Introduction

World War II left the economies of large parts of Europe in a state of devastation. The population had sustained heavy losses in life. A huge number of industrial plants and homes lay in rubble. Monetary systems had broken down. Europe's political and economic structure was materially changed by the erection of an "Iron Curtain" between the Eastern and the Western half of the continent. Reconstruction began with the production of basic necessities - food, clothing, homes. It formed the basis for the reversal of the downward trend in European economic development. Two circumstances were responsible for the success that in the free part of Europe the rehabilitation could be implemented: first, the possibility of developing under a free enterprise system and, second the Marshall-plan aid which the United States had offered to all countries in Europe, but which, most regrettably, only the free countries in Europe were in a position to accept. To this day the free Europeans are deeply grateful for this real and timely help by the American people. It did not take long for Europeans to realize that sustained economic growth and political harmony could be maintained by the creation of economic and political unity for Western Europe. One group of European countries formed E.E.C., the European Economic Community. This area is shown on Fig. 1. The countries representing the group of countries which founded a somewhat looser organization, EFTA, the European Free Trade Association are also shown. Let me add that, together, EFTA and E.E.C. encompass about 85 percent of the population of free Europe. In 1962. the EFTA countries had about 91 million inhabitants as compared to 176 million in the Common Market area as shown in Table 1. Many people in Europe hope that the day will come when a merger between E.E.C. and EFTA will occur and one great European Economic Community will be established. This, of course, is going to he a lengthy, difficult process.

THE COMMON MARKET AND ECONOMIC GROWTH

The Common Market became the core of the European Economy. In the so-called Rome treaties of 1957 the six E.E.C. partners agreed that by 1969 at the latest, all tariffs will have to be abolished in the trade among member countries and uniform tariffs will believed in the trade with non-member countries. Also, an effort will be made to harmonize the tax systems of the member countries. A further step which has not yet been worked out in detail would be the creation of a uniform currency system for the Common Market. In the other fields as well, definite measures have been agreed upon. For instance, a large degree of uniformity was established in antitrust legislation.

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