The European Economic Community (EEC) Treaty, signed in Rome in 1957, was established to foster political and economic integration among the member states. The initial members included France, Belgium, Italy, the Netherlands, West Germany and Luxembourg. Other countries, such as Austria, Sweden, Britain, Denmark and Ireland, later joined the EEC. The EEC was changed to the European Union (EU) in 1992 after the Treaty of Maastricht when member states desired to expand the community's powers to non-economic domains.
Sometimes called an internal market, the EEC is all about removing barriers and simplifying existing trade rules to enable members to make the most out of trade. The EEC promotes free trade within the EU and is aimed at making Europe a single-market economy. This community has enabled member states to gain direct access to 27 countries and 480 million people. The EEC has been instrumental in making companies that do business in EU member states lower their prices on products so as to become more competitive and by removing custom tax on goods transported or sold between member states. This has benefited members by making it cheaper and easier to do business with other EU countries and ensuring fair competition. The formation of the single market and the consequent increase in trade has made the EU a major trading power.
The EEC member states share a single currency, the Euro. The states that use the Euro currency are referred to as the euro zone. The euro was introduced in 1999, and it became a major factor in European integration. As of 2011, about 329 million EU citizens now use the euro as their currency and enjoy its benefits. This uniform currency boosts trade within and outside the euro zone borders as transaction costs have been reduced and there are less unexpected changes in the exchange rate. Member states no longer have to deal with several different currencies.
Free Movement of People
Article 17(1) of the EU makes persons holding the nationality of an EEC member state citizens of the union, and Article 18(1) gives every citizen within the union the right to move and live freely in other member states. The signing of the Schengen Agreement in 1985, followed by the Schengen Convention in 1990, initiated the abolition of border controls between participating countries, bringing about the concept of free movement. This is important for the citizens because they can look for jobs in other EU countries, work without a permit, study, live and enjoy equal treatment with nationals, besides access to employment, similar working conditions and all other social and tax advantages.
The EEC established common pricing levels in 1962 when member states were recovering from food shortages. This strategy ensured self-sufficiency and food security by subsidizing production of basic farm products, but this also resulted in surpluses of several products. Price controls were later reformed in 1992 and 2003, replacing subsidies on quantities produced with payment to farmers to guarantee them a decent income. This encourages farmers to produce high quality products by seeking new development opportunities, such as energy-friendly sources that comply with environmental standards, ensure food safety and protect the health of plants and animals. The policy ensures that farmers preserve the rural landscapes, birds and wildlife by keeping their lands in good condition.