EVOLUTION OF EUROPEAN UNION:

The reminiscences of the world wars left a scar on Europe. It shrilled over the devastation that pierced the economic conditions. There was not any support from the then powerful countries, which only tied them up tighter. There were many negotiations and peace accords signed among the European countries to work hand in hand and together develop their economies. Although, giving a cold shoulder towards the rival countries could not be ceased. Moreover, America started noticing the instability and tried on taking advantage to ruin them to ashes. There was an outcry in the entire Europe, which was left far behind, soon after the war.

In order to bury the weaknesses, the great minds of the continent came up with the concept of EUROPE as a single force. They analysed the benefits of a single community which could build up a stronger foundation and ease the standard of living of the individuals. Nevertheless, the wrestle between Germany and France relentlessly grew. The only solution to evoke the countries from the pathetic conditions was to fight the problem with unity. “Let overcome indifferences to form another United States in Europe” was the slogan adopted.

Finally, the efforts bore a fruit in 1951 when the 6 countries, France, Germany, Italy, Luxembourg, Belgium and Netherlands formed a union exclusively to develop military base as European Coal and Steel Community (ECSC) by signing the treaty of Paris. The treaty furthered the growth of the countries internally and so they developed the thoughts on integrating countries on other terms too which would economically sharpen them. Thus, the result came in the form of treaty of Rome by forming the European Economic Community (ECC). All the other countries, interested in growth, looking at the massive development of the union countries started one by one to apply for the membership. UK, after being rejected twice was accepted to be a member country in 1973. Denmark and Ireland also join in 1973 and Greece in 1981 making it a 10 member union. Currently the Union consists of 28 member states. In 1992, the Maastricht treaty renamed the ECC as European and Monetary Union.

The initial rules regarding the requirements for a country to migrate from its home currency to the euro were well-defined and meant to exclude weaker countries, while creating a relatively stable relationship between countries meeting similar criteria. The official rules were spelled out in the Maastricht treaty of 1992 that defined how members of the European Union could move into the European Economic and Monetary Union(EMU) and ultimately, the euro.

Part of the problem associated with the euro is the divergence from the original criteria for participation in the EMU. The most problematic issue has been debt. The original restrictions were set at a maximum of 60% of government debt as a ratio to Gross Domestic Product(GDP). But there are some countries having their debt-to-GDP ratios reaching over 100% of GDP

The main motto of EU was to share the economic and political benefits classically only associated with larger countries. It offered peaceful coexistence; the reduction of border restrictions, allowing for free travel; combined strength and influence on a global scale; increased prosperity; a multilateral promotion of human rights; the promotion of new ideas to reduce global warming, and most notably, the use of a single European currency - the euro. The euro is discussed in the upcoming blog.