What’s the EU
1. What’s the EU

1.1 Beginnings: war and peace

For centuries, Europe was the scene of frequent and bloody wars. In the period 1870 to 1945, France and Germany fought each other three times, with terrible loss of life. A number of European leaders became convinced that the only way to secure a lasting peace between their countries was to unite them economically and politically.

So, in 1950, the French Foreign Minister Robert Schuman proposed integrating the coal and steel industries of Western Europe. A a result, in 1951, the European Coal and Steel Community (ECSC) was set up, with six members: Belgium, West Germany, Luxembourg, France, Italy and the Netherlands. The power to take decisions about the coal and steel industry in these countries was placed in the hands of an independent, supranational body called the "High Authority". Jean Monnet was its first President.

1.2 From three communities to the European Union

The ECSC was such a success that, within a few years, these same six countries decided to go further and integrate other sectors of their economies. In 1957 they signed the Treaties of Rome, creating the European Atomic Energy Community (EURATOM) and the European Economic Community (EEC). The member states set about removing trade barriers between them and forming a "common market".

In 1967 the institutions of the three European communities were merged. From this point on, there was a single Commission and a single Council of Ministers as well as the European Parliament.

Originally, the members of the European Parliament were chosen by the national parliaments but in 1979 the first direct elections were held, allowing the citizens of the member states to vote for the candidate of their choice. Since then, direct elections have been held every five years.

The Treaty of Maastricht (1992) introduced new forms of co-operation between the member state governments - for example on defence, and in the area of "justice and home affairs". By adding this inter-governmental co-operation to the existing "Community" system, the Maastricht Treaty created the European Union (EU).

1.3 Integration means common policies

Economic and political integration between the member states of the European Union means that these countries have to take joint decisions on many matters. So they have developed common policies in a very wide range of fields - from agriculture to culture, from consumer affairs to competition, from the environment and energy to transport and trade.

In the early days the focus was on a common commercial policy for coal and steel and a common agricultural policy. Other policies were added as time went by, and as the need arose. Some key policy aims have changed in the light of changing circumstances. For example, the aim of the agricultural policy is no longer to produce as much food as cheaply as possible but to support farming methods that produce healthy, high-quality food and protect the environment. The need for environmental protection is now taken into account across the whole range of EU policies.

The European Union's relations with the rest of the world have also become important. The EU negotiates major trade and aid agreements with other countries and is developing a Common Foreign and Security Policy.

1.4 The Single Market: banning the barriers

It took some time for the Member States to remove all the barriers to trade between them and to turn their "common market" into a genuine single market in which goods, services, people and capital could move around freely. The Single Market was formally completed at the end of 1992, though there is still work to be done in some areas - for example, to create a genuinely single market in financial services.

During the 1990s it became increasingly easy for people to move around in Europe, as passport and customs checks were abolished at most of the EU's internal borders. One consequence is greater mobility for EU citizens. Since 1987, for example, more than a million young Europeans have taken study courses abroad, with support from the EU.

1.5 The Single Currency

In 1992 the EU decided to go for economic and monetary union (EMU), involving the introduction of a single European currency managed by a European Central Bank. The single currency - the euro - became a reality on 1 January 2002, when euro notes and coins replaced national currencies in twelve of the 15 countries of the European Union (Belgium, Germany, Greece, Spain, France, Ireland, Italy, Luxembourg, the Netherlands, Austria, Portugal and Finland).

1.6 The growing family

The EU has grown in size with successive waves of accessions. Denmark, Ireland and the United Kingdom joined in 1973 followed by Greece in 1981, Spain and Portugal in 1986 and Austria, Finland and Sweden in 1995. The European Union welcomed ten new countries in 2004: Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia and Slovenia. Bulgaria and Romania expect to follow a few years later and Turkey is also a candidate country. To ensure that the EU can continue functioning efficiently with 25 or more members, its decision-making system must be streamlined. That is why the Treaty of Nice lays down new rules governing the size of the EU institutions and the way they work. It came into force on 1 February 2003.

1.7 The official languages of the European Union.

The very first Regulation enacted by the Council of what is now the European Union, was concerned with language. On 15 April 1958. The Council laid down that the official languages of the Member States should be both the official languages of the Community and the working languages of the Community institution. Every Member State's official language is an official language of the EU.

1.8 EU Presidency

EU Presidency is currently held by The Netherlands.

The Presidencies since 1980

Year

1. half

2. half

1980

Italy

Luxembourg

1981

The Netherlands

United Kingdom

1982

Belgium

Denmark

1983

Germany

Greece

1984

France

Ireland

1985

Italy

Luxembourg

1986

The Netherlands

United Kingdom

1987

Belgium

Denmark

1988

Germany

Greece

1989

Spain

France

1990

Ireland

Italy

1991

Luxembourg

The Netherlands

1992

Portugal

United Kingdom

1993

Denmark

Belgium

1994

Greece

Germany

1995

France

Spain

1996

Italy

Ireland

1997

The Netherlands

Luxembourg

1998

United Kingdom

Austria

1999

Germany

Finland

2000

Portugal

France

2001

Sweden

Belgium

2002

Spain

Denmark

2003

Greece

Italy

2004

Ireland

The Netherlands

2005

Luxembourg

United Kingdom

2006

Austria

Finland

Chapter І.

1. The EU's Relations with Ukraine

1.1 The Partnership and Co-operation Agreement

The PCA came into force in March 19981. It highlights respect for shared fundamental values as an essential element for the relationship; provides an appropriate framework for political dialogue; sets the principal common objectives in terms of harmonious economic relations, sustainable development, co-operation in a number of areas, and support to Ukraine’s efforts towards democracy; as well as creating an institutional framework for pursuing these goals.

The PCA is an important instrument in bringing Ukraine in line with the legal framework of the single European market and of the WTO system. It also contains a number of evolutionary clauses, including the prospect of establishing a free trade area.

1.2 The EU Common Strategy on Ukraine, and Ukraine’s Strategy for European Integration

The EU Common Strategy was adopted in December 1999 at the Helsinki European Council in response to the recognition that more coherence was needed between the EU and the Member States’ policies certain partner countries. It covers a period of four years.

The Strategy aims at developing a strategic partnership between the EU and Ukraine on the basis of the PCA, while acknowledging Ukraine’s European aspirations and welcoming the country’s European choice. It sets three principal objectives:

To support the democratic and economic transition process in Ukraine
To meet common challenges on the European continent (stability and security in Europe, environment protection, energy and nuclear safety)
To strengthen co-operation between the EU and Ukraine in the context of enlargement; assist Ukraine’s integration into the European and world economy; enhance co-operation in the field of Justice and Home Affairs.

1.3 EU Assistance to Ukraine

The EU is the largest donor to Ukraine; over the last 10 years, total assistance amounted to €1.072 billion from the EC while the Member States disbursed around €157 million in the period 1996 – 1999. This consists of technical assistance through TACIS, macro-financial assistance, and humanitarian assistance.

The overall amount allocated directly to Ukraine in 2002 is €47 and in 2003 €48 million. In addition, Ukraine benefited from a number of specific and regional Tacis programmes, totalling some €126 million that year. The National Indicative Programme for the years 2004−06 foresees 212 million Euro on further assistance.

With the closure of Chernobyl at the end of 2000 and pending alternative sources coming fully on stream, EU assistance in the energy sector has included additional support for Ukrainian fuel imports (Fuel Gap programme), along with a major contribution to the Chernobyl Shelter Fund managed by the EBRD.

Since 1998, the Commission has also contributed about €10 million to the Science and Technology Centre of Ukraine (STCU).

1.4 The Institutional Framework

The PCA establishes a number of bilateral institutions and provides the basis for taking further decisions as necessary:

Co-operation Council at ministerial level (EU-Presidency, European Commission, High Representative, Government of Ukraine)

Co-operation Committee (senior civil servants level, chaired alternately by the European Commission and the Ukrainian side)

Sub-Committees (experts level; supporting the work of the Co-operation Committee).

The political dialogue is conducted through yearly Summits, at the Co-operation Councils, and in Ministerial and Political Directors’ meetings in the Troika format.

The last summit (6th) Summit was held on 7 October 2003 in Yalta. The EU side presented its "Wider Europe - Neighbourhood" initiative, stressing the broad range of new opportunities, which should facilitate Ukraine's progressive participation in the EU’s internal market and in EU policies and programmes, taking into account Ukraine’s strategic goals and priorities. The EU side has made clear that this initiative is separate from the question of possible future accession to the EU, regulated by article 49 of the Treaty on European Union. President Kuchma reiterated Ukraine’s long-term strategic goal is to be fully integrated into the EU. The Summit leaders agreed to launch consultations on the development of a Wider Europe Action Plan for Ukraine. In addition, the Summit agreed that specific attention in future dialogue should be given to the effects of the forthcoming EU enlargement for EU-Ukraine relations. Both sides reiterated their strong determination of both sides to avoid any new dividing lines in Europe.

2. Highlights of the bilateral agenda

2.1 Priority Areas

Both sides co-operate closely on the specific priorities endorsed by the 4th Co-operation Council, i.e.: approximation of Ukraine’s legislation with that of the EU, energy, trade, Justice and Home Affairs, environmental protection, transport and science, and technology. Investment and cross-border co-operation were added as priority areas at the Fifth Co-operation Council.

Legislative approximation is, in accordance with the objectives of the PCA, a permanent feature of bilateral discussions. From the Ukraine perspective, it is also tied to its European integration strategy. The Tacis-financed, Kyiv based, Ukraine-Europe Policy and Legal Advice Centre, which has provided a source of expertise on a range of policy issues for several years, is now focused on this field.

Energy and nuclear safety is one of the most important areas of EU’s co-operation with Ukraine. Measures taken in the aftermath of the Chernobyl disaster continue to be a priority, ranging from the financing of the intended shelter for the nuclear reactor (for the ‘Shelter Fund’ managed by the EBRD a total amount of € 100 million has been decided for 2001 to 2004), over replacement production capacity in new nuclear power stations (‘K2R4’), to dealing with shortcomings in energy supply (the ‘fuel gap’ programme).

Trade issues are also a significant element in EU-Ukraine relations. A key focus is on negotiations for Ukraine’s accession to the WTO, where agreement has been reached on bilateral terms for market access in goods and services, and where the EU strategy supporting the adaptation of Ukrainian legislation to the multilateral rules of the WTO system. The Commission is currently assessing the Ukrainian request to be given ‘market economy’ status.

In order to intensify environmental co-operation, a working group on climate change has been set up that focuses on the implementation of the Kyoto Protocol, in addition to several projects of technical assistance.

Co-operation on transport concentrates on the integration of Ukraine’s transport infrastructure into the European transport networks along Pan-European Transport Corridors, the Black Sea and the TRACECA route.

In the field of Science & Technology, a bilateral co-operation agreement was signed in July 2002, offering broad perspectives for co-operation under the 6th Framework Programme and beyond. The EU also provides financial support under the multilateral Science and Technology Centre in Ukraine (STCU) and through INTAS, the international association for the promotion of co-operation with scientists from the countries of the former Soviet Union.

2.3 Prospects for the future

The possibilities for further strengthening bilateral relations are high on the bilateral agenda in 2003, not least following the adoption on 11 March 2003 of the European Commission’s Communication on Wider Europe – Neighbourhood, setting out a new framework for relations over the coming decade with Ukraine, Russia, Moldova and Belarus and the Southern Mediterranean countries who do not currently have a perspective of membership but who will soon find themselves sharing a border with the Union. The EU continues to consider full PCA implementation as a first priority. Also important is the improvement of co-operation on security threats, both in the context of terrorism and organised trans-border crime.

Further progress is expected on WTO accession negotiations, with the focus now on adaptation by Ukraine to the multilateral "rules” regime. In the energy sector, a solution to the modernisation of the nuclear reactors "K2R4" with highest safety standards should be found, and further discussion will take place on gas transit.

Chapter II.

1. EU Enlargement: Wider Europe - a new framework for EU-Ukraine relations

1.1 EU Enlargement: good news for Ukraine

The enlargement of the Union in May 2004 with ten new members, most of them in Central Europe, will impact profoundly both on the Union itself and on the Union’s relations with its neighbours and the world.

The opportunities for co-operation along the future enlarged EU borders are described in the Commission’s communications of 11 March and 1 July 2003 on the Wider Europe concept and a New Neighbourhood Instrument.

The EU is of the opinion that Ukraine will greatly benefit from the enlargement of the EU. Through its geographical proximity Ukraine will have access to the World’s biggest single Market of almost half a billion consumers. Therefore, Ukraine, because of its traditional trade and economic relations with many of the new member states as well its geographical position will be in a good position to take advantage of the opportunities of enlargement.

By way of example, tariffs on Ukrainian exports into the EU will go down after Enlargement from 9 percent to 4 percent on average, which in Dollar or Euro terms will mean a lot to the Ukrainian economy. And this is only one example of several benefits that will follow from Enlargement.

From earlier enlargement it is known that becoming a member of the EU will bring accelerated growth to the new Member States and thus increase import demands inter alia from Ukraine. The new Member States have already started to apply European norms step by step. This means that Ukrainian companies that have been doing business with neighbouring countries in the past years have already complied with EU regulations and will thus not experience major changes after 1 May 2004.

Very often people refer to the fact that as a result of enlargement some of the free trade agreements which Ukraine used to have with certain candidate countries e.g. the Baltics will now have to scrapped. Actually, technically, FTAs will have to be adjusted to be compatible with the EU Accession treaties signed by the Baltic States. The results of this adjustment are not known yet and therefore cannot be adequately calculated. But more importantly, this example, which is always mentioned is not representative: firstly, no one can calculate the effect of this future change, but if they were to try they should take into consideration that Ukraine’s trade with the Baltics constitutes only 2 percent of all of Ukraine’s total trade which is a drop in the bucket compared with the overall 5% decrease in tariffs mentioned above. Further

What is true is that EU enlargement will be the occasion to address a number of challenges and opportunities to avoid new dividing lines in Europe, for example in the area of cross border cooperation and migration issues. Between 2004 and 2006 the New Neighbourhood Programmes will start working and from 2006 on New Neighbourhoods instruments will applied. These programmes include cross border cooperation between Ukraine and Poland, Hungary, Slovakia and Romania. Between 2004 and 2006 the EU will allocate a sum of 75 million Euros for cross border cooperation programmes alone.

2. Wider Europe – Neighbourhood

The EU Commission on March 11 adopted a new framework for its relations with the EU’s future neighbours including Ukraine. In a Communication called Wider Europe - Neighbourhood: A New Framework for Relations with our Eastern and Southern neighbours, the Commission made it clear that the objective of the new framework is to develop a zone of prosperity and a friendly neighbourhood, a ring of friends, with whom it can enjoy close peaceful and co-operative relations.

The overall goal of Wider Europe will be to work with partner countries to foster the political and economic reform process, promote closer economic integration and sustainable development and provide political support and assistance.

In Wider Europe Ukraine is one of the priority countries and is offered a new deal, including i.a. the prospect of closer integration into the EU’s Single Market, of preferential trade relations, of further cultural cooperation and mutual understanding, integration into transport, energy and telecommunications networks and the European, Research Area.

Also the new framework provides new concrete tools for its implementation including participation in EU programmes and activities and new sources of finance, an Action Plan for Ukraine and Annual Reviews.

In this regard Wider Europe offers an ambitious and realistic framework for strengthening our strategic partnership allowing Ukraine to benefit fully from EU Enlargement. The new avenues offered for cooperation offered by Wider Europe include a perspective of future progressive integration into the EU’s internal market of 450 million consumers

A new tool introduced to implement the New Framework is the Action Plan, a essentially political document to be drawn up by the Commission and EU member States and agreed in association with Ukraine, clearly setting out not only policy targets but also benchmarks by which progress can be judged over several years. These benchmarks should be developed in close cooperation with the partner countries and new benefits should be offered to reflect the progress made in political and economic reform.

The Wider Europe Communication also outlines the Neighbourhood Programmes as a new initiative to take significant steps to deal with the effects of Enlargement boost co-operation across the EU’s borders with Ukraine. Under four different NNPs Ukraine will receive an additional funding of 20 million Euros.

The issue of Ukraine’s membership in the EU is left open for the time being. But during the recent EU-Ukraine summit in Yalta the EU representatives have repeatedly said that the door is kept open for Ukraine. The EU just not ready at this moment to give any concrete date. However, the Treaty of the European Union Article 49 explicitly allows for the possibility of Ukraine becoming a member and the Wider Europe does not exclude it as well.
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