Public Finance and European Integration

Abstract

The central objective of the European Union is to create a union of states and an integrated market area. European integration has evolved in a gradual, incremental and cyclical manner since the end of World War II — highs and lows, fits and starts. Episodic periods of treaty change, policy innovation and institutional deepening have been punctuated by periods of stagnation, institutional stasis and political stalemate. The continental model of integration subscribed to by the original six member states has always involved an interplay between economic and political integration. The relationship between market integration and political union is fluid, complex and multilayered. Although the core of the Rome Treaty was devoted to provisions on economic integration, the common market was regarded as a route to political integration by the political elite who established it. Economic integration carried the burden of building a polity.