What Is the European Community (EC)?
Let me explain the European Community (EC) directly: it was an economic association started by six European countries in 1957, made up of three communities that got replaced by the European Union (EU) in 1993. The EC handled policies and governance collectively across its member states.
The main aim was to build a common trade policy that removed barriers, boosting economic conditions region-wide. Plus, officials from these states, still dealing with World War II aftermath tensions, pushed for deep integration and cooperation to lower the chances of more wars.
Key Takeaways
- The European Community (EC) was created in 1957 to encourage trade cooperation and ease tensions after World War II.
- It included three economic associations: the European Economic Community (EEC), the European Coal and Steel Community (ECSC), and the European Atomic Energy Community.
- The six founding members were Belgium, Germany, France, Italy, Luxembourg, and the Netherlands.
- In 1993, the EC was replaced by the European Union with the Maastricht Treaty's implementation.
Understanding the European Community (EC)
I want you to grasp that the European Community (EC) emerged after World War II with the idea that a more unified Europe would be less likely to fight internally. When it launched in 1957, the initial members were Belgium, Germany, France, Italy, Luxembourg, and the Netherlands.
This original setup involved three organizations, all governed by treaties. These worked in tandem to apply and enforce fair policies across the participating nations.
The European Economic Community (EEC)
The first part of the EC was the European Economic Community (EEC), or Common Market. Set up in 1957 by the Treaty of Rome, it aimed to merge European economies and cut down on war-causing tensions, especially reconciling France and Germany.
To drop trade barriers and set unified policies, members had to cooperate politically and resolve disputes peacefully. This opened up profitable cross-border trade for everyone. By 1962, the EEC added an agricultural policy to protect its farmers from import competition.
The European Coal and Steel Community (ECSC)
Next in the EC was the European Coal and Steel Community (ECSC), designed to oversee manufacturing practices among members. It integrated western Europe's coal and steel sectors, nearly eliminating trade barriers for coal, steel, coke, scrap iron, and pig iron.
The ECSC enforced rules on pricing and quotas, fining violators. Trade in these goods grew in the 1960s, but by the 1970s, it shifted to cutting overproduction in steel to stay competitive against cheap Japanese imports.
The European Atomic Energy Community
Finally, the European Atomic Energy Community, or Euratom, started in 1958 to create a common market for nuclear materials and equipment among members. Its objectives included coordinating research and advancing peaceful atomic energy uses.
Euratom avoided military nuclear aspects, focusing instead on trade, health, and safety standards for atomic energy.
The European Union
In 1993, the European Community folded into the European Union (EU) when the Maastricht Treaty took effect. As of 2024, the EU has 27 countries: Austria, Belgium, Bulgaria, Croatia, Cyprus, Czechia, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, and Sweden.
On June 23, 2016, UK citizens voted to leave the EU in what's called Brexit. The United Kingdom officially left on January 31, 2020.
Other articles for you
The Mumbai Interbank Offer Rate (MIBOR) was India's benchmark for interbank lending rates, replaced in 2015 by a transaction-based version to prevent manipulation.
A jumbo loan is a mortgage exceeding federal limits for conventional loans, with stricter requirements and no backing from Fannie Mae or Freddie Mac.
Medicaid is a joint federal and state program offering health coverage to low-income individuals in the US.
A junior mortgage is a secondary loan on a property that ranks below the primary mortgage in priority during foreclosure.
Unfair claims practice occurs when insurers improperly avoid, delay, or reduce valid claims to minimize costs, which is illegal in many jurisdictions.
An air waybill (AWB) is a non-negotiable document used in international air shipping to detail and track shipments, serving as a legal contract between shipper and carrier.
The Low-Income Housing Tax Credit (LIHTC) is a federal program providing tax incentives to developers for creating affordable rental housing for low-income families.
The prisoner's dilemma illustrates how self-interested decisions by individuals can lead to worse outcomes for the group than if they cooperated.
A value chain outlines the steps to create and deliver a product while adding value at each stage for competitive advantage.
The Wharton School is a top-ranked business school at the University of Pennsylvania, renowned for its finance programs and global prestige.