THE EUROPEAN UNION: A STATE OR AN INTERNATIONAL ORGANIZATION

  The European Union was established on the basis of a treaty between sovereign and independent countries. The origins of the EU could be traced back to the European Community for Coal and Steel, the European Economic Community and the European Community for Atomic Energy, with the idea of creating an international community with certain mutual economic and political interests. The purpose of the aforementioned communities was to provide economic collaboration between the member states so that they could keep pace with the USA and the Eastern block. The economic development was enabled by overcoming political discrepancies, which often drove the European countries into war conflicts in the past. An idea was fermenting, over the course of functioning of the European communities, for these communities to become a strong economic and political community, which eventually took place in Maastricht in 1992. To the existing economic pillar (pillar I), two more pillars were added (pillar II - foreign affairs and pillar III - internal affairs and judicial system). The existing European Communities were thus joined into the European Union, but formally they never stopped to exist in legal terms. Within the EU, there are unique instruments of authority (legislative, executive and judicial), though they function in somewhat specific way; namely, there is no strict borderline between the first two, whereas the judicial authority is independent and separated, as is the case in every sovereign country. The member states remained sovereign, but they delegated some of their sovereignty and authority to the Union, which was arranged by an international treaty. The law of the EU, as community law, is above the legal system of any of the member states. That is why the EU is a real union, close to the system of authority existing in federal states

FOREIGN INVESTMENTS POLICY WITH SPECIAL ATTENTION TO BOSNIA AND HERZEGOVINA

International economic relations depend on political relations between the states. They are mutually conditioned and related. Every country, aiming at development of its industry, will strive to maintain good or at least tolerant political relations. This will be very important for foreign investments in the industry of the country only if it previously establishes internal political conditions and the rule of law in accordance with approved principles of international trade law. Political and economic elements form basic conditions together with market economy, foreign capital investment and free use of profit from invested capital. Foreign investing is not a donation, but an economic interest intended to make a profit which has to be higher than invested money by recruiting the citizens of the country where the capital is invested. This reflects mutual interests of the non-residents and the state. Recruitment creates better social conditions of living and, therefore, every country is interested in creating favourable conditions for foreign investments. In this way, foreign investments provide good conditions for participation of industrial subjects which belong to different types of sovereignty on the world market and form the prices of products and industrial services in the world. This is the role of World Bank as well as European Investment Bank. Bosnia and Herzegovina has legal assumptions for foreign investments, but lacks political assumptions as a base for development of economic relations with abroad. Due to this fact, foreign investors are not interested to invest their money in industry of this country. Investments of international community are mainly concerned with elimination of consequences of war damage, which proved to be insufficient to raise the unemployment rate. This causes a great number of poor families in Bosnia and Herzegovina