The establishment of the European Community
The European Community was established in the 1950s by major developed countries in Western Europe in order to strengthen mutual cooperation and promote the region and their respective economies. A regional economic and trade organization established and developed in the 1990s.
In May 1950, French Foreign Minister Robert Schumann proposed a plan to establish a "supranational" agency to plan and lead coal and steel production in France and the Federal Republic of Germany, namely "Schumann" Plan" (Schulman plan). The plan was echoed by the Federal Republic of Germany, Italy, Belgium, the Netherlands and Luxembourg. On April 18, 1951, six countries signed the 50-year European Coal and Steel Community Treaty (also known as the Paris Treaty) in Paris, France, and established the European Coal and Steel Community (ECSC) on the basis of the treaty. ). Since then, the countries have sought greater cooperation and decided to prioritize cooperation in the economic rather than the political realm. The economies of various countries can be more closely connected through the establishment of economic organizations that all countries participate in. Therefore, in 1957, the six countries signed the indefinite "Treaty Establishing the European Economic Community" and the "Treaty Establishing the European Atomic Energy Community" in Rome (collectively known as the "Treaty of Rome"), according to which the European Economic Community was created. On April 8, 1965, six countries signed the Treaty on the Establishment of a Single Council and a Single Commission of the European Atomic Energy Community (EEC) and the European Atomic Energy Community (EAEC, or EURATOM). The Treaty of Brussels) decided to merge the main institutions of the three organizations of the Coal and Steel Community, the Atomic Energy Community and the Economic Community, collectively known as the European Community (referred to as the "European Community"). "). After the "Brussels Treaty" came into effect on July 1, 1967, the three European Economic Community still exist independently. However, judging from the practice since the establishment of the European Economic Community, the European Economic Community is at the core. .
Since its establishment, the European Union has expanded three times. In 1973, the United Kingdom, Ireland, and Denmark joined; in 1981, Greece joined; in 1986, Spain and Portugal joined. There are 12 member countries in the bloc. By 1990, the bloc’s GDP reached US$6.2 trillion, surpassing the United States (5.39 trillion) and Japan (294 million), and its export trade accounted for 40% of the world’s total trade. , becoming the largest and most integrated regional economic organization in the world at that time
The integration process of the European Union
After the establishment of the European Union, the economy of the region changed. The integration process has gone through a gradual deepening process.
1. Customs Union
The European Union started as a customs union according to the Treaty of Rome. Yes: From 1958 to 1969, tariff barriers and trade quotas were gradually abolished among member countries, discriminatory treatment in road, railway and water transport freight rates between member countries was abolished to allow free circulation of goods, and a unified tariff rate was gradually implemented. More than a year after its implementation, the United States dumped a large amount of goods into the European Union, which prompted the European Union to speed up the establishment of a customs union. At the end of 1961, all countries canceled their internal trade quotas. In 1968, internal tariffs were established. All reductions have been completed, and while trade quotas and internal tariffs have been eliminated, the customs union has been gradually completed ahead of the deadline specified in the Treaty of Rome.
***Same as agriculture and finance. Policies
While establishing the customs union, the European Union also implemented a unique agricultural policy and a unique fiscal policy.
The European Union also implemented a unique agricultural policy. Since 1962, the unified agricultural policy has been implemented. Its main contents are: establishing an agricultural unified market organization, establishing a unified agricultural fund, and implementing unified price management and price guarantees for agricultural products to promote the free circulation of agricultural products. In order to ensure the income of agricultural products, the European Union specifically stipulates the intervention price of agricultural products. When the market price falls below the intervention price, the European Union is obliged to purchase at the intervention price. In 1968, the prices of major agricultural products were included in various agricultural market organizations, achieving unified prices for agricultural products. In 1969, internal tariffs on agricultural products were completely abolished, and differential taxes were levied externally. There were no internal tariffs on major agricultural products, while differential taxes were levied externally. The free circulation of major agricultural products within the same market was realized. In order to support the export of agricultural products, another main content of the European Union's unified agricultural policy is the implementation of export subsidy policies. The price of agricultural products for export can be lower than the international market price or lower than the cost, and the loss of the price difference will be compensated by the financial expenditure of the European Union.
Since its establishment, the European Union has established a unified fiscal policy. Through the redistribution of fiscal revenue, the European Union has supranational economic power to intervene in the European Union's internal economy. The financial revenue of European countries mainly comes from its own financial resources. It includes tariffs, agricultural product import balances and value-added tax. The main objects of tariffs are industrial products from outside the European Union. The agricultural product import balance is levied on agricultural products that come from outside and whose price is lower than the price of similar products in Europe. VAT is a tax that increases as production and sales increase in member states.
In the composition of fiscal revenue, tariffs account for about 30%, differential taxes on agricultural products account for 5%, value-added taxes account for 60%, and the rest are assessed payments.
The financial expenditures of the European Union mainly include the following aspects: administrative expenses for various institutions of the European Union account for about 5% of the total expenditure; in order to ensure consistent agricultural policies The agricultural guidance and guarantee funds provided by the implementation account for 70%; expenditures such as the European Social Fund and Industrial Development Fund account for 15%; expenditures as emergency reserves and reimbursement to member states account for 10%.
3． Monetary and Financial Policy
The European Union began its efforts to build an economic and monetary union in the early 1970s. In the early 1970s, in order to ensure exchange rate stability and promote the development of intra-regional trade and investment, the European Union successively implemented the snake-shaped exchange rate and the snake-shaped joint floating exchange rate system. The so-called snake-like exchange rate system stipulates that the exchange rate fluctuation range between the currencies of European member countries and the US dollar is reduced, allowing only a fluctuation of 1.125%, with a total fluctuation of 2.25%. This fluctuation range is less than half the fluctuation range of foreign currencies against the US dollar. Because the fluctuation range of the currency exchange rate between participating countries is less than half the fluctuation range of the currency exchange rate of non-participating countries. Since the fluctuation range of the currency exchange rate between participating countries is smaller than the fluctuation range of the currency exchange rate of non-participating countries, 4.5% is generally compared to a hole, and 2.25% is compared to a snake. If a chart is used to depict the changes in exchange rates, it looks like a snake in a hole. The upper and lower parts are squirming, so the exchange rate implemented by the European Union at this time is called the snake-shaped exchange rate system. In 1972 and 1973, successive dollar crises broke out. The dollar depreciated again, and currencies of various countries were no longer subject to the 4.5% fluctuation limit. That is to say, the "hole" in the European Union's exchange rate fluctuations no longer exists, but so far the European Union still stipulates that the exchange rate fluctuations of member countries can only be within a range of 2.25%. The exchange rate system implemented by the European Union at this time was called the snake-shaped joint floating exchange rate system.
In order to further promote the economic cooperation of the European Union, balance the international balance of payments of each member country, and stabilize the exchange rate, the European Union formally established the European Monetary Cooperation Fund in 1973, with a total fund of 1.4 billion European dollars. Unit of calculation.
In 1974, the European Union decided to implement a new unit of calculation that uses a "basket" of currencies from all European countries. This new unit of calculation is the European Unit of Account. The European calculation unit is based on the size of the gross national product of each European country, the proportion of each country in the total exports of goods and services in the European Union, and the share of each country in the short-term monetary payment system of the European Union. Factors such as shares are calculated through complex technical processing. The European Sports Council publishes the comparison of the European unit of account with national currencies every day. After the implementation of the European Unit of Accounting, the scope of use has gradually expanded. Many institutions in the European Community, such as the European Development Fund, the European Investment Bank and the European Coal and Steel Pool, use the European Unit of Accounting for internal settlements.
In 1979, the European Union established the European Monetary System, which has three main contents: establishing a European monetary unit, implementing a policy of stabilizing exchange rates, and establishing a European Monetary Fund.
The European Monetary Unit was developed on the basis of the European Unit of Account. It was designed as the future common currency of the European Community and is the core of the European Monetary System. The European Monetary Unit The calculation method is the same as the European calculation unit and is also determined based on the currencies of various countries. The European Monetary Unit is mainly used as a settlement instrument between member states or as a unit of account for development assistance to the third world or as one of the member's reserve assets.
The European Union's policy of stabilizing exchange rates is mainly reflected in the implementation of an adjustable fixed exchange rate internally and the joint floating system externally. The so-called adjustable fixed exchange rate, also known as a semi-fixed exchange rate system, means that the exchange rate between one country's currency and another country's currency generally remains unchanged and can be adjusted according to circumstances when necessary. The so-called joint floating system means that while the country implements a fixed exchange rate system among the currencies of member countries, it also implements a floating exchange rate system with rising and falling rates for the currencies of non-member countries, which is the snake-shaped and snake-shaped exchange rate system mentioned above. form a joint floating exchange rate system.
The European Monetary Fund plan of the European Union requires each member to concentrate 20% of their gold and foreign exchange reserves in the European Union as the European Union's reserve assets. The purpose is to Expand the lending capacity of the existing monetary cooperation fund, strengthen intervention in the currency market, and prepare for the establishment of the European Central Bank.
The implementation of joint floating exchange rates and the establishment of the European monetary system formed a preliminary economic and monetary union within the European Union, laying the foundation for the further deepening of the integration of the European Union.
4. Unified market
On the basis of the customs union, the European Union is committed to the establishment of a unified market, and finally established the European single market in 1993, achieving a leap in the integration process.
In 1985, Jacques Delors, the former French Finance Minister, became chairman of the European Commission. With his active efforts, European integration, which had once stalled, was restarted. In 1986, the member states of the European Community signed the "Single European Act (SEA)", which revised the "Treaty of Paris" and the "Treaty of Rome" and clearly stated that the treaty must be completed before December 31, 1992. Complete the construction of the internal market and achieve the following four free circulations.
(1) Free circulation of goods. Cancel all inspections of homogeneous goods at internal borders, and unify commodity technology and health standards to promote commodity circulation.
(2) Free circulation of capital. Remove restrictions on domestic residents buying and selling stocks and bonds in other member states; citizens can deposit and borrow in each member state, and cancel foreign exchange controls to accelerate capital flows.
(3) Free circulation of personnel. Allow free movement of population among member states. Citizens of the same community will not need to check their identity and property, and can move freely within the community; citizens of other countries enjoy the same treatment as companies of their own countries; mutual recognition of residency rights, staff higher education and technical titles to strengthen talent exchanges.
(4) Free exchange of services. Open the service market; allow cross-border free provision of new technologies such as finance, insurance, transportation services and software, and other services; operate banking, insurance, transportation and other businesses; and mutually exercise professional licenses to promote the development of service trade.
The "Single European Document" also makes clear provisions on European cooperation in the fields of economy and currency, social policy, scientific and technological development, environmental protection and foreign policy.
The establishment of a unified market within the European Union went through twists and turns, step by step, and was officially launched on January 1, 1993. The basic structure of the unified market has been largely completed, and barriers such as borders, technology, and taxation that hindered the "four major flows" of goods, capital, services, and people have been or are being eliminated. However, the realization of a unified market is not yet complete, and there are still some problems in the "four major circulations". In terms of commodities, there are still some commodities that are subject to control; in terms of capital, there are still some issues that require coordinated policies among countries; in terms of services, train transportation still cannot be fully liberalized, and banking business still needs to comply with national and regional treaties; in terms of personnel mobility , The United Kingdom, Denmark and other countries only agree that EU citizens can move freely, but they refuse to cancel their country's border inspections on the grounds that they cannot distinguish between EU companies and foreigners.
The initial establishment of the European Union's large market is an important step taken under the overall strategic goal of strengthening Western Europe's unity, revitalizing the economy, and competing with the United States and Japan. It is of great significance to the European Union. Developing economies of scale, strengthening scientific and technological cooperation, and improving competitiveness all have a promotional role.