European Community, The Euro and the Maastricht Treaty
The European Community - The EU
The European Community (EC) is the first of the three pillars of the European Union (EU) created under the Maastricht Treaty (1992). It is based upon the principle of supranationalism and has its origins in the European Economic Community, the predecessor of the European Union. If the Treaty of Lisbon comes into force, the EU's pillar structure will be abolished. This means that the European Community, and the other two pillars, will be merged and cease to exist as separate entities.
The Maastricht Treaty built upon the Single European Act and the Solemn Declaration on European Union in the creation of the European Union. The treaty was signed on 7 February 1992 and came into force on 1 November 1993. It superseded the European Communities, absorbing it as one of its three pillars. The first Commission President following the creation of the EU was Jacques Delors, who briefly continued his previous EEC tenure before handing over to Jacques Santer in 1994.
The Treaty of Amsterdam transferred responsibility for free movement of persons (e.g. visas, illegal immigration, asylum) from the Justice and Home Affairs (JHA) pillar to the European Community (JHA was renamed Police and Judicial Co-operation in Criminal Matters (PJCC) as a result).[1] Both Amsterdam and the Treaty of Nice also extended codecision procedure to nearly all policy areas, giving Parliament equal power to the Council in the Community.
In 2002, the Treaty of Paris which established the European Coal and Steel Community (one of the three communities which comprised the European Communities) expired, having reached its 50 year limit (as the first treaty, it was the only one with a limit). It was seen as redundant so no attempt was made to replace it; instead, the Treaty of Nice transferred its elements to the Treaty of Rome and hence its work continued as part of the EEC area of the Community's remit.
The Euro - Official Currency of 15 Member States
The euro (€) is the official currency of 16 of the 27 member states of the European Union (EU). The states, known collectively as the Eurozone, are Austria, Belgium, Cyprus, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Malta, the Netherlands, Portugal, Slovakia, Slovenia and Spain. The currency is also used in a further five European countries, with and without formal agreements and is consequently used daily by some 327 million Europeans. Over 175 million people worldwide use currencies which are pegged to the euro, including more than 150 million people in Africa.
The euro is the second largest reserve currency and the second most traded currency in the world after the U.S. dollar. As of November 2008, with more than €751 billion in circulation, the euro is the currency with the highest combined value of cash in circulation in the world, having surpassed the U.S. dollar. Based on IMF estimates of 2008 GDP and purchasing power parity among the various currencies, the Eurozone is the second largest economy in the world.
The name euro was officially adopted on 16 December 1995. The euro was introduced to world financial markets as an accounting currency on 1 January 1999, replacing the former European Currency Unit (ECU) at a ratio of 1:1. Euro coins and banknotes entered circulation on 1 January 2002.
The Maastricht Treaty - formally The Treaty on European Union
The Maastricht Treaty (formally, the Treaty on European Union, TEU) was signed on 7 February 1992 in Maastricht, the Netherlands after final negotiations on 9 December 1991 between the members of the European Community and entered into force on 1 November 1993 during the Delors Commission. It created the European Union and led to the creation of the euro. The Maastricht Treaty has been amended to a degree by later treaties.
The treaty led to the creation of the euro, and created what is commonly referred to as the pillar structure of the European Union. This conception of the Union divides it into the European Community (EC) pillar, the Common Foreign and Security Policy (CFSP) pillar, and the Justice and Home Affairs (JHA) pillar. The latter two pillars are intergovernmental policy areas, where the power of member-states is at its greatest extent. Whilst under the European Community pillar the Union's supra-national institutions - the Commission, the European Parliament and the Court of Justice - have the most power. All three pillars were the extensions of pre-existing policy structures. The European Community pillar was the continuation of the European Economic Community with the "Economic" being dropped from the name to represent the wider policy base given to it by the Maastricht Treaty. Coordination in foreign policy had taken place since the beginning of the 1970s under the auspices European Political Cooperation (EPC). EPC had been written into the treaties by the Single European Act but not as a part of the EEC. While the Justice and Home Affairs pillar introduced cooperation in law enforcement, criminal justice, asylum, immigration and judicial cooperation in civil matters, some of these areas had already been subject to intergovernmental cooperation under the Schengen Implementation Convention of 1990.
The creation of the pillar system was the result of the desire by many member states to extend the European Economic Community to the areas of foreign policy, military, criminal justice, judicial cooperation to the European Community and the misgiving of other member states, notably the United Kingdom, to add areas which they considered to be too sensitive to be managed by the supra-national mechanisms of the European Economic Community. The compromise was that instead of renaming the European Economic Community, as the European Union, the treaty would establish a legally separate European Union comprising of the renamed European Economic Community, and of the inter-governmental policy areas of foreign policy, military, criminal justice, judicial cooperation. The structure greatly limited the powers of the European Commission, the European Parliament and the European court of Justice to influence the new intergovernmental policy areas which were to be contained with the second and third pillars: foreign policy and military matters (the CFSP pillar) and criminal justice and cooperation in civil matters (the JHA pillar).