The Common Market Years

After the excitement of the Treaties of Rome, the Community entered a long period that is easy to forget and important to understand. It built a customs union, created a farm policy that is still its biggest single cost, survived a walkout by France, and took in new members. It also stalled in the 1970s and early 1980s, when the economic shocks of those years made many people doubt that the project was going anywhere. This chapter follows the years from 1958 to 1986, which is the period in which the United Kingdom joined. Dates and figures are given from general knowledge and flagged where they should be checked.

Building the Common Market

The Treaty of Rome set a timetable. The first goal was a customs union: the six members would remove tariffs on goods traded among themselves and apply one common tariff to goods from outside. The target was met ahead of schedule, in 1968 (check). Trade among the six grew quickly in these years, which supporters took as proof that the idea worked (check the size of the growth).

The Community's institutions were also tidied up. A treaty of 1965, in force from 1967, merged the executives of the three Communities (Coal and Steel, the Economic Community and Euratom) into a single Commission and Council (check). From this point it is reasonable to speak of "the European Community" in the singular, although the plural form lingered.

The Common Agricultural Policy

Farming was one of the first things the six agreed to manage jointly, partly because every member protected its farmers and could not easily open its markets without a shared system. The Common Agricultural Policy (CAP), launched in the early 1960s, guaranteed prices to farmers and protected the market from cheaper imports (check the start date).

• The aim. Secure food supplies, support farm incomes and modernise agriculture, after the shortages of the war years.
• The effect. Guaranteed prices encouraged production, and by the 1970s and 1980s the Community held large surpluses, remembered as "butter mountains" and "wine lakes" (check the examples).
• The cost. For decades the CAP took the largest share of the Community's budget, around two thirds at one point (check), and was repeatedly reformed.

De Gaulle and the Empty Chair

General Charles de Gaulle, the French president from 1959 to 1969, wanted a Europe of strong nation states and distrusted supranational institutions. He shaped the Community in two ways.

• Vetoing British entry. The UK, having stayed out of the Rome treaties, applied to join in 1961. De Gaulle blocked the application in January 1963, and again in 1967 (check). He argued that Britain was not yet ready to accept the Community's way of working, and the vetoes left a lasting mark on British memory.
• The empty chair crisis, 1965–66. The Rome treaty planned that more decisions would move from unanimity to majority voting in 1966. In mid-1965 a dispute over financing the CAP and the Commission's powers led France to withdraw its representatives from meetings of the Council, "the empty chair", which paralysed decision-making for months (check the dates).

The crisis ended with the Luxembourg Compromise of January 1966. It was a statement that where a very important national interest was at stake, discussion would continue until unanimous agreement was reached. The members did not agree on what it meant, and in practice it allowed any state to block a decision for many years (check). The balance between majority voting and the right to say no is explained in European Politics Fundamentals 4.

The First Enlargement, 1973

De Gaulle left office in 1969. His successor allowed the question of enlargement to be reopened, and the United Kingdom, Ireland and Denmark joined on 1 January 1973, making nine members (check). Norway had negotiated entry too, but its voters rejected membership in a referendum in 1972 (check).

• The United Kingdom. Membership was contested from the start. In 1975 the government held a referendum on whether to stay in on renegotiated terms, and about two thirds voted yes (check the figure). The UK then pressed for a rebate on its budget contribution, secured in 1984 (check).
• Ireland and Denmark. Both joined with large farming interests in mind, and Ireland's economy was closely tied to Britain's.

The Mediterranean Enlargements

Three southern European countries emerged from dictatorship in the 1970s: Greece in 1974, and Portugal and Spain soon after. The Community welcomed them, partly in the hope that membership would help to anchor their new democracies.

These accessions raised a recurring question: whether a Community of richer northern countries could take in poorer southern ones. The answer was regional funds, which transfer money to less developed regions (check the dates of the main funds), and the question returns in the eastern enlargement (Chapter 6).

Shocks and Stagnation

The 1970s were hard. The oil price shocks of 1973 and 1979 brought high inflation and unemployment, and exchange rates between European currencies moved sharply, which disturbed trade (check). Attempts at monetary cooperation produced the European Monetary System in 1979, which tied member currencies loosely together (check). The first direct elections to the European Parliament took place the same year (European Politics Fundamentals 3).

Despite these steps the early 1980s had a mood that commentators called Eurosclerosis, the sense that the Community was clogged with disputes about budgets and farm surpluses and had stopped progressing (check the origin of the word). Many national barriers still stopped goods crossing borders in practice, such as differing technical standards and customs paperwork, even though tariffs between members had gone.

A New Push

By the mid-1980s leaders concluded that the Community had to relaunch itself, and the obvious target was the barriers that remained. A new Commission president, Jacques Delors, took office in 1985 and championed a plan to complete the single market by the end of 1992. The result was the Single European Act of 1986 (check the dates), taken up in Chapter 4.

Exercises

Next chapter: Single Market, Maastricht & the Euro: 1986–2002, which follows the relaunch under Delors and the creation of the single currency.