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European Economic Community

European Economic Community was the full title of the EEC, which Britain joined on 1 January 1973, also known as the Common Market, later as the European Community; and, after the treaty of Maastricht, as the European Union.

Britain stayed out of the EEC's forerunner, the European Coal and Steel Community (ECSC), formed in 1952. This was a French initiative designed to ensure continuing influence over the German Ruhr's coal and steel production. It required a supranational high authority and Britain, with its attachment to sovereignty, its links with the Commonwealth, and a special relationship with the USA, could not have joined. The Labour government had just nationalized Britain's coal industry and faced trade union opposition to ‘handing it over to foreign capitalists’. The French had also discouraged Britain from entering the discussions so that they could shape the new entity to fit their interests.

The members of the ECSC agreed at the 1955 Messina conference to explore further economic and atomic co-operation. Britain declined to send a representative and therefore had no influence on the treaty of Rome that established the EEC. However, it soon became clear that the EEC countries were catching up or surpassing Britain both economically and politically, and this realization led to Macmillan's formal membership application in July 1961. This was vetoed by French President de Gaulle in 1963, after the Nassau agreement had increased British military dependence on US missile technology. Problems over Commonwealth and EFTA (European Free Trade Association) trade, and agricultural subsidies would have made agreement difficult, but the challenge posed by British membership to de Gaulle's aspirations as a leader of a ‘Third Force Europe’ probably condemned the negotiations to failure despite the support of other EEC members. The same factor led to de Gaulle's veto of Britain's second application, made by Wilson in 1967.

De Gaulle's downfall in 1969, coupled with French economic weakness and increasing German assertiveness under Brandt's leadership, cleared the way for the success of Britain's third application to join, under Heath in 1970–1. Unfortunately for Britain, the EEC had come to agreements in 1970, detrimental to Britain's future membership, on the Common Agricultural Policy (CAP), and budget contributions.

The application had major consequences for British domestic politics. Labour had opportunistically switched to an anti-EEC policy once in opposition in 1970, but a significant group of committed integrationists, headed by Roy Jenkins refused to follow, and supported the Heath government's European policy. The split in the Labour Party was contained only by Wilson's promises to renegotiate Britain's terms of membership and to hold a referendum on the results. This took place on 5 June 1975: the cross-party ‘Britain in Europe’ group managed to highlight the positive benefits of membership and secured 67 per cent of the vote.

Britain failed to use the EEC to her maximum advantage. The ill-will caused by the inept ‘renegotiation’ of 1974, the disdain shown towards Community institutions by some Labour anti-European ministers; the inability of British politicians and bureaucrats to adapt to the coalition-building necessary to influence EEC policy; and the distractions caused by domestic political problems over devolution and pay policy led to a loss of influence over collective decision-making.

The early Thatcher years from 1979 were dogged by arguments over Britain's EEC budget contribution. Opinion varies on how far Thatcher's aggressive behaviour was responsible for the favourable deal eventually reached at the Fontainebleau European Council in June 1984, but the whole row reinforced Britain's reputation for obstructiveness.

With the budget settled, Britain went on to play a positive role in the mid-Thatcher years. A more subtle approach to the Community enabled Britain to work with others to guide the eventual Single Market proposals towards the British aim of trade liberalization with minimal institutional reform. The Single European Act, signed in Luxembourg on 17 February 1985, was the result, coming into force on 1 July 1987. Majority voting in the Council of Ministers was extended to ease the passage of European legislation (directives and regulations) needed to create the single market. British fears of the Greeks vetoing progress towards deregulation proved greater than fears of pooling sovereignty.

However, Thatcher was still regularly to be found in isolation. This was perhaps inevitable given her personal style and perhaps inflated view of the realities of Britain's sovereignty. These underlay her hostility to participation in the Exchange Rate Mechanism (ERM), or European Monetary Union (EMU), which led to the resignation of cabinet ministers Lawson and Howe. They feared that Britain was not only repeating the mistakes of the 1950s, staying outside institutions rather than influencing them from within, but also deluding itself in believing that national sovereignty was a meaningful concept in an interdependent world without capital or trade barriers. Others ridiculed the idea that national identities were threatened by European integration. Thatcher's opposition to these views was famously articulated in her Bruges speech of 20 September 1988: ‘Europe will be stronger precisely because it has France as France, Spain as Spain, Britain as Britain, each with its own customs, traditions and identity … We have not successfully rolled back the frontiers of the State in Britain only to see them reimposed at a European level with a European superstate exercising a new dominance from Brussels.’ The turmoil in eastern Europe as the Communist system and USSR collapsed encouraged France and Germany to seek reforms to bind the newly unified Germany tighter into European structures. John Major declared himself happy with the resulting treaty of Maastricht, but the ‘no’ vote in the Danish ratification referendum (2 June 1992), the ignominious devaluation of the pound and exit from the ERM on ‘Black Wednesday’ (28 September 1992), emboldened Conservative ‘Eurosceptics’, who forced Major into a Commons vote of confidence to achieve ratification.

The Labour government of 1997 began with warm intentions towards Europe, which became less enthusiastic as the euro, the new single currency introduced in January 1999, went into free-fall. Meanwhile, their policy of devolution within the British Isles sat oddly with the avowed intention of many European spokesmen to seek ever further integration, which would inevitably increase the power of Brussels.

The last few years suggest that the EEC has lost its way, more as a consequence of the over-enthusiasm of supporters like Jacques Delors and Romano Prodi than the work of its critics. Even in economic matters its achievements look less impressive as several economies, particularly the German, seem sluggish and over-regulated. A distinctly anti-American tone has revealed itself in both economic and military questions, with talk of a European ‘super-power’ to balance (and rival?) America. EEC interventions in Bosnia, Kosovo, and Macedonia have often looked hasty and ill thought out, which has not prevented demands for a Rapid Reaction Force to implement dubious decisions even more quickly. The scheme to expand membership from fifteen states to 30, including most of the former Soviet bloc, seems bound to outrun the capacity of the EEC to reach and implement common policies. Worst of all, EEC spokesmen constantly reveal a most startling disregard for democratic processes, insisting that the Danes who voted ‘the wrong way’ in the 1992 referendum should hold another, and that the Irish, who voted against enlargement in 2001, should be made to think again. It is distressing if ‘guided democracy’, discredited by the collapse of the Soviet Union in 1989, should have returned in a new form, and if a noble concept of collaboration, respect, and understanding should have been ruined by imperialism, grandiosity, and bureaucracy.

Christopher N. Lanigan/ and Professor J. A. Cannon

Bibliography

Dinan, D. , Ever Closer Union? (Basingstoke, 1994);
George, S. , An Awkward Partner (Oxford, 1994);
Kitzinger, U. , Diplomacy and Persuasion: How Britain Joined the Common Market (1973);
Unwin, D. W. , The Community of Europe (1991).

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European Economic Community

European Economic Community (EEC), organization established (1958) by a treaty signed in 1957 by Belgium, France, Italy, Luxembourg, the Netherlands, and West Germany (now Germany); it was known informally as the Common Market. The EEC was the most significant of the three treaty organizations that were consolidated in 1967 to form the European Community (EC; known since the ratification [1993] of the Maastricht treaty as the European Union). The EEC had as its aim the eventual economic union of its member nations, ultimately leading to political union. It worked for the free movement of labor and capital, the abolition of trusts and cartels, and the development of joint and reciprocal policies on labor, social welfare, agriculture, transport, and foreign trade.

In 1958, Britain proposed that the Common Market be expanded into a transatlantic free-trade area. After the proposal was vetoed by France, Britain engineered the formation (1960) of the European Free Trade Association (EFTA) and was joined by other European nations that did not belong to the Common Market. Beginning in 1973, EFTA and the EEC negotiated a series of agreements that would insure uniformity between the two organizations in many areas of economic policy, and by 1995, all but four of EFTA's members had transferred their memberships from EFTA to the European Union.

One of the first important accomplishments of the EEC was the establishment (1962) of common price levels for agricultural products. In 1968, internal tariffs (tariffs on trade between member nations) were eliminated and a common external tariff was fixed. For subsequent developments, see European Union.

See A. E. Walsh and J. Paxton, The Structure and Development of the Common Market (1968); R. C. Mowat, Creating the European Community (1973); A. M. Eli-Agraa, ed., The Economics of the European Community (1985); A. Sapir and J. Alexis, ed., The European Internal Market (1989).

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