Exam Definitions (EU integration)

Question 1

Acquis communautaire

Answer 1

Acquis communautaire is the collection of common rights and obligations that constitute the body of EU law, and is incorporated into the legal systems of EU Member States.

The EU acquis evolves continuously over time and includes:
- the content, principles and political objectives of the EU Treaties;
- any legislation adopted to apply those treaties and the case-law developed by the Court of Justice of the European Union;
- declarations and resolutions that are adopted by the EU;
- measures in the fields of common foreign and security policy and justice and home affairs;
- international agreements that the EU concludes, and agreements concluded among the Member States themselves with regard to the EU’s activities.

Candidate (applicant) countries are required to accept the acquis before they can join the EU. Derogations (exceptions) from the acquis are granted only in exceptional circumstances and are limited in scope. The acquis must be incorporated by candidate countries into their national legal order by the date of their accession to the EU, and they are obliged to apply it from that date.

Question 2

Acquis screening

Answer 2

(or analytical examination of the acquis) is a preparatory phase of accession negotiations. The screening process is carried out jointly by the Commission and each of the candidate countries. This process allows the candidate countries to familiarise themselves with the acquis and, subsequently, to indicate their level of alignment with EU legislation and outline plans for further alignment. A further purpose of screening is to identify those areas of the acquis in which progress is needed if the candidate countries’ legislation is to be compatible with the EU rules.

Question 3

Agenda 2000

Answer 3

(For a stronger and wider Union) - a single complete framework offering a clear and coherent vision of the Union’s future at the beginning of the 21st century.

Its primary aim was to prepare the Union for its greatest challenges: the reinforcement of its policies and the accession of new members, within a strict financial framework.

The Agenda 2000 legislative package results from the combined effort of all the institutions. It was conceived at the Madrid European Council in December 1995 and presented by the Commission on 16 July 1997.

It covers four main, closely related areas:
1 - the reform of the common agricultural policy
2 - structural policy reform (improve the effectiveness of the Structural Funds and the Cohesion Fund)
3 - the pre-accession instruments
4 - the new financial framework

Question 4

Amsterdam leftovers

Answer 4

a number of institutional issues that had been addressed by the Maastricht and Amsterdam Intergovernmental Conferences (IGCs) but not satisfactorily resolved.

These included:

1) size and composition of the Commission,
2) weighting of votes in the Council
3) extension of qualified majority voting.

On the basis of a report by the Finnish Presidency, the Helsinki European Council decided in late 1999 that an IGC should deal with the leftovers and all other changes required in preparation for enlargement.

They were resolved in the Nice treaty.

Question 5

Association Agreements

Answer 5

are legally binding agreements between the EU and third countries. It is aimed to foster close relationships between the EU and countries on a wide range of topics.

Association agreements cover many policy areas, foremost of which is that of economic cooperation.

The EU generally enters into such agreements with countries that belong to any of the following three categories:
- countries that have a special historical bond with EU member states. Most of these are former colonies, as well as several developing countries
- members of the European Free Trade Area (EFTA)
- prospective members of the European Union

The EU has a special agreement procedure with which to adopt association agreements. To ensure the objectives laid down in an agreement are met as well as to facilitate cooperation an association council is instituted for each association agreement.

International agreements are based on the Treaty on the functioning of the European Union (TfEU).

Question 6

Avis

Answer 6

(an “opinion”) is a non-binding act by which the European Union conveys an evaluation along with possible actions that can be taken with regard to a certain issue without imposing a mandatory legal framework. Opinions are usually given out to member states or when addressing a very specific situation. It can be issued by the main EU institutions (Commission, Council, Parliament), the Committee of the Regions and the European Economic and Social Committee.

(DEFINITION 2: it is an instrument that allows the institutions to make a statement in a non-binding fashion, in other words without imposing any legal obligation on those to whom it is addressed).

Question 7

BBQ

Answer 7

one of the most controversial issues in UK-EU negotiations.
A period between 1979 and 1984 that culminated in the negotiation of a budget rebate (‘abatement’) by the Thatcher government in 1984. It was sometimes referred to by Roy Jenkins, president of the EC Commission 1977-1981, as the ‘Bloody British Question’

Before 1980, the main source of budget revenues was the so-called Traditional Own Resources, consisting of common custom duties and agricultural and sugar levies.

In 1980, to cover the increasing costs faced by the European Community, member states were asked to provide a fraction of their annual Value Added Tax (VAT) receipts to finance the budget. Because of this, the UK soon became a large contributor to the EU budget.

At that time, almost 70% of the EU budget was spent on the Common Agricultural Policy (CAP). The UK, whose agricultural sector had a different structure (and still has) than other member states, benefited little from the money distributed from the CAP. As a result, the UK soon became a large net contributor to the EU budget despite being the third poorest member at the time.

In June 1984, at Fontainebleau outside Paris, Margaret Thatcher negotiated what is now known as the UK rebate with other EU members. The aim was to correct for the apparent imbalance in the UK contribution at the time. The UK rebate was ratified and then implemented in May 1985.

Question 8

CEFTA

Answer 8

(Central European Free Trade Agreement) - was established on December 21, 1992 by representatives of Poland, Hungary and Czechoslovakia as a trade agreement that hoped to mobilize efforts to integrate into the western European institutions, and eventually join European political, economic, security, and legal systems.

The eventual goal was to consolidate democracy and free-market economics. Former parties are Bulgaria, Croatia, Czech Republic, Slovakia, Poland, Romania, Hungary, and Slovenia. Their memberships ended when they became member nations of the European Union, and per the agreement in 2006, the CEFTA decided to cover the Balkan states.

Current members of CEFTA include Albania, Bosnia and Herzegovina, Macedonia, Moldova, Montenegro, Kosovo, and Serbia.

Question 9

CFSP

Answer 9

(The European Union´​s Common Foreign and Security Policy) enables the EU to act and express its position on the international stage.

It was originally set up as a mechanism for coordinating the foreign policies of the various countries and was subsequently incorporated into the acquis communautaire of the Treaties by the Maastricht Treaty of 1997.

The CFSP was consolidated with the Treaty of Lisbon of 2009, which established a High Representative of the Union for Foreign Affairs and Security Policy and a European External Action Service (EEAS), a genuine European diplomatic corps at the service of the aforesaid High Representative, and provided the Union with its own legal personality and the capacity to enter into agreements with both States and international organisations.

The objectives of the CFSP, as set out in Article 21 of the Treaty of the European Union, are to:
- maintain peace and strengthen international security
- promote international cooperation with third countries
- advance and consolidate democracy and the rule of law, and respect for human rights and fundamental freedoms.

Question 10

Chicken war

Answer 10

the period of tensions between the United States and the Common Market over chicken tariffs in 1961–1964.

The chicken war began in mid‐1962 when the six member nations of the Common Market—France, West Germany, Italy, Belgium, the Netherlands, and Luxembourg—raised their common outer tariff on poultry to 13.43 cents a pound. It intended to serve as a barrier to chicken imports and encourage the development of European poultry growers and contribute to the agricultural self-sufficiency of the European Economic Community.

The tariffs damaged the United States exports (the Common Market said that the loss is only $19 million. The United States Government declared that the loss was $46 million).

The US response was a tariff on light trucks, potato starch, dextrin, and brandy known as “Chicken Tax”.

Eventually, the tariffs on potato starch, dextrin, and brandy were lifted but the truck tariff still stands at a whopping 25 percent. This form of protectionism has remained in place to give US domestic automakers an advantage over imported competitors, however, nowadays many are questioning this policy.

Question 11

Common price (Common Agricultural Policy)

Answer 11

“target price” is one of the instruments of achieving the objectives of CAP.

Common price is an ideal price set by the Commission for each of the major farm products in the EEC which is higher than the global price.

Foodstuffs entering the EEC from non-member countries were subject to “variable levies” (tariffs), which prevented target prices from being undercut by cheaper imports.

The target price is chosen as the maximum desirable price for those goods within the EU.

Question 12

Constructive abstention

Answer 12

refers to the possibility to be introduced in the common foreign and security policy to allow a Member State to abstain on a vote in Council without blocking a unanimous decision.

Such a possibility will be written into the Treaty on European Union with the entry into force of the Treaty of Amsterdam.

If the constructive abstention is accompanied by a formal declaration, the Member State in question will not be obliged to apply the decision but must accept that it commits the Union. The Member State must then refrain from any action which might conflict with Union action based on that decision.

Question 13

Council of Europe

Answer 13

is the continent’s leading human rights organisation (!! Distinct from the European Union).

It includes 46 member states, 27 of which are members of the European Union.

All Council of Europe member states have signed up to the European Convention on Human Rights, a treaty designed to protect human rights, democracy and the rule of law.

Question 14

Council of the European Union

Answer 14

(informally also known as the Council) one of the EU institutions where meetings of government ministers from each EU country are held with the aim to discuss, amend and adopt laws, and coordinate policies.

The ministers have the authority to commit their governments to the actions agreed on in the meetings.

Council meetings take place in Brussels, except for three months (April, June and October) when they are held in Luxembourg.

Together with the European Parliament, the Council is the main decision-making body of the EU.

The Council:
- negotiates and adopts EU laws, together with the European Parliament, based on proposals from the European Commission
- coordinates EU countries’ policies
- develops the EU’s foreign & security policy, based on European Council guidelines
- concludes agreements between the EU and other countries or international organisations
- adopts the annual EU budget - jointly with the European Parliament.

Question 15

Crocodile Club

Answer 15

(founded on the initiative of Altiero Spinelli on the 9th of July 1980) is a cross party group of members of the European Parliament (MEP) who advocated for further European integration (to the extent of a European federation) and more powers to the European Parliament.

It was named after the restaurant in Strasbourg where the members of the EP were meeting.

The legacy of the Crocodile Club:

1- Establishment of the Committee on Institutional Affairs and TEU drafted by it (despite the fact a Draft Treaty Establishing a European Union was not ratified by the National Parliaments of member states (except for Italian Parliament), it triggered the negotiations and provided a basis for the successive reform treaties and treaty proposals including Maastricht Treaty, Amsterdam, Nice and Lisbon Treaties);

2 - The manner of the treaty’s creation (it was the first project developed by a directly elected Parliament, with the democratic participation of different groups together representing the full spectrum of political views. The adoption of the treaty by the EP in February 1984 was a victory of parliamentary constitutionalism over intergovernmentalism)

In 1986, after Spinelli’s death, a group of MEPs established the “Altiero Spinelli Action Committee for European Union’’, an intergroup intended to continue the work started in 1980 by the Crocodile Club.

Question 16

Currency snake

Answer 16

an exchange rate system that operated between various member countries of the EEC during the 1970s, in which exchange rates between the currencies of the participating states were only allowed to fluctuate within a restricted range.

The fluctuations in the rates of each currency were confined within a margin of± 2,25 percent.

In addition, the group as a whole was also managed in respect to the dollar, with fluctuations confined within a range of ± 4,45 per cent.

After 1973, however, the ‘snake’ was left to float against the dollar, and the ‘tunnel’ vanished.
It was the first attempt at European monetary cooperation. This method of managing European currencies was replaced in 1979 by the European Monetary System.

Question 17

Customs union (stages of economic integration)

Answer 17

is an FTA, in which member countries apply a common external tariff on goods imported from outside countries. (EU; EU-Turkey, EU-Andorra, MERCOSUR, SACU etc.)

[MORE DETAILED DEFINITION]

The European Customs Union is a trade alliance formed by members of the European Union, allowing them to work as a single unit. Formed in the late 1960s, the organization allows the free movement of goods within the union without any tariffs and implements standardized rates of customs duties on goods imported from other countries. The union is also responsible for preventing the trade of dangerous goods, plants, and animals, as well as fighting organized crime, terrorism-related activities, and tax fraud.

Question 18

Decision

Answer 18

is a legally binding act in its entirety. Unless explicitly stated otherwise, a decision is binding for the EU as a whole.

Decisions can address specific legal entities, in which case a decision is binding only to them.

In its current form the decision was introduced with the Lisbon Treaty that came into force December 2009. It replaces various legal instruments introduced by earlier Treaties.

Decisions are directly applicable and do not need to be transposed into national legislation. Legal entities that are directly affected by a decision may make a direct appeal to decisions in a court of law in relation to both a state as other legal entities.

Decisions are most often used for specific measures, and rarely to set policy.

Question 19

Directive

Answer 19

A “directive” is a legislative act that sets out a goal that all EU countries must achieve.
*However, it is up to the individual countries to devise their own laws on how to reach these goals.
Ex: the EU single-use plastics directive

Question 20

Double majority

Answer 20

A double majority means that two different criteria are needed to decide on an EU law or to reach a decision.

Under the “double majority” proposed in theLisbon Treatyon 1 November 2014:
- 55% of member states must be in favour of a proposal
- Representing 65% of the total EU population.
- 72% of member states must agree if proposals do not come from the Commission

Question 21

Economic (and monetary) union (stages of economic integration)

Answer 21

The Economic and Monetary Union (EMU) represents a major step in the integration of EU economies. Launched in 1992, EMU involves the coordination of economic and fiscal policies, a common monetary policy, and a common currency, the euro.

The decision to form an Economic and Monetary Union was taken by the EC (later enshrined in the Treaty on European Union, aka the Maastricht Treaty).

Economic and Monetary Union takes the EU one step further in its process of economic integration, which started in 1957 when it was founded.

EMU means:
- Coordination of economic policy-making between Member States
- Coordination of fiscal policies, notably through limits on government debt and deficit
- An independent monetary policy run by the European Central Bank (ECB)
- Single rules and supervision of financial Institutions within the euro area
- The single currency and the euro area

Within the EMU there is no single institution responsible for economic policy. Instead, the responsibility is divided between Member States and the EU institutions.

Question 22

ECU

Answer 22

ECU = “European currency unit” was the former currency unit of the European Communities (from its adoption on 13 March 1979, replaced by the euro on 1 January 1999, at a ratio of 1:1).

The ECU was composed of a basket of currencies of the European Communities Member States and it served as the standard monetary unit of measurement of the market value/cost of goods, services, or assets in the European Communities.

Question 23

EFTA

Answer 23

The European Free Trade Association (EFTA) is the intergovernmental organisation of Iceland, Liechtenstein, Norway and Switzerland.

It was set up in 1960 by its then seven Member States for the promotion of free trade and economic integration between its members.

History: EFTA was founded by the Stockholm Convention in 1960. Relations with the EEC, later the European Community (EC) and the European Union (EU), have been at the core of EFTA activities from the beginning. Since the beginning of the 1990s, EFTA has actively pursued trade relations with third countries in and beyond Europe.

EFTA is an example of a “Free Trade Area,” an area that abolishes tariffs and quotas imposed on trade between member countries. By contrast, tariffs and quotas remain in place for third countries.

Question 24

Empty chair crisis

Answer 24

France boycotted Council meetings for the last six months of 1965 in protest against bureaucratic supranationalism and the advent of qualified majority voting

Charles de Gaulle boycotted European Institutions due to issues he had regarding new political proposals by the European Commission.
He did not want to move towards supranationalism and wanted a majority voting system and the right to veto.
So the French delegation refused to attend its seat in the Council of Ministers

In July 1965, intergovernmental Charles de Gaulle boycotted European institutions due to issues he had regarding new political proposals by the European Commission. This event, known as the “Empty Chair Crisis”, affected the European Community. Several issues regarding European political integration led to the confrontation. De Gaulle believed that national governments should move towards integration and did not agree with the Commission’s attempt to create a shift towards supranationalism, extending powers beyond national borders.

The Luxembourg Compromise (or “Luxembourg Accord”) was an agreement reached in January 1966 to resolve the “Empty Chair Crisis”.

Question 25

Euratom

Answer 25

Euratom = “European Atomic Energy Community” establishes a single market for the trade in nuclear materials and technology. It was established by the European Coal and Steel Community in 1957, to provide secure access to nuclear materials and technology for peaceful use and research.

Two key components of the single market created by Euratom are:
- the free movement of capital to invest in the development of nuclear power infrastructure;
- the free movement of experts to work at nuclear facilities.

It also facilitates the highly-regulated movement of nuclear goods.

Euratom also has extensive peripheral interests including research into nuclear technology; establishing standards and regulations for the safe and secure handling and use of nuclear materials.

Around 30% of the EU’s electricity supply comes from nuclear power and Euratom ensures that Europe’s nuclear plants are operated safely and guarantee a secure supply of nuclear fuel.

Question 26

European Commission

Answer 26

The European Commission is the EU’s politically independent executive arm. It is alone responsible for drawing up proposals for new European legislation, and it implements the decisions of the European Parliament and the Council of the EU.

Role: Promotes the general interest of the EU by proposing and enforcing legislation as well as by implementing policies and the EU budget.

Members: A team of Commissioners, 1 from each EU country

Year established: 1958

Location: Brussels, Belgium

Current President: Ursula von der Leyen

What does the Commission do?

• Proposes new laws
• Protects the interests of the EU and its citizens on issues that cannot be dealt with effectively at the national level
• Manages EU policies & allocates EU funding
• Sets EU spending priorities, together with the Council and Parliament
• Draws up annual budgets for approval by the Parliament and Council
• Supervises how the money is spent, under scrutiny by the Court of Auditors
• Enforces EU law
• Together with the Court of Justice, ensures that EU law is properly applied in all the member countries
• Represents the EU internationally
  speaks on behalf of all EU countries in international bodies, in particular in areas of trade policy and humanitarian aid
• Negotiates international agreements for the EU

Question 27

European Convention on the Future of Europe

Answer 27

The Convention on the Future of the European Union, also known as the European Convention, was a body established by the European Council in December 2001 as a result of the Laeken Declaration.

Its purpose was to produce a draft constitution for the European Union for the Council to finalise and adopt.

The European Convention was established with 102 members. Its members were drawn from the national parliaments of member states and candidate countries, the European Parliament, the European Commission, and representatives of heads of state and government.

The Convention finished its work in July 2003 with their Draft Treaty establishing a Constitution for Europe.

Basis and objectives

The Treaty of Nice and the Laeken European Council of 14 and 15 (December 2001) lead to the decision to organize a Convention for a debate on the future of the European Union.

The objectives were to prepare for the next IGC (Intergovernmental Conference) as transparently as possible and to address the four main issues concerning the further development of the EU:
- a better division of competences
- simplification of the EU’s instruments for action
- increased democracy, transparency and efficiency
- the drafting of a constitution for Europe’s citizens.

Organization

The Convention therefore had a total of 105 members.
The Convention comprised a chair, two vice-chairs , 15 representatives of the Member States’ heads of state or government, 30 members of the national parliaments (two per Member State), 16 members of the European Parliament and two members of the Commission.
(In addition to the chair and vice-chairs) the Praesidium = nine members of the Convention and an invited representative chosen by the applicant countries. The Praesidium had the role of lending impetus to the Convention and providing it with a basis on which to work.

Outcome

During the first half of 2003, the Convention drew up and debated a text which became the draft Treaty establishing a Constitution for Europe.
The European Council adopted the text on 18 June 2004:
Part I of the Treaty = principles and institutions; 59 articles
Part II = Charter of Fundamental Rights; 54 articles
Part III = policies; 338 articles
Part IV = final provisions; 10 articles

Approved by the European Parliament, the Treaty was then rejected by France (29 May 2005) and the Netherlands (1 June 2005) in their national referendums.

Question 28

European Council

Answer 28

The European Council is a collegiate body that defines the overall political direction and priorities of the European Union. It is composed of the heads of state or government of the EU member states, the President of the European Council, and the President of the European Commission.

The European Council was established during the 1974 Paris Summit (initiative of the French President Giscard d’Estaing).

*The aim was… to give a regular form and a new impetus to European summit meetings (since 1961), as an informal forum for discussion between heads of state or government of the EU member states.
In response to… a concern for the adoption of a global approach to problems.

*The European Council was established as an authority responsible for both Community affairs and issues relating to European political cooperation in areas subject to the intergovernmental approach. First meeting = 1975 in Dublin.

The 1986 Single European Act institutionalized the European Council, but it did not define its role.
The 1992 Treaty on European Union set out the functions, composition, frequency of meetings and the interinstitutional relations of the European Council. (1997 Treaty of Amsterdam also extended its role).

Question 29

European Defence Community

Answer 29

An attempt by western European powers- with US support- to counterbalance overwhelming conventional military power of the Soviet Union in Europe by the formation of a supranational European army to avoid the problem of West German rearmament.

The idea was brought up at the Hague Conference of 1948

The plan proposed the creation of a European army, with the eventual involvement of German units, to be placed under a single military and political European authority.

This proposal sparked fierce debate in France. Although it was accepted by most Western countries, the plan for a European Defence Community (EDC) was rejected by the French National Assembly in August 1954.

The refusal of the French National Assembly to ratify the Treaty establishing the EDC automatically led to the plan for a European Political Community, of which it was the institutional corollary, being abandoned.

Question 30

European Monetary Institute

Answer 30

1992- The Treaty on European Union, aka Maastricht Treaty, laid out a plan toward a common currency and a central bank for the European Union.
->The European Monetary Institute (EMI) established in January 1994

EMI’s main focus = establishing the European System of Central Banks (including the ECB) and the new currency.

The EMI aimed to:
- better coordinate monetary policy in the EU
- enforce financial stability
- improve (cross-border) payment systems in the EU
- develop a regulatory, organizational and logistical framework
- develop a common monetary policy strategy for the euro
- prepare a single money market.

Question 31

European Political Cooperation

Answer 31

The European Political Co-operation (EPC) was introduced in 1970 and was the synonym for European Union foreign policy coordination until it was superseded by the Common Foreign and Security Policy in the Maastricht Treaty of November 1993.

The concept of European Political Cooperation (EPC) had been under discussion since the early 1960s but had not been implemented due to the differences of opinion in this area between General de Gaulle and his partners. After de Gaulle’s retirement from political office, economic and political events taking place beyond the borders of Europe gradually made it necessary for the Member States to align their foreign policies more closely.

At the Hague Summit of 1–2 December 1969, the Foreign Ministers of the Six were instructed to draw up a report on the potential for cooperation in foreign policy.

Hague Summit of 1969, “Foreign Ministers of the Six” drew up a report on the potential for cooperation in foreign policy.

1970 meeting in Luxembourg adopted the Davignon Report = laid the foundations for political cooperation between Member States in the area of foreign policy.

1976, the Nine examined the Tindemans Report on the European Union and noted that European Political Cooperation should promote convergence in the exercise of national sovereignty.

1986- The Single European Act (SEA) institutionalized the EPC (that had been carried out since 1976)
codified previous EPC practices
established a small permanent secretariat in Brussels

It set the objective of a European foreign policy, extending it to include the political and economic aspects of security but excluding the area of defense.

Question 32

Export subsidies (Common Agricultural Policy)

Answer 32

The EC had to entice traders to sell overseas by paying them export “refunds” (export subsidies) equal to the difference between the Community intervention prices and the lower world prices.

Question 33

Flexibility clause

Answer 33

The flexibility clause- nicknamed the “rubber clause”- permits the EU to decide on areas not covered specifically by the treaties.

The Lisbon Treaty has extended the flexibility clause to allow flexible adjustments of EU competence in relation to all the objectives of the Union.

The clause can be found in Article 352 TFEU.
The old flexibility clause could only be used in connection with the common/internal market.
The new clause can be used in all areas of competence of the European Union.

Question 34

Force de frappe

Answer 34

Initiative by Charles de Gaulle for an independent French nuclear capacity (atomic bomb for France)
A triad of air/sea/land-based nuclear weapons intended for deterrence
De Gaulle intended for this to mainly protect France from a Soviet attack, or any others

Question 35

Fouchet plans

Answer 35

The Fouchet Plan was an unsuccessful plan written by Christian Fouchet, France’s ambassador to Denmark, and proposed by French President Charles de Gaulle in 1961 as part of de Gaulle’s grand design for Europe at the time.

The plan included a three-power directorate, consisting of France, Britain and the United States. The idea was to form a new ‘Union of States’, an intergovernmental alternative to the European Communities that had been created a few years prior.

De Gaulle feared a loss of French national influence in the Communities, which were becoming increasingly supranational so the plan was an attempt to keep the balance of power in France’s favor.

The success of the European Communities and the lack of enthusiasm of other states for the idea stopped the implementation of the Fouchet Plan.

1961- Christian Fouchet (French diplomat and Chairman of the “Study Group,” created by de Gaulle) submitted to the Study Group an initial draft treaty (Fouchet Plan I), establishing an indissoluble union of States based on intergovernmental cooperation and respect for the identity of Member States and their peoples.

It proposed cooperation, alongside the Community treaties, in the areas of foreign policy and defense, science, culture and human rights protection.

In institutional terms, the draft treaty provided for the establishment of a Council composed of Heads of State or Government, which would meet three times a year and adopt decisions on the basis of unanimity.

*Fearing French domination of the foreign policy of the Six, France’s partners opposed the draft treaty as submitted.

They also rejected any strengthening of the institutions’ intergovernmental character, which they regarded as a threat to the independence and supranational nature of the Community bodies.

Question 36

Free trade area

Answer 36

an area which abolishes tariffs and quotas imposed on trade between member countries. By contrast, tariffs and quotas remain in place for third countries (ASEAN, CETA, EFTA, EU-Japan, USA-South Korea, NAFTA); each member states keeps the right to have their own customs policy towards third member states

Question 37

Green paper

Answer 37

documents published by the European Commission to stimulate discussion on given topics at European Union (EU) level.

documents issued by the European Commission to indicate or start a integration-wide debate on specific issue or problem on a greater level, comes first and based on its conclusion the Commission elaborates a White Paper with specific solutions

Question 38

Import levies

Answer 38

The CAP provides for a system of common prices within the EU with market support to secure supplies.

When world market prices are lower than those of the EU, a charge called a “levy” brings the price of imported produce from non-EU prices up to the level of EU prices. This is to prevent low-priced imports undercutting EU produce.

Question 39

Internal intervention price

Answer 39

A form of administered price; the price at which national intervention agencies are obliged to purchase any amount of a commodity offered to them regardless of the level of market price (assuming that the commodities meet designated specifications and quality standards);

The EU intervenes in the agricultural market when the price for an agricultural product falls below a reference price or target price. This keeps prices high for farmers, but at the expense of higher prices for consumers

the intervention price serves as a floor for market prices.

Question 40

ISPA

Answer 40

(THE INSTRUMENT FOR STRUCTURAL POLICIES FOR PRE-ACCESSION)

is one of the three financial instruments of the European Union (along with Phare and SAPARD) to assist the candidate countries in the preparation for accession. It provides assistance for infrastructure projects in the EU priority fields of environment and transport. (started in 2000)

Enlargement, The Instrument for Structural Policies for Pre-Accession (ISPA) was designed to address environmental and transport infrastructure priorities identified in the Accession Partnerships with the 10 applicant countries of Central and Eastern Europe. Its aim was to enhance economic and social cohesion in the applicant countries.

It was replaced by the regional development component of the Instrument for Pre-accession Assistance (IPA) in 2007.

Question 41

Keynesian economic policy

Answer 41

There are three principal tenets in the Keynesian description of how the economy works:

• Aggregate demand is influenced by many economic decisions—public and private.Private sector decisions can sometimes lead to adverse macroeconomic outcomes, such as reduction in consumer spending during a recession. These market failures sometimes call for active policies by the government, such as a fiscal stimulus package (explained below). Therefore, Keynesian economics supports a mixed economy guided mainly by the private sector but partly operated by the government.
• Prices, and especially wages, respond slowly to changes in supply and demand, resulting in periodic shortages and surpluses, especially of labor.
• Changes in aggregate demand, whether anticipated or unanticipated, have their greatest short-run effect on real output and employment, not on prices. Keynesians believe that, because prices are somewhat rigid, fluctuations in any component of spending—consumption, investment, or government expenditures—cause output to change. If government spending increases, for example, and all other spending components remain constant, then output will increase. Keynesian models of economic activity also include a multiplier effect; that is, output changes by some multiple of the increase or decrease in spending that caused the change. If the fiscal multiplier is greater than one, then a one dollar increase in government spending would result in an increase in output greater than one dollar.

The central tenet of this school of thought is that government intervention can stabilize the economy

Question 42

Lisbon strategy

Answer 42

In March 2000, the European Council in Lisbon set out a ten-year strategy to make the Union “the most competitive and dynamic knowledge-based economy in the world, capable of sustainable economic growth, with more and better jobs and greater social cohesion”.

The Lisbon Strategy is a commitment by EU governments to concentrate their efforts on a single overarching goal - to bring about economic, social and environmental renewal in the EU.

The Lisbon Strategy means that growth should be created on an ecologically, economically and socially sustainable basis.

Question 43

Luxembourg compromise

Answer 43

The ‘Luxembourg compromise’ of January 1966 applies where qualified majority voting is used in the Council of the European Union.

Under the Luxembourg Compromise, any decision which affected ‘a very important national interest’ would be deferred until a unanimously acceptable solution could be found, regardless of whether the Treaty prescribed majority voting.

Question 44

One state one commissioner principle

Answer 44

it is the principal executive body of the European Union and is formed by a College of members composed of one Commissioner per Member State

For a long time the number of Commissioners per Member State had to be no less than one and no more than two. The Treaty of Lisbon originally stipulated that the membership of the Commission, from 1 November 2014, was to be equivalent to two thirds of the number of Member States. At the same time, it introduced an element of flexibility by allowing the European Council to determine the number of Commissioners (Article 17(5) TEU). In 2009, the European Council decided that the Commission would continue to consist of a number of members equal to the number of Member States.

Question 45

Opt-out

Answer 45

An ‘opt-out’ is a technique used exceptionally where a majority of Member States wish to commit themselves to cooperate in a particular policy area within a Community framework, but one or more Member States refuse to join in the cooperation. To allow for progress in Community cooperation by those who wish to proceed, the reluctant Member States may ‘opt out’.

In general, the law of the European Union is valid in all of the twenty-seven European Union member states. However, occasionally member states negotiate certain opt-outs from legislation or treaties of the European Union, meaning they do not have to participate in certain policy areas. Currently, three states have such opt-outs: Denmark (two opt-outs), Ireland (two opt-outs), and Poland (one opt-out). The United Kingdom had four opt-outs before leaving the Union.

Question 46

Outer seven

Answer 46

In December 1959 the European Free Trade Association was set up in Stockholm, and thus the postwar efforts to unite western Europe have led to a significant new division within it: two separate areas of free trade are being set up, at much the same pace, the “Inner Six” centered around France and Germany, the “Outer Seven” around Britain and Scandinavia.

group of countries who formed the European Free Trade Association rather than engage in supranational European integration. Five of the Outer Seven would themselves later join the European Communities.

Members of the EEC are known as the Big Six and members of EFTA are known as the Seven. EFTA was composed of Austria, Denmark, Norway, Portugal, Sweden, Switzerland, and the United Kingdom

Question 47

PHARE

Answer 47

one of the three pre-accession instruments financed by the European Union to assist the applicant countries of Central and Eastern Europe in their preparations for joining the European Union.

Originally created in 1989 as the Poland and Hungary: Assistance for Restructuring their Economies (PHARE) programme, Phare expanded from Poland and Hungary to cover ten countries. It assisted eight of the ten 2004 accession Member States: the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia, and Slovenia, as well as those countries that acceded in 2007 (Bulgaria and Romania), in a period of massive economic restructuring and political change.

Question 48

Pre-accession funds

Answer 48

The Instrument for Pre-accession Assistance (IPA) is the means by which the EU has been supporting reforms in the enlargement region with financial and technical assistance since 2007. IPA funds build up the capacities of the beneficiaries throughout the accession process, resulting in progressive, positive developments in the region.

The EU pre-accession funds are a sound investment into the future of both the enlargement region and the EU. They support beneficiaries to implement the necessary political and economic reforms, preparing them for the rights and obligations that come with the EU membership. Those reforms should provide their citizens with better opportunities and allow for the development of standards, equal to the ones we enjoy as citizens of the EU. The pre-accession funds also help the EU reach its own objectives including a sustainable economic situation, energy supply, transport, the environment and climate change, and stability.

Question 49

Regulation

Answer 49

A “regulation” is a binding legislative act. It must be applied in its entirety across the EU. For example, when the EU’s regulation on ending roaming charges while travelling within the EU expired in 2022, the Parliament and the Council adopted a new regulation both to improve the clarity of the previous regulation and make sure a common approach on roaming charges is applied for another ten years.

Regulation is a measure of general application that is binding in its entirety and directly applicable in EU member states without the need for national implementing legislation.

Question 50

SAPARD

Answer 50

a financial assistance program established in June 1999 by the Council of the European Union

The Special Accession Programme for Agricultural and Rural Development (SAPARD) was a key financial instrument to support the beneficiary countries of Central and Eastern Europe in dealing with the structural adjustment in their agricultural sectors and rural areas

Question 51

Snake in the tunnel

Answer 51

The snake in the tunnel was a system of European monetary cooperation in the 1970s which aimed at limiting fluctuations between different European currencies. It was the first attempt at European monetary cooperation. It attempted to create a single currency band for the European Economic Community (EEC), essentially pegging all the EEC currencies to one another.

The tunnel collapsed in 1973 when the US dollar floated freely. The snake proved unsustainable, with several currencies leaving and in some cases rejoining; the French franc left in 1974, rejoined, and left again in 1976 despite appreciating against the US dollar. By 1977, it had become a Deutsche Mark zone with just the Belgian and Luxembourg franc, the Dutch guilder and the Danish krone tracking it. The Werner plan was abandoned.[1] The European Monetary System followed the “snake” as a system for monetary coordination in the EEC.

Exchange rate fluctuations
+/- 2,25% bilateral margin
+/- 4,5% compared to $ (individual currencies: +/- 2,25% to $)

Experience
Crisis in 1973: divergence

Two groups of states:
- Deutche mark area: FRG, Belgium, Luxembourg, Netherlands, Denmark
- France, Italy, Great Britain, Ireland

Question 52

Total economic integration

Answer 52

Complete economic integration involves a single economic market, a common trade policy, a single currency, a common monetary policy, together with a single fiscal policy, including common tax and benefit rates – in short, complete harmonisation of all policies, rates, and economic trade rules.

(all policies are conducted at the supranational level)

Question 53

White paper

Answer 53

European Commission white papers are documents containing proposals for European Union (EU) action in a specific area. In some cases, they follow on from a green paper published to launch a consultation process at EU level.
The purpose of a White Paper is to launch a debate with the public, stakeholders, the European Parliament and the Council in order to arrive at a political consensus.

White Paper (1985): completing the European Market
- Elaborated by a committee with the Lord Arthur Cockfield
- How to reach the next stage of economic integration (the single market, the barriers stopping that step (physical barriers – border controls, technical barriers – standards, non-recognition of diplomas, administrative issues, fiscal barriers – different tax levels
- Around 300 initiatives to bridge the differences
- Discussed in Milan 1985: the overall aim of the White Paper was agreed on, two issues to be discussed in the conference: Single Market and Institutional issues
White Papers – issued by the European Commission and focus on specific community action on specific areas or problems