The European Union is a unique form of partnership between nations in which the member states have clubbed together sovereignty in certain policy areas, while still maintaining their own nationhood. The member of the EU share a customs union. This essentially means that there is a common trade policy. With 28 member states, each with different rates of economic growth, the idea of a common trade policy becomes conceptually interesting. Of the 28 member states, 19 use a common currency, and 22 are a part of the Schengen zone, wherein people may travel freely without passport checksCurrently, the European Union faces major challenges, as encapsulated below:BrexitThe Greek debt crisisConcerns with respect to the EurozoneIncreasing threat of terrorismRussian resurgenceThe migrant and refugee situationAmidst such chaos, the strength and the stability of the European Union comes under the scrutiny of experts, worldwide. A customs union as large as the European Union has to ensure that all the countries that engage in trade with each other, as a part of the union, do not suffer due to such turbulences. The World Bank was created with the basic purpose of ensuring financial and advisory aid to developing countries and those in need of such resources, so as to aid economic advancement. The European Union and the World Bank work as partners. The European Commission requires the Union’s organization to undergo policy changes, so as to ensure that the Union continues to remain beneficial for all the member states. Thus, it is interesting to realise the role of the World Bank in the development of trade in the European Union. The European UnionThe concept of a European trade area was first conceptualized in the year of 1951. The idea for a union between the countries of the European continent came from the objective of ending wars, as exhibited in the Second World War. In 1950, the European Coal and Steel Community began to unite the countries economically and politically so as to secure long-lasting peace. The six founding countries were Belgium, France, Germany, Italy, Luxembourg, and the Netherlands. The 1950s saw a cold war occur between the east and the west. In 1956, there were protests that took place in Hungary, against the existing Communist regime. These protests were put down by the Soviets – thus calling for the Treaty of Rome, which created the European Economic Community (the common market). In the 1960s, the European Economic Community prospered, as the member countries agreed to do away with customs duties, while trading with each other. They also decided to ensure joint food control so that everybody has adequate food to eat. The first enlargement took place in the 1970s, with Denmark, Ireland and the United Kingdom joining the European Union. The EU regional policy ensured the commencement of huge sums of money being transferred to poorer areas. The European Parliament decided to increase its influence in the matters of the EU and by 1979, all citizens could elect their members directly. The 1980s saw Greece, Spain and Portugal join the EU, and Germany reunite as one whole country, after the Berlin Wall was pulled down in 1989. Thus, communism across central and eastern Europe collapsed, ensuring that the countries in Europe were more close-knit than before. The Single Market was formed in 1993, with freedom of movement of goods, services, people and money. The Maastricht Treaty of the European Union was signed in 1993, and the Treaty of Amsterdam made amendments to the same, later, in 1999. Austria, Finland and Sweden joined the EU in 1995. The Euro was accepted as the new currency in the decade of the early 2000s. Post the 2001 terrorist attack in New York, the EU countries came closer, and the political divisions of the yesteryears, were declared finally over; 10 countries joined the EU in 2004, after which Bulgaria and Romania followed in 2007. After a financial crisis hit the global economy in 2008, the Treaty of Lisbon was formulated and ratified by all member countries of the EU, so as to provide the EU with higher efficiency through more contemporary institutions. In 2012, the European Union was awarded the Nobel Peace Prize, after which Croatia became the 28th member, in 2013. The current challenges faced by the European Union, as enumerated before, are: BrexitThe Greek debt crisisConcerns with respect to the EurozoneIncreasing threat of terrorismRussian resurgenceThe migrant and refugee situationThe European Union is headquartered in the city of Brussels, Belgium. The World BankThe World Bank Group is an international organization that aims at financing developing nations, and aiding member states, economically. It is affiliated to the United Nations. It is headquartered in Washington, D.C. The World Bank was formed in 1944 at what is commonly known as the Bretton Woods Conference, that is, the UN Monetary and Financial Conference. The idea was to establish an international economic system post the Second World War. The World Bank’s operations started effectively in June 1946. Its first credits were intended for the after war recreation of Western Europe. Starting in the mid-1950s, it assumed a noteworthy part in financing interests in infrastructural extends in creating nations, including streets, hydroelectric dams, water and sewage offices, oceanic ports, and air terminals. The World Bank Group involves five constituent foundations: The International Bank for Reconstruction and Development (IBRD)The International Development Association (IDA) The International Finance Corporation (IFC)The Multilateral Investment Guarantee Agency (MIGA)The International Center for Settlement of Investment Disputes (ICSID). The IBRD gives loans at market rates to middle-income developing countries and creditworthy lower-income countries. The IDA, established in 1960, gives interest free long haul loans, technical help, and policy advice to low-income developing nations in the areas of healthcare, education, and rural advancement. Though the IBRD raises a large portion of its assets on the world’s capital markets, the IDA’s loaning operations are financed through commitments from developed nations. The IFC, working in organization with private investors, gives loans and loan guarantees and equity financing to business undertakings in developing nations. Loan guarantees and insurances to foreign investors against non-commercial risks in developing nations are given by the MIGA. The ICSID, which works freely of the IBRD, is in charge of the settlement by conciliation or arbitration of investment disputes between foreign investors and their host countries. From 1968 to 1981 the president of the World Bank was the former U.S. Secretary of Defence Robert S. McNamara. Under his authority the bank reconciled the idea of “sustainable development,” which endeavored to accommodate financial development and economic growth, along with environmental protection in developing nations. Another component of the idea was the use of capital flows to developing nations as a method for narrowing the income gap between rich and poor nations. The bank has extended its loaning activities and with its various research and policy divisions, has formed into an effective and authoritative intergovernmental body.The World Bank is the largest source of financial assistance to developing countries. Literature ReviewThe Role of the World Bank in International Trade Policy January 2016Author: Elina VIILUPThe paper aims to provide an overview at the functions of the World Bank Group in regulating trade policy globally. It sheds light on the relationship between the European Union and the WBG, as well as on the strategy usually employed by the World Bank. Trade 2016-09-29 by EU PublicationsAuthor: Directorate-General for External Policies of the UnionThe European Union’s trade policy must be seen in the context of two of today’s realities. The first is the importance of the Union itself as a major world player. The second is the way globalisation is changing the international environment. The EU is the largest economy in the world, the biggest exporter and importer, the leading investor and recipient of foreign investment and the biggest aid donor. With just 7 % of the world’s population, it accounts for over one quarter of the world’s wealth as measured by gross domestic product (GDP) — the total value of goods and services produced. The European Union: Current Challenges and Future Prospects February 27, 2017Author: Kristin Archick, Specialist in European AffairsThe paper highlights the nature of the European Union, and explains the challenges faced by the EU specifically and on a broader level. It also analyses the state of affairs for furthermore potential of such an integration. Treaty of Amsterdam Amending the Treaty on European Union, The Treaties Establishing the European Communities and Certain Related Acts document sheds light on the formation of and the amendments of policies relevant to the formation of the European Union and relevant communities. The Relationship Between The European Union & The World Bank Group(Current Scenario)The cooperation between the European Union and the World Bank Group has proven to be very fruitful in the area of development cooperation – the European Union and its member states are the largest aid donors. The European Commission participates in the IMF/World Bank’s development committee, and is the 3rd largest contributor to the World Bank’s trust fund. From 2011-2015, the European Commission donated a total of USD 2,165 million in contributions to the World Bank Group.  The European Union is not, on the whole, a member of the World Bank Group. However, it has engaged in a strong partnership with the World Bank Group, and together, they focus on developmental cooperation. They share goals of economically strengthening developing countries, fighting social causes like poverty, and getting involved in sustainable developmental actions. Such a bilateral partnership is regulated by the Trust Funds and Co-Financing Agreement signed in 2009, for a period of 10 years. There was another Framework Agreement signed in 2014, when the European Commission made amendments to its existing financial regulations and introduced new ones. According to the World Bank Group, its mutual cooperation with the EU depends on:Aid coordinationFinancing relationshipPolicy dialogueGlobal public goodsThe Europe 2020 Programmatic Trust Fund was established to enable the European Commission to avail of the benefits of technical assistance, and analytical and policy work, so as to pursue the goals of Europe 2020 – which is, the European Union’s growth strategy till 2020. This program manager is based in Brussels, and was established in 2012. Since its establishment, it has received around €25 million in contributions from various directorates. This trust fund is managed under the EU-World Bank Group Framework Agreement, which is the same agreement under which the entirety of the partnership exists. Currently, four countries of the European Union benefit from the full portfolio of the World Bank Group’s functions, under the Country Partnership Framework, which is a document pertaining to economic strategy. These countries are:BulgariaCroatiaPolandRomaniaThe Role of the World Bank Group in the EU’s Trade PolicyThe role of the World Bank Group in the trade policy of the European Union has been of immense relevance, but is limited. The European Union and The World Bank Group, both, support the concept of trade liberalisation, and are in favour of rational amendments in economic policies so as to ensure the aforementioned liberalisation. The influence of the World Bank Group in terms of trade developments within and outside the European Union has been more or less indirect, and on a macrocosmic level, marginal. The highlights of the role played by the World Bank Group for the trade of the European Union are:Advocacy provided by the World Bank Group played an important role in the liberalisation of the European Union rules of origin under its Generalised System of Preferences (GSP) and Everything But Arms (EBA), particularly for the textiles sector The World Bank had a part to play in complementing the EU trade policy by supporting the business environment of those countries in which the European Union had shown interest – like Georgia, where the World Bank’s lending supported the EU-Georgia DCFTA by creating a favourable climate for the European Union to foster trade relations with the concerned country.The World Bank has also provided technical assistance for the implementation of the Central European Free Trade Agreement. This is important for the European Union because trade relations are important in the association process of the EU and the Western Balkans, as well as in the various Stabilisation and Association Agreements (SAAs) signed by both the parties – the European Union and the Western Balkans – in terms of regional cooperation. The World Bank has supported trade logistics reforms in Greece. And has also released recommendations for the reform of the EU-Turkey Customs Union.


I'm Erica!

Would you like to get a custom essay? How about receiving a customized one?

Check it out