The Single European Act established the European Community and a single European market, which later became the European Union. It aimed to remove bureaucratic barriers, increase competitiveness, and harmonize policies. The act was signed by 12 countries and led to the establishment of the single currency, the Euro, in 1993. The UK did not adopt the Euro.
The Single European Act established the European Community, which was dedicated to creating a common single European market, which eventually came to be known as the European Union. The act was finalized on February 28, 1986 and went into effect on July 1, 1987. It was the first major revision of the Treaty of Rome, signed in 1957 by France, West Germany, Belgium, Italy, Luxembourg and the Netherlands. The Treaty of Rome established the European Atomic Energy Community and the European Economic Community to increase industrial cooperation between countries, especially in atomic energy and steel and coal resources. The Single European Act was enacted largely as a result of growing discontent among European nations over the lack of free trade.
Business and political leaders have sought to streamline member countries’ laws in order to increase cooperation and resolve discrepancies in member countries’ policies. They employed a committee to determine whether the common market was even possible. If it were, the committee would also determine what steps should be taken.
The committee determined that bureaucratic barriers had to be removed in every member country and steps were taken to increase competitiveness in every country, because some nations had economic systems that were hundreds of years old. There was also a great need for harmonization between countries. For example, a German trader would traditionally face a different set of rules and regulations when selling his product in France than in Belgium. Furthermore, merchants needed to receive a uniform price for their wares.
Since the system was established before the Single European Act, prosperous countries have become more prosperous. Meanwhile, those countries that needed to catch up economically were never given a chance, because prosperous nations traded with each other. The committee determined that this was simply an inefficient governance function and that a number of well thought-out processes could be implemented to ensure that all member nations were competitive, not just with each other, but in an increasingly global economy.
The committee’s conclusions eventually became the Single European Act. It has been signed by the UK, France, Spain, Italy, West Germany, Belgium, Denmark, Greece, Ireland, the Netherlands, Portugal and Luxembourg. As a provision of the law, 1992 was set as the date on which the single European market would be established. The Single European Act was followed by the Maastricht Treaty in 1993 which formally established the European Union and the single currency, the Euro. The UK ultimately refused to adopt the single currency and instead kept the British pound.
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