1. European Communities
To safeguard peace and lay the foundation for a united Europe, the French foreign minister Robert Schuman proposed in a declaration of 9 May 1950 that ‘Franco-German production of coal and steel as a whole be placed under a common High Authority, within the framework of an organization open to the participation of the other countries of Europe’. This plan was put into practice by the Treaty establishing the European Coal and Steel Community (ECSC) which was signed in Paris on 18 April 1951 by Belgium, the Federal Republic of Germany, France, Italy, Luxembourg and the Netherlands and entered into force on 23 July 1952. After the collapse of the plan for a European Defence Community, the six ECSC founding states agreed to press on with economic integration. They signed the Treaty establishing the European Economic Community (EEC) in Rome on 23 March 1957, which was to lay the foundations of an ever closer union among the peoples of Europe, together with the Treaty establishing the European Atomic Energy Community (Euratom), the aim of which is to contribute to the raising of the standard of living in the Member States and to the development of relationships with the other countries by creating the conditions necessary for the speedy establishment and growth of nuclear industries. These so-called ‘Rome Treaties’ entered into force on 1 January 1958. As a result of merger treaties, the institutions of the three Communities were merged into institutions common to the European Communities (Convention on certain institutions common to the European Communities of 25 March 1957, which entered into force on 1 January 1958, and the Treaty establishing a Single Council and a Single Commission of the European Communities of 8 April 1965, which entered into force on 1 July 1967,  OJ 152).
As a result of the Treaty on European Union (EU Treaty), the European Economic Community changed its name to ‘European Community’ (EC) with effect from 1 November 1993. The ECSC came to an end on 23 July 2002 on the expiry of the ECSC Treaty (which had been concluded for 50 years), as a result of which coal and steel came under the EC Treaty.
The first expansion of the European Communities took place on 1 January 1973 with the accession of Denmark, Ireland and the United Kingdom. Greece joined on 1 January 1981. Spain and Portugal followed on 1 January 1986. The accession of Austria, Finland and Sweden followed on 1 January 1995. Ten other countries joined on 1 May 2004, namely the Czech Republic, Estonia, Cyprus, Latvia, Lithuania, Hungary, Malta, Poland, Slovenia and Slovakia. On 1 January 2007 the number of Member States was expanded with the accession of Bulgaria and Romania.
The EC was based on the Treaty establishing the European Community (EC), which originated from the Treaty establishing the European Economic Community. The Treaty of Lisbon, which was signed on 13 December 2007 and entered into force on 1 December 2009, changed the name of the EC Treaty to the ‘Treaty on the Functioning of the European Union’ (TFEU) and profoundly reshaped it. The word ‘Community’ was replaced throughout by ‘Union’. The European Union became the successor of the EC. The remainder of this text section describes the former EC.
The EC is the heart of the European Union. It has legal personality (Art 281 EC/essentially replaced by Art 47 TEU). Under Art 2 EC/essentially replaced by Art 3 TEU the Community has as its task, by establishing a Common Market and an economic and monetary union and by implementing common policies or activities referred to in Arts 3 and 4 EC, essentially replaced by Arts 3-6 TFEU and Arts 8 and 119 TFEU, to promote throughout the Community a harmonious, balanced and sustainable development of economic activities, a high level of employment and of social protection, equality between men and women, sustainable and non-inflationary growth, a high degree of competitiveness and convergence of economic performance, a high level of protection and improvement of the quality of the environment, the raising of the standard of living and quality of life, and economic and social cohesion and solidarity among Member States (European Economic Constitution).
Under Art 3(1) EC/essentially replaced by Arts 3-6 TFEU, the activities of the EC include the prohibition, as between Member States, of customs duties and quantitative restrictions on the import and export of goods, and of all other measures having equivalent effect; a common commercial policy; an internal market (European internal market) characterized by the abolition, as between Member States, of obstacles to the free movement of goods, persons, services and capital (fundamental freedoms (general principles); free movement of workers; freedom of establishment, free movement of services; free movement of capital and payments); measures concerning the entry and movement of persons; a common policy in the sphere of agriculture and fisheries; a common policy in the sphere of transport; a system ensuring that competition in the internal market is not distorted (competition (internal market)); the approximation of the laws of Member States to the extent required for the functioning of the Common Market; a policy in the social sphere comprising a European Social Fund (European labour law); the strengthening of economic and social cohesion; a policy in the sphere of the environment (environmental liability); the strengthening of the competitiveness of Community industry; the promotion of research and technological development; encouragement for the establishment and development of trans-European networks; a contribution to the attainment of a high level of health protection; a contribution to education and training of quality and to the flowering of the cultures of the Member States; a policy in the sphere of development cooperation; the association of the overseas countries and territories in order to increase trade and jointly promote economic and social development; a contribution to the strengthening of consumer protection (consumers and consumer protection law); and measures in the spheres of energy, civil protection and tourism. Article 4 EC/119 TFEU specifically mentions the adoption of an economic policy which is based on the close coordination of Member States’ economic policies, on the internal market and on the definition of common objectives, and conducted in accordance with the principle of an open market economy with free competition. It further mentions the objective of a single currency as well as the definition and conduct of a single monetary policy and exchange-rate policy the primary objective of both of which is to maintain price stability.
The institutions of the EC are the European Parliament, the European Commission (European Commission), the Council of the European Union, the Court of Justice of the European Communities (European Court of Justice (ECJ)) and the European Court of Auditors. Its political management and steering body is the European Council (Council and the European Council). Additional bodies, often called ancillary organs, are the Economic and Financial Committee, the Committee of the Regions, the European Investment Bank and the European Central Bank.
For the principal features of the legal system of the EC European Constitution. For the principles, procedures and forms of regulation by the EC and its competency in the field of private law EC Treaty.
The law laid down by the EC is normally implemented by the Member States (indirect administration). The EC itself acts by way of direct administration in a few areas only. It is partially supported in this respect by agencies, which have been established as independent bodies with their own legal personality (European Union).
The EC is funded through its own resources, which the Council determines and recommends to the Member States for adoption in accordance with their constitutional legislation. These resources include, in particular, agricultural levies, levies on sugar, common customs tariff duties, and funds computed from the gross national products of the Member States.
In order to advance integration, the Member States of the Community have repeatedly concluded conventions on various matters between themselves, for instance, the Convention on jurisdiction and the enforcement of judgments in civil and commercial matters signed in Brussels on 27 September 1968 ( OJ L299/32; recognition and enforcement of foreign judgments) and the Convention on the law applicable to contractual obligations opened for signature in Rome on 19 June 1980 ( OJ L266/1, consolidated version  OJ C27/1; foreign law (application)).
Eurozone designates the EC Member States that have introduced the euro as their common currency; they form a separate zone. Seventeen states are currently members of this zone and comprise Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Malta, the Netherlands, Portugal, Slovakia, Slovenia and Spain. Denmark and the United Kingdom are exempt from introducing the euro as a result of the opt-out clauses that are to be found in protocols to the Treaty of Maastricht. The other EC Member States will introduce the euro as soon as the Council has established that they satisfy the conditions for sharing a single currency.
An informal body known as the Eurogroup has been formed to consider current problems of economic and financial policy in the Eurozone countries; it normally meets the day before the Economic and Financial Affairs Council (ECOFIN).
4. Schengen Area
The Schengen Area came about through the agreement between the Governments of the states of the Benelux Economic Union, the Federal Republic of Germany and the French Republic on the gradual abolition of checks at their common borders ( OJ L239/13). The so-called Schengen acquis was concluded in Schengen on 14 June 1985. On 19 June 1990, again in Schengen, those same countries signed a Convention implementing the Schengen Agreement ( OJ L239/19), which regulates in detail the measures and facilities for the abolition of border controls. It entered into force with effect from 26 March 1995. The following EC Member States initially acceded to both treaties: Italy (1990), Spain and Portugal (1991), Greece (1992), Austria (1995) and Denmark, Finland and Sweden (1996). The protocol integrating the Schengen acquis into the framework of the European Union, which was annexed to the Treaty of Amsterdam (EU Treaty), empowers the 13 aforementioned countries to enter into enhanced cooperation under the Schengen Agreement and its associated provisions. Ireland and the United Kingdom are not bound by the Schengen acquis. However, the United Kingdom does partially participate in the provisions on police and judicial cooperation in criminal matters ( OJ L131/43). The provisions of the Schengen acquis were binding on the Member States that acceded on 1 May 2004 and 1 January 2007 from the date of their accession, based on their particular acts of accession, but some of the provisions were not immediately applicable. The Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia and Slovenia now have to implement them in full. For third party countries, see below.
5. EC external relations
The EC is linked to third party countries and international organizations through several thousand agreements, some of which it has concluded in conjunction with Member States as so-called ‘mixed’ agreements (external competence of the EU). There is scarcely any country that does not have a contractual link with the EC. The spectrum ranges from agreements on comprehensive cooperation in areas of commercial, industrial and social policy or technical sectors to agreements on trading in individual products. A vital role is played in practice by association agreements, which are used in particular to maintain special links between certain EC Member States and third party countries, to prepare for possible accession and to create a customs union, as well as by cooperation agreements, which are intended only to forge close economic links. Both the EC and its Member States are parties to the Agreement establishing the World Trade Organization ( OJ L336/3) which entered into force on 1 January 1995. A number of agreements are made integral parts of that agreement through numerous annexes, including the GATT (General Agreement on Tariffs and Trade 1994), the GATS (General Agreement on Trade in Services 1995) and the TRIPS (Agreement on Trade-Related Aspects of Intellectual Property Rights 1994).
The Agreement on the European Economic Area (EEA) ( OJ L1/3) was concluded as a ‘mixed’ agreement with the seven former EFTA Member States (Iceland, Norway, Sweden, Finland, Switzerland, Liechtenstein and Austria) on 2 May 1992. Switzerland was unable to ratify it following its rejection in a referendum. The EEA Agreement entered into force on 1 January 1994 (on 1 May 1995 for Liechtenstein). As Austria, Finland and Sweden acceded to the EC on 1 January 1995, the EEA Agreement now only covers Iceland, Norway and Liechtenstein on the EFTA side. The new EC Member States have also each acceded to the EEA Agreement.
The aim of that association agreement is to promote a continuous and balanced strengthening of trade and economic relations between the contracting parties with equal conditions of competition, and the respect of the same rules with a view to creating a homogenous European Economic Area. The association entails the free movement of goods, the free movement of persons, the free movement of services, the free movement of capital, the setting up of a system ensuring that competition is not distorted, and closer cooperation in other fields, such as research and development, the environment, education and social policy. This cooperation expressly includes consumer protection and company law. The annexes to the EEA Agreement list numerous acts of the Community, the binding nature of which is extended to contracting parties that are members of EFTA. If the Community adopts new legislation in one or other of the areas that come within the EEA Agreement, the EEA Joint Committee, which consists of representatives of the contracting parties, must adopt decisions to amend those annexes as soon as possible so as to ensure the requisite legal security and homogeneity of the EEA.
As a result of an agreement concluded with the Council of the European Union on 18 May 1999, Iceland and Norway also became associated with the implementation, application and development of the Schengen acquis ( OJ L176/36).
Switzerland has links with the EC via several bilateral agreements. Seven such agreements entered into force on 1 June 2002 ( OJ L114/1), including one on the free movement of persons. A further series of bilateral agreements was concluded on 26 October 2004, including an agreement on the Swiss Confederation’s association with the implementation, application and development of the Schengen acquis ( OJ L53/52), to which Liechtenstein can accede.
The EEC concluded an agreement establishing an association with Turkey on 12 September 1963 ( OJ 217/3687), which made provision for the gradual setting up of a customs union. It was supplemented in 1970 by an additional protocol and a financial protocol ( OJ L293/1). Before the third stage of the customs union entered into force on 31 December 1995, Turkey brought its laws into line with vital areas of Community law. It has since acquired the status of a candidate country. The association of the western Balkan countries is currently proceeding. Croatia, Macedonia and Montenegro are already candidate countries.
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