As a result of the Single European Act, Europe has become one of the largest trading areas in the world.
Post the second World War, the United States had one of the largest liberalized market. The war had not been able to hamper their economy as there was not much damage done to the infrastructural setup of the country. As a matter of fact, by being a neutral nation at the beginning of the war, they had provided arms and ammunition along with other supplies to the two warring factions in Europe. This was one of the major reasons that the American financial system was able to sustain itself.
On the other hand, the European economy had received a serious dent. The liberal American market was further cornering its European counterpart through the implementation of various policies that were conducive for trade. To reestablish the economy that was threatening to go down the drain, Belgium, France, Italy, Luxembourg, the Netherlands, and West Germany came together and started taking steps towards the integration of European finance system. This, in 1952, led to the formation of the 'European Coal and Steel Community' (ECSC). Further a treaty was signed between these nations in 1957, known as the 'Treaty of Rome'. The European Atomic Energy Community (EURATOM) and 'European Economic Community' (ECC), that was later known as the 'European Community' and what is today known as the 'European Union' were formed following this treaty.
In 1985, a British Commissioner, Arthur Cockfield, gave around 300 recommendations to form a single market in Europe. Following this France, West Germany, the Netherlands, Belgium and Luxembourg, Great Britain, Ireland, Spain, and Portugal signed the Single European Act (SEA) on 17th February, 1986, at Luxembourg. These nations were joined by Italy, Greece, and Denmark who signed the 'SEA' on 28th February, 1986 and this Act came into effect from 1st July, 1987.
What Did the Single European Act Do?
- The significance of SEA lies in the fact that it got each member country to stick to the timetable for economic merger.
- It was also instrumental in establishing a single currency in Europe along with the formation of common domestic and foreign policies.
- There were also some changes in the EEC, ECSC, and EURATOM which can be explained by the Single European Act 1986.
- It was also successful in removing restrictions over private enterprise as well as the public sector in order to reach the target of a single market on time.
- It also laid down a solid foundation for the creation of common European Foreign, Justice, and Home Affairs Policies that were to emerge in Maastricht Treaty of 1992.
- It gave the European Parliament the veto power over the admission of a new member state.
- It also established development strategies for European research and technology, health and safety standards for workers, and policies to protect the environment.
Summary of Single European Act
The SEA was the first major revision of the Treaty of Rome that had been signed in 1957. The main objective of this Act was to develop the 'European Community' as a 'Single Market' by the end of the year 1992. A 'Single Market' is a market that is supportive of 'Free Trade'. In such a market, there are no restrictions imposed by the government on the import and export of goods. This was an important and a major step taken in the direction of development of the European economy system.
When forming such a huge open market, there were a few barriers that needed to be crossed first. The nature of some of these barriers was physical because of the border controls, some were technical owing to the rules and regulations, and also they were fiscal which can be attributed to the different tax rates in different countries. The 'SEA' had to overcome these and has since played a major role in reviving and developing the European economy.