EEC (Common market) 1.1.58. France, Italy, Belgium, Holland, Luxembourg, West Germany.
UK Ireland and Denmark in 1972
Single European Act in 1987. Finland, Sweden, Austria in 1995.
1. Customs union-external tariffs, 46 African countries w/o tax.
2. Common market - economies of members are run as one.
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.
1. internal market and co-ordination
2. system of central banks with common monetary policy(60%debt, 3%PSBR, inflation 1.5% higher than 3 best, LT interest rates 2% higher, exchange in ERM for 2 years)
3. irrevocable rate fixing, euro-no symbols, 1.99, 12month before qualifying states known, 3y after euro replaces. If UK doesnt join banks can offer accounts in euro. Persuasive ads used.
After announce Germany slowed down and strikes in France. They have joint 4 year programme.
Mergers policy from 5b to 2b.
Budget-60b from aggricul. levies, customs, VAT, GNP(1.2%-1.27in99UK objected1.4)no deficit
9.92 ERM failed
1. no transaction costs
2. no Erate uncertainty
3. comparative adv and specialisation
4. lower Irates
5. efficient(capital moves free)
1. national identity
2. no independent monetary policy
3. no devaluation
4. restriction on fiscal policy
5. lost food trade with commonwealth
1. Products and capital free movement, tarif
2. Opening up Gov. contracts
3. Competition (telecom, IT, air)
4. Protection of industrial property, regulation of unfair trading practices
5. Professional qualities unified
6. Fiscal harmonisation
7. comparative adv
8. 1% addition to GDP
9. harmonised stats and inflation
a. already over capacity(steel, cars)
b. trade diversion-unfair
c. large co. only(take-overs)
1. no subsidy for exported food
2. price guarantee replaced by income support
2. Guaranteed income
3. Less Favoured Areas exist
4. productivity increase
5. 5oclock farmars
2. prices high
3. distortion in world market
5. member states paid unevenly and admin.
6. desturction of hedges