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E-briefing on the European Union


Date: Nov. 6, 2000
Contact: Mary Bridget Reilly
Phone: 513-556-1824

IS EUROPE DESTINED FOR UNITY?

It's been nearly two years since the euro became the official currency of 11 member states of the European Union (Jan. 1, 1999). Months and months of headlines indicate the euro remains a troubled and controversial currency. But should Americans care about the euro and the European Union (EU)? Are the euro's difficulties a sign of trouble ahead for the EU? What does the future hold for the European Community? Will this coalition blossom into a federation that rivals the United States or take on some of the burdens that now fall on American shoulders?

I. Questions of Identity, Unity

  • A. Unity or Separatism: Which Will Win?
  • B. The Origins of the Union
  • C. The Question of Nationality

    II. The Economic Impact

  • A. East Meets West
  • B. Euro Slump Tied to Trade
  • C. Transatlantic Business Dialogue

    III. Military Moves

  • A. A Separate Military Force?
  • B. Adjusting Policy for EU
  • C. Unlikely Scenario

    IV. Higher Education Impact

  • A. Emphasizing European Studies
  • B. Researchers Reach out to Europe

    V. Background and Web sites

    I. QUESTIONS OF IDENTITY, UNITY

    A. UNITY OR SEPARATISM: WHICH WILL WIN?
    The European Union is just one example of globalization and integration changing the world around us. But is consolidation really what the future holds? Mahyar Arefi, assistant professor of planning in UC's College of Design, Architecture, Art, and Planning, says it's not altogether clear whether consolidation or disintegration will be the victor. "The most intriguing issue about the European Union is the issue of identity. Look at Kurdistan and the former Yugoslavia. There is just as much fragmentation and disintegration going on around the world as there is integration. There is no clear-cut answer about who is winning and who is losing," he says. Recently, for example, some 10,000 anti-globalization activists marched outside the recent summit of European Union and Asian leaders meeting in Korea.
    contact: 513-556-0212

    B. THE ORIGINS OF THE UNION
    Though most of us look at the European Union as a '90s phenomenon, the roots of this collaboration date back as far as the 1950s to the Coal and Steel Authority, according to UC President Emeritus Henry Winkler, a UC historian who specializes in British history. Winkler also says you can't compare the founding of the EU with the founding of the United States. "The colonies were on the whole all English-speaking. In the European community, there are very different cultures, very different languages. It's going to go much more slowly." Before the effort will be successful, it's clear that Great Britain will have to make some more accommodations to change: It will need to sign onto the euro as well as agree that its courts are subservient to the European Union courts. Yet, Winkler adds, "The amount of collaboration and cooperation that has taken place already is really quite breath-taking."
    contact: 513-556-0125

    C. THE QUESTION OF NATIONALITY
    As European nations proceed to integrate into a union, a new European identity will emerge. However, that won't happen at the expense of individual, national identities, says Richard Schade, UC professor of Germanic languages and literatures who also serves as Honorary Consul for the Federal Republic of Germany. "There's no question there will be a loss of some individuality, but I don't think any country will simply turn their backs on thousands of years of their own history." He sees the European Union as at a stage similar to the "Federalist Papers phase" when the budding United States struggled with the issue of whether to form a federal model or have decentralized states. "It is definitely my sense that they are moving forward, but it's not going to be easy. Where there is a will there is a way, and I think there is a will there."
    contact: 513-556-2756

    II. THE ECONOMIC IMPACT

    A. EAST MEETS WEST
    The euro may be going through a shaky period, but that doesn't mean that the concept of the European Union isn't still appealing to many would-be participants. George Vredeveld, UC professor of economics with an expertise in eastern European economies, says almost all of the former Soviet-bloc countries in eastern Europe have applied for European Union membership. "They see something there, the access to so much more trade and access to financial stability," Vredeveld says. In the short term, a weak euro is a mixed tale for eastern Europe. Some eastern European countries, such as Bulgaria, have their currencies tied directly to western European currencies. So a weak euro translates into more expensive imports for Bulgaria, which creates inflationary pressures. On the flip side, however, a weak euro means exports become cheaper, making a country's products more competitively internationally. Eastern European countries whose currencies aren't directly tied to the euro right now are also enjoying cheaper imports from western Europe.
    contact: 513-556-2079

    B. EURO SLUMP TIED TO TRADE
    European Union officials have worried aloud lately as their currency, the euro, has slipped to new lows in the currency markets (although it has gained some ground recently). Paul Swanson, UC associate professor who studies international finance, points to a pair of factors that haven't helped to the stem the slide. One is the almost complete absence of any rumors of multi-country intervention in the euro. These rumors stopped over a week ago which suggests that the currency has been left out to dry. The second point has to do with the cost of oil and with trade tensions with the European Union's chief trading partner, the United States. Rising oil prices are almost always bad news in Europe because few countries have access to meaningful reserves. In addition, when you start throwing things like tariffs up even on only select goods, the combined effect will be rising prices and falling demand, which Swanson says suggests a possible disaster ahead. The euro's slide, he feels, is just reflecting the instability of the underlying economies of its member nations. "The euro is saying 'Hey folks, we've got a flat tire here -- do something.'"
    contact: 513-556-7085

    C. TRANSATLANTIC BUSINESS DIALOGUE
    Hundreds of CEOs from both sides of the Atlantic will gather in Cincinnati Nov. 16-18 for the sixth annual conference of the Transatlantic Business Dialogue (TABD) to develop recommendations on how to boost international trade and investment. Among those expected to attend are government officials from both the United States and the European Commission, a 20-member body working to expand the European Union. CEOs from America Online, Astra-Zeneca, Bayer, Cofide & CIR Group, FDX, KPMG, Meiko, Usinor, Power Clean 2000 are expected to participate in the conference. Previous conferences have been held in Spain, Chicago, Rome, Charlotte, and Berlin. This year's event will be held at the Omni Netherland Hotel, Cincinnati.
    contact: Jeff Werner, 202-336-7408 (US TABD)

    III. MILITARY MOVES

    A. A SEPARATE MILITARY FORCE?
    France has indicated it will push hard to create a European military force that can act independently of NATO. UC military historian Daniel Beaver would rather see NATO expanded than the creation of a separate European military. An independent force has "tremendous potential to disrupt things," he says. He believes NATO has worked well enough since 1948. An American presence is needed to counter-balance the domination of Germany. Beaver would prefer to see an expanded NATO that includes the former East bloc nations -- AND Russia. "But I am fantasizing. It would be very expensive and the politics of the thing are very complicated....China would really be upset."
    contact: 513-556-4179

    B. ADJUSTING POLICY FOR EU
    What might a united Europe mean to the future of U.S. security policy? Presidential candidate George W. Bush found out recently, when his campaign talked of reducing the U.S. military presence on European missions like peacekeeping in the Balkans. Some European leaders reacted with alarm. "With the Bush proposal there is some new thinking, but it is being overshadowed by default thinking," says Richard Harknett, UC associate professor of political science who specializes in international relations. Harknett points out that, with the Cold War over, it makes sense to hand over U.S. military responsibilities in Europe to European forces. That could free up the U.S. to use its power in difficult areas outside of Europe, such as the Persian Gulf or potential Asian hotspots. "The U.S. isn't going back to isolationism. The question to be looked at is how our relationship (with Europe) is manifested. We're not rethinking the relationship itself," Harknett says.
    contact: 513-556-3314

    C. UNLIKELY SCENARIO UC military historian George F. Hofmann says at this point, it's unlikely Europe will have a combined military anytime in the near future. Hofmann says there are too many economic and cultural differences between countries like France, Great Britain, Germany and the eastern European countries. "When I'm talking about economics, from the military-industrial complex, each country has a mechanized force based on their own indigenous systems. If you're going to have a mechanized element, you need to build it on the same ingredients." Hofmann says a combined European military would ease the burden on U.S. forces that are stationed around the world. "Right now, U.S. forces are involved in 70 hot spots all over the world and we're stretched thin. Our forces have a problem with 'insert' capabilities. What equipment can they insert overnight? You can't insert a 70-ton tank." Hofmann says the ideal system would allow the military to act within a week to 30 days.
    contact: 513-347-9529

    IV. HIGHER EDUCATION IMPACT

    A. EMPHASIZING EUROPEAN STUDIES
    The fall of the Berlin Wall, the creation of a "borderless" Europe, the expansion of the Common Market, and the introduction of the euro represent four reasons that UC's College of Arts and Sciences is re-examining the way it teaches graduate students about Europe. And there's a fifth, according to Sara Friedrichsmeyer, head of Germanic languages and literatures. "Understanding Europe, its past and its present, is of increasing importance to business and cultural leaders throughout our country, and UC students must therefore be given the opportunity to gain expertise in these issues," she said. This year is the first in a new four-year program that will lead to collaborative efforts within three departments --Germanic languages and literatures, Romance languages and literatures, and history. Associate professor of history Maura O'Connor is directing the first phase of the program, and about a dozen UC faculty members are working to create new courses for the program.
    contacts: Friedrichsmeyer, 513-556-2752; O'Connor, 513-556-2198

    B. RESEARCHERS REACH OUT TO EUROPE
    Work by UC researchers may help local authorities in Crete win funding from EU development programs to overcome environmental and economic problems associated with mass tourism. The city of Hersonissos, where planning for development has been virtually non-existent until the UC team began working there in 1999, has submitted a six-pronged proposal totaling 4.5 billion drachmas to the European Union's InterReg III program, much of it based on UC research. According to Michael Romanos, nearly all of the proposals are taken directly from UC's work in 1999 and 2000, including: a Heritage Corridor to identify and designate historically significant points of interest for preservation as well as natural areas to be protected and a business incubator and center to encourage the growth of micro-enterprises; redevelopment of the coastal area to reduce vehicular traffic along the seafront in Hersonissos; zoning and land use regulation and development. Hersonissos Mayor Zacharias Doxastakis says his city will be well-positioned to qualify for some of these funds because of UC. "The majority of the municipalities in Greece don't have development proposals or policies," the mayor said. Now Hersonissos does.
    contact: Marianne Kunnen-Jones, UC public relations, 513-556- 1826

    V. BACKGROUND AND WEB SITES

    There are 15 nations in the EU: Australia, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Netherlands, Portugal, Spain, Sweden and United Kingdom. Currently, all but four are in the euro-zone for currency. Those who have not yet opted for the euro are Denmark, Sweden, United Kingdom and Greece, although Greece is scheduled to come aboard soon. Euro notes and coins will not appear until Jan. 1, 2002, but their non-cash form can be used by consumers, companies, retailers and public authorities.

  • http://www.eurunion.org/

  • http://europa.eu.int/

    Up next: There's no such thing as a silent night anymore. Life is getting louder, and UC's e-briefing will examine the audio assault.

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