(EU; formerly to 1993 European Community) Political and economic alliance consisting of the European Coal and Steel Community (1952), European Economic Community (EEC, popularly called the Common Market, 1957), and the European Atomic Energy Commission (Euratom, 1957). The original six members—Belgium, France, West Germany, Italy, Luxembourg, and the Netherlands—were joined by the UK, Denmark, and the Republic of Ireland 1973, Greece 1981, and Spain and Portugal 1986. East Germany was incorporated on German reunification 1990. Austria, Finland, and Sweden joined Jan 1995; membership terms were agreed March 1994 for Norway, although membership was rejected by referendum Nov 1994. Association agreements— providing for free trade within ten years and the possibility of full membership—were signed with Czechoslovakia, Hungary, and Poland 1991, and with Romania 1992. In 1995 there were more than 360 million people in the EU countries.
On 1 Nov 1993 the Maastricht Treaty on European union came into effect and the new designation European Union was adopted, embracing not only the various bodies of its predecessor, the European Community (EC), but also two intergovernmental “pillars”, covering common foreign and security policy (CFSP) and cooperation on justice and home affairs.
The aims of the EU include the expansion of trade, reduction of competition, the abolition of restrictive trading practices, the encouragement of free movement of capital and labor within the alliance, and the establishment of a closer union among European people. A single market with free movement of goods and capital was established Jan 1993 (see Single European Market).
The EU has the following institutions: the European Commission of 20 members pledged to independence of national interests, who initiate Union action (two members each from France, Germany, Italy, Spain, and the UK; and one each from Austria, Belgium, Denmark, Finland, Greece, Ireland, Luxembourg, Netherlands, Portugal, and Sweden); the Council of Ministers of the European Union (formerly the Council of Ministers), which makes decisions on the Commission’s proposals; the European Parliament, directly elected from 1979; the Economic and Social Committee, a consultative body; the Committee of Permanent Representatives (COREPER), consisting of civil servants temporarily seconded by member states to work for the Commission; and the European Court of Justice, to safeguard interpretation of the Rome Treaties (1957) that established the original alliance.
A European Charter of Social Rights was approved at the Maastricht summit Dec 1991 by all members except the UK. The same meeting secured agreement on a treaty framework for European union, including political and monetary union, with a timetable for implementation, and for a new system of police and military cooperation. After initial rejection by Denmark in a national referendum June 1992, the treaty was formally ratified by all member states Nov 1993.
Almost 60% of the EC’s budget in 1990 was spent on supporting farmers (about 4 million people); of this, almost $7 billion a year went to dairy farmers, because the dairy quotas, which were introduced 1984, were 14% greater than EC consumption. The EC sheep policy cost approximately $3 billion in 1990, and 30 million metric tons of excess grain were exported annually at a subsidized price. Altogether it cost member countries’ taxpayers around $15 billion in 1989–90 to maintain the international competitiveness of the EC’s overpriced produce under the Common Agricultural Policy. In 1992 the EC budget for research spending was around $3 billion pounds, which was planned to double in the next five years.
In March 1995 the European Commission announced a significant increase in fraud within the EU 1993–94. The rise, which was attributed both to better accounting methods and an increase in organized crime, related largely to the misuse of EU grants and subsidies, particularly in agricultural industries. Fraud was most prevalent in Italy and Greece.