The Economic and Monetary Union of the European Union is an economic monetary structure that has the primary aim of bringing the economies of all member states of the European Union together for being more economically strong. The original organisation that eventually developed into the European Union is the European Coal and Steel Community. This community had six members at the beginning and has since grown to twenty-seven. A negotiation in Copenhagen in 1992 set some conditions to be fulfilled by member states so that they may join the organisation. In Copenhagen, the states agreed that all member states should have a certain form of a free economy so that monetary integration will be possible. Another contentious issue is that the member states were required to have a democratic government for them to qualify for integration into the union. The policy dictates that for a member state to join the monetary union, it should also be a member of the European Union itself (Archer 2008, p.23). However, all states within the European Union are also members of the monetary union. Although the monetary union is a separate entity, it plays a major role in the organisation such that all member states within the European Union must join the monetary union to be functional member states of the organisation.
There is a disparity in the political systems of the European Union that places considerable doubt on the legality and appropriateness of some member countries in the European Union. Some of the states have succession system of government integrated with a democratic system. This complicates the considerations made by the organisation in allowing a member with the intention of joining the organisation. The United Kingdom is not a signatory to the binding policies of the European Monetary Union. This fact casts doubt on the essence of the country being a member of the organisation. In fact, the United Kingdom has its own currency, the British pound sterling, which is stronger in the international money market than the common currency used by the European Union, which is the euro.
The other significant factor that affects the country’s membership in the organisation is the political system of the United Kingdom. The country has a democratic government, which runs the important affairs of the Union. In addition, a succession system that wields a certain degree of autonomy exists in the country. A monarch, which has been in the country for centuries and reigned in the kingdoms of England, Scotland and Ireland, is maintained even today. The monarch has official state duties and obligation, and can be interpreted as a true monarch for the United Kingdom. Furthermore, the European Union does not allow countries in which true monarchical system is still functional. The sole reason for the presence of the United Kingdom in the European Union is that an autonomous democratic government runs the key affairs of the county. Moreover, the United Kingdom, despite being a major power in Europe, joined the organisation in 1973 after several applications were rejected due to the influence of international politics. American influence was to be avoided at all costs. On the other hand, the United States and Canada, countries founded by people of British origin, were key allies of the United Kingdom. The country still maintains an alienated position in the Union due to the currency disparity and diplomatic relations with the American countries.
Even if the United Kingdom is regarded as a true succession country, its European Union membership should not be limited by this fact. Succession countries also have variation in their organisation regarding the government. Furthermore, succession countries that were considered by the European countries in its early days of operation are countries that have the succession government overseeing the day-to-day running of the government. These countries are prone to high level of political manipulation of the economy. If such a country is present in the European Union, and has a significant interest in the Union, then the country`s activities and economic trend will affect the overall economies of the member countries of the Union. Countries with a democracy have economic policies that allow free economy and free market with little regulation by the government. These types of economies can form an economic alliance that expands the market and harmonises currency.
Not all countries have a monarch, which has significant influence on economy of the country. In the United Kingdom, the monarch has very little influence on the overall economy, if any. The government led by the Prime Minister formulates all economic policies for the country and these policies are sanctioned by the legislature. Moreover, the Prime Minister and the legislature are elected through secret ballot in a purely democratic process. In this essence, the United Kingdom satisfies all criteria required for a country to join the European Union. Considering the military integration and the economic unity of the regions of the United Kingdom, it can be considered sovereign enough to maintain its position in the European Union. There is no justifiable reason for the country to leave the European Union or be voted out of the Union.
European Union has another institution known as the Common Agricultural Policy (CAP). This policy dictates that the members of the European Union create a common budget for the union. In addition, the larger part of the budget is dedicated to agriculture. A problem arises in the criteria used for determining the amount of contribution of each member states to the CAP budget. An equally critical issue emerges in determining the proportionate amount that is allocated to each country when the funds of the common budget are shared. At the particular time of formulation of the Common Agricultural Policy, Britain was in its worst economic state. Furthermore, Britain had a large industrial sector supporting the economy and a small agricultural sector playing part in the economy. On the other hand, Britain was a major contributor to the agricultural policy budget. The methods of evaluation and the policy regulations that governed the application of the agricultural policy at the time were uniform for all member states. This had a detrimental effect on Britain’s economy, since it would contribute a major proportion to the agricultural budget but receive the least benefits realised by the policy. The Britain’s Prime Minister, Margaret Thatcher set out on a campaign to convince the members of the European Union to revise the methodology of application of the agricultural policy. Rather than reconsider its membership in the Union, Britain suggested the revision of the criteria of determining the size of contributions and the methodology of allocating the funds realised, so that its membership in the Union could be even marginally beneficial.
Prior to Britain`s proposition to reform the CAP, it had been operation for ten years during which agricultural production exceeded the desired limit. To strengthen its opposition to uniform application of the policy, Britain fronted the problem of surplus production. Eventually a revision of the agricultural policy granted Britain its wish, but shifted some of the burden to other states. Britain’s contribution was lowered significantly and, thus, it was able to maintain its membership in the European Union. In the period between the integration of Britain into the European Union and the beginning of the twentieth century, Britain has developed in economic terms to surpass many nations that were economically superior to her in the 1970s. This has triggered complaints that Britain is now capable of contributing more to the European Union’s agricultural policy without strain. Some of the countries advocate for adoption of the former methodology of contribution and budgeting of the Common Agricultural Policy funds. The proponents of revision of the agricultural policy argue that Britain is more capable, that other poorer countries in the economic region, of paying the contributions without adverse effect on its economy. On the other hand, Britain advocates for expansions of the non-uniform scheme of contribution, sharing the funds to the other smaller and poorer states in the organisation. Britain’s arguments include allowing other agricultural exporters, particularly the third world countries, to enjoy the exemptions of the agricultural policy.
France and Germany joined effort and pushed for institution of an agricultural policy that abolished the dynamic agricultural policy and established a new fixed policy for all member states of the European Union. This new policy extended its expiry date to 2012 after which it could be subject to revision and amendment. Britain is still disadvantaged by this policy, since its agricultural sector is still small and much of its income comes from industrial activities. Britain wishes that this policy is revised for a cohesive future to be realised for the European Union.
Although agriculture is an important sector in the European countries that are members of the European Union, it is important to realise that the Union is expanding and more countries are joining the economic community. Some of the countries which are new EU members are in a situation similar to Britain’s, since their economies are much smaller than the economies of the major powers. Moreover, the role of the agricultural sector in the economies of the new member states is of least significance to the overall earnings of the economies. It is only reasonable that the current form of the agricultural policy is revised to enhance cooperation of the member states. Otherwise, lack of agricultural co- operation and of common currency that include Britain may lead to its technical exit. In addition, the exit of Britain, which is a major power in the economic community, may lead to weakening of the European Union.
Enlargement of the European community has a great significance in the development of the involved nations. The diversity of products in the European market is bound to increase significantly. Consequently, movement of goods and services in the European market is bound to increase. A large geographical area to match a large population is essential for development of a common market. In addition, the collective budget of the European Union is bound to increase significantly. This is a result of the increased number of the member states of the European community. A bigger European community presents the possibility of an increased bargaining power of the European nations compared to other economic communities of the world. A common currency is another factor advocating for the expansion of the European community. Establishment of a common currency for the European nations stabilises the economy, since the currency depends on the average state of all the member states of the economic community. The common currency is more stable than any other single currency belonging to one country. Economic security is established among the countries of the European Union as long as expansion is maintained.
The region covered by the countries of the European Union represents an economic entity similar to a massive country such as the United States. This country serves as a dynamic and stable market for commodities from all over the region. The region itself is dynamic in terms of natural resources and the nature of human resources in the region. These disparities support a good environment for exchange of commodities. The probability of the different regions producing similar goods is very low. Political unity and cohesion is enhanced by such integration as the European Union. This is brought about by the economic interdependence of the nations in the European Union. Once the governments of the region find themselves in complex interdependent relationships with other economies, then they are bound to promote cohesion for the members of the economic community.
A barrier is always formed by imposition of heightened tariffs for any country. The European Union lowers the tariffs in the European market for specific commodities. Due to these exemptions, some commodities can move through the European market more easily and this rate of trade is increased. In this way, the total earnings of the EU countries are increased.
A better balance of economic power among the countries of Europe can be achieved through expansion of the European Union. When the countries are subject to common market, economic policies distribution of wealth is bound to emerge among them. Wealth will spread evenly in the region in such way that there are no disparities in the regions of the economic community. This even distribution of wealth means economic strength for the countries of the economic community.
Britain’s side of the argument is that the current economic policies instituted by European Union are detrimental to the performance of its economy. The rate at which the country could have expected the economy to grow cannot be realised with the current economic cooperation. In addition, reforms cannot be successful without the agreement of other European states that hold major stakes in the Union. Germany and France argue that Britain should not receive any preferential treatment by the European Union. On the other hand, Britain is cautious not to commit itself to the monetary policies of the European Union, which could prove to be catastrophic for its existing currency system. The caution that is exhibited by Britain and the adamant stance of Germany and France are examples of indicators that cohesion is far from being achieved in the European Union. The deadlock is a sign of mistrust between the countries of the European Union.
Britain’s argument is substantial in that the country cannot enter into an economic organisation whose total contribution to its economy is negative. On the other hand, Germany and France have an argument that they also stand to lose if Britain is allowed to enjoy special treatment by the European Union. Coercive moves by the countries in question may not succeed in establishing a cohesive union for the countries of the European Union. If anything, coercive actions by any of the member states may cause disintegration of the union, which has been built and natured over a long period of time. In conclusion, a strong and massive economic block is necessary to increase the strength of European nations in comparison to the rest of the world.
If the United Kingdom exits from the European Union, then most of the countries in the European Union in a similar position may also opt to exit from the organisation. This may significantly weaken the organisation or even result to a total collapse of the economic cooperation. Recently, the People’s Republic of China and South Korea tried to negotiate formation of an economic block. This economic block may endanger the current superiority of European countries and the Americas in the world economy.