European Union Institutions LO1 European Integration

Before the First World War there had been several attempts to abolish trade barriers between European countries, however the main focus at this time was individual national development. After WW1 and throughout the inter-war period, nations attempted to rebuild their economies though a significant increase in protectionism, which resulted in a huge increase in unemployment, and led to the Great Depression.

Following the Second World War the European Economies were focused on rebuilding both their social and economic state after becoming desolate and impoverished as a result of the war and their previous protectionism stance. This forced the European leaders to work together in order to encourage international trade and forge greater co-operation between their nations. There were three main factors which encouraged the drive towards greater European Integration. These were: ?The desire for lasting peace. ?The emergence of the economic superpowers of the US and Japan. ?The emergence of the political superpowers of the US and USSR.

The European co-operation was supported by, and led to the creation of, organisations including: ?Organisation for European Economic Co-operation (OEEC) 1948 – Succeeded by the Organisation for Economic Co-operation and Development (OECD) ?The International Bank for reconstruction and Development (World Bank) 1944 ?The International Monetary Fund (IMF) 1947 ?The Benelux Union 1947 ?General; Agreement on Tariffs and Trade (GATT) 1948 – Succeeded by the WTO ?North Atlantic Treaty Organisation (NATO) 1949 ?The Council of Europe 1949.

Another hugely important stepping stone towards greater European co-operation was the Marshall Plan, named after George Marshall, US Secretary of State. Also called the European Recovery Programme, it was initiated to provide financial assistance in order to help rebuild countries left devastated and disintegrated after WW2. There were two main reasons the US was willing to provide financial assistance towards the European countries reconstruction, which were: ?Europe was a market for American exports ?Spread of communism.

The Marshall Plan was a mutual agreement between the US and Europe which outlined that, providing Europe devised a long term, co-operative rebuilding programme, the US would provide funding to assist this. The European nations and the Soviet Union gathered in Paris to discuss the proposal, however the Soviets withdrew from the talks, creating the Council for Mutual Economic Assistance (COMECON) to try to establish a plan to integrate the Communist states in Eastern Europe.

This was due to the US insisting on close Soviet co-operation with the capitalist West, and caused the division of the European continent. The Organisation for Economic Co-operation (OEEC) was set up to distribute over $13bn in aid between 1947 and 1952. The UK, France, Italy, and West Germany received the majority of these funds, and by 1952 the Marshall Plan had met its objectives: ?Western Europe’s saw a 35% increase from pre-war levels in industrial production ?West Germany had become independent and had a rapidly improving economy ?Communist control of Western Europe had been averted.