Going for growth: The European Union & India

By Amruta Sawarkar

V BSL. LL.B, ILS Law College, Pune

Introduction

“A day will come when all nations of this continent without loosing their distinct qualities or their glorious individuality, will fuse together in higher unity and form European brotherhood. A day will come when there will be no other battle fields than those of the mind – open market places for the ideas. A day will come when bullets and bombs will be replaced by votes”[1]

More than a century later that Victor Hugo’s utopian predictions have started coming true. Two World Wars and countless other conflicts on the European soil causing millions of death, shattered dreams and ravaged humanistic ideals and this was the time when all hope seemed glossed. But from the rubble of World Wars, French Foreign Affairs Minister Robert Schuman took up an idea originally conceived by Jean Monnet and proposed setting up the European Coal and Steel Community (ECSC)[2].

The European Union (EU) {formerly known as the European Economic Community (EEC)} came into existence following the signing of Treaty of Rome in 1957 by six original Member States of France, Germany, Italy, Belgium, Netherlands and Luxembourg. EU today encompasses of 25 member countries with combined population of 455 million people. The EU is more than just a confederation of countries; in fact it is something entirely new and historically unique. It is a political system constantly evolving over the past fifty years founded on series of treaties those signed in Paris, Rome, Maastricht, Amsterdam and Nice.

The ECSC[3] was such a success that, within few years the six member countries decided to go further and integrate other sectors of their economies. In 1957 they signed Treaty of Rome, creating European Atomic Energy Community (EURATOM) and the European Economic Community (EEC) now the European Union (EU).

The European Union (EU) is mainly created with aim of establishing common market. With setting up of ECSC[4] production of coal, steel, materials of war was now under common control with an aim to eradicate possibility of another war. Formation of EU has helped abolish all trading barriers between the Member States, where the entire area comprises of a single market and a single set of trade rules apply to all with common custom tariffs. With the passing of the Single European Act[5] a single currency Euro (Є) was put into circulation on 1^st January 2002[6], making it easy to travel, compare prices, and provide stable environment for flourishing business, stimulating growth and competitiveness.

The European Union aims to promote human values and social progress and its motto is the principle of ‘unity in diversity’. The old saying ‘strength in unity’ is as relevant as ever. Europe’s strength springs from its ability to take united action on basis of decisions made by democratic institutions – the European Council, the European Parliament, the European Commission and the European Court of Justice.

How Does The European Union Work?

All the institutions work in 20 official languages of the European Union.

The EU policies in general, are the result of decisions taken by the four main institutions:

Ø The Council of European Union (representing the Member States).

Ø The European Parliament (representing the citizens).

Ø The European Commission (politically independent body, upholding collective European interest).

Ø The European Court of Justice.

“In order to carry out their task and in accordance with the provisions of the treaties, the European Parliament acting jointly with the Council and the Commission shall make regulations and issue directives, take decisions, make recommendations and deliver opinions”. [7]

The Council of European Union

It is EU’s main decision making institution. The Council represents national interest of the Member States. It considers legislative proposals from the Commission and, usually acting by Qualified Majority Votes (QMV) decides whether to enact them or not. Each EU country in turn presides over the Council for a period of six months. One minister attends every meeting from each Member State, and which minister will attend the meeting depends on the topic of agenda. For example, in case of foreign policy, Foreign Affairs Minister from each country will attend the meeting.

The European Parliament

Originally, under the Treaty of Rome, the European Parliament had only consultative role in the legislative process. Subsequent treaties have extended it to a much fuller involvement. The European Parliament is elected every five years by the people of Europe to represent their interests. The present Parliament, elected in June 2004, has 732 members representing the 25 EU countries.

The main job of Parliament is to pass European laws. It shares this responsibility with the Council and the proposals for new laws come from the Commission. Parliament and Council also share joint responsibility for approving the EU’s 115-billion Єuro annual budget[8].

The European Commission

The Commission is the institution representating community’s interest. It plays crucial role in enabling EU to deliver its promises. Its powers and responsibilities include proposing new policies, initiating legislation and helping implementation of policies. It is the guardian of treaties, acting like a ‘watch dog’ on issues concerning infringements of Community Law.

Commission consists of 25 Commissioners chosen from each Member States for term of five years. Each new Member State is entitled to nominate a Commissioner. The Commission is entrusted with role of investigating infringements of the Member States.

One of the Commission’s tasks is to manage EU budget. The Commission itself is accountable to the citizens of Europe via European Parliament that can sack all 25 Commissioners through a no confidence vote. Thus in short Commission, the guardian angel of EU is involved in law making process. The Commission also drafts legislation but it’s the Council and the Parliament who debate it, call for amendments and finally enact or reject them.

The European Court of Justice

The European Court of Justice (ECJ) has played an important role in enhancing effectiveness of the European Community Law. Where there is conflict between national law and community law the latter prevails and national law must be ‘set aside’. European Community courts are two-tier courts comprising of the European Court of First Instance (CFI) and European Court of Justice (ECJ).

The ECJ consists of 25 judges one from each Member State assisted by 8 to 9 Advocate General. The ECJ normally sits in chambers; rarely sits in plenary session unless the case is of high significance.

The caseload of the ECJ has increased dramatically and as a result in order to alleviate this problem the Court of First Instance (CFI) has been established. The CFI currently consists of 25 judges from each Member State. It does not have separate Advocate Generals.

Appeal from decisions of CFI on point of law may be made to ECJ. Judgments of the European Court of Justice (ECJ) are now the ultimate authority in judicial hierarchy.

Spectrum of relations between India and European Union

The cornerstone of European Union's link with India lies in its trade and investment relationship. These relations got strengthen after the first EU-India summit held in Lisbon in the year 2000. Since then there has been significant development between EU and India due to increasing positive links and enhanced interaction in large number of sectors such as economy, culture, tourism, trade, science and technology. The EU now is India's largest trading and investment partner; EU’s bilateral trade constitutes a quarter of India's total trade!

On the other hand India is a primary partner of EU on both political and economical prospective. Statistics show that EU continues to be India’s largest trading partner, accounting for nearly one-fourth of our imports and exports. The main products exported by India to EU are textiles & clothing, gems & jewellery, leather & leather goods, engineering goods, chemicals & allied products, agriculture & allied products. It is interesting to note that textile & clothing, leather & leather goods, gems & jewellery itself constitute more than 55 percent of total Indian exports to EU.

The bilateral trade between EU and India has grown 2.5 times in last ten years and currently stands at 25 billion Єuros.[9] EU is also the largest source of actual Foreign Direct Investment (FDI) in India. One of the biggest on going projects under economic co-operation programme between EU and India is the Civil Aviation Project, which aims at strengthing civil air safety and relative procedures. The project has a total value of 32 million Єuros. In past eight years EU has contributed 42.5 million Єuros, (Approx. 213 Crores Rupees) towards 55 research projects with Indian partners dealing mainly in health, agriculture, environment and natural resources.

EU and India are already solid partners in Trade and Investment, but even larger opportunities lie ahead for business and industry namely, food processing, mechanical engineering, information technology, telecommunications, energy & power, biotechnology and financial services, and the European Commission is actively co-operating with Indian counterparts to fully exploit this potential

India-EU relations have grown exponentially from what used to be a purely trade and economic driven relationship to one covering all areas of interaction. In the year 2000 the EU-India Round Table was established to promote contacts between civil societies representatives on both sides. This interaction has helped bridge cross-cultural communication gap and has facilitated a better understanding of the pluralistic societies on either sides.

The 5^th Summit at The Hague was a landmark Summit for it endorsed the EU’s proposal to upgrade its relationship with India to a ‘Strategic Partnership’. The EU, which has strategic partnerships with only five other countries (USA, Canada, Russia, Japan and China), now sees India as a “regional and global leader, engaging increasingly on equal terms with other world powers”.

No doubt that the frequency and intensity of India’s contacts with the EU have grown exponentially in order to provide greater coherence but more focus needs to be laid on various activities being undertaken as well as to further undertake new initiatives. The European Commission has prepared a comprehensive Communication outlining in detail on various areas in which a strategic partnership could be forged with India.

Conclusion

Half a century of European integration has shown that, ‘the whole is always greater that sum of its parts’. EU as a unit has much more economic, social, technological, commercial and political ‘clout’ than the individual efforts of its Member States, even when taken together. There is added value in acting as one and speaking with single voice as the European Union. Thus with formation of EU, Europe has become the largest trading block in world with the world’s greatest over all GDP one quarter of the global total!

No doubt that the EU India relations are marked as a watershed in the evolution of international relations and therefore more intensified joint efforts need to be put in, in order to strengthen the growing alliances between the two regions.

[1] Victor Hugo’s prophetic speech in 1849.

[2] On 9^th May 1950 forwarded proposal of having common steel & coal resources for France and Germany.

[3] European Coal and Steel Community set up in 1951, with the treaty of Paris, by the six original member states.

[6] Euro has replaced the old national currencies in 12 EU counties: Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, Luxemburg, Portugal, Spain and Netherlands.