European Economic Community

Definition

The European Economic Community (EEC) was an international organization founded in 1957 to promote economic integration and cooperation among its member states. It aimed to establish a common market and customs union, facilitating free trade and the movement of goods, services, labor, and capital across member countries, which significantly contributed to economic collaboration in Europe.

5 Must Know Facts For Your Next Test

1. The EEC was established by the Treaty of Rome in 1957, originally consisting of six founding members: Belgium, France, Germany, Italy, Luxembourg, and the Netherlands.
2. The main goal of the EEC was to create a common market by eliminating trade barriers and promoting economic cooperation among its member states.
3. Over time, the EEC expanded to include more countries, ultimately serving as a precursor to the formation of the European Union in 1993.
4. One of the key achievements of the EEC was the establishment of the customs union in 1968, which eliminated tariffs on goods traded between member states.
5. The EEC laid the groundwork for deeper political integration among European nations, influencing policies on areas such as agriculture, regional development, and competition.

Review Questions

• How did the establishment of the European Economic Community change trade dynamics among its member states?
  • The establishment of the European Economic Community fundamentally altered trade dynamics by eliminating tariffs and trade barriers among member states. This facilitated not only the free movement of goods but also encouraged investments and labor mobility across borders. As a result, member countries experienced increased economic growth and cooperation, fostering a stronger sense of unity within Europe.
• Discuss the significance of the Treaty of Rome in relation to the European Economic Community's goals and initial structure.
  • The Treaty of Rome was significant because it laid the foundational framework for the European Economic Community by outlining its objectives, including creating a common market and fostering economic cooperation. It established institutions such as the Commission and the Council to govern and oversee EEC operations. This treaty marked a crucial step in post-war European integration efforts aimed at preventing future conflicts through economic collaboration.
• Evaluate the impact of the EEC on later developments within Europe, particularly regarding its evolution into the European Union.
  • The EEC played a vital role in shaping later developments within Europe as it set the stage for broader political and economic integration leading to the creation of the European Union. The EEC's focus on economic cooperation paved the way for initiatives such as monetary union and expanded governance frameworks. This evolution into the EU allowed for more comprehensive policies addressing not only trade but also environmental concerns, human rights, and regional security, reflecting a deeper commitment to unity among European nations.

Related terms

Common Market: A type of trade bloc that allows for the free movement of goods, services, labor, and capital between member countries while also implementing a common external tariff.

Treaty of Rome: The treaty that established the EEC in 1957, signed by six founding countries: Belgium, France, Italy, Luxembourg, the Netherlands, and West Germany.

European Union: A political and economic union that evolved from the EEC, now encompassing a wider scope of cooperation beyond just economic integration among European countries.