Economic and monetary integration
can be traced back to the very beginnings of the European
Communities, as shown by the provisions of the 1957 Treaty
establishing the European Economic Community.
The Member States had to co-ordinate their economic policies closely
with the institutions of the Community (Article 6) to the extent
necessary to obtain the objectives of the treaty (Articles 2 and 3).
Some of the main objectives, such as the creation of a common market
and the increasing convergence of the economic policies of the
Member States (Article 2), made it necessary to foresee (Article 3)
the abolition of the obstacles which existed to the free movement of
goods, persons, services, and capital between the Member States.
Because of the restrictions on capital movements and foreign
exchange regulations at that time, the liberalisation of capital
movements and the co-ordination of foreign exchange policies was an
important part of the original Treaty establishing the European
Economic Community (EEC,
The Commission was given an important role in this process of
liberalisation (Articles 71, 72), in particular in supervising
potential safeguard measures taken by Member States in relation to
the functioning of their capital markets (Article 73).
The Treaty’s Economic Policy chapter (Articles 103-116) consisted of
three items, “conjunctural policy” (Article 103),
“balance-of-payments” (Articles 104-109) and “commercial policy”
The scope of common action was different; conjunctural (or
short-term) economic policies were considered as “a matter of common
concern” (Article 103), while each Member State recognised by
signing the treaty that each of them was ready to treat its policy
in the field of exchange rates as “a matter of common concern”
(Article 107), and to accept a common commercial policy (Article
Although responsibility for economic and monetary policies remained
with the Member States, measures appropriate to the economic
situation could be taken at European level on a proposal from the
European Commission by a unanimous vote of the Council of Ministers;
any decision linked to the application of a measure once decided
could be taken by a qualified majority vote.
In order to facilitate the objectives of high employment, price
stability, balanced external exchanges and confidence in the
currency (Article 104), Member States agreed to co-ordinate their
economic and monetary policies and to ensure co-operation among
themselves, especially between the relevant ministries and their
central banks (Article 105). In particular, in order to promote the
co-ordination of the monetary policies of Member States for the
smooth functioning of the common market, a Monetary Committee was
set up, consisting of representatives of the appropriate national
ministries, the central banks and the Commission.
Furthermore, it was agreed that payments between Member States
should be liberalised and transfers of capital and labour income be
authorised (Article 106).
In the event of a Member State encountering balance-of-payment
difficulties (Article 108), the Commission was required to
immediately investigate the position of the State in question and
the action which it had taken, and then to recommend measures
itself. If these measures did not prove effective in solving the
problem, the Commission would, after consulting the Monetary
Committee, then propose to the Council a mutual assistance mechanism
and the appropriate methods. The Council would decide by qualified
majority on the mutual assistance mechanism and on what directives
or regulations should be adopted.
In the event of a sudden crisis in which a Member State had
introduced a protective measure for its balance of payments, the
Commission would recommend the mechanism of mutual assistance or the
Council could, on an opinion from the Commission and after having
consulted the Monetary Committee, amend or suspend the protective
measure (Article 109).
Finally, in international organisations of an economic character
Member States agreed to speak with one voice in all matters of
particular interest to the common market (Article 116). To that end,
the Commission would propose the scope and implementation for common
action to the members of the Council, which would ultimately take
the decision by a qualified majority.
As to the common commercial policy, the Commission negotiates on
behalf of the Community with the support of a Council Committee (113
Committee) and according to directives that the Council can address
to the Commission. In executing its powers under this article the
Council decides by qualified majority (Article 113).
Next: First revision: Luxembourg 1986