economic community

European Economic Community (EEC)

later European Community (EC) known as the Common Market

Association of European countries designed to promote European economic unity. It was established by the Treaty of Rome in 1957 to develop the economies of the member states into a single common market and to build a political union of the states of western Europe. The EEC also sought to establish a single commercial policy toward nonmember countries, to coordinate transportation systems, agricultural policies, and general economic policies, to remove measures restricting free competition, and to assure the mobility of labour, capital, and entrepreneurship among member states. The liberalized trade policies it sponsored from the 1950s were highly successful in increasing trade and economic prosperity in western Europe. In 1967 its governing bodies were merged into the European Community. In 1993 the EEC was renamed the European Community (EC); it is now the principal organization within the European Union.

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Encyclopedia Britannica, 2008. Encyclopedia Britannica Online.

European Economic Community

The European Economic Community (EEC, it was also known as the "Common Market" in the United Kingdom) was an international organisation created in 1957 to bring about economic integration between Belgium, France, Germany, Italy, Luxembourg and the Netherlands.

It since enlarged to six other states and from 1967 its institutions also governed the European Coal and Steel Community (ECSC) and European Atomic Energy Community (EAEC or Euratom) under the term European Communities. When the European Union (EU) was created in 1993, the EEC was transformed into the European Community, one of the EU's three pillars, with EEC institutions continuing as those of the EU.

History

Background

In 1951, the Treaty of Paris was signed, creating the European Coal and Steel Community (ECSC). This was an international community based on supranationalism and international law, designed to help the economy of Europe and prevent future war by integrating its members together.

In the aim of creating a federal Europe two further communities were proposed: a European Defence Community (EDC) and a European Political Community (EPC). While the treaty for the latter was being drawn up by the Common Assembly, the ECSC parliamentary chamber, the EDC was rejected by the French Parliament. President Jean Monnet, a leading figure behind the communities, resigned from the High Authority in protest and began work on alternative communities, based on economic integration rather than political integration. After the Messina Conference in 1955, Paul Henri Spaak was given the task to prepare a report on the idea of a customs union. The so-called Spaak Report of the Spaak Committee formed the cornerstone of the intergovernmental negotiations at Val Duchesse castle in 1956. Together with the Ohlin Report the Spaak Report would provide the basis for the Treaty of Rome.

In 1956, Paul Henri Spaak lead the Intergovernmental Conference on the Common Market and Euratom at the Val Duchesse castle, which prepared for the Treaty of Rome in 1957. The conference led to the signature, on 25 March 1957, of the Treaty of Rome establishing a European Economic Community.

Creation and early years

The resulting communities were the European Economic Community (EEC) and the European Atomic Energy Community (EAEC or Euratom). These were markedly less supranational than the previous communities, due to protests from some countries that their sovereignty was being infringed (however there would still be concerns with the behaviour of the Hallstein Commission). The first formal meeting of the Hallstein Commission, was held on 16 January 1958 at the Castle of the Valley of the Duchess. The EEC (direct ancestor of the modern Community) was to create a customs union while Euratom would promote co-operation in the atomic energy 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 (1962) of common price levels for agricultural products. In 1968, 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 1962. 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" where by 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 1966 whereby a gentlemen's agreement permitted members to use a veto on areas of national interest.

In 1967 the Merger Treaty was signed, which combined the institutions of the ECSC and Euratom into that of the EEC, they already shared a Parliamentary Assembly and Courts. 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.

Enlargement and elections

The 1960s saw the first attempts at enlargement. On 3 May 1960 Denmark, Ireland, Norway and the United Kingdom applied to join the three Communities. However, President Charles de Gaulle saw British membership as a Trojan horse for US influence and vetoed membership, and the applications of all four countries were suspended.

The four countries resubmitted their applications on 11 May 1967 and with Georges Pompidou succeeding Charles de Gaulle as French President, the veto was lifted. Negations began in 1970 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 and all but Norway acceded to the Community (Norway rejected membership in a referendum).

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, 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 1976 the Council agreed part of the necessary instruments for election, deferring details on electoral systems which remain varied to this day. During President Jenkin's tenure, in June 1979, the elections were held in all the then-members (see European Parliament election, 1979). The new Parliament, galvanised by direct election and new powers, started working full time and became more active than the previous assemblies.

Shortly after its election, Parliament became the first Community institution to propose that the Community adopt the Flag of Europe. The European Council agreed to this and adopted the Symbols of Europe as those of the Community in 1984.

Towards Maastricht

Greece applied to join the community on 12 June 1975, following the restoration of democracy, and joined on 1 January 1981. Following on from Greece, and after their own democratic restoration, Spain and Portugal applied to the communities in 1977 and joined together on 1 January 1986. In 1987 Turkey formally applies to join the Community and begins the longest application process for any country (as of 2008, they are still in negotiations).

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 1986 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 1987. The act was influence by work on what would be the Maastricht Treaty, which was agreed on 10 December 1991, signed the following year and coming into force on 1 November 1993 establishing the European Union.

The EU absorbed the EEC as one of its three pillars. The EEC's areas of activities became the European Community pillar, continuing to follow the supranational structure of the EEC. The EEC institutions became those of the EU, some changing their name accordingly, 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 Community. If the Treaty of Lisbon is to come into force, this pillar system would be abolished and the Community way would be followed by these pillars also.

Aims and achievements

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 1) the establishment of a customs union with a common external tariff 2) common policies for agriculture, transport and trade 3) enlargement of the EEC to the rest of Europe. For the customs union, the treaty provided for a 10 % reduction in custom duties and up to 20 % of global import quotas. Progress on the customs union proceeded much faster than the twelve years planned, however France faced some setbacks due to their war with Algeria.

Members

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). The six were France, West Germany, Italy and the three Benelux countries: Belgium, the Netherlands and Luxembourg. The first enlargement was in 1973, with the accession of Denmark, Ireland and the United Kingdom. Greece, Spain and Portugal joined throughout in the 1980s. Following the creation of the EU in 1993, it has enlarged to include a further fifteen countries by 2007.

State	Accession	State	Accession

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. Prior to 2004, the larger members (France, Germany, Italy and the United Kingdom) have had two Commissioners. In the European Parliament, members are allocated a set number seats related to their population, however these (since 1979) 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.

Institutions

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 1975. These institutions (except for the Auditors) were created in 1957 by the EEC but from 1967 onwards they applied to all three Communities. The Council represents governments, the Parliament represents citizens and the Commission represents the European interest. Essentially, the Council, Parliament or another party place a request for legislation to the Commission. 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). 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. After the Maastricht treaty in 1993, these institutions became those of the European Union, though limited in some areas due to the pillar structure. 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.

Background

The EEC inherited some of the Institutions of the ECSC in that the Common Assembly and Court of Justice of the ECSC had their authority extended to the EEC and Euratom in the same role. However the EEC, and Euratom, had different executive bodies to the ECSC. In place of the ECSC's Council of Ministers was the Council of the European Economic Community, and in place of the High Authority was the Commission of the European Communities.

There was greater difference between these than name: the French government of the day had grown suspicious of the supranational power of the High Authority and sought to curb its powers in favour of the intergovernmental style Council. Hence the Council had a greater executive role in the running of the Community than was the situation in the EEC. By virtue of the Merger Treaty in 1967, the executives of the ECSC and Euratom were merged with that of the EEC, creating a single institutional structure governing the three separate Communities. 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.

Council

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 states every six months and it is related to the European Council, which is an informal gather of national leaders (started in 1961) on the same basis as the Council.

The Council was composed of one national ministers from each state. However the Council meets 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 are 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.

Commission

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.

Parliament

Under the Community, the European Parliament (formerly the European Parliamentary Assembly) had an advisory role to the Council and Commission. 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 1970 and 1975, the Budgetary treaties gave Parliament power over the Community budget. The Parliament's members, up-until 1979 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 1979 (see European Parliament election, 1979). After that, Parliament was elected every five years.

Court

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.

Auditors

The fifth institution is the European Court of Auditors, which despite its name had no judicial powers like the Court of Justice. Instead, it ensured that taxpayer funds from the Community budget have been correctly spent. The court provided an audit report for each financial year to the Council and Parliament and gives opinions and proposals on financial legislation and anti-fraud actions. It is the only institutions not mentioned in the original treaties, having been set up in 1975.