The European Economic Community, Past and Present
The prospect of a united Europe has been in the minds
of people since ancient times. The Romans, during their
heyday, desired to conquer the entire European continent,
and nearly succeeded. Between then and now, there have been
other attempts to unify the European continent under one
ruler - people such as Charlemagne, Napoleon and Hitler. It
is only now that the unification of Europe seems to be
possible, but in such a way as has never been thought of in
the history of civilized man. No longer is the move towards
a single ruler or a conquest of land. Today's unification
is one of political and economic borders, in which the
"conquered" nations gain a seat in an international High
Authority and all people involved prosper. At least, this
is the goal of the growing organization in Europe called the
European Economic Community (EEC), or the Common Market.
Officially established in 1958 with six member countries,
the Common Market has been touted as being the best thing to
happen to Western Europe (excepting, of course, the defeat
of Hitler and the decline of Communism). On the other side
of the coin, the EEC has not realized many of it's goals
that were set back in 1958 - it seems that even a slight
recession has the capacity to undermine the Community and
threaten it's existence. While the nations of Europe try to
work together towards this common goal of a unified Europe,
it is necessary to look at the situation and ask if the EEC
is truly having an effect on Europe. The facts are that
most of the "prosperity" of Europe can be as easily blamed
on normal economic practices than on the "integration" of
Europe by the members of the Common Market, and while it is
impossible to determine what Europe would have been like
without the EEC, it is completely probable that it would be
no worse off than it is now.
Following World War II, Europe was in disarray, both
economically and physically. Germany had been divided into
an East and a West, and Communism was creeping into the
Eastern nations. In 1947, the United States began offering
financial aid to any European country which so desired it to
aid in rebuilding after the war - the Marshall Plan. Many
of the Western European nations accepted the gift, which the
United States gave without expectation of direct
reimbursement, while the Soviet Union and most of the
countries it had influence over declined. This was the pump
that primed the post-war revival in Europe. The United
State's main condition for the Marshall aid was that the
recipient nations set up a joint organization to manage the
funds given them and to set up a common economic policy.1
This the nations of Western Europe did this,
and the OEEC (Organization for European Economic
Co-operation) was born. While not a predecessor of the
Common Market, it did give Europe a taste of what working
together would be like.
In Europe in the late 1940's was still the fear of
another war. Germany had been demilitarized, but France was
still unsure of its safety. On May 9, 1950, the foreign
minister of France, Robert Schuman, approached West Germany
with a plan.2 The plan was to unite certain
elements of German and French production under a single
multi-national organization to control the resources. In
this case, the resources were coal, steel, and iron -
without which, it was believed, it was impossible to go to
war. Italy, Belgium, Holland, and Luxembourg were also
invited to join the organization. In 1951, the six signed
the Treaty of Paris, which established the following: the
six member nations gave all control over their steel, iron,
and coal industries to a multi-national High Authority that
would control prices and production, and a small
parliamentary body, a court of law, and a Council of
Ministers was created to see that the rules set down by the
Authority were followed and that each nation had a limited
say (at least an opinion) in the actions of the High
Authority.3 This organization was the
predecessor and model for the Common Market, and was known
as the European Coal and Steel Community (ECSC). Under the
ECSC, France, Germany, Belgium, Holland, Italy and
Luxembourg pooled their coal, iron, and steel resources
quite successfully. Trade barriers and tariffs on coal and
steel between the member nations were gradually eliminated
by the High Authority by 1955.4 Production of steel and mining of coal (now
under the command of the High Authority) increased, and the
six member nations seemed to be getting along with each
other in a common effort for the first time.
Because of the apparent success of the ECSC, there were
advocates within Europe to take the idea a step (or three)
further - instead of merging only the production of coal and
steel between nations, why not merge the nations themselves
(their economies, anyway)? There were a few very outspoken
proponents for a unified European economy, among them Jean
Monnet, Konrad Adenauer, and Robert Schuman. The six member
countries of the ECSC began in 1955 to listen to proposals
for the further unification of Europe. In 1956, the High
Authority commissioned a committee to investigate the
possibility of an integrated European economy.5 The committee, headed by the prime minister of Belgium,
Paul-Henri Spaak, gave their conclusions to the Authority.
Negotiations between the six members ensued, and climaxed in
the signing of the Treaty of Rome in 1957.
The Treaty of Rome was to the EEC what the Treaty of
Paris had been to the ECSC. As the goal of the ECSC had
been to join the coal and steel production of the six member
nations, the goal of the EEC was to join the economies of
the six in order to create a single economic nation. In
1958 the EEC was under production. In style, the EEC was
identical to the ECSC - there was a Council (the equivalent
of the High Authority), made up of elected delegates from
each of the member countries, there was the larger Assembly
(also known as the European Parliament) which had very
little actual power, and there was the European Court of
Justice to handle disputes between member nations and to
enforce the laws made by the Council.6 Also
similar between the two was the idea of eliminating trade
barriers and tariffs. While in the ECSC, the only tariffs
were those on coal and steel, the EEC had to deal with all
tariffs, taxes, and barriers.
The EEC, upon its birth, had several goals for its
members. The most important was the gradual elimination of
tax barriers and tariffs within and between the member
nations. The idea was to turn the six original members into
a customs union, with free trade between themselves and a
uniform trade with the rest of the world - many entities
acting with one economy. Another factor of the EEC was to
equalize the tariffs and taxes on imports for all member
countries. Without these two steps, there would be too much
competition between members, and the EEC would loose it's
competitiveness with the rest of the world - without a world
market, there was no point of even attempting such a union
as the EEC wanted. Other goals of the Common Market
involved a type of social unity of member states - the
ability of any citizen of one member to work in any other
member for equal pay, conditions and benefits as compared to
a citizen of that member, and the right of any business
established in one member to operate in any other member and
receive equal judicial rights and taxation as any firm local
to that member nation. Also important were rules forbidding
member governments unfairly helping local businesses or
citizens over foreign (but member) businesses or citizens.
Finally, the EEC desired (and still does, as it has yet to
be a practical application in Europe) for a single EEC
currency, to be valid and used in all member nations. These
were, and are, the main goals and aspirations of the EEC.
Great Britain refused to be a part of the EEC at this
time, as it had avoided the ECSC a few years earlier. In
1959, she teamed up with Austria, Denmark, Portugal, Norway,
Sweden, and Switzerland to form the European Free Trade Area
(EFTA). The EFTA was designed to be a looser confederation
of nations than the EEC, yet to compete with the EEC by
having its members reduce intra-member customs on
manufactured goods. The EFTA had hoped, and still does, to
merge with the EEC at some time in the future. In 1962,
apparently unimpressed with the advancement of the EFTA,
Britain applied for membership in the EEC. Charles de
Gaulle was president of France at the time, and, fearing an
English takeover of the EEC (which France had largely been
in control of), he vetoed Britain's application (decisions
had to be unanimous between the member nations, and the
other five members had agreed to let Britain enter).
Britain again applied in 1967, and was again rejected by de
Gaulle. In 1969, the Community merged what had been the
three branches of the EEC - the ECSC (which had been a
separate entity from the Common Market), the EEC, and
Euratom, a combined agency designed to research atomic
energy and share its results with the rest of the EEC - into
a single entity - the new European Community (EC).7 When Britain re-applied in 1970, de Gaulle was no
longer in control, the new president of France was Georges
Pompidou. Negotiations began in earnest for the admittance
of Great Britain and Scotland (the United Kingdom), Ireland,
Denmark, and Norway, the latter three having decided to join
Britain in the attempt. In 1973, Denmark, Scotland and the
UK became full members of the EC, Norway's population having
recalled their application. Greece was admitted without
complication in 1981, and Spain and Portugal in 1986. There
have been no other admittances since 1986, although Austria
has applied for membership and agreements are pending with
the Eastern European nations of Czechoslovakia, Poland, and
Hungary that should pave the way towards admittance.8
The goals of the EEC have been described above - free
movement of labor and goods between member nations, a
unified economy (with unified import tariffs, inflation, and
taxes), and a movement towards political unity for the
member nations. These goals were set in 1959, and to date,
only a few have become reality. While the idea of free
movement of goods and labor between nations seems easy to
visualize, there are more problems associated with it than
have been currently solved. Such hindrances as: to whom
does a laborer pay taxes - where he is a citizen, or where
he works and receives social benefits from (such as social
security or a retirement benefit) - because, as of yet,
there is no common taxation plan for the EEC; what can be
done to make buying and selling more fair in the EEC - some
nations can simply produce more for cheaper, and without the
tariffs that used to be put on the cheaper, foreign-made
goods, local manufacturers will be put out of business;
products that are produced in one country and shipped to
another to be sold are not necessarily made with the same
standards or ingredients that the receiving country expects
(this is especially true of foodstuffs).
Another obstruction to European unity is the
ever-present nationalism of each member. The complete
unification of the member nations of the EEC (which was one
of the hopes of the Treaty of Rome) means eliminating all
nationalism as it exists today in Europe. While some
nations are capable of saying that they are willing to lose
their national identity to the promise of a greater good for
Europe, it is only necessary to look at the slight recession
that hit the world in 1982-84.9 The EEC was well established in Europe, and had
just admitted Greece as a full member. Yet, when the
recession hit, each country turned inward instead of outward
to try to remedy the problem. The prospects of the EEC
faded as each nation was faced with economic trouble - which
was exactly what the EEC was supposed to help with.
Unfortunately, no organization works well when its members
flee, and the member nations quickly forgot about the
potential advantages of working together through the
recession. Unemployment in Europe rose to the highest in
recorded history, and the EEC slowly lost its funding until
the Community almost went bankrupt.10 The Community has since slowly revived,
and has regained at least the position and strength it held
before the recession. With challenges such as these, it is
doubtful that there will be further unification of the
member nations of the EEC in the next ten years.
One final note about the apparent prosperity of the EEC
and its members was brought up by Alexander Lamfalussy in an
essay published in the Lloyds Bank Review in 1961.11 In the essay/report, Lamfalussy examines and
analyzes the performances of the individual Western European
nations as they existed before the EEC was introduced to
Europe, and after. (Because there was a war being fought
before the creation of the ECSC, Lamfalussy disregards
findings that are related to the ECSC, such as the
development of iron and coal mines and the production and
export of steel from his analysis.) His conclusion is that
the EEC has neither hampered nor accelerated the development
of Western European nations, and his argument is so well
documented that it is impossible not to give it some thought
and perhaps credit for an alternative explanation of the
European situation. While it is true that things do change
in thirty years of history (from 1961 to 1991), the EEC
seems to have had more problems as the memory of World War
II drifted into the past than it has had economic or
political advancements. Simple evolution of the workplace
can explain much of the EEC's "progress" in the last decade,
and even now it is becoming doubtful of the competitiveness
of the EEC in the future world market.12
The EEC began as a plan to stop the ability of six
major Western European powers to wage war (the ECSC), and
has developed into a twelve-member intra-continental customs
and economic union. It is now being opened up to the
recently Soviet-controlled Eastern Europe - something that
would have been unthinkable 30 years ago. Yet, after over
30 years of existence, there are problems that existed from
the beginning that remain unsolved - mainly, the people
problem. And while the European Community had previously
been viewed as a possible giant in the world market, this
view is changing, gradually lessening the probable degree of
importance of the EEC in the future. Now, a complete
economic union seems to be an unlikely prospect, with a
political union (as per the ambitions of the Rome Treaty)
even less plausible. Still, non-member European nations are
interested in what the EEC has begun, and slowly the EEC's
membership will continue to grow (with Austria likely to be
the next member), despite the reports that there is no
advantage to joining. At least, yet. It is possible that
the EEC will turn themselves around, but there have yet to
appear any signs of this happening. The EEC began as an
organization, the biggest of its kind, and that is what it
remains today - an organization. For the Common Market to
not only succeed but to prosper, it will be necessary in the
future for a more complete collaboration on the parts of the
member nations towards working together through thick and
thin, not only when the going is easy and the seas are calm.
ENDNOTES
- 1. Kerr, Anthony J C, The Common Market and How it
Works, p 5.
- 2. Ibid p 5.
- 3. Ibid p 6.
- 4. Stern, Robert M. "EEC." Groliers Electronic
Encyclopedia, 1990.
- 5. Armitage, Paul, The Common Market, p 10.
- 6. Kerr, op. cit., p 7.
- 7. Ibid p 10.
- 8. Francis, David R. "East European Shift Accelerates
West European Union." The Christian Science Monitor, (8 may
1991), p 7, c 2.
- 9. Cooper, Mary H. Common Market in Disarray.
(Pamphlet) Vol 1, no. 21, p 411.
- 10. Ibid p 411.
- 11. Krause, Lawrence B, ed. The Common Market:
Progress and Controversy, pp 90-107.
- 12. LaFranchi, Howard. "European Unity Drive Falters."
The Christian Science Monitor, (20 May 1991), p 4, c 1.
BIBLIOGRAPHY
Armitage, Paul. The Common Market. New Jersey : Silver Burdett,
1978.
Cooper, Mary H. Common Market in Disarray. (Pamphlet)
Washington, DC: Editorial Research Reports, 1984, vol 1, no. 21.
Francis, David R. "East European Shift Accelerates West European
Union." The Christian Science Monitor, (8 may 1991), p 7, c 2.
Kerr, Anthony J. C. The Common Market and How it Works. New
York : Pergamon Press, 1986.
Krause, Lawrence B., ed. The Common Market : Progress and
Controversy. New Jersey : Prentice-Hall, Inc., 1964.
LaFranchi, Howard. "European Unity Drive Falters." The Christian
Science Monitor, (20 May 1991), p 4, c 1.
Stern, Robert M. "EEC." Groliers Electronic Encyclopedia, 1990.
Tyler Jones, May 28, 1991