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Economics of the EU and International Institutions > Unit 1. General introduction > Flashcards

Unit 1. General introduction Flashcards

1
Q

What was the Political union project

A

International Paneuropean Union: attempted to stop
soviet communism and counterweight USA’s growing economic
power after the war —> Europe would be “divided” by an artificial
border “into a Soviet colony and an American protectorate.”

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2
Q

When started the Paneuropean Union?

A

1923

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3
Q

What were the reasons for the failure of the paneuropean project? -> ECONOMIC (2)

A
  • Economic —> decline of the European economies due to:
  • Great Depression (stock market crash in 1929)
  • Which lasted over a decade
  • Longest, most widespread and deepest crisis of the 20th
    Century
  • World War II (1939-45): 6 years of fight and destruction
  • Human lives (workforce)
  • Infrastructure (transportation, production)
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4
Q

What were the reasons for the failure of the paneuropean project? -> POLITICAL (3)

A
  • Reaction after the crisis (Great Depression, 1929)
  • Nationalist: protectionism unleashed by the 1930 Tariff Act
    (Herbert Hoover) in the USA and retaliated by other
    countries.
  • Authoritarian: Nazism (Hitler to power in 1933).
  • UK’s rejection: imperial legacy, isolationism, less devastation
    in WWI, differing national interests…
  • World War II (1939): mistrust
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5
Q

What started in 1929

A

Great depression

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6
Q

What was the Great Depression

A

Stock market crash (1929)
* Which lasted over a decade
* Longest, most widespread and deepest crisis of the 20th
Century

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7
Q

When did WWII start and till when?

A

1939-1945: 6 years of fight and destruction

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8
Q

What were the consequences of WWII? (5)

A
  • Drastic fall in the economic growth (industrial production
    halved).
  • Fall in the standards of living.
  • Disruption of trade flows: bilateralism and non
    convertibility.
  • Europe splits into two blocs after WWII
  • Risk of crisis in the USA due to decreasing international
    demand
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9
Q

When was the economic, political and humanitarian situation critical?

A

1945-1947

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10
Q

Why was the economic, political and humanitarian situation critical?

A
  • Hunger was widespread.
  • Food rationing: food was rationed in most European countries up
    to the mid-1950s —> at times, rations fell to just 900 calories per
    day in some parts of Germany (the standard today is 2000).
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11
Q

Around the critical years (1945-47) many Europeans were dependent on humanitarian aid. What did the UN
Relief and Rehabilitation Administration? (3)

A
  • Spent nearly $4 billion on emergency food and medical aid.
  • Helped about 7 million displaced people return home.
  • Provided camps for about a million refugees.
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12
Q

Who were the KEY PLAYERS in the early post-war years. In Europe’s architecture since all other nations were in ruins?

A

USA, UK and USSR (Sovjet Union)

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13
Q

However, the wartime alliance between the three countries unravelled
—> the Allies versus Axis confrontation was replaced by an East
West confrontation. What was that?

A

Cold War

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14
Q

What was the driver of the Cold War

A

Cold war as a driver of European economic integration

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15
Q

However the wartime alliance between the three countries (USA, UK and USSR) unravelled… what happend between the Allies and Axis

A

The Allies versus Axis was replaced by an East-west confrontation

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16
Q

Cold war was as a driver of European economic integration, what happen in 1947 and 1948?

A
  • US and UK merged their occupation zones in Germany in 1947.
  • France added its zone in 1948
  • West Germany or the Federal Republic of Germany was born.
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17
Q

How to promote the economic recovery of Europe? and who promoted it?

A

Marshall Plan (1948) - promoted by USA

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18
Q

The Marshall Plan (1948) was promoted by the USA - How was this political driven?

A

Political: stop the spread of soviet communism in Western
Europe.

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19
Q

The Marshall Plan (1948) was promoted by the USA - How was this economic driven?

A

Economic: increase US demand and preventing recession.
Solutions to recover European economies in a post-war scenario

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20
Q

What were the 3 specific mesures of the Marshall Plan?

A
  • Accumulate productive capital to regain growth.
  • Convertibility and multilateralism.
  • Create a bloc of countries to stop the USSR
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21
Q

Name the specific measures (promoted by the US) (4)

A
  • New cooperation institutions:
  • Organization for European Economic Cooperation (OEEC,
    1948): responsible for managing the financial aid and
    advancing in the economic integration.
  • …which required improving the system of payments…
  • …leading to the founding of the European Payments Union -
    EPU (1950)
  • …and ultimately to convertibility in 1958: EPU franc —> virtual
    currency to compensate trade deficit/surpluses among
    countries
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22
Q

The US transferred over $17 billion (equivalent to $ 214 billion in
2021) in economic recovery programs to Western European
economies. It operated for four years beginning in 1948. What were the goals? (5)

A
  • Rebuild regions affected by the war.
  • Remove trade barriers.
  • Modernize industry.
  • Improve European prosperity.
  • Prevent the spread of soviet communism
23
Q

The Marshall Plan aid was divided among the participant states roughly on a per capita basis. However (2)..:

A
  • A larger amount was given to the major industrial powers, as
    the prevailing opinion was that their resuscitation was essential
    for the general European revival.
  • More aid per capita was also directed toward the Allied
    nations.
24
Q

Who were the largest recipients (ontvangers) from the amount of the economic recorvery? (3)

A
  • UK: 26%
  • France: 18%
  • West Germany: 11%
25
Q

What was formed in 1948? and with what goal?

A

The OEEC was formed in 1948 to administer American and Canadian aid in the framework of the Marshall Plan for the
reconstruction of Europe after World War II.

26
Q

What provided the OEEC in the 1950’s?

A

In the 1950s, the OEEC provided the framework for negotiations
aimed at determining conditions for setting up an European Free
Trade Area, to bring the European Community of the six (European
Steel and Coal Community) and the other OEEC members together
on a multilateral basis.

27
Q

What happend by the end of the 1950s?

A

By the end of the 1950s, with the job of rebuilding Europe effectively
done, some leading countries felt that the OEEC had met its
purpose, but could be adapted to fulfill a more global mission. It
was reestablished as the Organization for Economic Cooperation
and Development (OECD - 1961)

28
Q

The project to advance in European Integration was not the only plan. An alternative project was:

A

The Morgenthau plan (1944)

29
Q

The project to advance in European integration was not the only plan —> An alternative
project was the Morgenthau plan (1944), whose goals were (2):

A
  • To avoid future European war by turning Germany into a backward country whose
    economy was based on agriculture.
  • To dismantle Germany’s industrial infrastructure, particularly its heavy industries and
    war-related production capabilities.
30
Q

Why did the Morgenthau Plan face criticism from within the US government, as well as from
some of the Allies, who were concerned about the plan’s potential negative impact on
European recovery and stability? (2)

A
  • the plan might lead to severe economic hardship for German civilians, hinder overall
    European recovery, and possibly create political instability.
  • a more balanced approach to rebuilding Europe’s economy was necessary to
    prevent further inestability and to promote regional recovery.
31
Q

What did the Morgenthau Plan show?

A

Morgenthau Plan shows that there was debate about what the right political project for
Europe was after the war.

32
Q

What did the US promote since the Marshall Plan? and based on what?

A

Since the Marshall Plan, the US promoted a New International Order based on liberalism and multilateralism through the
creation of GATT, IMF, WB (General Agreement on Tariffs and Trade,
International Monetary Fund and World Bank).

33
Q

What was increasingly felt since the marshall plan when the US promoted a New International Order

A

It was increasingly felt that deeper integration was necessary to:
* Avoid war in the future
* Recover economic growth

34
Q

The US promoted a New International Order, what was the tension between two strands of integration (it is still an issue today):

A
  • Federalism
  • Intergovernmentalism
35
Q

While it was clear by the late 1940s that European integration would be the foundation of western Europe’s post-war architecture,
a divide emerged about how this integration should look like.
* Trade-off between European integration vs national sovereignty.
What was the debate?:

A
  • How much power should be handed to joint decision-making
    bodies at the European level?
  • How much power should be kept at the national level?
  • Today this division still defines the debate over European
    integration
36
Q

What are Centralizers called? and explain:

A

Centralizers are called federalists:
Nations should be embedded in a federalist structure: a
supranational organization embodied with some of the powers
that had traditionally been exercised exclusively by nations.

37
Q

What are decentralizers called? and explain:

A

Decentralizers are called intergovernmentalists:
Integration should take the form of closer cooperation conducted
strictly on an intergovernmental basis: all power would remain in
the hands of national officials and any cooperation would have to
be agreed unanimously by all participants.

38
Q

When was the European Defense Community (EDC)?

A

1951

39
Q

Tell what happend during the European Defense Community (EDC, 1951) Create.., required.., France.., project..

A
  • Create a European army.
  • It required common foreign policy, substantial budget and thus taxation and spending
    authority.
  • France ended up rejecting the project
  • It created the groundwork for a different project: NATO
40
Q

When was the European Political Community (EPC)?

A

1952

41
Q

Tell what happend during the European Political Community (EPC, 1952). (3)

A
  • Ambitious federalist institution.
  • It would have been something like the United States of Europe.
  • Once the EDC failed, the EPC failed too.
42
Q

What was the result of the failures of these political integration projects?

A

The failure of these political integration projects turned European leaders towards
economic integration.

43
Q

What was first proposed after the end of WWII and by who?

A

The European Coal and Steel Community. First proposed in the Schuman Declaration 5 years after the end of World War II,
as a way to prevent war between France and Germany:

44
Q

Tell something about the European Coal and Steel Community. Declared.., achieved by.., create..,

A
  • Schuman declared “make war not only unthinkable but materially impossible”.
  • It was to be achieved by regional integration, of which the ECSC was the first
    step.
  • It would create a common market for coal and steel among its member
    states with freely set market prices, free movement of products, and
    without customs duties or taxes, subsidies or restrictive practices.
45
Q

What was signed to create the European Coal and Steel Community (ECSC) and when/who?

A

Treaty of Paris (1951), “The Six”: Six countries agreed to a common management of heavy
industries (France, Germany, Italy, the Netherlands, Belgium and
Luxembourg).

46
Q

What were the reasons for integration? (4)

A
  • Reduce tension between France and Germany and make
    future wars between them very difficult.
  • Concentration of big companies (avoid market segmentation).
  • Enhance the productive capacity of the sector.
  • Unify markets.
47
Q

What did the integration create?

A

It created common institutions at the supranational level and led
the way to general integration.

48
Q

The ECSC was overseen by four institutions, which one?

A
  • High Authority, composed of independent appointees.
  • Common Assembly composed of national parliamentarians.
  • Special Council composed of national ministers.
  • Court of Justice.
49
Q

The ECSC was overseen by four institutions, these would be the blueprint for today’s: (4)

A
  • European Commission,
  • European Parliament,
  • the Council of the European Union
  • the European Court of Justice.
50
Q

European integration has always been driven by political factors, which one? (4)

A
  • Prevent another war between France and Germany.
  • Lock a revitalized and rearmed Germany into a European superstructure.
  • Prevent the spread of communism to west Europe.
  • Guard against military threats from the USSR.
51
Q

While the push factors were always political, the means were always
economic. Why? (2)

A
  • Europe’s founders believed that tighter economic integration would set off
    a snowball effect that would bring Europeans ever closer as people and
    nations.
  • They believed that economic integration would foster political
    integration, and political integration would solve Europe’s problems.
52
Q

Which were more important for European integration: economic or political goals?

A

Economic goals initially led European integration, with the ECSC fostering interdependence to prevent conflict. However, political goals like peace and unity were also key.

53
Q

Which goals hold greater importance today?

A

Both are important, but economic goals focus on market unity, while political goals like democracy and unity are crucial amid rising populism and external threats.

54
Q

Has economic integration led to political integration in Europe?

A

Yes, economic integration fostered political cooperation, leading to EU institutions. However, full political integration faces obstacles like national interests and euroscepticism.

Economics of the EU and International Institutions (2 decks)

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