The steps of European integration

The foundations of European integration can be traced from the discussions immediately after World War II (Baldwin and Wyplosz, 2006). The central question was “How can Europe avoid another war?” and the natural answer was dependent on the identification of the roots of the war.

At the time, three main interpretations were proposed: the Germans were to blame as in 1914; the competition for market dominance induced by capitalism (Lenin's imperialism view); and the destructive nationalisms of the early 1900s. Different interpretations called for different solutions: a neutered Germany (Morgenthau Plan, 1944), adopting communism, or pursuing European (political) integration. The latter ultimately prevailed, but this was far from clear in the late 1940s.

The United States tried to promote integration among European countries to counter the emerging power of the Soviet Union at the beginning of the Cold War. Economic, military, and political calculations lay behind the US aid program for European countries (the Marshall Plan), which made aid conditional on effective cooperation among European governments and the gradual liberalization of trade and payments between the European economies (a reasonable stipulation given the rivalries of the 1930s).

The US attempt, however, received a feeble response from a Europe deeply divided after the war. A genuine European economic cooperation began only with the Schuman Declaration of 1950 and the construction of the European Coal and Steel Community (ECSC) in 1951.

This putative European Union was then strengthened and expanded by the Treaty of Rome of 1957, which established the European Common Market and the European Atomic Energy Community between Italy, France, Germany, Belgium, the Netherlands, and Luxembourg (the Six).

Political integration began from the economic sphere and remained focused around economic measures for a long time. The need to introduce Europe-wide policy coordination gradually and the limited scope of the initial approach to economic integration were prompted by the difficulty of proceeding with full political integration as the failure to create a European Political Community, inspired by De Gasperi in 1954, showed.

At the start, the European Common Market was not much more than a customs union, devoted to the lowering of internal duties, the setting of a single customs tariff for countries outside the Market (a common external tariff was adopted in 1968), and a set of specific common policies relating to agriculture, transport, and competition legislation.