What is the full form of ECM?

Introduction

European Common Market (ECM) was established by signing the Treaty of Rome. The main vision was to create a common markbet for services, labour, and goods in Europe. The project had the ambition to create a unified economic system in Europe.

The European Common Market removed all barriers to trade such as tariffs, quotas etc. After World War II, the leaders realised that there is a need for European countries to have close economic ties to prevent future conflicts. The establishment of the European Common Markets has brought prosperity to the region. The European region has seen increased trade, job creation and investments.

History of the European Common Market

The idea of a European Common Market was proposed by a French Economist known as Jean Monnet after World War II. It was believed that future wars and conflicts can be prevented if there is economic integration of the region.

In 1950, French foreign minister Robert Schuman proposed the creation of the European Coal and Steel Community (ECSC), its aim was also to create a common market for coal and steel in Europe. The European Coal and Steel Community (ECSC) was established in 1951 by the Treaty of Paris and paved a way for the European Common Market in 1957.

The European Common Market was established by the Treaty of Rome and was signed by the six European countries i.e. Belgium, West Germany, Luxembourg, Italy, Netherlands and France. The Treaty of Rome made the basis of the principles of the European Common Market. The EEC came into effect in January 1959 and led to Europe’s movement towards political and economic union.

Objectives of the European Common Market

• The main objective of the European Common Market was to promote economic integration and increase cooperation among European countries.

• It aimed to create a single market for goods, services, labour etc.

• The creation of a common market had several specific objectives such as removing trade barriers, promoting free trade, and allowing workers to move freely between the member countries to fill the shortages of labour.

• The European Common Market created a level playing field for businesses, fair competition and prevented monopolies.

• The European Common Market also aimed to promote peace and stability in Europe by reducing the chances of conflicts arising from economic competition.

• The increase in competition was expected to result in greater efficiency and innovation. It will ultimately benefit the consumers.

Impacts of European Common Market

The European Common Market had a major impact on the European economy and has resulted in the overall prosperity of the region. Some of the key impacts of the Common Market are discussed below.

• Increased Trade − It is one of the primary impacts of the European Common Market. The ECM has increased trade among member states by removing barriers to trade. This led to an increase in intra-European trade, which continued to grow over the years. In 2019, intra-European trade accounted for nearly 70% of total trade in the European Union.

• Greater Investment − The Common Market also led to an increase in investment among member states. When the barriers were removed for the investments, businesses were able to easily invest in other member states. It also resulted in an increase in foreign direct investment (FDI) in Europe. The FDI is an important source of economic growth in the region.

• Economic Growth − The Economic Common Market has contributed to the overall economic growth of the European Union. Since the creation of the Common Market, the European economy has grown significantly. The GDP increased from €2.2 trillion in 1960 to €15.9 trillion in 2019.

• Improved Efficiency and Creation of Jobs − The ECM allowed businesses to operate on a larger scale and led to the increase in productivity, competitiveness for businesses operating within the EU. It created jobs, particularly in trade- related industries. The free movement of labour also allowed filling the shortages of labour. In 2019, more than 36 million jobs were linked to exports, either directly or indirectly.

• Promoting political and regional integration − The European Common Market helped to create a sense of unity and shared vision. It helped to prevent future conflicts and promote peace in Europe. By creating a single market, member states are willing to cooperate on economic issues which have helped to build trust among the nations. The Common Market is considered to be a good option for the model of regional integration.

• Increased Consumer Choice and Standardization − As the trade barriers were removed, businesses in member states started offering a variety of products and services to consumers. There was also an increase in competition among businesses which ultimately benefited the consumers. The ECM has also led to increased standardisation of products and regulations in member states. Standardisation is considered important to ensure consumer safety and environmental protection.

Conclusion

The European Common Market is an important factor for economic growth, political and regional integration. Since the establishment of ECM, there has been an increase in trade, competition and investment. The consumer has a variety of products to choose from, job creation and standardisation. The common market has faced major challenges over the year such as BREXIT, and unequal economic development, but still is working strong and is still an important institution.

FAQs

Q1. What is the European Common Market and when was it established?

The European Common Market or European Economic Community (EEC) was established in 1957 by signing the Treaty of Rome by Belgium, Luxembourg, France, Netherlands and West Germany. The primary aim was to promote economic cooperation and integration to inculcate stability and peace in Europe.

Q2. What are the challenges faced by the European Common Market today?

The European Common Market, like any other economic bloc, is not immune to challenges. The ECM faces many challenges today, including the rise in populism, economic disparities among member states etc. Other challenges are climate change and interference from external powers such as China and Russia. Some of the challenges are external but others require reforms in the institutions.

Q3. What are the benefits of the European Common Market for its members?

The European Common Market provides numerous benefits for its members including job creation, more trade, economic growth and access to a large market. It promotes cooperation among the European nations. One of the main benefits of the European Common Market is the ability for its members to pool their resources and expertise.