The United Kingdom and the E.E.C.

Abstract

The United Kingdom is now a member of the European Economic Community, and this raises several important issues for the U.K. economy. The E.E.C. is often spoken of as a ‘common market’ or an ‘economic union’, as if these terms were interchangeable. However, this is far from the case. A common market is simply a group of countries between which movements of goods, services (and possibly factors of production, e.g. labour) are unhampered by restrictions, while external trade with nations outside the group is subject to a common set of restrictions. An economic union not only implies a common market but also that all the principal economic policies, monetary, fiscal, regional, are centralised and applied uniformly over the nations which are members of the economic union. In this sense, then, the E.E.C. is not yet truly an economic union but it is the expressed aim of the Community to become one, and some faltering steps have been taken to implement this aim. Of special importance here is the aim of the European Monetary Union (EMU).