After WW2 there was an understandable and commendable surge in efforts to ensure that such a disaster would never again befall Europe. In 1949 a Council of Europe was formed with ten members, but it was supplanted in 1952 by the six-nation European Coal and Steel Community. This strangely named body tied the two-key war-making industries together in a broadly-formed political alliance that would render another European war extremely unlikely.
In 1957 the Treaty of Rome was signed which led to the creation of the European Economic Community (1958) and, importantly, established a Customs Union. The then French President, Charles de Gaulle, blocked a British application to join the EEC in 1963 but Georges Pompidou, who succeeded de Gaulle, finally allowed British entry in January 1973 – under Britain’s Conservative Prime Minister, Edward Heath. Interestingly, a referendum was held in June 1975 over Britain’s continuing membership of the EEC and it was passed with a substantial majority (67%) but with strong resistance to many of the super-state goals of the EEC leadership.
Membership of the EEC steadily increased and in 1993 formally became known as the European Union following the signing of the Maastricht Treaty. The Lisbon Treaty of 2009 further amended various legal and administrative aspects of the expanding body. Today, there are 28 member nations of the EU. The eurozone, a sub-plot if you like, is made up of 19 of the 28 members. These 19 all adopt the euro as their national currency and come under the wing of the European Central Bank. The Eurozone sprang into life in 1999 with an original 12 members. Bank notes were not introduced until 2002.
The governance and administration of the EU is far too complex to be addressed in detail in these pages. In other words, we admit that we have great difficulty in coming to grips with what resembles a Jackson Pollock painting gone wrong. There are seven key decision-making bodies: the European Council; the European Commission; the Council of the European Union; the European Parliament; the Court of Justice of the European Union; the European Central Bank and the European Court of Auditors.
To further complicate matters the European Parliament is based in three different cities: Strasbourg (the official ‘seat’), Brussels and Luxembourg city (it hosts the Secretariat of the European Parliament). Most of the staff and institutions are located in Brussels but constant shuttling from city to city is required as Strasbourg holds 12 plenary sessions each year. This travelling circus is recognised as a huge waste of money and time, but France refuses to give up on Strasbourg.
What started out as an entirely admirable effort to eliminate future European conflicts has now morphed over 70 years into a large body controlling a great many aspects of everyday life in its member countries. The Economist has estimated that the European Parliament costs more than the German, French and British parliaments combined. And this excludes the cost of double-handling of many of the issues which inevitably cross-pollinate over the various jurisdictions.
The edifice is financed by its members. Payments are based on the size of a country’s economy, VAT receipts and customs duties on imports from outside the Customs Union. The largest net contributors in 2017 were, in order, Germany, the UK and France. In all, 10 countries were net contributors whilst the remaining 18 received more than they paid. Relative to the size of their economies Bulgaria and Hungary were the biggest beneficiaries.
Is it all worth it?
A quick browse of the effusive EU website would suggest that it is the most wonderful political/economic body to have ever graced the world stage. We are informed it is the largest trading bloc in the world, accounting for 15% of world trade in 2017. Half of the EU’s trade was with five main partners: the US, China, Switzerland, Russia and Turkey. There were a combined 700 million items exported and imported and 332 million customs declarations.
And that brings us to the Customs Union – a bone of contention in the great UK Brexit fiasco. The Customs Union is simply an alliance of the 28 EU members which applies standardised rates of customs duties on goods imported from outside the Union – in other words, a common tariff wall (varying by product) is applied to all imports. Once inside the EU the goods are able to move freely around the 28 countries without any further levies or impediments. This, obviously, is a most advantageous feature of any Customs Union. In addition, the Union enforces rules relating to protection of health and safety; weapons trafficking; money laundering; counterfeit goods; prohibited products and the like. All of this saves each member country mounting duplicate defences. No member country is free to negotiate independent trade deals with non-EU countries. All negotiations are handled centrally, and any “deal” applies to all members.