European Institutions – Compact Exam Handbook
EU Institutions
COMPACT EXAM HANDBOOK
KU Leuven – Faculty of Economics and Business
Crash Course · Compact Textbook · Exam Survival Guide
Rania El Ghalbzouri Page 1
MBA Bridging Programme
, European Institutions – Compact Exam Handbook
Table of Contents
Chapter 1 — Institutions of the European Union ..................................................... 3
Chapter 2 — Policy-Making in the EU: Competences and Budget ........................... 16
Chapter 3 — The Single Market ............................................................................. 23
Chapter 4 — The Economic and Monetary Union .................................................. 29
Chapter 5 — Competition Policy of the EU ............................................................ 35
Chapter 6 — External Relations of the European Union......................................... 39
Chapter 7 — Check Your Progress: Answer Guide ................................................ 45
Rania El Ghalbzouri Page 2
MBA Bridging Programme
, European Institutions – Compact Exam Handbook
Chapter 1 — Institutions of the European Union
This chapter establishes what kind of entity the EU is, traces the history of European
integration from the post-war period to the Treaty of Lisbon and Brexit, explains the
rules and process for EU membership and withdrawal, and describes the
composition, powers, and decision-making rules of each of the four political
institutions plus the Court of Justice. It forms the constitutional bedrock for
everything else in the course: competences, policy-making procedures, the single
market, the EMU, and EU external relations all presuppose a working knowledge of
the institutional architecture analysed here.
1. What Kind of Entity Is the EU?
1.1 International Organisations — Basic Concepts
The EU is an international organisation. International organisations share four
defining features: they are established by states through a founding treaty; they
pursue common goals set out in that treaty; they operate through common organs
(secretariat, council, assembly, etc.); and they possess international legal
personality, meaning they hold rights and duties under international law and their
headquarters are inviolable.
Common examples include the UN, WTO, WHO, NATO, IMF, World Bank, ASEAN,
and Mercosur. All are established by states. The EU belongs to this family but is
exceptional within it because it combines supranational and intergovernmental
elements simultaneously.
1.2 Supranational vs Intergovernmental
This distinction is the single most important conceptual tool in the course. It runs
through every chapter and recurs in almost every exam question.
📌 Key distinction: Supranational organisation vs Intergovernmental
organisation
In a supranational organisation, member states transfer sovereignty — decision-
making powers — to the organisation for specific policy areas. Decisions can be
taken by majority vote and are legally binding on all members, including those that
voted against. An independent organ (judges, commissioners) can also bind
member states without their individual consent. In an intergovernmental
organisation, no sovereignty is transferred. Legally binding decisions require
unanimity; a state cannot be bound against its will. Decisions taken by majority
are only binding on states that voted in favour.
The EU is unique because it contains both features. Most economic policy areas
(customs union, single market, competition, trade, monetary policy for the eurozone)
are supranational: QMV in the Council can bind a dissenting member state. The
Common Foreign and Security Policy remains purely intergovernmental: all
Rania El Ghalbzouri Page 3
MBA Bridging Programme
, European Institutions – Compact Exam Handbook
decisions require unanimity and no legislative acts can be adopted. No other
international organisation combines these two dimensions at the EU's level of depth
and legal integration.
⚠ Exam warning: Almost all major international organisations outside the EU are
predominantly intergovernmental (UN, NATO, WTO, WHO, IMF). The EU is
exceptional precisely because it is substantially supranational. Be ready to
explain the exact consequences: majority voting, legally binding decisions, and
the ability to bind a dissenting member state.
2. Historical Overview of European Integration
The EU emerged from two urgent post-war challenges: rebuilding destroyed
European economies and preventing future large-scale conflict. Economic
integration was used deliberately as an instrument of peace — embedding former
enemies in a web of mutual dependency that would make war materially impossible.
2.1 Post-War Foundations (late 1940s) — All Intergovernmental
Three organisations were created in rapid succession after 1945. All were purely
intergovernmental.
• Organisation for European Economic Cooperation (OEEC, 1948): Established
to coordinate economic recovery and distribute Marshall Plan aid from the
United States. Later evolved into the OECD (Organisation for Economic
Cooperation and Development), still based in Paris.
• Council of Europe (1949): Founded on Churchill's initiative to promote
democracy, rule of law, and human rights. Its main instrument is the
European Convention on Human Rights (ECHR), enforced by the European
Court of Human Rights in Strasbourg. Currently 46 member states —
significantly larger than the EU. Has nothing to do with EU institutions or EU
law.
• NATO (1949): Military collective-defence alliance. Article 5 makes an armed
attack against one member an attack against all, entitling a collective armed
response. Includes the USA and Canada; purely intergovernmental; decisions
by consensus.
⚠ Exam warning — Council of Europe ≠ European Council ≠ Council of the EU.
The Council of Europe is a separate international organisation (46 members,
founded 1949, no link to EU). The European Council and the Council of the EU are
both EU institutions, but with entirely different compositions and powers. This
distinction is tested every year.
Rania El Ghalbzouri Page 4
MBA Bridging Programme
EU Institutions
COMPACT EXAM HANDBOOK
KU Leuven – Faculty of Economics and Business
Crash Course · Compact Textbook · Exam Survival Guide
Rania El Ghalbzouri Page 1
MBA Bridging Programme
, European Institutions – Compact Exam Handbook
Table of Contents
Chapter 1 — Institutions of the European Union ..................................................... 3
Chapter 2 — Policy-Making in the EU: Competences and Budget ........................... 16
Chapter 3 — The Single Market ............................................................................. 23
Chapter 4 — The Economic and Monetary Union .................................................. 29
Chapter 5 — Competition Policy of the EU ............................................................ 35
Chapter 6 — External Relations of the European Union......................................... 39
Chapter 7 — Check Your Progress: Answer Guide ................................................ 45
Rania El Ghalbzouri Page 2
MBA Bridging Programme
, European Institutions – Compact Exam Handbook
Chapter 1 — Institutions of the European Union
This chapter establishes what kind of entity the EU is, traces the history of European
integration from the post-war period to the Treaty of Lisbon and Brexit, explains the
rules and process for EU membership and withdrawal, and describes the
composition, powers, and decision-making rules of each of the four political
institutions plus the Court of Justice. It forms the constitutional bedrock for
everything else in the course: competences, policy-making procedures, the single
market, the EMU, and EU external relations all presuppose a working knowledge of
the institutional architecture analysed here.
1. What Kind of Entity Is the EU?
1.1 International Organisations — Basic Concepts
The EU is an international organisation. International organisations share four
defining features: they are established by states through a founding treaty; they
pursue common goals set out in that treaty; they operate through common organs
(secretariat, council, assembly, etc.); and they possess international legal
personality, meaning they hold rights and duties under international law and their
headquarters are inviolable.
Common examples include the UN, WTO, WHO, NATO, IMF, World Bank, ASEAN,
and Mercosur. All are established by states. The EU belongs to this family but is
exceptional within it because it combines supranational and intergovernmental
elements simultaneously.
1.2 Supranational vs Intergovernmental
This distinction is the single most important conceptual tool in the course. It runs
through every chapter and recurs in almost every exam question.
📌 Key distinction: Supranational organisation vs Intergovernmental
organisation
In a supranational organisation, member states transfer sovereignty — decision-
making powers — to the organisation for specific policy areas. Decisions can be
taken by majority vote and are legally binding on all members, including those that
voted against. An independent organ (judges, commissioners) can also bind
member states without their individual consent. In an intergovernmental
organisation, no sovereignty is transferred. Legally binding decisions require
unanimity; a state cannot be bound against its will. Decisions taken by majority
are only binding on states that voted in favour.
The EU is unique because it contains both features. Most economic policy areas
(customs union, single market, competition, trade, monetary policy for the eurozone)
are supranational: QMV in the Council can bind a dissenting member state. The
Common Foreign and Security Policy remains purely intergovernmental: all
Rania El Ghalbzouri Page 3
MBA Bridging Programme
, European Institutions – Compact Exam Handbook
decisions require unanimity and no legislative acts can be adopted. No other
international organisation combines these two dimensions at the EU's level of depth
and legal integration.
⚠ Exam warning: Almost all major international organisations outside the EU are
predominantly intergovernmental (UN, NATO, WTO, WHO, IMF). The EU is
exceptional precisely because it is substantially supranational. Be ready to
explain the exact consequences: majority voting, legally binding decisions, and
the ability to bind a dissenting member state.
2. Historical Overview of European Integration
The EU emerged from two urgent post-war challenges: rebuilding destroyed
European economies and preventing future large-scale conflict. Economic
integration was used deliberately as an instrument of peace — embedding former
enemies in a web of mutual dependency that would make war materially impossible.
2.1 Post-War Foundations (late 1940s) — All Intergovernmental
Three organisations were created in rapid succession after 1945. All were purely
intergovernmental.
• Organisation for European Economic Cooperation (OEEC, 1948): Established
to coordinate economic recovery and distribute Marshall Plan aid from the
United States. Later evolved into the OECD (Organisation for Economic
Cooperation and Development), still based in Paris.
• Council of Europe (1949): Founded on Churchill's initiative to promote
democracy, rule of law, and human rights. Its main instrument is the
European Convention on Human Rights (ECHR), enforced by the European
Court of Human Rights in Strasbourg. Currently 46 member states —
significantly larger than the EU. Has nothing to do with EU institutions or EU
law.
• NATO (1949): Military collective-defence alliance. Article 5 makes an armed
attack against one member an attack against all, entitling a collective armed
response. Includes the USA and Canada; purely intergovernmental; decisions
by consensus.
⚠ Exam warning — Council of Europe ≠ European Council ≠ Council of the EU.
The Council of Europe is a separate international organisation (46 members,
founded 1949, no link to EU). The European Council and the Council of the EU are
both EU institutions, but with entirely different compositions and powers. This
distinction is tested every year.
Rania El Ghalbzouri Page 4
MBA Bridging Programme
