European Economic Community - Essay Example

To what extent does the EC represent a 'new legal order' The History of the European Community Initially known under the European Economic Community, established by the Treaty of Rome in 1957, the European Community was established in 1967 and is today known under the name EC by the Maastricht Treaty in 1992, which aimed to the creation of the European Union under three separate pillars. The European Community being one of these is concerned with common economic, environmental and social policies within the Union. The other two are the "Common Foreign and Security Policy" and the third is called "Police and Juridical Co-Operation in Criminal Matters". Three treaty organizations were considered for the creation of the European Communities known under EC since 1992. The European Economic Community, being the processor of the EC, was a treaty between Belgium, France, Luxemburg, the Netherlands and West Germany. It aimed for the economic inclination of the participating counties which would eventually lead to common political goals and institutions. Today the organization numbers 25 members which all fall under the European Union organization. These are Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Netherlands, Portugal, Spain, Sweden, Kingdom of Great Britain and Northern Ireland1. The aim of this paper is to investigate to what extend the European Union has penetrated the economy of each party and to what extend it represents a new legal order meaning the effect the of the common regulations and policies followed on the participant countries. What's more, the prevalence of Community Laws over local Laws is examines and for this matter the Dutch transport firm Van Gend & Loos case is discussed as an example case. All former are sustained through comparison within the EC member countries and comparison to development rates universally. Since European Community is a pillar of the European Union focusing on environmental, social and primarily economical matters, the two terms are used interchangeably for the rest of this paper. Common Policy Issues The first issue to discuss here are the emerging problems of the common momentary policy implemented four year ago by twelve of the fifteen members and how these were tackled by the Community authorities. To start with and moving away from the prevalence issues per se, attaining the deficit goals is not an easy task and there is not much confidence for all countries. Strong economies are expected to perform better than smaller economies that might not achieve the set standards and conflicts within the union boundaries are common to occur. Secondly, the bilateral conversion rates are put into question as to how much these reflect the currency prior to conversion. Thirdly, the core or strong economy countries will be a lot more lucrative in risk taking; in fact they will be a lot more conservative. Interest rate level however on the fast growing countries however will be a lot higher and countries such as Ireland, Portugal, Greece and Spain. The former might encounter great issues when managing their economies (Krijsman, 1998). The entire former sum up to a list of problems the Community had to tackle even before embracing the common monetary policy. Of course the authority of the Community enforced the members to follow the guidelines imposed to them; these however were based on the actual facts and the potential of each member. In any case, the members followed, or are still trying to in case they have not achieved, the set standards imposed by the EC. The EC Facts The European Union focuses on economic and environmental policies on subjects as agriculture, trade, humanitarian aid and taxation policies. The unique property of common economic policy met within the European Union boundaries holds an extra property; all participating countries will fail or succeed. This is the main concern of countries that refuse to join the European Union as Switzerland and Norway that refuse to join the community and are considered "arrogant" by the rest of the participating countries, which might also freeze the relations between the European countries. Another prospect the following occurs could be the authorisation passed on from the members to the Community upon entrance to the Union. In this case, the higher authority is the Community and most decisions of the country-member have to comply by the given rules or simply activate those. On the other hand, one needs to contend to what extend such strict policies on behalf of the Community are justified. Following a constant growth of the European Economy, a point of slow growth rate is usually reached which raises concerns about the success of the common economic policy pursuit. Is to blame EC for the slowdown And if not, why should there be penalties for the idle growth rates The United States and Japan have been exchanging the lead in world economy for the last 30 years when Japan took the lead of automobile manufacturing the US proved more eligible to adapt to technological innovations (Rogoff, 2004). In 1999 there has been a difference in growth rates between countries of the union; countries like Finland and Ireland have appeared to have taken a step forward to a much larger growth rate than countries as France and Germany (Krijgsman, 2000). Growth rates in general within the EC have been on decline since 2000. Even though there appears to be a variation of growth between the members, the impediment in growth has been a common issue. With inflation having reached at 1.6% within the euro-zone it summed up to 1.9% for 8 of the total 11 participation countries. Even though there seems to be a consensus on the impediment of the growth rates the exact numbers vary. Countries within the boundaries therefore seem to follow the general incline/decline rules, but the extend to which such changes occur may vary. Germany growth rate in 1999 reached 1.2%, while France performed a lot better with 3.0%, UK 1.5% and Italy 0.8%. The Community prevalence does not stop on the economic level but penetrates further deep into the Law system; in case a regional law is found in conflict with the Community Laws the latter is directly applied. The Dutch transport firm Van Gend & Loos brought the Dutch Customs into Court when they imposed great custom duties on a chemical product imported from the Federal Republic of Germany. The Court should address whether to consider Article 12 of the EEC Treaty (now Article 25 EC), which forbids introduction of new customs duties and the existing duties augment of the Community market. In any case the Court ruled that the Community Laws are directly applicable and stated in fact that: "the Community constitutes a new legal order ... the subjects of which comprise not only the Member States but also their nationals. Independently of the legislation of Member States, Community law not only imposes obligations on individuals but is also intended to confer upon them rights. These rights arise not only where they are expressly granted by the Treaty, but also by reason of obligations which the Treaty imposes in a clearly defined way upon individuals as well as upon the Member States and upon the institutions of the Community".(EUR-Lex, 2004) The court decided that the Community Treaties find direct applicability and do not call for therefore any further action on the behalf of the Member States or the Community institutions in order find direct applicability or to call for compliance2. With regard of freedom of movement in the Community boundaries, another case of a Dutch national, Miss van Duyn in 1973, she was deprived the right of entrance in the UK in order to work as a secretary of the Church of Scientology. Miss van Duyn brought the case in front of the High Court which decided that she has the right of occupation in the United Kingdom. The Economy Policy Revised After the EC expansion none of the participating countries seem to have made convergence to the laid criteria as their first priority. With Germany, France and the Benelux countries having met these criteria none of the other participants seemed able to reach the standards3,4. The main goal of the Maastricht Treaty was to make available to all participating countries a common monetary that would keep prices on the same levels and tackle inflation between the participating countries, it seems however that this cannot be the case mainly due to the lack of working positions, confidence and demand (Fairlamb, 2001). With Europe's Central Bank (ECB) former president Karl-Otto Poehl, claiming that the Community is in need for more freedom within the participating countries and the EC leaders being furious at ECB for keeping a tight policy and predictions and facts about inflation keeping away from reality; even though it has been under control for the years 1995-2000, was estimated to fall under 1% in 2002, it however increased to 2% with ECB claiming its accordance to the inflation rates. At this crucial point ECB President Wim Duisenberg5 has been much hated as his personal estimation of the policy to follow in accordance with the inflation rates within the union wasted too much valuable time. At the point he changes were essential as to take measures inflation was diminishing across the Union. The ECB wrong decision making at this point was a turning point to the inflation rates within the union. In fact it looks as if the ECB and the taken decision are a performance measure that needs to give some more freedom on the participating countries. It is common wish between the participating countries of the EC for some freedom from the ECB. In fact many claim for the Maastricht treaty to be reordered to amend the vulnerabilities discovered since its application in 1992. It is the case the largest economies within the community are showing a small growth rate, other economies as Greece and Ireland however are enjoying the benefits of the Maastricht treaty and do not wish for things to change. Conclusion As far as the monetary policy is concerned there seems to be a general inclination on growth rates among the economic policies of the European Union countries, there are also countries however that fail to achieve the set goals. The EU seems to be lacking the power to take measures and impose severe penalties to countries which do not comply with the EU economical standards which removes power from the EU authority. Evidently, on one hand the European Union seems to be lacking the power to impose measures and on the other hand there seems to be no serious prohibition on the growth rate of the participating countries. The only measure to be taken here is the fine impose, which however does not comply with the case of economic standards miss. As far as common policy is concerned there also seem not to be a pediment due to limited power given to the regulations imposed by the community; the former turns the EU to a weak tool not seriously taken by the participating countries. The most serious problem the EC member countries have to face which is finding common goals and agreeing on a path to follow that will work for the benefit of all countries. Of course that is inherent to the nature of the EC since it is composed of countries which are based on different institutions and have different primary sources of capital. Conflicting goals both inhibit growth on he personal level and freeze the relationships of the participating countries. As things stand the Union policy seems to have laid the guidelines each country is asked to follow rather than giving directions to each member. For the former to happen each country properties and growth potential is taken under consideration and is examined to help the member find their own way to success. Integration between the country members seems to be at a very low rate therefore the EC does not seem to have been transformed into a "legal policy" since it does not present to have achieved the inclination. Common growth and unemployment rates are a mere coincidence of international phenomena appearing all over the world. Moreover, the ECB being the central monetary authority is also run by human governed by bias and have to carry out a tardy task taking decisions to tackle inflation which can raise objections between the participating countries. The largest economies are bogged down and the smallest economies flourish of the benefits they enjoy from the EU. New economies have however joined the Union and the worries are reaching the roof; since the least advanced economies within the European Union just now seem to show some growth and the oldest economies are bound to help these how will the other developing countries be sustained Economies as that of Greece, Spain, Portugal and Ireland do not seem to be able to provide great assistance to the development of Poland that counts a great population. What's more, one needs to take into consideration of the global phenomena and how these affect the economies worldwide; the Iraq war calls for low interests rates to sustain the crisis the measures to be taken towards short and long-term interest rates are important to the how the economy of a country fights back (economist, 2005). Eventually, some freedom from the ECB is necessary. Unfortunately, the countries to have just joined the European Union are in need of the developed countries to fight inflation and create new opportunities, but even the rising parties within the developed countries seem to boost measures against the help provided to the developing countries. Economy on a global level is going through crises and if the developed countries need to help developing countries within the community they first need to help themselves. Although the EU is trying to bring down the boundaries with whatever means available the facts are showing that the diversity of the countries within the European Union cannot be easily overcome to a convergence of the members. This diversity gives different priorities to the participating countries in terms of economical growth and a common goal is hard to find. As suggested earlier therefore the EU needs to learn from mistakes of the past and lighten the authority given to the ECB and allow more freedom to the participants for the creation of individual goals. References Economist. "Out of kilter."00130613. 2005. Vol. 375. Issue 8428 Economist. "Always look on the bright side.", 00130613, 3/12/2005, Vol. 374, Issue 8417 EUR-Lex, "Conflict Between Community Law and International Law", April 2004 http://europa.eu.int/eur-lex/en/about/abc/abc_27.html Fairlamb, David. 2001. "COMMENTARY: THE MAASTRICHT TREATY NEEDS A MAKEOVER." Business Week Online. Kriigsman, John. 2000. "THE EU: A CONDITIONAL GROWTH EXPANSION.", CIBC Observations. 1204931X. Vol. 8. Issue 1 Krijgsman, John. 1998. "For the major European Economies." CIBC Observations. 204931X. Vol. 5. Issue 11/12 New Statesman & Society. "NOT WHAT EUROPE NEEDS." 09542361. Vol. 8. Issue 383 Rogoff, Kenneth. 2004. "Europe's Quiet Leap Forward." Foreign Policy. 00157228. Issue 143 The Columbia Encyclopedia, Sixth Edition.2001-05. http://www.bartleby.com/65/eu/EuropnEC.html Read More