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What is the European Economic Community?

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  • Written By: Susan Grindstaff
  • Edited By: Heather Bailey
  • Last Modified Date: 26 September 2016
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The European Economic Community is the name of a treaty between Italy, France, and Germany that was signed in Rome in 1957. Also included in the treaty were Belgium, Luxembourg, and the Netherlands, which at the time were know as the Benelux countries. The European Economic Community treaty was meant to bring the member countries together to help strengthen their military and economic powers. The member countries put in place a parliamentary assembly to manage the treaty. The European Economic Community eventually came to be known as the European Union (EU).

One of the primary goals of the European Economic Community was to establish trade relations within the member countries. It was believed that the treaty would lead to fair trade and bring prosperity to underdeveloped regions. The member countries agreed to trade policies that would restrict commercial trade to countries outside their union. In this way, they hoped to be able to exercise some control over pricing and job creation. The economic development that the member countries hoped to achieve was based on what came to be called the "four freedoms," which would ensure the free transport of people, goods, money and services between the member countries.

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Another major goal of the European Economic Community was related to the development of atomic energy. During that time, many countries were trying to develop atomic energy both for domestic and military use. Together they formed the European Atomic Energy Community, which later came to be called Euratom. Unlike many other nuclear programs, Euratom had the stated goal of developing nuclear energy only for peaceful domestic purposes. None of the original six member countries was wealthy enough individually to launch such a program, but by pooling their resources, they were able to join the nuclear community.

Between 1957 and 2005, the European Economic Community went through many changes and added many new members. One of the most important events in relationship to the treaty was the addition of Denmark, Ireland, and the United Kingdom. These countries signed the treaty in 1972 and were followed by Greece in 1979. By 1994, Spain, Portugal, Sweden, Finland, and Austria had signed onto the treaty, which increased the total member states to 15. By 2005, a large block of Eastern European countries also signed the treaty, which brought the total membership to 27.

The 27 countries that formed the European Economic Community became to be known as the EU. The EU is considered one of the most powerful unions in the world. They share a common market and are considered strong military allies. The trade policies of the European Union are considered some of the most successful trade policies ever created.

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SarahGen
Post 3

@ZipLine-- I think UK is actually thinking about leaving the EU because despite the economic advantages, there are many political and social restrictions placed by being a member of the European Economic Community. I think this is why Norway isn't part of the EEC as well, although they have a free trade agreement with the EU. Being part of the EEC means that EU countries have access to the resources of that state. The fishing industry in Norway is important and I think they want to protect their waters from European fishers.

stoneMason
Post 2

@ZipLine-- Yea, the entry of Greece and eastern European countries seemed to have caused issues. The economic crisis in Greece made things very bad for a while and now we are watching the Euro fall in value.

I think it's too early to jump to conclusions though. There are still many benefits of being a part of an economic union, like the lack or reduction of tariffs and taxes. Europeans are buying one another's goods for cheaper and everyone is benefiting. This is also attracting investors and helping the economically weaker countries to slowly catch up to the rest.

ZipLine
Post 1

When the idea of an economic union in Europe first came about, it was very exciting and everyone was eager to be a part of it. It wasn't just about free trade and economic cooperation but also having free movement of goods and people and a common currency. And then Britain announced that it won't be switching to the euro. For a while, the world taught that this was an awful idea for Britain and that there would be negative repercussions.

Fast forward to 2014, Britain is still using the British pound and its economy is doing just fine. The world didn't end because Britain didn't switch currencies. And people have started saying that the European economic union wasn't so great after all. Economically strong countries like Germany are having to bear the burden of weaker countries and no one is sure how long this will continue for.

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