On March 25, 1957, France, West Germany, Italy, the Netherlands,
Belgium, and Luxembourg sign a treaty in Rome establishing the
European Economic Community (EEC), also known as the Common Market.
The EEC, which came into operation in January 1958, was a major step
in Europe's movement toward economic and political union.
By 1950, it was apparent that centuries of Western European world
supremacy was at an end. The national markets of Europe, isolated from
each other by archaic trade laws, were no match for the giant market
enjoyed by the United States. And looming over Europe from the east
was the Soviet Union, whose communist leaders commanded vast territory
and economic resources under a single system. Many European leaders
also feared the resumption of conflict between traditional European
antagonists such as France and Germany, which would only diminish the
European economies further.
As a means of improving Europe's economic climate and preventing war,
some influential statesman and political theorists suggested economic
integration. The first major step in this direction was taken in 1951,
when France and West Germany formed the European Coal and Steel
Community (ECSC), integrating their coal and steel industries. French
leaders proposed the organization primarily as a means of monitoring
German industry, and West German leaders immediately agreed, to allay
fears of German militarization. To supervise the ECSC, several
supranational bodies were established, including an executive
authority, a council of ministers, an advisory assembly, and a court
of justice to settle disputes. Italy and the three nations of the
Benelux Economic Union--Belgium, the Netherlands, and Luxembourg--soon
joined. The groundwork for the EEC was laid.
On March 25, 1957, representatives of six European nations signed two
treaties in Rome. One created the European Atomic Energy Community
(Euratom) for the common and peaceful development of Europe's nuclear
resources. The other created the EEC. In the Common Market, trade
barriers between member nations were gradually eliminated, and common
policies regarding transportation, agriculture, and economic relations
with nonmember countries were implemented. Eventually, labor and
capital were permitted to move freely within the boundaries of the
community. The EEC, the ECSC, and Euratom were served by a single
council of ministers, representative assembly, and court of justice.
In 1967, the three organizations were fully merged as the European
Britain and other European nations initially declined to join the
Common Market and established the weaker European Free Trade
Association (EFTA) in 1960 as an alternative. By the early 1960s,
however, the Common Market nations showed signs of significant
economic growth, and Britain changed its mind. Because of its close
ties to the United States, however, French President Charles de Gaulle
twice vetoed British admission, and Britain did not join the EC until
January 1973, when Ireland and Denmark also became EC members. Greece
joined in 1981, Portugal and Spain in 1986, and the former East
Germany as part of reunified Germany in 1990.
In early 1990s, the European Community became the basis for the
European Union (EU), which was established in 1993 following
ratification of the Maastricht Treaty. The treaty called for a
strengthened European parliament, the creation of a central European
bank and common currency, and a common defense policy. In addition to
a single European common market, member states would also participate
in a larger common market, called the European Economic Area. Austria,
Finland, and Sweden became members of the EU in 1995. As of 2006,
there were twenty-five member states in total.