The European Economic Community

The European Economic Community (EEC) has emerged as one of the three world economic powers, along with the United States (EC) and Japan. Further economic integration, together with a significant level of political integration, is scheduled for the EEC on 1 January 1992. Nonmember states of the EEC are apprehensive over the implications of both the further economic and the more limited political integration of the EEC. This research examines the creation, status, and post1992 outlook for the EEC.INTEGRATION IN EUROPE

Within the context of international regional integration, there are five levels(1) freetrade area, (2) customs union, (3) common market, (4) economic union, and (5) political union (Grosse, & Kujawa, 1988). Each successive level involves agreater degree of integration. At the lowest level of integration, the freetrade area, tariffs are eliminated on the trade between the member countries. At the next level, the customs union, common external tariffs are applied to all trade between the member countries and nonmember countries. The third level, the common market, moves one step further along, and permits the free flow of the factors of production among member

2countries. At the fourth level, economic union, monetary and fiscal harmonization among member countries is added to the common market system. The final level, political union, involves the creation of a single government over all member countries, and the l

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ities (Brewin, & McAllister, 1988). The fact that the European Communities, through the European Economic Community can and often does act as a single entity in international economic relations is often 8misconstrued as proof that the European Communities can act in a similar way with respect to external political issues (Brewin, & McAllister, 1988). With respect to external political issues, the European Communities, as a single body, have very little more power to act independently of their member states than does the United Nations to act independently of the five permanent member states of the Security Council which may exercise a veto in that organization (Brewin, & McAllister, 1988). The Single Act of Luxembourg, which, by 1987, had been ratified by all European Communities member countries, is the vehicle which is designed to bring about the complete economic integration of the communities (Paxton, 1990). Common communities' responses to international political crises, defense, and other matters are also envisioned by the Single Act. This part of the act, however, causes Britain, in particular, to worry about its independent freedom of action, and Ireland to worry about its constitutional neutrality.

Category: Economics - T