nious economie performance in the EEG.
Depression in less prosperous areas produces local economies which become socially and politically unstable, so that electorates are motivated to
press for autonomy from the higher authority, whether it is national or supranational, because this is perceived to be the only means whereby the
region's or nation's particular economie problems can be overcome. This is
the situation which the EEG finds itself facing at present.
Thus, divergent trends in inflation , employment, balance of payments and
incomes threaten the unity of the Gommunity, and the authority of its institutions, to the .extent that countries may feel increasingly obliged to take unilateral action because the Gommunity is failing to live up to its promises embodied
in Article 2 3 of the Treaty of Rome. It is important for the future progress of the
present Gommunity that new policies are found which can regenerate growth
within the EEG, and at the same time reduce the existing and widening disparities between its member parts. It is even more vital that such policies are
introduced before the accession of Greece, Spain and Portugal whose economie weakness in certain sectors requ ires that the EEG has a range of policies
at its disposal designed to tackle these problems quickly and effectively.
It is sometimes suggested that monetary unification will require close coordination of national monetary policies, and that this will lead member states
into closer political co-operation. It is a false hope to believe that, by applying a
common monetary system and enforcing a strict economie policy regime, this
will somehow paper-over the cracks appearing in the political unity of the EEG.
If the Gommunity fails to cure the divergent trends within itself, then the further
the EEG goes down the road to monetary union, without economie integration ,
the louder and more damaging will be the schism when nations feel obliged to
reject the Gommunity's rules and act in their own interests. The Gommunity
can only become unified when ali members feel that thei r economie and
political interests are best served by this union.
With this background, the purpose of this paper is to suggest a range of
policies which might be considered as ways of producing the conditions for the
continued and lasting progress of the EEG, including the step to monetary
unification. Many of the policies required for this already exist within the Gommunity, they only need to be adapted and reinforced where necessary, so that
they can operate more effectively than at present.
We first discuss the policies which could be used by the EEG to reduce the
differences in economie performance between Member States.
Such policies should not be regarded merely as mechanisms by which to
divert economie growth from the advantaged to the disadvantaged areas.
Rather they should be part of an overall industriai policy designed to increase
(3) This states that " The Community shall have as its task, by setting up a common market and
progressively approximating the economie policies of Member States to promote throughout the Community an harmonious development of economie activities, a continuous and balanced expansion , an
increase in stability, an accelerated raising of the stand,ard of living and closer relations between the
Member States belonging to it ",
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