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Part of a series on the
History of the
European Union
Timeline
Organisation
European Communities (1958–2009)
European Coal and Steel Community (1952–2002)
European Economic Community (1958–1993)
European Atomic Energy Community (1958–present)
European Community (1993–2009)
Justice and Home Affairs (1993–2003)
Police and Judicial Co-operation in Criminal Matters (2003–2009)
Common Foreign and Security Policy pillar (1993–2009)
Western European Union (1954–2011)
Western Union (1948–1954)
Treaties
Treaty of Paris 1951
Treaty of Rome 1957
Merger Treaty 1965
Single European Act 1986
Maastricht Treaty 1992
Treaty of Amsterdam 1997
Treaty of Nice 2001
Treaty of Lisbon 2007
Commissions
Hallstein Commission 1958
Rey Commission 1967
Malfatti Commission 1970
Mansholt Commission 1972
Ortoli Commission 1973
Jenkins Commission 1977
Thorn Commission 1981
Delors Commissions I–III 1985
Santer Commission 1994
Prodi Commission 1999
Barroso Commission I & II 2004
Juncker Commission 2014
Von der Leyen Commission I 2019
Von der Leyen Commission II 2024
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The European Economic Community (EEC) was a regional organisation created by the Treaty of Rome of 1957,[note 1] aiming to foster economic integration among its member states. It was subsequently renamed the European Community (EC) upon becoming integrated into the first pillar of the newly formed European Union (EU) in 1993. In the popular language, the singular European Community was sometimes inaccurately used in the wider sense of the plural European Communities, in spite of the latter designation covering all the three constituent entities of the first pillar.[2] The EEC was also known as the European Common Market (ECM) in the English-speaking countries,[3] and sometimes referred to as the European Community even before it was officially renamed as such in 1993. In 2009, the EC formally ceased to exist and its institutions were directly absorbed by the EU. This made the Union the formal successor institution of the Community.

The Community's initial aim was to bring about economic integration, including a common market and customs union, among its six founding members: Belgium, France, Italy, Luxembourg, the Netherlands and West Germany. It gained a common set of institutions along with the European Coal and Steel Community (ECSC) and the European Atomic Energy Community (EURATOM) as one of the European Communities under the 1965 Merger Treaty (Treaty of Brussels). In 1993, a complete single market was achieved, known as the internal market, which allowed for the free movement of goods, capital, services, and people within the EEC. In 1994 the internal market was formalised by the EEA agreement. This agreement also extended the internal market to include most of the member states of the European Free Trade Association, forming the European Economic Area, which encompasses 15 countries.

Upon the entry into force of the Maastricht Treaty in 1993, the EEC was renamed the European Community to reflect that it covered a wider range than economic policy.[4] This was also when the three European Communities, including the EC, were collectively made to constitute the first of the three pillars of the European Union, which the treaty also founded. The EC existed in this form until it was abolished by the 2009 Treaty of Lisbon, which incorporated the EC's institutions into the EU's wider framework and provided that the EU would "replace and succeed the European Community".[5]

History

[edit]
Further information: History of the European Union

Background

[edit]

In April 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.

With the aim of creating a federal Europe two further communities were proposed: a European Defence Community and a European Political Community. While the treaty for the latter was being drawn up by the Common Assembly, the ECSC parliamentary chamber, the proposed defence community was rejected by the French Parliament. ECSC 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.[6] Following 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 conference centre in 1956.[7] Together with the Ohlin Report the Spaak Report would provide the basis for the Treaty of Rome.

In 1956, Paul-Henri Spaak led the Intergovernmental Conference on the Common Market and Euratom at the Val Duchesse conference centre, 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

[edit]

The resulting communities were the European Economic Community (EEC) and the European Atomic Energy Community (EURATOM or sometimes EAEC). These were markedly less supranational than the previous communities,[citation needed] 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). Germany became a founding member of the EEC, and Konrad Adenauer was made leader in a very short time. The first formal meeting of the Hallstein Commission was held on 16 January 1958 at the Château de Val-Duchesse. 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. The first move towards political developments came at the end of 1959 when the foreign ministers of the six members announced that would be meeting quarterly to discuss political issues and international problems.[8] 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.

French President Charles de Gaulle vetoed British membership, held back the development of Parliament's powers and was at the centre of the 'empty chair crisis' of 1965.

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" 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 1966 whereby a gentlemen's agreement permitted members to use a veto on areas of national interest.[9][10]

On 1 July 1967, when the Merger Treaty came into operation, combining 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

[edit]

The 1960s saw the first attempts at enlargement. In 1961, Denmark, Ireland, the United Kingdom and Norway (in 1962), applied to join the three Communities. However, President Charles de Gaulle saw British membership as a Trojan Horse for U.S. influence and vetoed membership,[11] and the applications of all four countries were suspended.[12] Greece became the first country to join the EC in 1961 as an associate member, however its membership was suspended in 1967 after a coup d'état established a military dictatorship called the Regime of the Colonels.[13]

A year later, in February 1962, Spain attempted to join the European Community. However, because Francoist Spain was not a democracy, all members rejected the request in 1964.

The four countries resubmitted their applications on 11 May 1967 and with Georges Pompidou succeeding Charles de Gaulle as French president in 1969, the veto was lifted. Negotiations began in 1970 under the pro-European UK 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 1973. The Norwegian people had rejected membership in a referendum on 25 September 1972.[14]

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,[15] 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.[16]

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.[15] During the tenure of President Jenkins, in June 1979, the elections were held in all the then-members (see 1979 European Parliament election).[17] The new Parliament, galvanised by direct election and new powers, started working full-time and became more active than the previous assemblies.[15]

Shortly after its election, the Parliament proposed that the Community adopt the flag of Europe design used by the Council of Europe.[18][19] The European Council in 1984 appointed an ad hoc committee for this purpose.[20] The European Council in 1985 largely followed the committee's recommendations; but, as the adoption of a flag was strongly reminiscent of a national flag representing statehood was controversial, the "flag of Europe" design was adopted with the status only of a "logo" or "emblem".[1]

The European Council, or European summit, had developed since the 1960s 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.g. the commission) over the integration process. It was mentioned in the treaties for the first time in the Single European Act (see below).[21]

Enlargement, 1957 to 2013
  Community enlargement
  Since 1995

Toward Maastricht

[edit]

Greece re-applied to join the community on 12 June 1975, following the restoration of democracy, and joined on 1 January 1981.[22] Following on from Greece, and after their own democratic restoration, Spain and Portugal applied to the communities in 1977 and joined on 1 January 1986.[23] In 1987, Turkey formally applied to join the Community and began the longest application process for any country.

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 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.[24] The act was followed 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, and paving the way for the European Monetary Union.

European Community

[edit]

The EU absorbed the European Communities as one of its three pillars. The EEC's areas of activities were enlarged and were renamed the European Community, continuing to follow the supranational structure of the EEC. 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".

There are more competencies listed in Article 3 of the European Communities pillar than there are in Article 3 of the Treaty of Rome. This is due to the fact that some competencies were already inherent in the Treaty of Tome, some were referred to in the Treaty of Rome, and some were extended under Article 235 of the Treaty of Rome. Competencies were added to cover trans-European networks, and the work of the Culture Committee and Education Committee that were previously sharing existing competencies. The only entry in Article 3 that represented something new is the competence covering the entry and movement of persons in the internal market.

However, after the Treaty of Maastricht, Parliament gained a more formal role. Maastricht brought in the codecision procedure, which gave it equal legislative power with the Council on Community matters. This replaced the informal parliamentary blocking powers established by the 1979 Isoglucose decision.[25]

It also abolished any existing state like Simple Majority voting in the EEC, replacing it with Qualified Majority Voting, a procedure more commonly used in international organisations.

The Treaty of Amsterdam transferred responsibility for free movement of persons (e.g., visas, illegal immigration, asylum) from the Justice and Home Affairs (JHA) pillar to the European Community (JHA was renamed Police and Judicial Co-operation in Criminal Matters (PJCC) as a result).[26] Both Amsterdam and the Treaty of Nice also extended codecision procedure to nearly all policy areas, giving Parliament equal power to the Council in the Community.

In 2002, the Treaty of Paris which established the ECSC expired, having reached its 50-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 2009 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 2005.

Aims and achievements

[edit]

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:[27]

  1. The establishment of a customs union with a common external tariff
  2. Common policies for agriculture, transport and trade, including standardization (for example, the CE marking designates standards compliance)
  3. Enlargement of the EEC to the rest of Europe

Citing Article 2 from the original text of the Treaty of Rome of 25 March 1957, the EEC aimed at "a harmonious development of economic activities, a continuous and balanced expansion, an increase in stability, an accelerated raising of the standard of living and closer relations between the States belonging to it". Given the fear of the Cold War, many Western Europeans were afraid that poverty would make "the population vulnerable to communist propaganda" (Meurs 2018, p. 68), meaning that increasing prosperity would be beneficial to harmonise power between the Western and Eastern blocs, other than reconcile Member States such as France and Germany after WW2.

The tasks entrusted to the Community were divided among an assembly, the European Parliament, Council, Commission, and Court of Justice. Moreover, restrictions to market were lifted to further liberate trade among Member States. Citizens of Member States (other than goods, services, and capital) were entitled to freedom of movement. The CAP, Common Agricultural Policy, regulated and subsided the agricultural sphere. A European Social Fund was implemented in favour of employees who lost their jobs. A European Investment Bank was established to "facilitate the economic expansion of the Community by opening up fresh resources" (Art. 3 Treaty of Rome 25 March 1957). All these implementations included overseas territories. Competition was to be kept alive to make products cheaper for European consumers.

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.[28]

Members

[edit]
Further information: Member state of the European Union and Enlargement of the European Union

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 in the 1980s. The former East Germany became part of the EEC upon German reunification in 1990. Following the creation of the EU in 1993, it has enlarged to include an additional sixteen countries by 2013.

  Founding members of EEC
  Later members of EEC
Flag State Accession Language(s) Currency Population
(1990)[29]
Belgium 25 March 1957 Dutch, French and German Franc (fr.)[note 2] 10,016,000
France 25 March 1957 French Franc (F) 56,718,000
West Germany/Germany[note 3] 25 March 1957 German Mark (DM) 63,254,000[note 4]
Italy 25 March 1957 Italian Lira (Lit.) 56,762,700
Luxembourg 25 March 1957 French, German and Luxembourgish Franc (fr.)[note 2] 384,400
Netherlands 25 March 1957 Dutch and Frisian Guilder (ƒ) 14,892,300
Denmark 1 January 1973 Danish Krone (kr.) 5,146,500
Ireland 1 January 1973 Irish and English Punt (£) 3,521,000
United Kingdom 1 January 1973 English[note 5] Sterling (£) 57,681,000
Greece 1 January 1981 Greek Drachma (₯) 10,120,000
Portugal 1 January 1986 Portuguese Escudo () 9,862,500
Spain 1 January 1986 Spanish[note 6] Peseta (₧) 38,993,800

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

[edit]
Further information: Institutions of the European Union

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 the member state governments, the Parliament represents citizens and the Commission represents the European interest.[30] 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.[30] 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 of Justice was the highest authority in the law, settling legal disputes in the Community, while the Auditors had no power but to investigate.

Background

[edit]
The High Authority had more executive powers than the Commission which replaced it.

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 EEC than was the situation in the ECSC. 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).[31][32][33]

Council

[edit]
President Jacques Delors, the last EEC Commission President

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 1961) on the same basis as the council.[34]

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.[34] Since the 1960s the council also began to meet informally at the level of heads of government and heads of state; these European summits followed the same presidency system and secretariat as the council but was not a formal formation of it.

Commission

[edit]

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 interest of the Community as a whole. Every member state submitted one commissioner (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

[edit]
The European Parliament held its first elections in 1979, slowly gaining more influence over Community decision making.

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.[35][36] 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 1980 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 1979 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.

Court

[edit]

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

[edit]

The fifth institution is the European Court of Auditors. Its ensured that taxpayer funds from the Community budget had been correctly spent by the Community's institutions. The ECA provided an audit report for each financial year to the Council and Parliament and gave opinions and proposals on financial legislation and anti-fraud actions. It is the only institution not mentioned in the original treaties, having been set up in 1975.[37]

Policy areas

[edit]
Further information: Three pillars of the European Union

At the time of its abolition, the European Community pillar covered the following areas;[26]

See also

[edit]

EU evolution timeline

[edit]

Since the end of World War II, most sovereign European countries have entered into treaties and thereby co-operated and harmonised policies (or pooled sovereignty) in an increasing number of areas, in the European integration project or the construction of Europe (French: la construction européenne). The following timeline outlines the legal inception of the European Union (EU)—the principal framework for this unification. The EU inherited many of its present organizations, institutions, and responsibilities from the European Communities (EC), which were founded in the 1950s in the spirit of the Schuman Declaration.

Legend:
  S: signing
  F: entry into force
  T: termination
  E: expiry
    de facto supersession
  Rel. w/ EC/EU framework:
   de facto inside
   outside 		                  European Union (EU) [Cont.]  
European Communities (EC) (Pillar I)
European Atomic Energy Community (EAEC or EURATOM) [Cont.]      
/ / / European Coal and Steel Community (ECSC)  
(Distr. of competences)
    European Economic Community (EEC)    
            Schengen Rules European Community (EC)
TREVI Justice and Home Affairs (JHA, pillar III)  
  / North Atlantic Treaty Organisation (NATO) [Cont.] Police and Judicial Co-operation in Criminal Matters (PJCC, pillar III)

Anglo-French alliance 		[Defence arm handed to NATO] European Political Co-operation (EPC)   Common Foreign and Security Policy
(CFSP, pillar II)
Western Union (WU) / Western European Union (WEU) [Tasks defined following the WEU's 1984 reactivation handed to the EU]
     
[Social, cultural tasks handed to CoE] [Cont.]                
      Council of Europe (CoE)
Entente Cordiale
S: 8 April 1904
Dunkirk Treaty[i]
S: 4 March 1947
F: 8 September 1947
E: 8 September 1997
Brussels Treaty[i]
S: 17 March 1948
F: 25 August 1948
T: 30 June 2011
London and Washington treaties[i]
S: 5 May/4 April 1949
F: 3 August/24 August 1949
Paris treaties: ECSC and EDC[ii]
S: 18 April 1951/27 May 1952
F: 23 July 1952/?
E: 23 July 2002/—
Rome treaties: EEC and EAEC
S: 25 March 1957
F: 1 January 1958
WEU-CoE agreement[i]
S: 21 October 1959
F: 1 January 1960
Brussels (Merger) Treaty[iii]
S: 8 April 1965
F: 1 July 1967
Davignon report
S: 27 October 1970
Single European Act (SEA)
S: 17/28 February 1986
F: 1 July 1987
Schengen Treaty and Convention
S: 14 June 1985/19 June 1990
F: 26 March 1995
Maastricht Treaty[iv][v]
S: 7 February 1992
F: 1 November 1993
Amsterdam Treaty
S: 2 October 1997
F: 1 May 1999
Nice Treaty
S: 26 February 2001
F: 1 February 2003
Lisbon Treaty[vi]
S: 13 December 2007
F: 1 December 2009


  1. ^ a b c d e Although not EU treaties per se, these treaties affected the development of the EU defence arm, a main part of the CFSP. The Franco-British alliance established by the Dunkirk Treaty was de facto superseded by WU. The CFSP pillar was bolstered by some of the security structures that had been established within the remit of the 1955 Modified Brussels Treaty (MBT). The Brussels Treaty was terminated in 2011, consequently dissolving the WEU, as the mutual defence clause that the Lisbon Treaty provided for EU was considered to render the WEU superfluous. The EU thus de facto superseded the WEU.
  2. ^ Plans to establish a European Political Community (EPC) were shelved following the French failure to ratify the Treaty establishing the European Defence Community (EDC). The EPC would have combined the ECSC and the EDC.
  3. ^ The European Communities obtained common institutions and a shared legal personality (i.e. ability to e.g. sign treaties in their own right).
  4. ^ The treaties of Maastricht and Rome form the EU's legal basis, and are also referred to as the Treaty on European Union (TEU) and the Treaty on the Functioning of the European Union (TFEU), respectively. They are amended by secondary treaties.
  5. ^ Between the EU's founding in 1993 and consolidation in 2009, the union consisted of three pillars, the first of which were the European Communities. The other two pillars consisted of additional areas of cooperation that had been added to the EU's remit.
  6. ^ The consolidation meant that the EU inherited the European Communities' legal personality and that the pillar system was abolished, resulting in the EU framework as such covering all policy areas. Executive/legislative power in each area was instead determined by a distribution of competencies between EU institutions and member states. This distribution, as well as treaty provisions for policy areas in which unanimity is required and qualified majority voting is possible, reflects the depth of EU integration as well as the EU's partly supranational and partly intergovernmental nature.

Notes

[edit]

References

[edit]

Further reading

[edit]
[edit]
Revisions and contributorsEdit on WikipediaRead on Wikipedia

European Economic Community

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The European Economic Community (EEC) was a supranational organization established by the Treaty of Rome, signed on 25 March 1957 by Belgium, France, Italy, Luxembourg, the Netherlands, and West Germany, and entering into force on 1 January 1958, with the primary aim of creating a common market to facilitate the free movement of goods, services, capital, and labor among its founding members while establishing a customs union and common policies in sectors such as agriculture and transport. The EEC's core institutions included a Commission to propose and oversee , a representing national governments, a initially with advisory powers, and a Court of to ensure uniform application of the ; these structures enabled progressive , culminating in the elimination of internal tariffs and quotas by 1968, which boosted intra-community trade volumes significantly. The organization expanded through accessions, adding , , and the in 1973, in 1981, and and in 1986, thereby extending its market to 12 member states and enhancing economic interdependence across . Despite these accomplishments, the EEC encountered notable controversies, including the 1965–1966 Empty Chair Crisis precipitated by French President Charles de Gaulle's boycott of meetings to resist what he viewed as excessive supranational authority encroaching on national sovereignty, particularly regarding majority voting and agricultural policy financing; this led to the , allowing vetoes on vital national interests, which preserved intergovernmental elements amid tensions over the Common Agricultural Policy's costs and the community's budgetary autonomy. De Gaulle also vetoed British membership applications in 1963 and 1967, citing concerns over the UK's Atlanticist orientation potentially diluting the community's continental focus. The EEC evolved through subsequent treaties, merging executives with related communities in 1967, deepening integration via the in 1986, and transforming into the European Community as the economic pillar of the under the 1992 , marking its shift from purely economic cooperation toward broader political union.

Historical Origins

Post-World War II Context and Early Integration Efforts

The end of on May 8, 1945, left Western Europe in economic ruin, with industrial production halved, agricultural output severely reduced, and widespread infrastructure destruction exacerbating shortages of food, fuel, and housing for populations scarred by over 40 million deaths and displacements. The onset of the , formalized in conferences like (February 1945) and (July-August 1945), divided the continent along ideological lines, prompting Western leaders to seek mechanisms for economic stabilization and mutual security to counter Soviet influence and prevent renewed intra-European conflict, particularly between and a recovering . In response to Europe's plight, U.S. George C. announced an aid program on June 5, 1947, offering over $12 billion (equivalent to approximately $150 billion in current terms) in grants and loans to rebuild economies and foster self-sustaining growth among 16 participating Western European nations, explicitly conditioned on coordinated European planning to avoid fragmented national recoveries that could invite communist expansion. This initiative culminated in the formation of the Organisation for European Economic Co-operation (OEEC) on April 16, 1948, comprising the 16 aid recipients (including , , , , , , , , , the , , , , , , and the ), which administered the funds, promoted intra-European trade liberalization by reducing tariffs and quotas, and established consultative bodies for multilateral coordination—marking the first institutional framework for supranational economic dialogue in postwar Europe, though lacking enforcement powers. The OEEC's emphasis on collaborative recovery, driven by U.S. insistence rather than endogenous European , achieved a 35% industrial production increase by 1951 but highlighted persistent national barriers to deeper integration. Parallel political efforts emphasized unity to underpin peace. British Prime Minister , in a September 19, 1946, speech in , advocated a "United of " centered on Franco-German reconciliation as essential to avert future wars, influencing movements across the continent. This led to the , signed March 17, 1948, by , , , the , and the , committing signatories to collective self-defense against aggression, economic and social collaboration, and "progressive integration of " through cultural ties—serving as a defensive bulwark amid rising tensions and a precursor to while tentatively addressing without ceding . The Hague Congress, convened May 7-11, 1948, by the International Committee of the Movements for European Unity, gathered over 800 delegates from 16 countries to debate federalist principles, adopting resolutions for a European assembly, , and protections, alongside a "Message to Europeans" urging immediate steps toward political federation to secure lasting peace. These deliberations directly spurred the Council of Europe's Statute, signed May 5, 1949, in by ten founding members (, , , , , , the , , , and the ), which entered into force August 3, 1949, with headquarters in ; the organization aimed to foster "greater unity" via a consultative and of ministers, prioritizing economic activities, social advancements, and defense, yet its intergovernmental structure—requiring unanimous decisions—limited it to advisory roles, underscoring early integration's reliance on voluntary cooperation amid divergent national interests. Such initiatives, motivated by pragmatic needs for reconstruction and rather than abstract idealism, revealed the causal primacy of external pressures like U.S. and Soviet threats in catalyzing Europe's tentative postwar economic and political alignment, though substantive supranationalism awaited sector-specific proposals.

Schuman Plan and European Coal and Steel Community

The Schuman Plan, formally presented in the on 9 May 1950 by French Foreign Minister , proposed placing the production of coal and steel—key resources for military armament—under a joint supranational authority shared by and , with participation open to other European states. This initiative, drafted primarily by , a French economic planner, aimed to render between historic rivals "not merely unthinkable, but materially impossible" by economically intertwining their heavy industries, thereby preventing unilateral rearmament. While often framed in official narratives as a bold step toward perpetual peace, the plan's causal drivers were pragmatic: sought to constrain 's resurgent industrial capacity, which had fueled two world wars, while facilitating its economic recovery under controlled integration, amid U.S. pressures for European unity to counter Soviet expansion during the early . Monnet's functionalist strategy emphasized sector-specific integration as a foundation for broader political spillover, prioritizing causal mechanisms like resource interdependence over abstract idealism. Negotiations following the declaration involved the six interested nations—Belgium, France, West Germany, Italy, Luxembourg, and the Netherlands—and culminated in the Treaty of Paris, signed on 18 April 1951. The treaty established the (ECSC), which eliminated tariffs and quotas on intra-community trade in coal and steel, introduced common pricing mechanisms, and invested revenues from levies into modernization funds. Ratified by national parliaments, the treaty entered into force on 23 July 1952, marking the first supranational in modern . The ECSC's institutions reflected a novel balance of supranationalism and : the High Authority, a nine-member executive body independent of national governments (with as its first president from 1952), held powers to enforce rules, set production quotas, and mediate disputes; it was overseen by a Special representing member states, a Common Assembly of 78 appointed parliamentarians for consultative review, and a Court of to adjudicate legal challenges. This structure prioritized causal efficacy in preventing —evident in the High Authority's authority to impose fines for —over equal , though it faced early resistance from national industries wary of lost . By 1953, intra-ECSC steel trade had risen 50% from pre-treaty levels, demonstrating the plan's empirical success in fostering interdependence, though long-term data later revealed uneven benefits favoring larger producers like . The ECSC's 50-year mandate expired in 2002, with assets transferred to the , but its framework laid precedents for subsequent communities by proving supranational governance could align national interests through enforceable economic rules.

Formation and Initial Structure

Negotiations Leading to the Treaty of Rome

Following the success of the (ECSC), established in 1951, the foreign ministers of its six member states—, , , , , and the —convened the Messina Conference from June 1 to 3, 1955, in , , to explore broader economic integration. The conference, hosted by Italian Foreign Minister Gaetano Martino, addressed stalled European Defense Community plans and sought to relaunch supranational cooperation in non-military sectors, including transport, conventional energy, and a potential common market to reduce trade barriers and foster economic interdependence. Participants, including Belgian Foreign Minister , emphasized extending ECSC principles to prevent future conflicts through economic ties, while the attended as an observer but expressed reservations about supranational authority. The Messina Resolution mandated an intergovernmental committee, chaired by Spaak, to examine these proposals, explicitly excluding defense to focus on economic revival amid post-war recovery needs. The Spaak Committee, comprising high-level officials from the six states, convened from July 1955 and produced its report on April 21, 1956, outlining the creation of a European Economic Community (EEC) with a to eliminate internal tariffs over a transitional period and establish common external tariffs, alongside a European Atomic Energy Community () for nuclear cooperation. The report advocated supranational institutions, including a commission with executive powers, a parliamentary assembly, and a , to enforce rules on , , and social policies, drawing on ECSC precedents to ensure irreversible integration. It addressed French concerns by proposing safeguards for and nuclear independence, while accommodating German and Dutch preferences for free movement of goods, services, capital, and people. The , invited to participate, declined full involvement, favoring a looser that preserved national sovereignty, highlighting early transatlantic divergences on integration depth. Building on the Spaak Report, the Intergovernmental Conference opened on June 26, 1956, at the Val Duchesse castle in , involving foreign ministers and experts from the six states to draft the EEC and treaties over 18 months of intense sessions. Negotiations tackled core disputes, such as the pace of tariff reductions (set at 10% initial cuts by 1958, full by 1970), institutional balance (strengthening the Commission over national vetoes via qualified majority voting after transition), and policy harmonization, including a common agricultural framework to secure French exports. French negotiator Christian Pineau pushed for protections against German industrial dominance, while Dutch and German delegates emphasized open markets; compromises emerged through incremental concessions, avoiding deadlock despite occasional tensions over . By early 1957, consensus solidified, enabling the treaties' finalization without major concessions to intergovernmental models, reflecting the six states' commitment to supranationalism as a bulwark against .

Signing and Ratification of the Treaty (1957–1958)

The Treaty establishing the European Economic Community (EEC) was signed on 25 March 1957 in by the foreign ministers of its six founding members: , , the , , , and the . The signing occurred alongside that of the parallel Treaty establishing the (Euratom), reflecting complementary aims of economic and nuclear integration among the same states, which had previously formed the in 1951. Following signature, the EEC Treaty required ratification by each signatory state's national parliament, a process that unfolded without significant opposition and spanned from May to December 1957. Ratification proceeded as parliamentary assemblies reviewed and approved the text, affirming commitments to a customs union, common market, and coordinated policies. Key dates included Italy on 23 November 1957, France on 25 November 1957, the Netherlands on 5 December 1957, Belgium and the Federal Republic of Germany on 13 December 1957, and Luxembourg on 29 December 1957.
CountryRatification Date
23 November 1957
25 November 1957
5 December 1957
13 December 1957
Federal Republic of 13 December 1957
29 December 1957
With all ratifications secured, the entered into force on 1 January 1958, marking the formal establishment of the EEC and initiating transitional measures toward . This timeline ensured synchronized commencement, as the stipulated activation upon unanimous by the original signatories.

Operational Development

Implementation of the Customs Union (1958–1968)

The Customs Union of the (EEC), comprising , , , , the , and , began implementation on 1 January 1958 upon the Treaty's , aiming to eliminate internal tariffs and quantitative restrictions while establishing a uniform (CET) against non-members. This structure, rooted in Articles 9–30 of the Treaty, prohibited customs duties between members and mandated progressive liberalization to foster intra-community trade, with the CET calculated as the of the members' pre-existing duties, subject to adjustments via General Agreement on Tariffs and Trade (GATT) negotiations. Tariff reductions proceeded in multiple phases during the transitional period, originally projected to span 12 years but accelerated to completion within a . The outlined 10 stages for duty abolition, starting with an initial 10% reduction in customs duties and up to 20% relaxation in quantitative restrictions on global imports, enacted via Regulation No. 3 of 4 January 1958. Subsequent annual decreases of approximately 10% followed, with the first major intra-EEC cut of 10% effective from 1 1960 under Decision 1/60, covering industrial goods and building toward full elimination. By the end of the first stage (), cumulative reductions reached 30–40% on average, supported by parallel efforts to harmonize the CET nomenclature using the Brussels Tariff Nomenclature adopted in . The CET's adoption faced initial hurdles, including discrepancies in national tariff levels—e.g., lower Dutch and German rates versus higher French and Italian ones—necessitating compensatory adjustments and GATT concessions. decisions in 1960 and 1962 progressively aligned external duties, with the Dillon Round (1960–1962) securing a 6.5% average cut in the provisional CET to facilitate third-country acceptance. Quantitative restrictions were largely dismantled by 1962 for industrial products, though agricultural quotas persisted pending the Common Agricultural Policy's rollout, ensuring the Customs Union's scope covered all trade in goods as per Treaty Article 3. Full realization occurred on 1 July 1968, four years ahead of the original schedule, when all internal duties and restrictions were abolished and the CET fully enforced, marking the Customs Union's operational maturity. This acceleration stemmed from accelerations in and sustained political commitment among the Six, despite interim frictions like France's temporary withdrawal from meetings in 1965–1966, yielding a tripling of intra-EEC trade from 1958 levels by 1968 and laying groundwork for deeper .

Empty Chair Crisis and Luxembourg Compromise (1965–1966)

The Empty Chair Crisis stemmed from French opposition to European Commission proposals aimed at enhancing the supranational character of the European Economic Community (EEC). In March 1965, the Commission, under President Walter Hallstein, presented plans to finance the EEC budget through its "own resources"—primarily levies on imports from non-member countries and a harmonized value-added tax (VAT)—replacing national contributions, alongside a shift to qualified majority voting in the Council after the transitional period for establishing the common market ended in 1969. These measures were intended to support the Common Agricultural Policy (CAP) by ensuring stable funding independent of national governments, but French President Charles de Gaulle rejected them as an infringement on state sovereignty, particularly France's veto rights on agricultural issues vital to its economy, which accounted for a significant portion of EEC trade. De Gaulle, prioritizing intergovernmental cooperation over federalism, viewed the Commission's initiative as an unauthorized power grab that undermined the equality of member states. Tensions escalated at the meeting on 30 June 1965, when refused to accept a package deal linking CAP financing to majority voting reforms, leading French ministers to subsequent EEC Council and committee sessions. This "empty chair" policy, initiated by de Gaulle to force concessions, halted decision-making across EEC institutions for approximately six months, from July 1965 to January 1966, as the other five members continued limited operations without . The highlighted de Gaulle's strategy to reassert national control, including his prior vetoes of UK membership and criticism of the Commission's quasi-executive role, reflecting broader French resistance to supranationalism amid domestic political pressures following de Gaulle's 1965 presidential reelection. Diplomatic efforts, mediated partly by Luxembourg's foreign minister , culminated in the on 30 January 1966, an informal agreement among the Six that preserved EEC functionality without amending the . The compromise stipulated: "Where, in the case of decisions by an absolute majority, very important interests of one or more partners are at stake, the Members of the will endeavour, within a reasonable time, to reach solutions which can be adopted by all the Members of the while respecting their mutual interests and the interests of the Community." This effectively enshrined a veto for vital national interests, allowing prolonged consultations to avoid majority votes, though it did not legally override the treaty's provisions for qualified majority voting. The resolution enabled the EEC to proceed with implementation and completion, but the compromise institutionalized a consensus norm that frequently invoked national vetoes, impeding legislative progress and reinforcing intergovernmental dynamics over supranational authority for subsequent decades. Critics, including Commission officials, argued it perpetuated inefficiency, as member states repeatedly claimed vital interests to block reforms, while proponents saw it as a pragmatic safeguard for in a nascent integration project. The crisis underscored the tension between and political autonomy, with securing short-term gains at the cost of long-term integration momentum.

First Enlargement (1973)

The first enlargement of the European Economic Community (EEC) occurred on 1 January 1973, when , , and the acceded as full members, expanding the Community from six to nine states. This process followed initial applications in the early 1960s from the , , , and , which were blocked by French vetoes in 1963 and 1967 under President , who opposed British entry due to concerns over its transatlantic ties potentially undermining the EEC's supranational character. Negotiations resumed in June 1970 after de Gaulle's resignation in 1969 and under the more accommodating stance of President , with formal talks commencing on 30 June in . The accession treaty was signed on 22 January 1972 in by representatives of the six existing members and the four applicants, addressing transitional arrangements for tariffs, , fisheries, and regional policies to accommodate the newcomers' economies. Ratification proceeded through national parliaments and, where required, : approved via on 2 1972 with 63.3% in favor, through a 1 December 1972 plebiscite yielding 83.1% support, and the via parliamentary vote without a public ballot under Heath's Conservative government. , however, rejected membership in a 25 September 1972 , with 53.5% voting against, primarily citing threats to national sovereignty over resources like fisheries and emerging . Accession motivations varied: the sought to reverse economic stagnation and bolster its post-imperial influence through integration into a dynamic continental market, having previously formed the rival (EFTA) in 1960. and , heavily dependent on UK trade—accounting for over 70% of Irish exports and significant Danish agricultural shipments—pursued entry to preserve access to their primary market amid the UK's accession, viewing EEC membership as essential for economic stability rather than ideological alignment. Upon entry, the enlargement introduced budgetary strains, particularly from the UK's net contributor status and demands for agricultural funding reforms, while enhancing the Community's global weight and internal market size to encompass approximately 260 million consumers. The entered into force on the stipulated date after all ratifications, marking a pivotal shift toward broader despite initial frictions over common policies.

Objectives and Key Policies

Economic Integration Goals and Common Market Principles

The economic integration goals of the European Economic Community (EEC), established by the Treaty of Rome signed on 25 March 1957, focused on creating a common market to drive coordinated growth and stability among its six founding members: Belgium, France, the Federal Republic of Germany, Italy, Luxembourg, and the Netherlands. Article 2 of the treaty defined the Community's core task as "by establishing a common market and progressively approximating the economic policies of Member States, to promote throughout the Community a harmonious development of economic activities, a continuous and balanced expansion, an increase in stability, an accelerated raising of the standard of living and closer relations between the States belonging to it." This objective emphasized empirical economic convergence through reduced barriers rather than political union, with integration mechanisms designed to eliminate distortions in trade and production factors over a 12-year transitional period beginning 1 January 1958. Article 3 enumerated the specific activities to achieve these goals, including the prohibition of customs duties, quantitative restrictions, and equivalent measures on intra-Community trade in goods; adoption of a toward third countries; removal of obstacles to the free movement of persons, services, and capital; establishment of common policies for and ; maintenance of undistorted by state aids or monopolies; and approximation of member states' laws as necessary for market functioning. These provisions reflected a causal approach to integration, where tariff elimination and policy harmonization were intended to stimulate intra-Community trade volumes—projected to rise substantially through —and foster productivity gains via larger-scale operations, without relying on fiscal transfers or centralized redistribution. The common market principles rested on a foundational , as articulated in Title II (Articles 9–29), which mandated the complete abolition of internal s and quotas on all goods by the transitional period's end, alongside a unified external to prevent deflection and ensure . This union extended to the progressive realization of three additional freedoms—movement of persons (Title III, Articles 48–51, securing worker mobility and non-discrimination in employment by 1 July 1968 at latest), services and establishment (Titles IV–V, Articles 52–66, abolishing restrictions on cross-border business operations), and capital (Title VI, Articles 67–73, liberalizing payments and transfers)—forming the "" that underpinned market integration by treating labor, enterprise, and finance as mobile inputs akin to goods. rules (Articles 85–90) further reinforced these principles by prohibiting cartels, abuses of dominant position, and distortive subsidies, aiming to replicate competitive pressures of a single national across borders while allowing limited state interventions justified by public interest.

Common Agricultural Policy (CAP) Establishment (1962)

The (1957) outlined the CAP's objectives in Articles 39–40, including increasing agricultural productivity, ensuring a fair for the agricultural population, stabilizing markets, and guaranteeing regular supplies at reasonable prices. These goals reflected post-World War II priorities for in , where employed a significant portion of the —over 20% in founding member states like and —and national policies had previously led to fragmented markets and . Negotiations for the CAP's detailed framework began in 1960 under the leadership of , the European Commission's Vice-President for Agriculture, amid tensions between member states with divergent interests. , whose agricultural sector accounted for about 15% of GDP and relied on exports of grains and dairy, insisted on robust supranational mechanisms including common pricing and subsidies to protect its farmers from competition within the emerging common market, in exchange for accepting tariff reductions on industrial goods favored by and the countries. This Franco-German compromise was essential, as threatened to block progress on the customs union without CAP assurances, prioritizing rural stability over in where its producers faced efficiency disadvantages compared to U.S. or Dutch counterparts. On 14 January 1962, the Council established the European Agricultural Guidance and Guarantee Fund (EAGGF) to manage CAP financing through market interventions and structural improvements. The policy's core was codified on 30 June 1962 via three regulations: Regulation No 19 creating a common organization of markets for specific products like cereals, meat, and dairy; Regulation No 20 instituting the EAGGF with two sections for guidance (rural development) and guarantee (market support); and Regulation No 21 on financing, emphasizing community-level funding from own resources like agricultural levies. These instruments introduced unified pricing (starting with target prices and intervention thresholds), import levies for community preference, and export refunds to offset internal support costs, aiming for self-sufficiency while binding member states to abstain from distorting national aids. The CAP's design prioritized supply management through public intervention purchases of surpluses to stabilize prices above production costs, funded initially by national contributions transitioning to EEC revenues by 1964. Mansholt's proposals emphasized structural reforms for farm consolidation and modernization, though initial implementation focused on price supports, reflecting political pressures from to safeguard incomes in a sector prone to inelastic demand and weather variability. By 1964, common prices were set for key commodities, marking operational launch amid debates over costs, which reached 40% of the EEC by the late , underscoring the policy's causal link to fiscal solidarity as a for market unity.

Competition Policy and State Aid Rules

The competition policy of the European Economic Community (EEC), as established by the signed on 25 March 1957, aimed to create a system ensuring that competition within the common market was not distorted, as mandated by Article 3(f) of the Treaty. This framework prohibited restrictive business practices through Articles 85 and 86, with Article 85 banning agreements between undertakings, decisions by associations of undertakings, and concerted practices that prevented, restricted, or distorted competition within the common market, such as price-fixing cartels or market-sharing arrangements, unless they satisfied specific conditions for exemption under Article 85(3) promoting economic progress and benefiting consumers. Article 86, in turn, outlawed the abuse of a dominant position by one or more undertakings within the common market or a substantial part thereof, exemplified by unfair pricing, limiting production or markets, or discriminatory practices. State aid rules, outlined in Articles 92 to 94, complemented these antitrust provisions by targeting government interventions that could undermine competitive equality. Article 92(1) declared incompatible with the common market any aid granted by a or through state resources that distorted or threatened to distort by favoring certain undertakings or the production of certain , insofar as it affected between Member States, with exceptions in Article 92(2) for aids with social character or . Article 93 required Member States to notify the Commission in advance of any plans for new aid or modifications to existing aid, granting the Commission powers to initiate proceedings and propose measures, while Article 94 allowed the to act unanimously on Commission proposals in cases of general policy. Enforcement of antitrust rules was operationalized by Council Regulation No 17 of 6 February 1962, the first implementing regulation for Articles 85 and 86, which centralized authority with the to investigate suspected infringements, conduct inquiries, impose interim measures, and levy fines up to 10% of an undertaking's annual turnover for violations. For state aid, the notification procedure under Article 93 enabled control, with the Commission able to suspend aid pending , though early was limited by procedural ambiguities and national sensitivities until the 1970s. Early application of these rules yielded landmark decisions, such as the Commission's 1964 prohibition of the Grundig-Consten exclusive distribution agreement, upheld by the Court of Justice in 1966, which established that territorial protection clauses partitioning national markets violated Article 85 by hindering intra-Community trade, marking the inception of robust EEC antitrust enforcement. By the late 1960s, the Commission had issued initial negative clearance decisions under Regulation 17, signaling a commitment to proactive scrutiny, though state aid cases remained sporadic, with fewer than 20 formal proceedings initiated before 1970 due to reliance on notifications and limited investigative resources.

Institutions and Governance

Council of the European Economic Community

The Council of the European Economic Community (EEC), established by the signed on 25 March 1957 and entering into force on 1 January 1958, functioned as the principal decision-making institution representing the member states' governments. Composed of one representative per member state at ministerial level, its membership varied by policy area, with relevant national ministers attending specialized configurations such as , and , or . The presidency rotated every six months among member states in alphabetical order of their names in the , with the presiding country setting the agenda and chairing meetings. Acting on proposals from the High Authority (later the Commission), the held legislative powers to adopt binding acts, including regulations and directives, to implement the 's objectives of creating a common market and coordinating economic policies. Under Article 149 of the , it could only amend Commission proposals by unanimity; otherwise, it adopted them as proposed or rejected them outright. The 's role emphasized intergovernmental coordination, ensuring that decisions aligned with national economic interests while advancing goals like tariff elimination and free movement of , services, capital, and persons. Decision-making procedures combined simple majority, qualified majority, and unanimity, as outlined in Articles 7 and 148. A qualified majority required at least 12 votes out of 17 during the initial six-member phase (with each state holding votes weighted by population: , , and at 4 each; , , and at 2, 2, and 1 respectively), intended to facilitate progress beyond the transitional period ending 31 December 1969. However, the Empty Chair Crisis of 1965–1966, triggered by French opposition to majority voting in agricultural financing, led to the of 28 January 1966, which permitted any member state to invoke a discussion until unanimous agreement on issues touching "very important interests." This informal agreement effectively suspended qualified majority voting in practice, enforcing de facto across most domains until the of 1986 partially restored majority procedures for specific internal market measures. Preparatory work occurred through the (COREPER), comprising member states' ambassadors, which filtered proposals and built consensus before Council sessions, typically held in or . From 1958 to 1993, the oversaw key EEC milestones, including the 1962 establishment of the via Regulation No. 19 and the 1968 completion of the , though veto practices often delayed integration amid national divergences, such as France's protectionist stances. With each enlargement—, , and the in 1973; in 1981; and in 1986—voting weights adjusted proportionally, maintaining the qualified majority threshold at roughly 70% of total votes to balance larger states' influence.

European Commission

The European Commission was created by the Treaty establishing the European Economic Community (EEC Treaty), signed on 25 March 1957 by the six founding member states—, , , , the , and —and entering into force on 1 January 1958. As the EEC's primary executive body, it functioned as a supranational independent from national governments, tasked with advancing the 's objectives of through a common market. The first Commission, led by President from 1 January 1958 to 30 June 1967, consisted of nine commissioners nominated by member states (two each from the larger states of , Germany, and ; one each from the smaller states) but required to act solely in the Community's interest upon appointment. Under Article 155 of the EEC Treaty, the Commission possessed autonomous decision-making authority, including the formulation of recommendations and opinions, while serving as the "guardian of the Treaties" to monitor compliance and enforce provisions against member states. Its core functions encompassed the monopoly on legislative initiative—proposing all measures, such as regulations and directives, for approval to establish the by 1 July 1968 and implement policies like the —and the execution of adopted policies, including budget management and oversight of structural funds. In policy, the Commission investigated and penalized cartels, abuses of dominant positions, and state aids distorting trade, applying Articles 85–94 (now 101–109 TFEU) to foster undistorted . The Commission's supranational character enabled it to drive integration, such as negotiating tariff reductions and representing the EEC in trade talks under Council mandate, but provoked conflicts with intergovernmentalists, notably French President , who viewed its federalist push under Hallstein as encroaching on national sovereignty. Hallstein's tenure ended amid the Empty Chair Crisis, with his resignation tied to the 1966 , which preserved national vetoes and curbed Commission activism. Subsequent Commissions adapted by emphasizing technocratic implementation over bold initiatives, though retaining enforcement powers that grew with enlargements and policy deepening through 1993.

European Parliament's Role

The European Parliamentary Assembly, established under Articles 137 to 189 of the signed on 25 March 1957 and effective from 1 January 1958, functioned as the EEC's deliberative body with 142 members delegated from the national parliaments of the six founding states. Its role was predominantly consultative, entailing the provision of non-binding opinions on Commission legislative proposals, such as those concerning the common market, , and competition policy, though these opinions were frequently disregarded by the Council. The Assembly lacked any or co-decision authority, with ultimate legislative power vested in the intergovernmental acting on qualified majority or bases as specified in the treaty. Supervisory functions provided the Assembly's principal mechanism of influence over the executive, including the interrogation of Commissioners during sessions introduced in 1973 and mandatory debate of the Commission's annual general report. Under Article 201 of the EEC Treaty, it could adopt a motion of against the Commission en bloc, requiring a two-thirds of votes cast by a of its members to compel collective resignation; this was never successfully passed during the EEC era, despite occasional attempts amid controversies like the 1970s agricultural scandals. On 30 March 1962, the Assembly resolved to rename itself the , a designation informally used thereafter and formally ratified by the 1987 . Budgetary prerogatives expanded modestly via treaty amendments: the 1970 Budgetary Treaty enabled amendments to non-compulsory expenditures (about 20% of the budget, mainly for ) and referral of the draft budget back to the for reconsideration, while the 1975 Treaty granted the power to reject the entire budget outright if discrepancies persisted, thereby establishing the Parliament as one arm of budgetary authority alongside the . These changes shifted financing from national contributions to Community "own resources" like customs duties, increasing the Parliament's leverage over approximately €10 billion annually by the late 1970s (in nominal terms). Direct elections held from 7 to 10 June 1979 across the nine member states marked a pivotal enhancement of legitimacy, electing 410 members for the first time rather than relying on national appointments, with turnout averaging 61.99% and subsequent terms every five years. The 1976 Decision on electoral procedure standardized the process but preserved national variations in constituencies and thresholds. Legislative influence remained constrained until the 1986 , which instituted the cooperation procedure for 15 policy areas (e.g., research, environment), allowing the a second reading on common position texts and the potential to block adoption if the failed to act unanimously to overrule amendments; this applied to roughly 40% of EEC legislation by 1992 but still subordinated Parliament to the 's final authority. Throughout the EEC period, the Parliament's limited powers—confined to advice, oversight, and partial budgetary control—reflected the treaty's emphasis on economic coordination among sovereign states rather than supranational , prompting criticisms from advocates of an inherent "" wherein unelected Commissioners and government-dominated Council decisions bypassed direct citizen input. Empirical assessments, such as those tracking opinion adoption rates, indicate the Council's override of parliamentary views in over 70% of cases pre-1986, underscoring the body's marginal impact on policy outcomes.

Court of Justice

The Court of Justice of the European Economic Community was instituted under Articles 165 to 188 of the establishing the European Economic Community (EEC Treaty), signed on 25 1957 and effective from 1 January 1958, to interpret and enforce the treaty's provisions uniformly across the six founding member states. It extended the pre-existing Court of Justice of the (ECSC), originally established in 1952, by incorporating jurisdiction over EEC matters such as the common market's —free movement of goods, services, capital, and persons—alongside rules and institutional disputes. The Court's foundational mandate emphasized resolving legal uncertainties to prevent divergent national interpretations that could undermine , with proceedings seated in . Composed of one judge per member state plus additional judges to ensure impartiality (initially seven judges for the six members), supplemented by two Advocates General tasked with independent legal opinions, the Court operated through appointments by unanimous agreement of member state governments for renewable six-year terms. Judges were selected for their legal expertise rather than nationality, though national balance was maintained, and decisions required a majority vote in chambers or plenary sessions. Jurisdiction encompassed preliminary rulings requested by national courts under Article 177 to clarify EEC law applicability; infringement actions by the Commission against non-compliant states under Article 169; annulment of EEC acts under Article 173; and appeals against Commission decisions in competition cases. This framework empowered the Court to adjudicate disputes involving institutions, member states, and eventually individuals, fostering a supranational legal order distinct from traditional international adjudication. The Court's jurisprudence profoundly shaped EEC integration through landmark rulings establishing core doctrines. In NV Algemene Transport- en Expeditie Onderneming van Gend & Loos v Inland Revenue Administration (Case 26/62, judgment of 5 February 1963), it ruled that certain EEC Treaty provisions create direct effect, granting individuals enforceable rights in national courts without prior national implementation, thereby piercing the veil of inter-state treaty law to enable private enforcement. Building on this, Flaminio (Case 6/64, judgment of 15 July 1964) asserted the primacy of EEC law, holding that conflicting national legislation yields to rules due to the EEC's "new legal order" character, accepted voluntarily by member states upon . These principles, derived from teleological interpretation prioritizing the treaty's integration aims over literalism, compelled national courts to disapply domestic laws and catalyzed deeper market liberalization, though they sparked debates on erosion without explicit treaty basis. Subsequent cases, such as those on state aid and , reinforced uniform application, with the handling over 100 preliminary references by the mid-1960s, evidencing its growing caseload amid expanding EEC .

Economic Impacts and Achievements

Intra-Community Trade Expansion and Empirical Metrics

The EEC's , established under the (1957), involved the progressive elimination of internal s and quantitative restrictions on trade among the six founding members (, , , , , and the ), culminating in full abolition by July 1, 1968—18 months ahead of the original 12-year schedule. This process included five annual cuts starting in 1959, alongside the adoption of a (CET) averaged from members' pre-existing rates, which ranged from 6.4% in to 18.7% in in 1958. The CET stood at approximately 15% initially, reducing to 10.4% post-Dillon Round (1962) and 6.6% post-Kennedy Round (1967). These measures demonstrably shifted trade patterns toward intra-EEC flows, as evidenced by the rise in the share of intra-community trade from less than 40% of members' total trade in 1958 to nearly 50% by the mid-1960s, driven primarily by trade creation effects from reduced transaction costs and rather than mere diversion from third countries. Empirical assessments attribute much of this expansion to the customs union's removal of barriers, with intra-EEC exports growing at rates exceeding overall trade expansion in the period; for instance, the six members' combined GDP rose by over 20% from 1957 to 1961, with integration contributing an estimated 1% annual boost in the early 1960s through enhanced market access. By 1972, counterfactual models projected EEC GDP would have been 2.2% lower absent integration, widening to 5.9% by 1981, underscoring causal links between tariff elimination and productivity gains from specialization. Post-1968 enlargements amplified these effects: the 1973 accession of Denmark, Ireland, and the United Kingdom increased intra-EEC trade volumes by integrating larger markets, while subsequent joins (Greece in 1981; Portugal and Spain in 1986) further elevated the intra-share, with trade creation outweighing diversion in gravity model estimates showing bilateral flows among members rising 30-40% above non-member baselines. Quantitative metrics from the era highlight the scale: intra-EEC industrial goods expanded by factors of 5-7 times between 1958 and 1973, outpacing global growth, as internal barriers fell while external protection via the CET redirected some flows inward without net welfare losses in member economies. Sectoral data reveal pronounced effects in manufactures, where intra-trade shares reached 60-70% by the early 1970s, compared to stagnant or declining extra-EEC shares for protected sectors like under the . These outcomes align with Viner's trade creation framework, where efficiency gains from lower-cost intra-producers supplanted higher-cost domestic or external suppliers, though empirical tests confirm minimal third-country diversion due to multilateral tariff cuts.

Growth in GDP and Productivity Across Member States

The founding members of the European Economic Community (EEC)—, , , , , and —registered strong GDP expansion in the initial decades following the 1957 . From 1950 to 1973, GDP per capita in , dominated by these states, advanced at an average annual rate of nearly 5%, outpacing pre-war trends and reflecting a postwar reconstruction boom amplified by tariff eliminations and market unification. This period's "" saw aggregate GDP growth averaging 5.1% annually across the Six, with achieving 5.9%, 5.7%, and 5.1% in real terms from 1958 to 1973. Productivity gains underpinned much of this performance, as labor productivity (output per hour worked) in EEC countries grew at 4.6% per year during the , fueled by capital deepening, industrial restructuring, and scale efficiencies from intra-EEC trade, which rose from 30% of members' total trade in to over 60% by 1972. Empirical analyses attribute 0.25 to 0.9 percentage points of annual GDP growth directly to EEC integration effects, such as reduced trade costs and specialization, though broader postwar factors like U.S. aid and domestic reforms also contributed. , measuring efficiency beyond inputs, accelerated in sectors, with West Germany's rising 3.5% annually in the due to export-oriented competition within the . Post-1973 oil shocks and enlargements introduced variability. The first enlargement (, , in 1973) coincided with a growth slowdown to 2-3% annually across members through the , yet Ireland's GDP accelerated to 4.5% average yearly growth from 1973 to 1990, aided by EEC structural funds and that boosted exports from 20% to 70% of GDP. Southern enlargements ( 1981; and 1986) spurred convergence for laggards: Spain's GDP grew 3.1% annually from 1986 to 1992, with in tradable sectors rising via foreign investment and , narrowing GDP gaps from 70% of the EEC average in 1986 to 80% by 1992. However, aggregate growth decelerated to 2.2% per year in the 1970s-, reflecting saturation of catch-up gains and external shocks, though EEC policies mitigated divergences better than non-members like .
Country/GroupAvg. Annual GDP Growth (1958-1973)Avg. Annual Labor Productivity Growth (1960s)Notes on EEC Impact
Founding Six (aggregate)5.1%4.6%Trade liberalization added ~0.5 pp to growth; convergence from (poorer) to .
5.7%4.8%Export surge within EEC; TFP gains from competition.
5.9%4.2%Industrial modernization; catch-up from 60% of EEC average GDP/capita.
Ireland (post-1973)4.0% (1973-1990)3.5%Structural funds; exports to EEC drove reallocation to high-productivity sectors.
Spain (post-1986)3.1% (1986-1992)2.8%FDI inflows; reduced lifted tradables productivity.
Overall, while external booms and national policies drove baseline growth, EEC mechanisms promoted and trade-led , with econometric evidence indicating positive but modest net effects amid heterogeneous outcomes—stronger for initial catch-up phases than sustained frontier .

Sectoral Benefits and Trade Diversion Effects

The European Economic Community's , established under the 1957 , produced varying sectoral outcomes in line with Jacob Viner's 1950 framework distinguishing trade creation—shifting production from high-cost domestic to lower-cost partner sources—and —replacing efficient external suppliers with higher-cost intra-bloc alternatives due to common external tariffs. Empirical analysis by Bela Balassa in 1967, using import demand elasticities for 1959–1964 data across commodities, estimated gross trade creation effects of approximately 60% for EEC imports, with net effects after accounting for potential diversion remaining substantially positive at around 50%, indicating overall efficiency gains rather than net welfare losses. These effects were uneven across sectors, with exhibiting predominant creation and marked by diversion. In manufacturing sectors such as machinery, transport equipment, and chemicals, the elimination of internal tariffs facilitated intra-industry trade and economies of scale, boosting specialization and productivity. For instance, intra-EEC trade in finished manufactures rose from 28% of total EEC trade in 1958 to over 50% by 1970, driven by tariff reductions completed by July 1968, which enabled firms like those in Germany's automotive industry to expand market access without prior quota restrictions. Chemical products benefited similarly, with EEC-wide production concentration allowing cost reductions; Balassa's disaggregated estimates showed trade creation exceeding 70% in non-electrical machinery and vehicles, as lower intra-bloc barriers redirected demand from protected national markets to comparative advantages within members like the Netherlands' chemicals and Italy's machinery exports. Steel, though initially governed by the 1951 European Coal and Steel Community, integrated further under EEC rules, yielding scale benefits that increased output per worker by 4–5% annually in the 1960s through cross-border mergers and reduced fragmentation. Agriculture, conversely, exemplified via the (), implemented from 1962, which imposed high internal prices supported by variable import levies and export subsidies, shielding inefficient producers from global competition. A 1975 study on dairy products like and cheese found EEC policy diverted trade from low-cost third-country suppliers (e.g., and pre-accession) to higher-cost intra-EEC sources, with diversion effects estimated at 20–30% of protected imports, as levies raised effective external barriers to 50–100% above world prices. This resulted in self-sufficiency ratios climbing from 90% in grains to over 100% by the 1970s, but at the cost of distorted ; CAP expenditures reached 70% of the EEC budget by 1980, funding surplus production that required dumping on world markets, thus transferring income from consumers to farmers without proportional productivity gains. While CAP stabilized farm incomes amid reconstruction, its protectionist mechanics prioritized diversion over creation, contrasting with manufacturing's liberalized dynamics.

Criticisms and Controversies

Economic Distortions from Protectionism and CAP

The , formalized in 1962 as a of EEC integration, relied on price supports, intervention purchases, and variable import levies to guarantee farm incomes and secure food supplies, but these mechanisms engendered profound economic distortions by insulating producers from market signals. High guaranteed prices, often set well above world levels, incentivized excessive production of cereals, dairy, and other commodities, leading to structural overcapacity and inefficient toward at the expense of more productive sectors. By the mid-1970s, this manifested in massive surpluses, including the "butter mountains"—stockpiles exceeding 1.2 million tons of butter by 1980—and "wine lakes" surpassing 20 million hectoliters annually, which required costly government storage and disposal. These distortions imposed substantial fiscal burdens, with CAP expenditures escalating to consume approximately 60-70% of the EEC budget by the early , diverting funds from and industrial development while taxpayers shouldered intervention costs estimated at 0.5-1% of EEC GDP annually. Consumers faced elevated —up to 20-30% higher than global benchmarks due to internal price floors and external barriers—transferring wealth from urban households to rural producers and exacerbating income inequalities within member states. subsidies, funded by these levies, enabled dumping of surpluses on markets at below-cost prices, distorting global trade and undermining agricultural competitiveness in developing economies, as evidenced by GATT disputes in the 1970s and . Broader EEC , embodied in the (CET) established by 1968, compounded these issues by erecting uniform barriers against non-member imports, averaging 10-20% on industrial goods and higher on , which shielded inefficient domestic industries from competition and fostered rather than creation. Empirical analyses indicate that CET implementation raised effective protection rates, particularly in and , reducing import volumes from efficient third-country suppliers by redirecting flows to higher-cost intra-EEC sources, thereby inflating production costs and hampering overall gains from the . Non-tariff measures, including quotas and standards, further entrenched these distortions, contributing to persistent current account imbalances and slower adjustment to global shocks, as seen in the 1970s oil crises.

Sovereignty Losses and National Veto Limitations

The Treaty establishing the European Economic Community, signed on 25 March 1957 and entering into force on 1 January 1958, mandated the transfer of national sovereignty in key economic domains to supranational bodies, including the relinquishment of independent commercial policy competence. Member states committed to forming a by eliminating internal tariffs and adopting a , thereby forfeiting the ability to negotiate bilateral trade agreements autonomously. This pooling extended to competition rules, agricultural policy via the (CAP), and the enforcement of uniform economic regulations, with the holding exclusive initiative rights and the Court of Justice empowered to issue binding interpretations overriding national laws. Decision-making in the Council of the EEC predominantly required for major policies during the transitional period and beyond, affording member states a to protect national interests. However, the envisioned a shift to qualified majority voting (QMV) in certain areas after , such as implementation of the , which threatened to curtail powers. This tension precipitated the Empty Chair Crisis from June 1965 to January , when French President withdrew from Council meetings to protest proposals expanding QMV, particularly for financing the CAP and Community own resources, viewing them as encroachments on national fiscal sovereignty. The crisis resolved with the on 30 January 1966, an informal agreement stipulating that where unanimity was not required by the Treaty, a could request prolonged discussion on issues touching "very important interests," effectively preserving a right until consensus emerged. This mechanism, while averting deadlock, institutionalized a veto culture that member states invoked over 40 times by the , often on routine matters, thereby limiting the EEC's capacity for decisive action despite formal QMV provisions. Critics contended that even with veto safeguards, the supranational architecture compelled compliance with collective decisions, eroding practical ; for instance, France's invocation delayed but did not prevent CAP implementation, which by 1968 bound all members to subsidized agricultural pricing detached from domestic fiscal priorities. The Compromise's ambiguity—lacking a definition of "vital interests"—enabled expansive interpretations, as seen in repeated French and other es on enlargement and matters, underscoring how veto limitations paradoxically both shielded and constrained by fostering paralysis. Empirical evidence from the period shows that while vetoes preserved autonomy in vetoed domains, irreversible commitments like the common market's completion by imposed structural dependencies, with intra-EEC trade rising from 30% of members' total in 1958 to over 50% by , tying national economies to supranational outcomes beyond unilateral control. Gaullist perspectives, emphasizing confederalism over , highlighted these dynamics as a causal of state primacy, where institutional momentum outpaced veto efficacy.

Democratic Deficit and Supranational Overreach

The European Economic Community (EEC) exhibited a through the marginal role of its parliamentary assembly and the concentration of authority in supranational bodies lacking direct electoral accountability. Established by the in 1957, the EEC's European Parliamentary Assembly—composed of national parliament delegates—possessed only consultative powers, unable to amend or veto legislation proposed by the Commission or adopted by the . This structure prioritized technocratic decision-making, with the Commission holding exclusive initiative rights under Article 155 of the treaty, allowing unelected officials to shape policies on , , and without citizen input. Critics, including Gaullist factions in , contended that such arrangements bypassed national democracies, as EEC regulations applied directly in member states, enforceable by the Commission without parliamentary . Supranational overreach became evident in the EEC's erosion of national vetoes and the assertion of Community law supremacy. The Court of Justice's rulings, such as in (1964), affirmed that EEC law took precedence over conflicting domestic legislation, enabling supranational norms to override sovereign acts without recourse to elected bodies. This dynamic fueled accusations of unaccountable power centralization, particularly as the Commission pursued integration agendas like the , which imposed binding quotas and subsidies diverging from national priorities. National parliaments, responsible for ratifying the , retained no ongoing oversight, leading to claims that sovereignty transfers diminished democratic control over economic governance. A pivotal manifestation occurred during the Empty Chair Crisis of 1965–1966, when French President withdrew ministers from meetings to block the shift to qualified majority voting (QMV) scheduled under the treaty for 1966. De Gaulle argued that QMV would compel to accept decisions against its vital interests, undermining national sovereignty and democratic legitimacy derived from the state. The seven-month halted EEC operations, exposing tensions between supranational ambitions and intergovernmental realities. The crisis resolved with the on January 30, 1966, whereby members agreed to seek unanimous consensus on issues touching "very important interests," effectively reinstating de facto veto rights despite treaty provisions for QMV. This informal accord preserved national sovereignty but entrenched the by deferring structural reforms, such as empowering the , and fostering a culture of consensus that often stalled integration while avoiding enhancements. Euroskeptics later cited it as evidence of supranational overreach's fragility, reliant on national pushback rather than robust democratic mechanisms. Direct elections to the in 1979 marginally addressed legitimacy concerns but did not grant co-decision powers until the 1980s, leaving the EEC's core institutions critiqued for prioritizing efficiency over representation.

Dissolution and Legacy

Merger into European Communities (1967) and Single European Act (1986)

The , formally signed on 8 April 1965 in by the foreign ministers of , , , , , and the —the six founding members of the European Economic Community (EEC)—facilitated the integration of the executive institutions across the three European treaties. Ratified by all member states, it entered into force on 1 July 1967, merging the High Authority of the European Coal and Steel Community (ECSC), the Commission of the EEC, and the into a single comprising 13 members (two each from , , and ; one each from the other three states). Simultaneously, a unified was established with a rotating six-month presidency, supplanting the separate councils and commissions while maintaining the legal distinctness of each community under the new collective designation of the . This institutional consolidation eliminated overlapping bureaucracies, centralized policy coordination on economic, atomic, and coal-steel matters, and laid groundwork for enhanced supranational efficiency, though it did not alter the substantive treaties or introduce new powers. The merger marked a pivotal administrative evolution for the EEC, transitioning it from a standalone entity to the dominant economic component within the broader framework, with shared budgeting and parliamentary oversight via the (formerly the Common Assembly). By unifying , the reform addressed inefficiencies from parallel structures—such as duplicative staffing estimated at over 1,000 personnel across the prior bodies—and facilitated smoother implementation of the EEC's , which had been fully realized by 1968. However, the ECSC's expiration in 1982 and persistent national divergences limited the merger's long-term unification effects, preserving rights under for core decisions. Two decades later, the (SEA) advanced the EEC's market integration ambitions amid stalled progress from national resistances and the 1970s economic crises. Signed on 17 February 1986 in (by five states) and 28 February 1986 in (by Denmark, after domestic ratification delays), the Act amended the and entered into force on 1 July 1987 following parliamentary approvals. Its core provision committed the Communities to establishing an internal market by 31 December 1992, defined as an area without internal frontiers where goods, persons, services, and capital move freely, through targeted removal of physical, technical, and fiscal barriers via harmonized standards and mutual recognition. The SEA expanded qualified majority voting (QMV) in the to 12 areas, including harmonization measures for the internal market, thereby curtailing individual vetoes that had previously blocked over 300 proposals since 1958. It introduced the cooperation procedure, granting the a second reading on and the ability to force reconsideration, alongside creating the Court of First Instance to alleviate the European Court of Justice's caseload. New chapters addressed economic and social cohesion (allocating structural funds), , and research , with a dedicated fund for technology development. These reforms, driven by the 1984 Fontainebleau summit's Dooge and Adonnino reports, empirically accelerated integration: internal trade barriers fell by an estimated 20-30% in affected sectors post-1987, though critics noted increased centralization risks without offsetting democratic enhancements. The Act's provisions directly presaged the EEC's treaty-based evolution, embedding single-market imperatives that outlasted the Communities' nomenclature.

Transition to European Union via Maastricht Treaty (1992–1993)

The Maastricht Treaty, formally the Treaty on European Union, was signed on 7 February 1992 by the foreign and finance ministers of the 12 member states of the European Communities in Maastricht, Netherlands, following intergovernmental conferences initiated in December 1990. These negotiations, chaired by European Council President Jacques Delors, aimed to deepen integration beyond the economic focus of the European Economic Community (EEC) by establishing an overarching political union, including provisions for economic and monetary union (EMU) and enhanced supranational elements. The treaty amended the Treaty of Rome (1957), which had established the EEC, renaming it the Treaty establishing the European Community (EC) and integrating the EEC's institutions and acquis communautaire as the first pillar of a new three-pillar structure: the EC, the Common Foreign and Security Policy (CFSP), and Cooperation in Justice and Home Affairs (JHA). Ratification proved contentious, reflecting national sovereignty concerns over ceding powers to supranational bodies. Denmark rejected the treaty in a 2 June 1992 referendum (50.7% against), prompting the Edinburgh Agreement in December 1992 granting opt-outs on EMU, defense, and justice matters, followed by a second referendum approval on 18 May 1993 (56.7% in favor). France approved narrowly in a 20 September 1992 referendum (51.0% yes), amid debates on the "federalist" shift, while Ireland endorsed it by 69.1% on 18 June 1992; parliamentary ratifications proceeded in other states, with Germany—the last—approving via constitutional court ruling on 12 October 1993 after challenges alleging incompatibility with national law. The treaty entered into force on 1 November 1993, upon Germany's ratification, formally establishing the European Union (EU) and subsuming the EEC's customs union, single market pursuits, and common policies (e.g., agriculture, competition) under the EC pillar, while introducing EU citizenship rights, qualified majority voting expansions, and a timeline for EMU convergence criteria targeting 1999. This transition marked the EEC's effective dissolution as an independent entity, as its foundational and operations were reframed within the EU's broader framework, shifting from a primarily economic to a hybrid supranational-intergovernmental union with aspirations for political cohesion. Critics, including Euroskeptics in ratification debates, argued the changes eroded national vetoes and accelerated centralization without sufficient democratic accountability, evidenced by the 's clause as a partial concession. Empirically, the move enabled subsequent enlargements and the euro's launch but entrenched path dependencies toward fiscal integration, with convergence criteria (e.g., below 60% of GDP, within 1.5% of the three best performers) imposing binding constraints on member fiscal policies from 1993 onward.

Long-Term Assessments of Successes and Failures

The European Economic Community (EEC) is credited in scholarly reviews with contributing to growth and real convergence among member states through reduced barriers and enhanced , effects that persisted into subsequent enlargements. analyses indicate that integration spillovers, including knowledge transfers, boosted by facilitating specialization and scale economies, with early implementation in 1968 correlating to intra-EEC shares exceeding 60% of members' external by 1980. These outcomes supported post-war recovery, as evidenced by average annual GDP growth rates of 4-5% in core members like and from 1958 to 1973, partly attributable to tariff eliminations and common external tariffs that expanded . However, such gains were not uniform; peripheral economies experienced slower convergence, with gaps widening in some cases due to asymmetric benefits from liberalization. Critiques emphasize economic distortions from protectionist mechanisms, particularly the (CAP), enacted in 1962, which by the 1980s absorbed 60-70% of the EEC budget—equivalent to over 1% of GDP annually—and fostered inefficiencies like surplus production ("butter mountains" and "wine lakes") that required costly storage and export subsidies. Empirical assessments highlight effects under the theory, where intra-EEC shifts favored higher-cost producers over global competitors, reducing overall welfare gains estimated at only 0.5-1% of GDP in static models, while dynamic benefits from were offset by CAP-induced misallocation of resources away from . Long-term fiscal burdens exacerbated budgetary pressures, contributing to and issues in the 1970s-1980s, with CAP payments disproportionately benefiting large farms in northern states at the expense of smaller southern operators and non-member exporters. On sovereignty, the EEC's supranational framework, including qualified majority voting introduced via the 1986 (building on EEC precedents), eroded national veto powers in trade and competition policy, leading to analyses of "shared " as a drag on autonomous economic . This institutional rigidity fueled empty chair crises (1965-1966) and later opt-out demands, with econometric studies linking deeper integration to reduced policy flexibility and heightened vulnerability to asymmetric shocks, as seen in divergent inflation rates post-1973 oil crises. While proponents attribute stability to the EEC's role in averting interstate conflicts—evidenced by no wars among members since 1945—detractors, drawing on causal analyses of , argue that centralized competencies distorted national priorities, foreshadowing enlargement challenges and fiscal imbalances that persisted into the era. In aggregate, long-term evaluations, informed by counterfactual simulations, suggest the EEC generated net positive but modest welfare effects (1-2% cumulative GDP uplift by 1992), primarily through creation, yet failures in reconciling agricultural with free-market ideals and accommodating preferences undermined efficiency and equity. These tensions prompted reforms like the 1992 transition, reflecting a legacy of foundational integration marred by path-dependent costs that academic sources, often cautious of over-attributing amid global growth trends, view as empirically mixed rather than transformative.

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