The Economics of the New Europe: From Community to Union

Europe is in a period of rapid transition. The Single European Market has been completed, and many barriers to the free mvoement of goods, services, labour.
Table of contents

Measuring European integration

The EEC direct ancestor of the modern Community was to create a customs union while Euratom would promote co-operation in the nuclear power sphere. The EEC rapidly became the most important of these and expanded its activities. One of the first important accomplishments of the EEC was the establishment of common price levels for agricultural products.

In , internal tariffs tariffs on trade between member nations were removed on certain products. Another crisis was triggered in regard to proposals for the financing of the Common Agricultural Policy , which came into force in The transitional period whereby decisions were made by unanimity had come to an end, and majority-voting in the Council had taken effect.

Then- French President Charles de Gaulle 's opposition to supranationalism and fear of the other members challenging the CAP led to an "empty chair policy" whereby French representatives were withdrawn from the European institutions until the French veto was reinstated. Eventually, a compromise was reached with the Luxembourg compromise on 29 January whereby a gentlemen's agreement permitted members to use a veto on areas of national interest.

Collectively they were known as the European Communities. The Communities still had independent personalities although were increasingly integrated. Future treaties granted the community new powers beyond simple economic matters which had achieved a high level of integration. As it got closer to the goal of political integration and a peaceful and united Europe, what Mikhail Gorbachev described as a Common European Home.

The s saw the first attempts at enlargement. A year later, in February , Spain attempted to join the European Communities. However, because Francoist Spain was not a democracy, all members rejected the request in The four countries resubmitted their applications on 11 May and with Georges Pompidou succeeding Charles de Gaulle as French president in , the veto was lifted.

Europe’s economic integration narrative

Negotiations began in under the pro-European government of Edward Heath , who had to deal with disagreements relating to the Common Agricultural Policy and the UK's relationship with the Commonwealth of Nations. Nevertheless, two years later the accession treaties were signed so that Denmark, Ireland and the UK joined the Community effective 1 January The Norwegian people had finally rejected membership in a referendum on 25 September The Treaties of Rome had stated that the European Parliament must be directly elected, however this required the Council to agree on a common voting system first.

The Council procrastinated on the issue and the Parliament remained appointed, [9] French President Charles de Gaulle was particularly active in blocking the development of the Parliament, with it only being granted Budgetary powers following his resignation. Parliament pressured for agreement and on 20 September the Council agreed part of the necessary instruments for election, deferring details on electoral systems which remain varied to this day.

Shortly after its election, the Parliament proposed that the Community adopt the flag of Europe design used by the Council of Europe.

The European Council, or European summit, had developed since the s as an informal meeting of the Council at the level of heads of state. It had originated from then- French President Charles de Gaulle 's resentment at the domination of supranational institutions e. It was mentioned in the treaties for the first time in the Single European Act see below. Greece re-applied to join the community on 12 June , following the restoration of democracy, and joined on 1 January With the prospect of further enlargement, and a desire to increase areas of co-operation, the Single European Act was signed by the foreign ministers on the 17 and 28 February in Luxembourg and the Hague respectively.

In a single document it dealt with reform of institutions, extension of powers, foreign policy cooperation and the single market. It came into force on 1 July The EU absorbed the European Communities as one of its three pillars. The EEC institutions became those of the EU, however the Court, Parliament and Commission had only limited input in the new pillars, as they worked on a more intergovernmental system than the European Communities. This was reflected in the names of the institutions, the Council was formally the "Council of the European Union " while the Commission was formally the "Commission of the European Communities ".

However, after the Treaty of Maastricht, Parliament gained a much bigger role. Maastricht brought in the codecision procedure , which gave it equal legislative power with the Council on Community matters.


  • European Economic Community;
  • Goals and values of the EU;
  • The EU in brief.

Hence, with the greater powers of the supranational institutions and the operation of Qualified Majority Voting in the Council, the Community pillar could be described as a far more federal method of decision making. The Treaty of Amsterdam transferred responsibility for free movement of persons e. In , the Treaty of Paris which established the ECSC expired, having reached its year limit as the first treaty, it was the only one with a limit. No attempt was made to renew its mandate; instead, the Treaty of Nice transferred certain of its elements to the Treaty of Rome and hence its work continued as part of the EC area of the European Community's remit.

After the entry into force of the Treaty of Lisbon in the pillar structure ceased to exist. The European Community, together with its legal personality , was absorbed into the newly consolidated European Union which merged in the other two pillars however Euratom remained distinct. This was originally proposed under the European Constitution but that treaty failed ratification in The main aim of the EEC, as stated in its preamble, was to "preserve peace and liberty and to lay the foundations of an ever closer union among the peoples of Europe".

Calling for balanced economic growth, this was to be accomplished through: Progress on the customs union proceeded much faster than the twelve years planned. However, France faced some setbacks due to their war with Algeria. The six states that founded the EEC and the other two Communities were known as the " inner six " the "outer seven" were those countries who formed the European Free Trade Association.

Belgium, the Netherlands and Luxembourg. The first enlargement was in , with the accession of Denmark, Ireland and the United Kingdom. Greece, Spain and Portugal joined in the s. Following the creation of the EU in , it has enlarged to include an additional sixteen countries by Member states are represented in some form in each institution.

The Council is also composed of one national minister who represents their national government. Each state also has a right to one European Commissioner each, although in the European Commission they are not supposed to represent their national interest but that of the Community.

In the European Parliament , members are allocated a set number seats related to their population, however these since have been directly elected and they sit according to political allegiance, not national origin. Most other institutions, including the European Court of Justice , have some form of national division of its members. There were three political institutions which held the executive and legislative power of the EEC, plus one judicial institution and a fifth body created in These institutions except for the auditors were created in by the EEC but from onwards they applied to all three Communities.

The Council represents governments, the Parliament represents citizens and the Commission represents the European interest. The Commission then drafts this and presents it to the Council for approval and the Parliament for an opinion in some cases it had a veto, depending upon the legislative procedure in use.

A history of Europe’s economic integration

The Commission's duty is to ensure it is implemented by dealing with the day-to-day running of the Union and taking others to Court if they fail to comply. Despite this, Parliament in particular has gained more power over legislation and security of the Commission. The Court was the highest authority in the law, settling legal disputes in the Community, while the Auditors had no power but to investigate.

There was greater difference between these than name: From here on, the term European Communities were used for the institutions for example, from Commission of the European Economic Community to the Commission of the European Communities.

From economic to political union

The Council of the European Communities was a body holding legislative and executive powers and was thus the main decision making body of the Community. Its Presidency rotated between the member states every six months and it is related to the European Council , which was an informal gathering of national leaders started in on the same basis as the Council. The Council was composed of one national minister from each member state. However the Council met in various forms depending upon the topic. For example, if agriculture was being discussed, the Council would be composed of each national minister for agriculture.

They represented their governments and were accountable to their national political systems. Votes were taken either by majority with votes allocated according to population or unanimity. In these various forms they share some legislative and budgetary power of the Parliament. The Commission of the European Communities was the executive arm of the community, drafting Community law , dealing with the day to running of the Community and upholding the treaties.

It was designed to be independent, representing the Community interest, but was composed of national representatives two from each of the larger states, one from the smaller states. One of its members was the President , appointed by the Council, who chaired the body and represented it. There were a number of Community legislative procedures , at first there was only the consultation procedure , which meant Parliament had to be consulted, although it was often ignored. The Single European Act gave Parliament more power, with the assent procedure giving it a right to veto proposals and the cooperation procedure giving it equal power with the Council if the Council was not unanimous.

In and , the Budgetary treaties gave Parliament power over the Community budget. The Parliament's members, up-until were national MPs serving part-time in the Parliament. The Treaties of Rome had required elections to be held once the Council had decided on a voting system, but this did not happen and elections were delayed until see European Parliament election, After that, Parliament was elected every five years.

In the following 20 years, it gradually won co-decision powers with the Council over the adoption of legislation, the right to approve or reject the appointment of the Commission President and the Commission as a whole, and the right to approve or reject international agreements entered into by the Community.

The Court of Justice of the European Communities was the highest court of on matters of Community law and was composed of one judge per state with a president elected from among them. Its role was to ensure that Community law was applied in the same way across all states and to settle legal disputes between institutions or states. It became a powerful institution as Community law overrides national law.

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European Economic Community - Wikipedia

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