A History of the World From the 20th to the 21st Century

movement of workers, of capital and of services,
harmonisation of taxation and of quality stan-
dards, and a system of managing currency
exchange rates. An essential feature of the EEC,
beyond the removal of internal barriers of trade
between the Six, was the erection of a common
tariff, which non-member states had to pay when
exporting industrial and agricultural goods to the
Common Market. This provided protection where
it was most needed by the Six. Together with pay-
ments from its members it provided the funds of
the common budget of the EEC that could be
used to support economic and educational activi-
ties within the Six and to pay for the administra-
tion of the Common Market. But it also led to
much tension with the US, whose agricultural
exports particularly were discriminated against.
The most controversial aspect of the Com-
munity has proved to be the support given to
farmers by the Common Agricultural Policy
(CAP). Intervention prices are fixed annually by
the Council of Ministers for each kind of agricul-
tural produce and the farmers are guaranteed
these prices. What they cannot sell in the
Common Market, that is the surpluses, are
bought by the Community; exports to non-
Community members are subsidised so that the
farmer secures the intervention price. The farm
costs are met by the EEC budget, which has had
to devote to them the greater part of its funds.
The CAP benefits the countries with most farmers

• France, Eire and Denmark – and is unfavourable
  to countries such as Britain, a member since
  1973, which import food, because world prices
  frequently are below those fixed by the Common
  Market to support its farmers. If not corrected by
  other mechanisms, this would result in Britain
  and Germany paying disproportionate contribu-
  tions to the common budget. A second undesir-
  able feature is the high prices that have to be paid
  by the consumers of the member countries, and
  the stimulus to agricultural production that was
  to lead to costly cereal, meat and butter moun-
  tains maintained by the EEC as it bought up what
  could not be sold at the set prices. The funds
  required by the CAP became larger as each year
  passed, but member governments found it diffi-
  cult to deny their farmers, who form an import-

ant political constituency. Not until the later

1980s was any serious reform attempted. The

subsidies were devastatingly harmful to Third

World farmers denied cheaper exports.

As France braced itself for the full impact of

German industrial competition in its markets, its

politicians could boast that they had secured ben-

efits for the large agricultural sector. But the

Common Market proved an immediate success,

greatly surpassing the hopes of those who had

negotiated its establishment. French industry was

stimulated by competition and by the new export

opportunities. Industrial production between

1958 and 1962, far from declining, grew by

almost a quarter; the West Germans did even

better, increasing industrial production by more

than a third. West Germany’s and France’s trade

with the rest of the Six doubled and trade

between France and West Germany tripled in the

same period. The continued economic success of

the Common Market won it the support of the

peoples of the Six as they gained in prosperity

from economic collaboration, but hopes that it

would lead to closer political union were frus-

trated, especially after the return of General de

Gaulle in 1958.

The Commission is the body that runs the

EEC, two commissioners being appointed by

each of the member states. In practice, on import-

ant issues it can only put forward plans and pro-

posals. Decisions are reached by the Council of

Ministers, which represents the viewpoints of

national governments. Here again, escape clauses

allow individual countries to opt out of joint deci-

sions if they believe their vital interests to be

affected; what is more, it later turned out that

individual countries could exercise a veto. Even

so, the degree of integration actually achieved

went much further than Britain and its European

Free Trade Area partners were at that time willing

to accept. The European Parliament of the Six

was also given only limited supervisory powers.

The most important controlling body to emerge

was, therefore, the Council of Ministers. That has

remained the case to the present day.

Two of the most important achievements of the

Fourth Republic were the French contribution to

522 THE RECOVERY OF WESTERN EUROPE IN THE 1950s AND 1960s