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European Union
After a long history of wars and conflicts the european countries decided in the middle of the 1940`s that they have to find a way to anchor peace for the continent and find new ways to balance their payment-deficits. After World War II Europe suffered a lot under the destruction and low economies.
They were afraid of foreign competition and started to impose trade barriers like tariffs for example. This should protect their domestic firms and workers from external competition.
But just a few years later in the 1950`s all these trade barriers were considered to be counterproductive and the first attempts were started to abolish them.
Based on the Treaty of Rom of 1957 the European Community was founded by six nations. Belgium, France, Italy, Germany, Luxembourg and the Netherlands agreed in 1968 to create a free trade area; that ended up eliminating all their tariffs. Just 2 years later, they formed a Custom Union by adjusting common external tariffs. In 1973 United Kingdom, Ireland and Denmark joined the trade bloc and Greece became a member in 1981. Six years later Spain and Portugal were accepted and in 1992 the 12 members established a common market without any trade restrictions. Its name changed in 1993 when the Contract for the European Union was signed. In 1995 Sweden, Finland and Austria were admitted and helped to build the European Monetary Union with one single currency in 2002 which was necessary to fulfil all 4 criterias of the convergence criterias.
They regulate four important economic targets. The price stability in each country should be less than 1.5 % above the average of the inflation rates in the three countries with lowest inflation rate. An ...