECB (Executive Board and Governing Council) administer the European System of Central Banks (ESCB), whose roles are to manage money supply, conduct exchange operations, hold and manage the official foreign reserve assets of the Member States and ensure the smooth functioning of payment systems.

The ECB acts totally independently.

The Treaty of Nice, which came into force on 1 February 2003, did not change the composition of the Governing Council (comprising the members of the Executive Board and the governors of the national central banks), but created the possibility of changing the rules on decision-making (generally adopted by a simple majority of members, with each having one vote).

The planned enlargement of the Eurozone to include the ten countries that joined the Union in 2004 as well as Bulgaria and Romania in 2007 will lead to more members of the Governing Council. A Council Decision of March 2003 therefore allowed the ECB and ESCB constitutions to be amended with regard to voting arrangements, in order to maintain the Governing Council's ability to take decisions effectively in an enlarged Eurozone, however many Member States adopt the euro.

European Commission

The European Commission is a politically independent collegial institution which embodies and defends the general interests of the European Union. Its virtually exclusive right of initiative in the field of legislation makes it the driving

force of European integration. It prepares and then implements the legislative instruments adopted by the Council and the European Parliament in connection with Community policies.

The Commission also has powers of implementation, management and control. It is responsible for planning and implementing common policies, executing the budget and managing Community programmes. As "guardian of the Treaties", it also ensures that European law is applied.

The Commission is appointed for a five-year term by the Council acting by qualified majority in agreement with the Member States. It is subject to a vote of appointment by the European Parliament, to which it is answerable. The Commissioners are assisted by an administration made up of Directorates-General and specialised departments whose staff are divided mainly between Brussels and Luxembourg.

Since its inception the Commission has always been made up of two nationals from each of the Member States with larger populations and one national from each of the others. However, the Treaty of Nice limited the number of Members of the Commission to one per Member State. The Constitution, which is in the process of ratification, provides for a Commission in which only two thirds of the Member States would be represented after 2014. The Members will then be selected in accordance with a rotation system based on the principle of equality.

European Community

The European Community (EC) is a founding element of the European integration process.

It was established (as the European Economic Community) by the Treaty of Rome in 1957, with the principal objective of creating a common market without internal borders.

The establishment of the European Union (EU) in 1992 did not cause the European Economic Community to disappear. It remains part of the EU under the designation "European Community".

Article 2 of the Treaty establishing the EC defines its task as promoting throughout the Community:

-a harmonious, balanced and sustainable development of economic activities;

-a high level of employment and of social protection, and equality between men and women;

-sustainable, non-inflationary growth;

-a high degree of competitiveness and convergence of economic performance;

-a high level of protection and improvement of the quality of the environment, the raising of the standard of living and quality of life, economic and social cohesion, and solidarity among the Member States.

To achieve these goals, the EC has devised a set of sectoral policies, focusing on the fields of transport, competition, fisheries and agriculture, asylum and immigration, energy and the environment.

These policies are implemented under the decision-making procedure laid down by the Treaty establishing the EC, with particular emphasis on codecision. The decision-making mechanism governing these policies is based on a specific model known as the "Community method".

European Company

The European Company (known by its Latin name of "Societas Europaea" or SE) is a company established under Community law. It has its own legal framework and can operate as a single entity throughout the EU.

In 2001, the Union formally adopted the regulation on the Statute for a European Company and the associated directive on employee participation in European Companies.

This legislation entered into force in 2004 after some 30 years of discussion. It allows companies to cut administrative costs and provides them with a legal structure suitable for the common market, avoiding the legal and practical constraints arising from 25 different legal systems.

Under the European Company Statute, an SE can be set up by:

-merger;

-creation of a holding company;

-creation of a joint subsidiary;

-conversion of an existing company set up under national law.

The SE must have a minimum subscribed capital of 120 000 euros and its registered office, specified in the statutes, must be at the same place as its real head office.

The agreement on the SE is one of the priorities identified by the Financial Services Action Plan (FSAP) and is regarded as vital to the creation of a fully integrated market in financial services.

European Constitution

The European Constitution, officially known as the "Treaty establishing a Constitution for Europe", marks a key step in European integration.

It is the result of the work of the Convention, which drew up a "Draft Treaty establishing a Constitution for Europe" in July 2003. This draft served as a basis for the work of the Intergovernmental Conference (IGC) which started officially in October 2003. The IGC concluded on 29 October 2004 in Rome with the signature of the new Constitutional Treaty by the 25 Heads of State and Government of the Member States.

The aim of the Treaty establishing a Constitution for Europe is to make the enlarged Europe more effective, democratic and transparent. It is intended to replace the Treaty on European Union and the Treaty establishing the European Community. It also:

- simplifies the treaties so as to improve the visibility of the EU's work;

-reforms the institutions (in particular by scrapping the pillar-based structure of the Union);

-deepens European integration (for example reinforcing the common foreign and security policy by creating a European foreign affairs minister).

To enter into force, the Treaty establishing a Constitution for Europe must be ratified by all the Member States, in accordance with each one's constitutional rules.

European Convention

The process of setting up the European Convention began in December 2000 with a Declaration annexed to the Nice Treaty, the "Declaration on the Future of the Union". This proposed continuing with institutional reform beyond what had been achieved at the 2000 Intergovernmental Conference (IGC) following a three-stage procedure: launching a debate on the future of the European Union, a Convention on institutional reform to be set up as decided at the Laeken European Council in December 2001 and an IGC to be convened in 2004.

According to the Laeken Declaration, which created it, the aim of this Convention was to examine four key questions on the future of the Union: the division of powers, the simplification of the treaties, the role of the national parliaments and the status of the Charter of Fundamental Rights. Three phases were envisaged: a listening phase, a deliberating phase and a drafting phase. At the end of the last phase, a single constitutional text would be proposed. This document would serve as the starting point for the IGC negotiations conducted by the Heads of State and Government, ultimately responsible for any decision on amendments to the treaties.

The inaugural meeting of the Convention was held on 28 February 2002, and it concluded its work on 10 July 2003 after reaching agreement on a proposal for a European Constitution.

The Convention is an innovation in the history of the European Union as previous IGCs had never been preceded by a phase of debate open to all stakeholders.

On18 June 2004, the Intergovernmental Conference met at Head of State or Government level and agreed on the draft European Constitution prepared by the Convention.

European Convention on Human Rights (ECHR)

The European Convention on Human Rights, signed in Rome under the aegis of the Council of Europe on 4 November 1950, established an unprecedented system of international protection for human rights, offering individuals the possibility of applying to the courts for the enforcement of their rights. The Convention, which has been ratified by all the Member States of the Union, established a number of supervisory bodies based in Strasbourg. These were:

-a Commission responsible for advance examination of applications from States or from individuals;

-a European Court of Human Rights, to which cases were referred by the Commission or by a Member State following a report by the Commission (in the case of a judicial settlement);

-a Committee of Ministers of the Council of Europe, which acted as the guardian of the ECHR and was called upon to secure a political settlement of a dispute where a case was not brought before the Court.

The growing number of cases made it necessary to reform the supervisory arrangements established by the Convention. The supervisory bodies were thus replaced on 1 November 1998 by a single European Court of Human Rights. The simplified structure shortened the length of procedures and enhanced the judicial character of the system.

The idea of the European Union acceding to the ECHR has often been raised. However, in an opinion given on 28 March 1996, the Court of Justice of the European Union stated that the European Communities could not accede to the Convention because the EC Treaty did not provide any powers to lay down rules or to conclude international agreements on human rights.

The Treaty of Amsterdam nevertheless calls for respect for the fundamental rights guaranteed by the Convention, while formalising the judgments of the Court of Justice on the matter. As regards relations between the two Courts, the practice developed by the Court of Justice of incorporating the principles of the Convention into Union law has made it possible to maintain their independence and coherence in their work.

The Constitution, which is in the process of ratification, nevertheless provides for the European Union to have legal personality, thus enabling it to accede to the ECHR. It also provides for the incorporation of the Charter of Fundamental Rights, announced at the Nice European Council on 7 December 2000, which will give it binding legal force.

European Council

The European Council is the term used to describe the regular meetings of the Heads of State or Government of the European Union Member States. Its role is to provide the European Union with the necessary impetus for its development and to define the general political guidelines (Article 4 of the Treaty on European Union). It does not enact legislation and is not an institution.

It meets at least twice per year (in practice, twice per presidency) and the President of the European Commission attends as a full member. An extraordinary meeting can be held whenever necessary. It is chaired by the Member State holding the six-month presidency of the Union. Decisions are taken by consensus following negotiation between the Member States, which begins before the summit. The outcome of the European Council deliberations is recorded in the conclusions published at the end of the meeting.

The European Council was set up by the communiqué issued at the close of the December 1974 Paris Summit and first met in 1975. Before that time, from 1961 to 1974, the practice had been to hold European summit conferences. The

Single European Act (1986) gave a legal basis to its existence and the Treaty on European Union (Treaty of Maastricht, 1992) specified its functions.

Under the terms of a declaration attached to the Final Act of the Intergovernmental Conference preparatory to the Treaty of Nice, all meetings of the European Council have been held in Brussels since the Union attained a membership of 18 (May 2004).

The European Constitution currently being ratified gives the European Council the status of a European institution. It also provides for changes to the presidency system by establishing the permanent function of President of the European Council, elected by that body for a term of two and a half years.

European Court of Auditors

The European Court of Auditors, based in Luxembourg, is composed of one national from each Member State. Its members are appointed for six years (renewable) by a qualified majority of the Council of the European Union after consulting the European Parliament. The Court of Auditors acts in complete independence.

The Court checks the revenue and expenditure of the European Union (and any body created by the Community) for legality and regularity and ensures that its financial management is sound. It also supplies the European Parliament and the Council with a statement of assurance as to the reliability of the accounts and the legality and regularity of the underlying transactions. It draws up an annual report published in the Official Journal at the end of each budgetary year. Under the Treaty of Amsterdam, the Court of Auditors also has the power to report any irregularities to the European Parliament and the Council, and its audit responsibilities have been extended to Community funds managed by outside bodies and by the European Investment Bank. However, it does not have the power to impose penalties.

Under the Treaty of Nice, the Court is also able to establish internal chambers to adopt certain categories of report or opinion.

The Court of Auditors was established in 1975 and began work in 1977, and has been a European institution since the Treaty on European Union in 1992. It is governed by Articles 246 to 248 of the EC Treaty.

European Development Fund

Created by the Treaty of Rome in 1957, the European Development Fund (EDF) is the main instrument providing Community aid for development cooperation with the countries of Africa, the Caribbean and the Pacific (ACP countries) and with the Overseas Countries and Territories (OCTs).

The EDF finances any projects or programmes which contribute to the economic, social or cultural development of the countries in question. It consists of several instruments, including grants, risk capital and loans to the private sector. The EDF is funded by the Member States and does not yet come under the general Community budget. However, the aid granted to OCTs is to be included in the European Union's general budget as of 1 January 2008, while the aid granted to ACP countries will continue to be funded by the EDF, at least for the period 2008-2013.

Each EDF, which generally follows the cycle of the partnership agreements, is concluded for a period of around five years. The ninth EDF (2000-2007) has been allocated 13.5 billion euros, in addition to 9.9 billion euros left over from the previous EDFs. The European Investment Bank's own resources contribution adds a further 1.7 billion euros over the period covered by the ninth EDF.

European Economic and Social Committee (EESC)

The European Economic and Social Committee was set up, as an advisory body, by the Treaty establishing the European Economic Community in 1957 to represent the interests of the various economic and social groups. It consists of 344 members falling into three categories: employers, workers and representatives of particular types of activity (such as farmers, craftsmen, small businesses and industry, the professions, consumer representatives, scientists and teachers, cooperatives, families, environmental movements). Members are appointed by qualified majority of the Council for four years and this term may be renewed.

The EESC is consulted before a great many instruments concerning the internal market, education, consumer protection, environment, regional development and social affairs are adopted. It may also issue opinions on its own initiative. Since the entry into force of the Treaty of Amsterdam (May 1999), the EESC has to be consulted on an even wider range of issues (the new employment policy, the new social affairs legislation, public health and equal opportunities) and it may also be consulted by the European Parliament.

The Treaty of Nice, which entered into force on 2003, did not change the number and distribution by Member State of seats on the Committee. However, eligibility for membership was clarified: the EESC is to consist of "representatives of the various economic and social components of organised civil society".

The European Constitution, which is in the process of being ratified, envisages increasing the term of EESC members from four to five years.

European Employment Strategy (EES)

Since the Treaty of Amsterdam added a new Title VIII on Employment to the Treaty establishing the European Community, coordination of Member States' employment policies has become a Community priority.

It was on the basis of these new provisions that the Luxembourg European Council, held in November 1997, launched the European Employment Strategy (EES), also known as the "Luxembourg process".