After WWII, the economy of the European countries was destroyed. Marshall Plan ( ): USA invests close to $13 billion to stabilize Western European countries. Why? Because it wanted international trade partners.
Treaty of Rome (1958): The European Economic Community (EEC) joins the European Coal and Steel Community (ECSC). The EEC creates a common market (no customs duties) for agricultural products and industrial production.
Member countries could trade with each other without having to pay customs duties. This leads to increased trade between EEC countries.
Common Agricultural Policy (1962): The EEC would give subsidies (money) and put measures in place to protect agricultural production from foreign competition. Example: a farmer who is subsidised can sell his produce at a cheaper price than a farmer who isn’t. Other countries have complained that this is unfair competition with respect to their own agricultural producers.
Maastricht Treaty: (1993) the creation of the European Union (EU). The EU has powers in the area of foreign policy, security, justice. The EEC was replaced by the European Community (EC): to establish an economic and monetary union, free circulation of goods, services, people and money.
No, some people didn’t want to lose national sovereignty (control over certain national issues) and some didn’t want a globalized market. The Maastricht Treaty was only approved by a tiny majority.
The Euro was introduced in 2002 and replaced the national currencies of many member countries. Why have a common currency? To make trade easier and bring about lower interest rates.
Do all EU countries use the Euro? No, the United Kingdom, Sweden, Danemark, Latvia, Lithuania, Poland, Czech Republic, Hungary, Romania and Bulgaria don’t.
An EU country that adopts the Euro gives up part of its economic sovereignty. In other words, by using the Euro, the country isn’t completely free to make decisions about its economy.