European Economic Community

Definition

The European Economic Community (EEC) was an economic integration initiative established in 1957 by the Treaty of Rome, aimed at fostering economic cooperation and reducing trade barriers among its member states. It played a critical role in the evolution of the European Union, promoting not only trade but also political unity among countries in Europe.

5 Must Know Facts For Your Next Test

1. The EEC was founded by six countries: Belgium, France, Italy, Luxembourg, the Netherlands, and West Germany.
2. It aimed to create a common market to boost trade and economic growth among its members through tariff reductions and common external tariffs.
3. The EEC's establishment marked a significant step towards European integration, eventually leading to the formation of the European Union in 1993.
4. Over time, the EEC expanded its membership and deepened its scope to include policies on agriculture, fisheries, and regional development.
5. In 2009, the EEC's original framework was replaced by the Treaty of Lisbon, which further integrated European political and economic systems.

Review Questions

• How did the establishment of the European Economic Community impact trade among its member states?
  • The establishment of the EEC significantly boosted trade among its six founding member states by creating a common market that eliminated tariffs and other trade barriers. This increased economic cooperation led to more efficient allocation of resources and stimulated economic growth. By facilitating easier access to each other's markets, member countries experienced an increase in cross-border investments and trade volumes.
• Discuss the evolution of the EEC into the European Union and what changes occurred during this transition.
  • The transition from the EEC to the European Union marked a significant shift from purely economic integration to a broader political union. The Treaty of Maastricht in 1992 expanded the goals of integration to include political cooperation, foreign policy alignment, and monetary union with the introduction of a common currency. This evolution reflected an increasing desire among member states for deeper collaboration beyond just economic aspects.
• Evaluate the long-term effects of the EEC on Europe's political landscape and economic stability.
  • The long-term effects of the EEC on Europe's political landscape have been profound, as it laid the groundwork for a politically unified Europe. The EEC fostered a sense of solidarity among European nations, encouraging dialogue and cooperation that reduced historical tensions. Economically, it contributed to stability and growth within Europe, facilitating collective responses to financial crises and enabling coordinated economic policies that enhanced resilience across member states.

Related terms

Common Market: A type of trade bloc that allows for the free movement of goods, services, capital, and labor among member countries, which was one of the core principles of the EEC.

Treaty of Rome: The treaty that established the EEC and set the foundation for further European integration, signed in 1957.

Single Market: An advanced form of economic integration that allows for the free movement of goods, services, capital, and people across member states, evolving from the EEC's initial goals.