The European Economic Community and Its Evolution
The European Economic Community (EEC)
Formation and Objectives
The European Union emerged during a time of global division. Motivated by the Treaty of Rome, six European nations—Belgium, France, Germany, Italy, Luxembourg, and the Netherlands—formed a multinational entity to promote economic and social progress by removing barriers within Europe. Their goal was to establish a large, barrier-free trading area with a common trade policy. This area would ensure the free movement of goods, services, capital, and workers, improve living and working conditions, establish a common social policy, and create a European Social Fund to enhance worker employability.
Institutions
Several institutions were established to manage these objectives. The European Parliament, based in Strasbourg, represented European citizens through elected deputies. The Council of Ministers, with one minister per member state, made decisions unanimously. The Commission developed and executed budgets approved by the ministers, and the Court of Justice ensured compliance with EU legislation.
In 1974, with the expansion to nine members, the European Council was established.
Expansion of the EEC
The Treaty of Rome allowed any European state to apply for membership. Great Britain, initially hesitant, formed the European Free Trade Association (EFTA). Its limited success led Britain, along with Denmark, Ireland, and Norway, to seek EEC membership in 1963. However, French President Charles de Gaulle vetoed their application. After de Gaulle’s departure, these countries joined in 1973, except for Norway, which declined after a referendum.
The 1973 economic crisis slowed further expansion. Greece joined in 1981, followed by Spain and Portugal in 1986. German reunification brought the former East Germany into the EEC. Austria, Finland, and Sweden joined in 1995. In 2004, Cyprus, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia, and Slovenia became members.
Schengen Agreement and Other Developments
By 1985, the EEC had primarily achieved a customs union. Before Spain and Portugal joined, the Schengen Agreement fostered a sense of continental unity and allowed free movement of EU citizens between member states, eliminating immigration controls.
The addition of Spain and Portugal presented agricultural and fishery challenges due to their large primary sectors. Rapid modernization was necessary in these countries.
The Maastricht Treaty and the Single European Act
In 1987, the Single European Act aimed to fulfill the Treaty of Rome’s goals. To integrate Greece, Spain, and Portugal effectively, regional disparities needed to be addressed. Regions with a GDP below 90% of the EU average required support to achieve homogenous development. The Committee of the Regions, the Cohesion Fund, and other European structures were created for this purpose.
German reunification in 1990 further complicated matters, necessitating the Act of Union, outlined in the Maastricht agreements.
The Single European Act aimed to create an area without internal borders, strengthen economic and social cohesion, and establish an economic and monetary union, eventually leading to a single currency.
Further Expansion and the Treaty of Amsterdam
With the accession of Austria, Finland, and Sweden in 1995, the EU became “Europe of Fifteen.” The 1997 Treaty of Amsterdam, effective in 1999, aimed to evaluate the Maastricht Treaty and set new goals. These included strengthening the Parliament’s powers, extending Council decisions, unifying efforts to address unemployment, defining EU citizenship, removing obstacles to free movement, and enhancing police cooperation, ultimately giving Europe a stronger global voice.
In 1998, negotiations began for eastward expansion, with Bulgaria, Cyprus, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia, and Slovenia joining in 2004. Turkey’s candidacy remained problematic due to its location and economic challenges.
The Nice Conference
The Nice Conference addressed changes arising from new members. It aimed to revive enhanced cooperatives, identify institutional reforms for the expanded EU, redistribute votes in the Council of Ministers, expand the number of commissioners, and strengthen the Commission President’s role.
The European Union and the Euro
The euro was introduced in 1995. Following the work of the European Monetary Institute, the euro entered circulation in January 2002, replacing national currencies. Of the fifteen members, all but Greece met the convergence criteria. Britain, Sweden, and Denmark chose to retain their national currencies.
The Future and the Charter of Fundamental Rights
The 1999 Charter of Fundamental Rights, based on liberty, equality, human rights, and fundamental freedoms, served as the foundation for the EU Constitution, sparking debate on the Union’s future.
A Multipolar World
From 1949, the world appeared divided into two blocs. The first, supported by the US, saw economic growth and democratic consolidation. However, this support created a degree of European dependence on the US. The second bloc, under Stalin’s influence, established political (Cominform) and economic (COMECON) ties, preventing member states from benefiting from the Marshall Plan or establishing independent socialist regimes.
The Non-Aligned Movement, including Tito’s Yugoslavia, and the EEC challenged this bipolarity, leading to peaceful coexistence. The first bloc faced a structural economic crisis, while the second bloc, after the deaths of Stalin and Mao, began a cautious rapprochement with the West.
Case Studies and Challenges
1. Panama and the Canal
In the early 20th century, Latin America became part of US policy under the Monroe Doctrine. Panama was a key area of focus. After failed attempts by Spain and France, the US completed the Panama Canal project. The Hay-Bunau-Varilla Treaty granted the US control over the canal zone, a crucial shipping route. After negotiations and a US military occupation, the canal was returned to Panama in the late 20th century.
2. Early Industrialization Attempts
In the early 20th century, Latin America benefited from World War I, exporting agricultural products. However, the ruling oligarchies failed to develop industrialization, leading to debt. Foreign investors, mainly American, created monopolies. The 1929 crisis severely impacted these economies, leading to protectionist policies and the rise of middle classes.
3. Resistance to Democratization
The middle classes developed national-populist ideologies, blaming economic backwardness on colonialism and international capitalism. Populist leaders often cultivated paternalistic relationships with the masses.
4. The Cold War’s Impact
The Cold War led to military dictatorships in Latin America, with some aligning with the US and others seeking Marxist solutions. Conflicts arose in several countries. In the 1960s, Kennedy attempted to counter communist influence with economic aid. Military dictatorships, often backed by the CIA, reached their peak in the 1970s. Debt and capital flight led to widespread poverty.
5. The Mexican Revolution
In 1910, Mexico revolted against dictator Porfirio Diaz, whose policies favored US investments and land concentration. Peasant leaders like Pancho Villa and Emiliano Zapata demanded land redistribution, supported by intellectuals and artists. The revolution led to a bourgeois republic, nationalization of resources, and recognition of democratic and social rights. The PRI ruled for decades, but economic issues and indigenous claims eventually led to its decline.
6. Argentina
In the early 20th century, Argentina enjoyed high per capita income but was ruled by populist dictatorships. Perón’s rise brought expanded social benefits but also nationalistic economic policies that led to crisis. His attempts to retain power failed, but he returned in 1972. Following his death, his wife’s rule was overthrown by military dictatorships, which sought to distract from economic problems with the Falklands War. Defeat in the war led to the government’s downfall.
7. The Implementation of Socialism: Cuba
After gaining independence, Cuba fell under US influence. The US-backed Batista dictatorship’s corruption led to a guerrilla movement led by Fidel Castro and Che Guevara. Castro’s government implemented socialist reforms and nationalized the economy, leading to conflict with US interests and closer ties with the USSR. The Cuban Missile Crisis brought the Cold War to a head. Castro adopted a Soviet-style government, facing similar economic challenges. The USSR’s collapse left Cuba isolated, forcing it to accept foreign investment.
8. Liberation Theology
Pope John XXIII convened the Second Vatican Council to address the changing world. The council sought peace and détente, eliminated Latin in Mass, and addressed relations with other Christian churches and Jewish communities. Liberation theology emerged in Latin America, advocating for the poor and criticizing church hierarchies. This movement, with its Marxist influences, faced opposition from the Church and national oligarchies, and some of its members were assassinated.