As the European Union enters its middle ages, its Economic Union’s approval rating has dropped considerably, a member of the European Parliament said yesterday.
Italian European Parliament member Francesco Turchi took time out from dealing with the present foot-and-mouth crisis in Europe to address the effect of the Euro yesterday during, “The Euro: For Good, For All and Forever?,” the latest IR Forum presented by the Boston University Department of International Relations.
“The respect for the European Union and its institutions is just not there,” Turchi said. “The Union just does not have the established pull of national institutions.”
One of the main problems with the EU is the lack of joint monetary policy, with tax rates for business differing from around 12 percent in Ireland to upwards of 45 percent in Italy, Turchi said. These rates have created a “Celtic Tiger,” causing the Italian auto company Fiat to all but leave Italy, and widening the gap between “haves” and “have-nots,” he said.
One of the Union’s main goals was to bring together a united Europe in which living standards would be improved for all, but today a consensus cannot be reached as to how to make that happen 50 years later. Nothing comes easy in the European Parliament, Turchi said, relating the strenuous nature of the negotiations to establish water quality standards among the 15 members of the Union.
“We worked until 4:00 or 5:00 in the morning and then I had them,” Turchi said of the water negotiations.
When it comes to the question of economic policy and fiscal management, the EU’s most heated battles involve currency. To further the European economic community, in January of 1999 the Euro was introduced and four days later it reached it’s highest mark against the U.S. dollar at 1.189. Today, the Euro is about .95 of the dollar. The Euro was meant to replace all individual country currencies by 2002, thus combining most European economies into one.
And, while the Euro has shown some promise as its member states’ gross national product grew 2.7 percent, dissatisfaction continues as people in Europe feel the 4 percent value-added tax they pay is being sent away to a parliament that is not in touch with its constituency, Turchi said
“It is hard to explain to an Italian farmer why Italian agriculture would receive half the backing agriculture in Poland would, while they have roughly the same production,” Turchi said.
The Euro has been a tentative first step in the conglomeration of Europe, and two years later the picture is becoming clearer. When asked if Italy had benefited from its participation in the Euro experiment, Turchi said, “The Euro has constrained us and has caused Italy to undertake the needed steps to reform.”
“The Euro is a deepening of the EU and an enlargement of the European community that could have far reaching effects not only economically but politically as well,” said IR grad student Dave Diaz.
The political effect of the Euro and the EU will soon expand with the planned addition of several former Soviet bloc nations this year.
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