In 1958, Britain proposed that the Common Market be expanded into a transatlantic free-trade area. After the proposal was vetoed by France, Britain engineered the formation (1960) of the European Free Trade Association (EFTA) and was joined by other European nations that did not belong to the Common Market. Beginning in 1973, EFTA and the EEC negotiated a series of agreements that would insure uniformity between the two organizations in many areas of economic policy, and by 1995, all but four of EFTA's members had transferred their memberships from EFTA to the European Union.
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 eliminated and a common external tariff was fixed. For subsequent developments, see European Union.
See A. E. Walsh and J. Paxton, The Structure and Development of the Common Market (1968); R. C. Mowat, Creating the European Community (1973); A. M. Eli-Agraa, ed., The Economics of the European Community (1985); A. Sapir and J. Alexis, ed., The European Internal Market (1989).
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.