3.3.5

Integration into the European Economy

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Reasons Behind Integration into Europe's Economy

The prospect of a federal Europe had begun with the 1951 Treaty of Paris, which formed the European Steel and Coal Community. Several countries in Europe wanted to create a customs union, meaning that the continent could have an integrated economy.

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A common market

  • The European Economic Community (EEC) was formed to establish a common market in Europe.
  • Countries sought to eliminate trade barriers and create a shared trade policy with nations outside the EEC.
  • Between 1958 and 1968, the value of trade between members of the EEC increased fourfold.
Illustrative background for Common Agricultural Policy (CAP)Illustrative background for Common Agricultural Policy (CAP) ?? "content

Common Agricultural Policy (CAP)

  • The EEC provided a CAP. This appealed to European farmers as they were protected against agricultural imports.
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Political motivations

  • The EEC was designed to reduce tensions after WW2 and establish harmony in the continent.
  • It was hoped that it would build upon the rapprochement between France and Germany, and create lasting reconciliation and reducing the possibility of war.
  • Political cooperation was prerequisite for joining the EEC.
  • Hallstein (1963): "[The EEC] would give Europe the power to act and to play its part in the building of a better world. Above all, it would be a decisive rejection of an old, precarious, and unstable system which had led to such destruction and misery....it is an attempt to build on a federal pattern a democratically constituted Europe."

The Treaty of Rome, 1957

The Treaty of Rome was signed in 1957, establishing the EEC.

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Signatories of the Treaty of Rome

  • The Treaty of Rome in 1957 was signed by:
    • West Germany.
    • France.
    • Italy.
    • Belgium.
    • The Netherlands.
    • Luxembourg.
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Later members

  • In 1973, the UK, Ireland and Denmark joined the EEC.
Illustrative background for West Germany and the European Monetary SystemIllustrative background for West Germany and the European Monetary System ?? "content

West Germany and the European Monetary System

  • In 1978, Helmut Schmidt helped form the European Monetary System.
  • This was designed to align the currencies of members of the EEC. It was hoped this would help create stable exchange rates and prevent inflation.
  • Organically, the Deutschmark became the anchor for this system. This was because it was relatively strong and the Bundesbank pursued low-inflation policies.
  • The Bundesbank became the heart of the European Monetary System.

Jump to other topics

1Political & Governmental Change, 1918-1989

2Opposition, Control & Consent 1918-1989

3Economic Developments & Policies, 1918-1989

4Aspects of Life, 1918-1989

5Historical Interpretations

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