Changes

===Fiscal and Monetary Policy===

===Fiscal and Monetary Policy===

Introduced in 1999, the euro is currently the official currency of fifteen of the 27 EU Member States. United Kingdom, Denmark and Sweden chose to retain their national currencies, and newer EU members have yet to adopt the Euro. Prior to the Euro's launch in 1999, national currency exchange rates of countries intending to join the Euro were fixed within an Exchange Rate Mechanism. Following the January 2002 introduction of Euro notes and coins into general circulation, national currencies were removed from circulation. Each of the Euro area countries agreed to abide by a shared fiscal policy rule book known as the Stability and Growth Pact (SGP). This agreement generally obliges national governments to limit government budget deficits to 3 percent of GDP and established a target debt-to-GDP ratio of below sixty percent. Although enforcement actions have been forgiving – France and Germany, for example, avoided sanctions despite missing SGP targets – countries violating the SGP are technically subject to sanctions by the European Commission. As of March 2005, national governments have been granted budget leeway to achieve structural reforms and to combat prolonged stagnation, negative growth or other factors, such as the cost of German reunification or state pensions. The revised standards still require deficits to remain close to the targets; they may only temporarily exceed the three percent limit. The ten Member States that joined the EU in May 2004 may adopt the Euro after complying with the SGP targets and meeting other applicable criteria.  

Introduced in 1999, the euro is currently the official currency of fifteen of the 27 EU Member States. United Kingdom, Denmark and Sweden chose to retain their national currencies, and some of the newer EU members have yet to meet the strict economic conditions required to adopt the euro. Prior to the euro's launch in 1999, national currency exchange rates of countries intending to join the euro were fixed within an Exchange Rate Mechanism. Following the January 2002 introduction of euro notes and coins into general circulation, national currencies were removed from circulation. Each of the euro area countries agreed to abide by a shared fiscal policy rule book known as the Stability and Growth Pact (SGP). This agreement generally obliges national governments to limit government budget deficits to 3 percent of GDP and established a target debt-to-GDP ratio of below sixty percent. Although enforcement actions have been forgiving – France and Germany, for example, avoided sanctions despite missing SGP targets – countries violating the SGP are technically subject to sanctions by the European Commission. As of March 2005, national governments have been granted budget leeway to achieve structural reforms and to combat prolonged stagnation, negative growth or other factors, such as the cost of German reunification or state pensions. The revised standards still require deficits to remain close to the targets; they may only temporarily exceed the three percent limit.

The Euro area’s monetary policy is set by the European Central Bank (ECB), which must devise a monetary policy to accommodate a wide range of domestic policies and economic conditions within Euro area Member States. The Treaties require that the ECB’s primary objective be to maintain price stability (i.e., to keep inflation low). Euro-area national governments have sometimes criticized the ECB for guarding against inflation at the expense of interest rate flexibility that could enable struggling economies to gain traction. The ECB’s consistent overnight interest rate of two percent has been credited with creating favorable conditions for growth in Spain and Ireland, but has been blamed for hindering growth in France, Germany, Italy, and Portugal.  

The euro area’s monetary policy is set by the European Central Bank (ECB), which must devise a monetary policy to accommodate a wide range of domestic policies and economic conditions within the euro area. The Treaties require that the ECB’s primary objective be to maintain price stability (i.e., to keep inflation low). Euro area national governments have sometimes criticized the ECB for guarding against inflation at the expense of interest rate flexibility that could enable struggling economies to gain traction. The ECB’s consistent overnight interest rate of two percent has been credited with creating favorable conditions for growth in Spain and Ireland, but has been blamed for hindering growth in France, Germany, Italy, and Portugal. Non-EU countries have also adopted the euro, including Andorra, United Kingdom base areas, Kosovo, Monaco, Montenegro, and the Vatican City. Additionally, several countries have currencies pegged to the euro, including French African states and those in the Exchange Rate Mechanism.

===Trade===

===Trade===

Signed in 1997 and entering into force on May 1, 1999, the Amsterdam Treaty partially streamlined the EU institutional structure. Its most significant effects were: (1) to transfer aspects of Justice and Home Affairs policy to the Community Pillar, enabling the Commission to propose decisions to be taken by the EU Council by qualified majority voting instead of by consensus, and (2) to establish a High Representative for the CFSP (who also serves as Secretary-General of the Council Secretariat). Ten countries in Central and Eastern Europe and Cyprus began accession procedures in 1997, followed by Malta. The prospect of eastward enlargement raised significant resource concerns and prompted the adoption in March 1999 of the "Agenda 2000" package, which covered amendments to the CAP and EU structural policies, as well as a budgetary framework through 2006.  

Signed in 1997 and entering into force on May 1, 1999, the Amsterdam Treaty partially streamlined the EU institutional structure. Its most significant effects were: (1) to transfer aspects of Justice and Home Affairs policy to the Community Pillar, enabling the Commission to propose decisions to be taken by the EU Council by qualified majority voting instead of by consensus, and (2) to establish a High Representative for the CFSP (who also serves as Secretary-General of the Council Secretariat). Ten countries in Central and Eastern Europe and Cyprus began accession procedures in 1997, followed by Malta. The prospect of eastward enlargement raised significant resource concerns and prompted the adoption in March 1999 of the "Agenda 2000" package, which covered amendments to the CAP and EU structural policies, as well as a budgetary framework through 2006.  

In May 1998, EU heads of government officially designated eleven Member States eligible to adopt a single currency. Greece initially did not qualify, and Sweden, the UK and Denmark "opted out." On January 1, 1999, the Euro became the official currency of the EU, and the European Central Bank (ECB) put euro notes and coins into circulation on January 1, 2002. Today, twelve countries use the euro: Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal and Spain.  

In May 1998, EU heads of government officially designated eleven Member States eligible to adopt a single currency. Greece initially did not qualify, and Sweden, the UK and Denmark "opted out." On January 1, 1999, the euro became the official currency of the EU, and the European Central Bank (ECB) put euro notes and coins into circulation on January 1, 2002. Today, fifteen countries use the euro: Austria, Belgium, Cyprus, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Malta, the Netherlands, Portugal, Slovenia and Spain.  

Streamlining the size and procedures of EU institutions to make the expanded EU more efficient was also an aim of the 2003 Treaty of Nice. A year later, in May 2004, Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia, and Slovenia joined the EU, and in 2007 Bulgaria and Romania acceded, bringing total membership to 27. Candidate countries currently include  Turkey, FYR Macedonia and Croatia, and potential candidates include the rest of the Western Balkan states.

Streamlining the size and procedures of EU institutions to make the expanded EU more efficient was also an aim of the 2003 Treaty of Nice. A year later, in May 2004, Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia, and Slovenia joined the EU, and in 2007 Bulgaria and Romania acceded, bringing total membership to 27. Candidate countries currently include  Turkey, FYR Macedonia and Croatia, and potential candidates include the rest of the Western Balkan states.

In October 2004, Member States signed an EU Constitutional Treaty in Rome, intending that it take effect on November 1, 2006. French and Dutch voters rejected the treaty through referendums in 2005, thereby suspending the ratification process.  

In October 2004, Member States signed an EU Constitutional Treaty in Rome, intending that it take effect on November 1, 2006 by replacing all previous treaties. French and Dutch voters rejected the treaty through referendums in 2005, thereby suspending the ratification process. In 2007, a modified Treaty of Lisbon was agreed upon, which retains most of the reforms of the Constitution, but amends rather than replaces previous treaties. If ratified by all member states, it is expected to enter into force in 2009, ready for the elections of the Parliament in June, which will decide the Presidents of the Parliament, Commission and Council.  

==Candidates for membership==

==Candidates for membership==

There are three official candidates being considered for membership, [[Turkey]], [[Croatia]] and [[The Former Yugoslav Republic of Macedonia]]. Typically a country that is considered will have to make some economic or social changes to bring it in line with other member states.

There are three official candidates being considered for membership, [[Turkey]], [[Croatia]] and [[The Former Yugoslav Republic of Macedonia]]. The western Balkan states of Serbia, Montenegro, Kosovo, Bosnia-Hercegovina and Albania are officially ''potential candidates''. A country that is expected to accede is required to make some economic, social and governmental changes to bring it in line with other member states.

There is some conflict between current EU member states over possible candidates for membership. For example, The United Kingdom is in favor of adding Turkey to the EU, while France is strongly against Turkey's possible membership.  

There is some conflict between current EU member states over possible candidates for membership. For example, The United Kingdom is in favor of adding Turkey to the EU, while France is strongly against Turkey's possible membership.