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The European Community

The European community(EC)

First in 1952. Treaty of Rome in 1957 and EEC (Common market) in 1.01.58. France, Italy, Belgium, Holland, Luxembourg, West Germany. UK joined in 1972 with Ireland and Denmark. Greece 1981, Spain + Portugal 1986, Single European Act in 1987. Finland, Sweden, Austria in 1995.

1.    Customs union-common external tariffs, abolition of tariffs between. 46 African countries w/o tax.

2.    Common market - economies of members are run as one.

The structure

1.    The council of ministers

One minister from each state. Voting is weighted, executive body

2.    The European Commission

17 commissioners (2 from larger states), headquarters in Brussels, day-to-day running

3.    The European Parliament

Little authority, monitors common institutions.

4.    The European Court of Justice

Ensures that law is followed. Final arbiter.

UK gained in specialisation and comparative advantage, lost food trade with commonwealth.

After 1992 Common market:

1.    Products approved in one country can be freely marketed in any member.

2.    Opening up of government and other contracts

3.    More competition in telecommunications, IT, air routes, shipping + Channel Tunnel

4.    All capital restrictions will be removed

5.    Protection of industrial property will become easier

6.    Professional qualities obtained in one country are accepted in others

     Trade diversion - moving to a more expensive supply
     Fiscal harmonisation - making taxes equal.


1.     Establishment of ECU.
2.     The Exchange rate Mechanism
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