Treaty of Rome

Background

The Treaty of Rome, officially known as the Treaty establishing the European Economic Community (EEC), was signed on March 25, 1957. Alongside it, a second treaty established the European Atomic Energy Community (Euratom). These treaties mark the foundational governance structures that progressed over time into the modern-day European Union (EU).

Historical Context

Post-World War II Europe was keen on fostering economic cooperation to ensure ongoing peace and stability among nations. The Treaty of Rome was signed by the representatives of six European countries: Belgium, France, the Federal Republic of Germany, Italy, Luxembourg, and the Netherlands. The goal was to create a common market and customs union that would eventually expand both geographically and institutionally.

Definitions and Concepts

The Treaty established the European Economic Community (EEC). Key objectives included:

• Economic Integration: Remove trade and economic barriers to create a single market.
• Customs Union: Establish uniform tariffs and standards across member states.
• Common Policies: Develop and harmonize policies in agriculture, transportation, and competition.
• Institutions: Establish major EEC institutions like the European Commission, European Parliament, and European Court of Justice.

A second treaty, signed simultaneously, established the European Atomic Energy Community (Euratom), aimed at the peaceful use of nuclear energy.

Major Analytical Frameworks

Classical Economics

• View: Advocates for free trade and supports the dismantling of barriers to the movement of goods, services, and labor.

Neoclassical Economics

• View: Emphasizes the benefits of economic integration and market efficiencies brought about by common markets.

Keynesian Economics

• View: Focus on the requirement of governmental policies that align with the collective socio-economic goals of integrated economies.

Marxian Economics

• View: Analyzes economic integration through the lens of power dynamics and the distribution of capital among different socioeconomic classes.

Institutional Economics

• View: Examines the role of established frameworks, such as treaties and organizations, in facilitating cooperation and stability.

Behavioral Economics

• View: Focus on how the integration changes consumer behavior and corporate strategies within and between member states.

Post-Keynesian Economics

• View: Emphasizes the importance of persistent governmental roles in managing economic cycles and crises in an integrated economy.

Austrian Economics

• View: Generally skeptical of economic integration efforts carried out by political processes instead of organic, market-driven processes.

Development Economics

• View: Highlights the Treaty’s potential to foster regional development and reduce disparities among member states.

Monetarism

• View: Looks at the implications of economic integration on control over monetary policy and its effects on inflation and other monetary concerns.

Comparative Analysis

The key advantage of the Treaty of Rome was its foundational impact on European economic integration. It contrasted sharply with the protectionist policies previously prevalent and initiated a successfully interconnected economic zone that has evolved to include 27 member countries today.

Case Studies

1. Economic Progress Post-Treaty Adoption: Examine the growth metrics of Belgium, France, Germany, Italy, Luxembourg, and the Netherlands.
2. The Eurozone Project: Study the impacts of the establishment of the Euro on common market dynamics.
3. Brexit: Analyze the socio-economic impacts of the UK’s exit from an evolved EU structure.

Suggested Books for Further Studies

1. “The European Economic Community: History and Commentary on Its Treaty” by George D. Green
2. “Economic Integration in Europe” by Richard Pomfret
3. “The European Union: Economics and Policies” by Barry Eichengreen

Related Terms with Definitions

1. European Union (EU): A political and economic union of member states that are located primarily in Europe, which developed from the structures set up by the Treaty of Rome.
2. Customs Union: An agreement between countries to remove import duties and adopt a common external tariff.
3. Euratom Treaty: Treaty establishing the European Atomic Energy Community aiming for collective development of nuclear energy.
4. Single Market: An integrated market allowing goods, services, capital, and labor to move freely among member states.

The Treaty of Rome served as a remarkable turning point in European history, heralding the launch of a cooperative era, fostering economic prosperity, and laying the groundwork for today’s extensive European Union.