1 Jan 1958, Brussels (Belgium), on coming into force of the Treaty Establishing the European Economic Community (Treaty of Rome), signed 25 Mar 1957, following a conference in June 1955, Messina (Italy), of the then 6 member countries of European Coal and Steel Community (ECSC) - Belgium, France, Germany FR, Italy, Luxembourg and Netherlands. The Rome Treaty was ratified by parliaments of member states between 5 July 1957 and 4 Dec 1957. The other Treaty of Rome, Treaty Establishing the European Atomic Energy Community (Treaty of Rome), setting up the European Atomic Energy Community (Euratom), was signed, ratified and came into force at the same time. The European Community thus traces its origins to the Treaty Establishing the European Coal and Steel Community (Treaty of Paris), signed 18 Apr 1951, creating the European Coal and Steel Community.
The original title was: European Economic Community (EEC) -- Communauté économique européenne (CEE) -- Comunidad Económica Europea (CEE) -- Europäische Wirtschaftsgemeinschaft (EWG) -- Comunidade Económica Europeia (CEE) -- Comunità Economica Europea (CEE) -- Europese Economische Gemeenschap (EEG) -- Europaeiske Økonomiske Faellesskab (EØF) -- Evropaiki Ikonomiki Kinotita (EOK). Following the 'Merger' Treaty of 8 Apr 1965, which came into force in July 1967, a single commission - the Commission of the European Communities (CEC) - superseded the High Authority of ECSC and the EEC and Euratom Commissions, and a single Council - the Council of the European Communities - came into being.
The Single European Act (SEA), signed Feb 1986, ratified by member parliaments by 31 Mar 1987 and came into force 1 July 1987, amended and complemented the Paris (France) and Rome Treaties. The Treaty on European Union (Maastricht Treaty), signed 7 Feb 1992, covers the establishment of the European Union (EU), of which the European Communities (EC) comprised the first pillar. Title II of the Maastricht Treaty reads: 'Provisions amending the Treaty establishing the European Economic Community with a view to establishing the European Community'. Provisions adopted in the Maastricht Treaty with reference to the treaties establishing the EEC replaced the term 'European Economic Community' by 'European Community' throughout. However, the acronym 'EC' refered officially only to the European Communities together.
When Treaty of Lisbon came into force, 1 Dec 2009, original treaty was amended to become Treaty on the Functioning of the European Union (TFEU) and the European Union replaced and succeeded the European Community.
The Maastricht Treaty replaces Article 2 of the Treaty of Rome by the following: the Community shall have as its task, by establishing a common market and an economic and monetary union to promote throughout the Community a harmonious and balanced development of economic activities, sustainable and non-inflationary growth respecting the environment, a high degree of convergence of economic performance, a high level of employment and social protection, the raising of the standard of living and quality of life and economic and social cohesion and solidarity among member states. The Treaty extends the range of policy areas which may be handled by the European Community rather than by national governments by extending existing EC responsibilities - for example with environment policy - and by introducing new ones - for example in the areas of: education, vocational training and youth; culture; health; trans-European networks. Particular Articles refer to consumer protection and to industry.Available with paid subscription only.
The Maastricht Treaty assigns to the European Community the activities of the European Union in the area of the first pillar: Community activities. As well as increasing economic and social responsibilities, the change of the Community's name from 'European Economic Community' to 'European Community' marks the conferring of new responsibilities in the fields of education, culture, health, European citizenship and visa policy. The Treaty of Amsterdam, signed 2 Oct 1997, at a meeting of the European Council, established a new section on freedom, security and justice, bringing some areas previously within the remit of the third pillar of the EU into the framework of the first pillar. These include: free movement of people, with measures relating to external border controls, asylum and immigration; measures to combat crime; other measures on judicial cooperation in civil matters.
1. 'European Single Internal Market', successor to the European Common Market, aims to achieve a unified economic territory undivided by customs or trade barriers, resting on free movement of goods, persons and capital and freedom to provide services. Workers are free to seek jobs and settle with their families anywhere in the Community; and firms can produce and sell their goods in free competition. No member state may give its nationals preferential treatment.
Completion of the European internal market, 1992, rationalized production and distribution structures, leading to improvements in productivity and cost and price reductions - an estimated savings of euro 200,000 million for firms, 2-5 million new jobs, extra non-inflationary economic growth of 5-7% and an increase in the Community's gross domestic product of up to 5% on 1988 prices. Means for achieving this include removal of barriers directly affecting intra-Community trade (internal frontier formalities and related delays) and of barriers to production which hinder new market entrants and obstruct free competition, together with economies of scale achieved through larger production runs implied offered by a large, single market. Anticipated medium-term effects include avoiding overheating the economy and relaxation of budgetary and external constraints. In the context of the Single Market, a directive of the Council of Ministers, 13 Feb 1989, required all member countries to follow the same definitions and accounting procedures and collect statistics according to harmonized rules, thus calculating their GNPs in the same way.
Preparatory studies carried out by the Commission and independent economic experts, consultants and research institutes included: individual categories of trade barrier; disadvantages affecting manufacturing industries; disadvantages for the services sector; principal relevant economic phenomena; opinion survey of industrialists covering all member countries and branches of industry; econometric model for integrating micro-economic data results with overall macro-economic results. Areas singled out for specific activity are: audio-visual media; financial services; liberalization of capital movements; removal of technical barriers to trade; small and medium-sized enterprises (SMEs); social policy; telecommunications.
2. 'Common Policies'
• (a) EU Customs Union - on the basis of Common Customs Tariff (CCT) and Community Customs Code, member states ensure implementation of Community policies in most fields connected with international trade, intervene in combating fraud, ensure citizens' safety and allow the operation of lawful trade. Originally the main task was collection of customs duties and indirect taxes at import, amounting to over euro 14,000 million in 1999. This has been modified by current developments, including enlargement of the EU and development of e-commerce.
• (b) 'Common Agricultural Policy (CAP) -- Politique agricole commune (PAC)' ensures that agricultural markets are common within and protected from outside the Community and from price fluctuation. European Agricultural Guidance and Guarantee Fund (EAGGF), through 'European Agricultural Guarantee Fund', covers agricultural markets and prices policy including production and processing of certain products, intervention buying and storage, and export refunds; and through 'European Agricultural Guidance Fund' contributes to financing of policy on agricultural structures and social aspects of agriculture, by granting direct aid for certain investment projects connected with the marketing and processing of agricultural products and with agricultural infrastructures and reimbursing some of the member states' expenditure under Community legislation.
• (c) 'Common Fisheries Policy (CFP)' came into effect in Jan 1983. The Community has a 200-mile fishing zone open to all member states with the exception of certain national exclusive or limited zones depending on historical rights, and with the exception of the Mediterranean. Reciprocal fishing rights have also been agreed with countries outside the Community. There are common rules on processing, marketing and prices, and a system of export subsidy and import levies for trade outside the Community. Financial Instrument for Fisheries Guidance (FIFG), set up 1993, provides financial support for restructuring of the fisheries industry in the light of overcapacity of the fleet, overexploitation of stocks, debt and marketing problems. FIFG was replaced by European Fisheries Fund (EFF), Jan 2007.
• (d) 'Competition Policy' prohibits agreements between undertakings to restrict competition and abuse by enterprises with a dominant position in the market. The Commission ensures that principles of free competition are observed and punishes infringements with fines. Assisted by the Court of Justice, it refines rules to ensure full effectiveness.
• (e) 'Common Transport Policy' - negotiations take place on road, rail, maritime, inland waterway and air transport policies. A system of Community-wide permits for commercial vehicles eases crossing of frontiers and work continues on flexibility of internal air transport and reduced fares.
3. 'Economic and Monetary Policy' The setting up of the European Monetary System, Mar 1979, gave a new dimension to monetary cooperation which had, up to that time, fallen short of expectations. Obligations under EMS have led to greater convergence between policies of member states. The basket of currencies acts as reference unit for exchange rates, as an indicator for determining deviations of one currency from the others, as a means of settling debts between national monetary authorities and as a unit of account for the Community budget. The new European currency - the 'euro', previously referred to as the 'ECU' - came into circulation on 1 Jan 1999 and replaced national currencies of 11 member countries on 1 Jan 2002.
4. 'Energy' Steps towards a 'Common Energy Policy' have been taken as member states have become increasingly dependent on a number of countries outside Europe. Current primary objectives are to break the link between economic growth and energy demand, to keep oil imports down and to increase the proportion of power generated from coal and nuclear energy. As well as realistic energy pricing policies and coordination of external energy relations, objectives for 1985-1995 included development of a common energy market for gas and electricity, environmental protection and innovative technology.
5. 'Research, Technology': The budget for the 'Sixth Framework Programme for Research and Technology Development' (2002 to 2006), funds projects within the framework of 4 main themes. Funding under the Programme covers all research activities subsidized through the European Union budget and allows companies, research centres and universities to work together across national frontiers in fields which include computers, telecommunications, energy, the environment, biotechnology, transport and agriculture. The concept of a 'European Technology Community' is put forward as a competitor to USA and Japan.
6. 'Industry': Activities are largely through the ECSC, with controls on state aid to both coal and steel industries being increased; EC major areas of activity are the textile industry, shipping and information technology. Common structures for company law and patents are also coming into effect.
1. 'Education and Culture': Aims include: creation of a European cultural area, with free movement of cultural goods and services, better living and working conditions for artists, increased information and business sponsorship; promotion of the audio-visual industry, which includes collaboration with European Broadcasting Union (EBU); improved access to cultural resources; better training for the cultural sector; dialogue with the rest of the world. SOCRATES Programme, commenced activities 1995, comprises the most promising elements of Community Programme in Education and Training for Technology (COMETT), European Community Action Scheme for the Mobility of University Students (ERASMUS) and LINGUA, and aims in particular to: develop the European dimension in studies at all levels; promote knowledge of the languages of the Community; increase mobility of the Community's students, so they have an opportunity to complete part of their studies in another member state.
2. 'Employment': Priority areas are: unemployment - in particular, problems of migrant workers in Community countries; equal opportunities and rights for women workers in employment and social schemes.
3. 'Regional Policy': The aim is to reduce differences between various regions and backwardness of less-favoured regions, mainly through European Regional Development Fund (ERDF). The Structural Funds of the European Community - originally EAGGF, ERDF and European Social Fund (ESF) together and now including the Financial Instrument for Fisheries Guidance (FIFG) - serve the economic growth of regions lagging behind, supporting not only basic infrastructure but also productive investment. Objectives in force from Jan 1989 are: 1. Regions lagging in development; 2. Declining industrial areas; 3. and 4. Long-term unemployment and the professional integration of young people; 5a. Modernization of agricultural structures; 5b. Diversifying rural regions. Amended objectives for 1994-1999: Objective 3 combats long term unemployment and aims to integrate into the labour market young people and others excluded from it; Objective 4 addresses the adaptation of workers to industrial change. Community funds assist regions whose per capita GDP is at least 25 percent less than the Community average. By 1993, a total of Euro 63,727 million had been spent through the 3 funds, plus Euro 3,000 million to help development and integration of German DR. For 1994-1999 this has risen to Euro 141,471 million, based on 1992 prices. In addition the Cohesion Fund will disburse Euro 15,150 million from 1993-1999 and the EIB makes loans of over Euro 15,000 million a year. 'Community Support Frameworks (CSFs)', approved June 1990, represent Community response as regards priorities for assistance and Community funds to be assigned. Members are invited to submit programmes in the following fields: conversion of the coalmining industry; improving the environment, especially for coastal areas; research and development in disadvantaged areas; development of cross-border regions; development of ultra-peripheral regions.
'Community Initiatives' for 2000-2006 include:
• Employment Community Initiative 2000-2006 (EQUAL), to combat discrimination and inequalities in connection with the labour market, replaces and/or builds on ADAPT and EMPLOYMENT Human Resources 1994-1999 Community initiatives: INTEGRA, replacing HORIZON; INCLUSION; New Opportunities for Women (NOW); YOUTHSTART;
• INTERREG V to encourage cooperation between border regions and help areas on external frontiers to overcome problems stemming from their remoteness;
• SMEs 1994-1999 to assist adjustment to the Single Market and competitiveness in the international market, including -
• -European Loan Insurance Scheme for Employment (ELISE) to facilitate credit access for SMEs, reduce their loan costs and support creation of employment;
• URBAN II to help find solutions to social problems in depressed urban areas by supporting schemes for social and economic revitalization, renovation of infrastructure and facilities and environmental improvement.
'Integrated Mediterranean Programmes (IMPs)' are an example of an innovative approach mobilizing all available sources of finance (Community, national, regional and local) for a coherent set of measures covering main sectors of the economy in Greece and some French and Italian Mediterranean regions.
4. 'Environment and Consumer Protection': This covers protection of health and safety; standardization of rules for additives and for packaging; rules for machines and equipment; authorization procedures for new products; monitoring of quality and durability of products; after-sales service; legal remedies for unsatisfactory goods and services; consumer associations. For the environment, Action Programmes lay down principles. The 4th Programme, 1987-1992, made environmental protection an integral part of economic and social policy. Emphasis is on: acid rain; effects of heavy metals on health, including lead additives in petrol; climatic research in deforestation and improvement of fossil fuels; limiting technological hazards in chemical and petrochemical industries; protection of the ozone layer; the greenhouse effect.
1. 'Common Commercial Policy': This covers foreign trade arrangements, the Community fixing common customs tariffs, concluding customs and trade agreements, harmonizing measures liberalizing trade with non-member countries, planning export policy and deciding on action to protect trade, particularly against unfair practices such as dumping or subsidies. International negotiations include those under GATT and UNCTAD, efforts to resolve trade conflicts and 'self restraint' agreements to protect crisis-hit industries.
2. 'Special Trading Arrangements': These include association agreements, to maintain the special relationships that exist between some member states and certain non-member countries, or to prepare the way for possible accession or with a view to membership of EC Customs Union; and the less comprehensive cooperation agreements to promote intensive economic cooperation.
3. 'Development Policy': Relations with developing countries include concern to show solidarity with the less prosperous and are formalized in five conventions with African, Caribbean and Pacific Group of States (ACP Group):
• ACP-EEC convention (Lomé convention);
• Second ACP-EEC convention (Lomé II);
• Third ACP-EEC convention (Lomé III);
• Fourth ACP-EEC convention (Lomé IV);
• ACP-EU partnership agreement (Cotonou agreement).
These allow duty-free access to the Community market of exports other than specified agricultural products (currently 4 percent of total) for which there are special arrangements. Under Lomé III, stabilization of export earnings from agricultural commodities through the 'STABEX System' offset negative effects of major fluctuations in world prices for a total of 48 raw materials, including tea, coffee, cotton, groundnuts, bananas, timber and leather; Euro 1,376 million were set aside to replace decreases in export earnings. The 'SYSMIN System', or 'Special Financing Facility' remedies harmful effects on income due to serious temporary disruptions affecting the mining sector and includes Euro 450 million for (repayable) assistance when production capacity falls, covering copper, cobalt, phosphates, manganese, bauxite, alumina, tin and iron ore. Under Lomé IV, SYSMIN aid takes the form of grants to ACP States to be on-lent to mining companies. Under Lomé III, Euro 7,160 million was available for subsidies, special loans, risk capital and low-interest loans for development projects. Technical Centre for Agricultural and Rural Cooperation (CTA) was set up in the EEC-ACP framework. Economic Partnership Agreements (EPAs), currently under discussion, aim to enhance duty-free access to the EU market for exporters in ACPs and to remove barriers that prevent European goods and services from entering their markets. In this regard, a new type of ACP-EU free-trade pact has been proposed by the European Commission which would stimulate economic growth among ACP states. Beyond the Lomé and Cotonou Conventions, other developing countries are covered by less global agreements. These countries are referred to as 'ALAMED' - Asia, Latin America, Mediterranean. Although South Africa is not party to the Lomé Convention, development projects are currently being financed through nongovernmental organizations in the areas of education and training, health and economic development.
4. European Economic Area (EEA), also referred to as 'European Economic Space (EES)'. On the basis of bilateral agreements between each of the countries of EFTA and the EC, there is effectively an 'EEC-EFTA Free Trade Zone'; bilateral joint committees are responsible for the administration of these agreements. Subsequent work established the EEA, comprising the internal market of the EC and of the individual EFTA countries. The first meeting of EFTA-EC negotiators took place on 20 June 1990. An agreement was concluded 21 Oct 1991, signed 2 May 1992, Porto (Portugal) and came into effect on 1 Jan 1994.
5. 'Other Agreements with Third Countries' - Individual Association Agreements signed with the following countries: Cyprus; Malta; Turkey. Individual Cooperation Agreements signed with: Algeria; Egypt; Israel; Jordan; Lebanon; Morocco; Syria; Tunisia; Yugoslavia. Treaty with Andorra, signed June 1990 and implemented 2 July 1991, establishes formal links; Andorra is the only non-Community country to be a member of the EC Customs Union. Five-year free trade agreement which would make San Marino a member still to be formalized. On Central and Eastern Europe, talks on trade relations with Council for Mutual Economic Assistance (CMEA) resulted in an agreement, signed 25 June 1988, Luxembourg, declaring mutual recognition and normalization of relations between the two organizations and removing impediments to commercial and cooperative agreements between the EEC and individual CMEA member countries. Subsequently agreement was reached to open diplomatic relations between the EEC and Bulgaria, Czechoslovakia, German DR, Hungary and the USSR. Following political changes in Eastern Europe: European Training Foundation (ETF) is set up from Community budgets; G-24's programme, Assistance for Economic Restructuring in the Countries of Central and Eastern Europe, and the EC's own Phare Programme assist in restructuring of Central and Eastern European economies; a European Bank for Reconstruction and Development (EBRD) has been set up. Europe Agreements have been signed with 5 countries - Bulgaria, Czechoslovakia, Hungary (in force 1 Feb 1994), Poland (in force 1 Feb 1994), Romania. The Agreement with Czechoslovakia is superseded by individual agreements, signed 4 Oct 1993, with the Czech Republic and Slovakia. Trade and Economic Cooperation Agreements exist with Albania, Estonia, Latvia, Lithuania and Slovenia; more advanced trade agreements are being negotiated with the Baltic States.
Agreements concluded under European Community auspices and not mentioned above:
• Additional Protocol to the Agreement on the Temporary Importation, Free of Duty, of Medical, Surgical and Laboratory Equipment for Use on Free Loan in Hospitals and other Medical Institutions for Purposes of Diagnosis or Treatment;
• Protocol to the 1979 Convention on Long Range Transboundary Air Pollution on Long-term Financing of the Cooperative Programme for Monitoring and Evaluation of the Long-range Transmission of Air-pollutants in Europe (1984 EMEP protocol);
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Relations with 96 inter-governmental organizations.
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Members in 40 countries
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