This is the third lesson of the first module of the EUPress teacher training by Professor Fabio Masini on the creation process of EU single market.
The objective of this lesson is to present a concise and impartial comprehension of the prominent occurrences and procedures that culminated in the creation of the European Union’s single market.
The creation of the European single market may seem like the natural culmination of decades of integration, but its origins are far from linear. As Lesson 1.3 reveals, the economic foundations of today’s European Union emerged through crises, recalibrations, and a pragmatic embrace of “functionalism” — the gradual, sector-by-sector pooling of sovereignty.
The first European economic experiment: coal and steel
The path began in 1950 with the Schuman Declaration, crafted by French diplomat Robert Schuman under the intellectual guidance of Jean Monnet. The genius of the proposal was both symbolic and strategic:
- Coal and steel — essential to war-making — would be jointly managed,
- A new High Authority (not controlled by national governments) would make decisions through majority voting,
- The result: sovereignty in these sectors shifted to a supranational body.
With the signing of the Treaty of Paris in 1951, the European Coal and Steel Community (ECSC) was born, bringing together France, West Germany, Italy, Belgium, the Netherlands, and Luxembourg. It was the first supranational community in modern history — and a test for much broader ambitions.
Functionalism: When the political is too hard, start with the practical
Monnet’s plan wasn’t only about economics: it was a strategic route to federalism. Functionalist theory held that:
- Integrating key sectors would build trust and interdependence,
- New common interests would emerge,
- Eventually, it would become impossible not to integrate politically.
It was a subtle yet radical idea: use shared functions (trade, research, resources) to make shared politics inevitable.
A dead end for defense — and a pivot to economics
For a moment, Europe tried to leap straight into political union through the European Defence Community (EDC) — a plan to create a joint army under a supranational command. It failed in 1954, blocked in the French Parliament during the Cold War.
Why? Because:
- Defense required a shared foreign policy,
- Shared foreign policy required shared diplomacy,
- Shared diplomacy implied shared government,
- In other words — full federalism.
With politics at an impasse, the spotlight turned instead to economics.
The Treaties of Rome: 1957 and the birth of the Common Market
In 1957, the six ECSC members signed the Treaties of Rome, creating:
- The European Economic Community (EEC) — with the goal of forming a common market,
- Euratom — to jointly develop atomic energy for civil use.
These treaties:
- Introduced new institutions (Commission, Council, Parliamentary Assembly, Court of Justice),
- Extended majority voting to certain economic areas,
- Enshrined four freedoms: free movement of goods, services, capital, and people.
Notably, the EEC’s early architecture was, in some ways, more supranational than the EU today. Decisions were often taken without the need for unanimity among states — a degree of sovereignty transfer that would later be partially rolled back.
De Gaulle’s empty chair: the first integration crisis
The momentum of the 1950s was abruptly halted when French President Charles de Gaulle refused to attend Council meetings in 1965, blocking decision-making in what became known as the “Empty Chair Crisis.” His demand? A return to national vetoes in key areas.
The resulting Luxembourg Compromise (1966):
- Gave each Member State veto power on issues of “vital national interest,”
- Cemented intergovernmentalism at the heart of the EEC.
Though the move slowed integration, it didn’t reverse it. Functionalism endured. The path to the single market reopened under different conditions — and different leaders.
Europe’s economic integration was neither natural nor inevitable. It was shaped by a pragmatic recognition: when political agreement is elusive, economic cooperation can do the heavy lifting. The story of the single market begins in coal and steel — and unfolds across decades of negotiation, disruption, and reinvention.
