Economic Co Operation Between European Countries example essay topic

Merchants believed that money equals wealth. They claimed that if they sent out more goods in value than they bring to the country, the surplus could come in coin. Therefore, if the British exports exceed imports other countries have to pay the balance in treasure and the nation grows rich. However, to David Hulme more exports than imports is not as helpful for the economy as merchants think.

He believed that although money can increase output in the short run, it causes inflation The term "European Union" has evolved as the organisation has evolved. At first, the organisation was known as the "European Economic Community" (EEC) or "Common Market" but, after the Single European Act was passed in 1986, the name changed to " European Community" (EC). In 1993, after the ratification of the Maastricht Treaty, the name changed again from European Community to "European Union" (EU). Three factors are central to origins of the EEC. First of all, at the end of the Second World War, European politics realised that both wars had a similar pattern. For instance, twice, Germany had invaded France through Belgium, Luxembourg and the Netherlands (the Benelux countries).

Therefore, some politicians thought that the best way of avoiding a third war was for European countries to work together politically, economically and perhaps even militarily. Secondly, most of the European countries involved the Second World War and the economies in many of them had been stretch to breaking point. Thus, European countries did not have the resources to rebuild their economies on their own. That led to economic co-operation between European countries. And finally, the end of the Second World War was soon followed by the outbreak of the Cold War.

Europe was divided between the East (dominated by the Soviet Union) and the West (dominated by the USA). Therefore, the Cold War encouraged Western Europe, with help of the USA, to co-operate together. Although Churchill had proposed a United States of Europe in his speech at the Zurich University in 1946, he did not want the UK to be a part of it. He wanted to continue with the traditional route of British foreign policy, that of the 'three interlocking circles'.

First of all there was the British Imperial circle. It was obvious that Britain could not leave these countries overnight, countries with which such strong trading and historical links existed, not to mention the peoples of which had been called to fight in two world wars at the instance of the crown. In 1947 Britain started to decolonize peacefully and later the commonwealth was formed but it was still Britain's most important trading partner. It is clear then that the British government saw the commonwealth and the sterling trading block as crucial to the recovery of Britain. The Benelux countries made the first step towards a united Europe when they joined together to establish the Benelux custom union, which came into effect in January 1948.

This was soon followed by the setting up the Organisation for European Economic Cooperation (OEEC). The OEEC was set up to administer 'Marshall aid' a massive programme of financial aid set up by the USA to encourage economic recovery in Europe ($13 billion was distributed in four years). Although Marshall aid was offered to East European countries, they refused it on the grounds that it would lead to American interference in their domestic affair. Therefore, members of the OEEC all came from Western Europe.

A French civil servant and Robert Schuman, French Foreign Secretary, formulated what became known as the Schuman Plan in 1950. The plan had two concepts. First, they wanted to promote economic recovery in both France and Germany by pooling both countries' coal and steel industries. Second, they hoped to make war between the two countries impossible by placing their key industries under joint authority. The Schuman plan was announced in 1950 and led to the creation of the European Coal and Steel Community (ECSC). The ECSC came into operation in 1952 after six countries (France, West Germany, Italy and the Benelux countries) signed the Treaty of Paris in 1951.

The aim of the ECSC was to: 'Establish a common market for coal and steel to ensure supplies, to promote expansion and modernisation of production and to provide better employment conditions'.