The policies covered by the First Pillar are of two types. Some are designed to boost
economic growth and prosperity. These are concerned with promoting economic
efficiency, building markets and encouraging economic liberalisation. They are largely
devised in and run from Brussels. Others are designed to cushion the impact of market
forces. In these areas, policy is jointly decided by the Brussels machinery and the
national governments, with the Commission playing a key role.
In this chapter, we will deal firstly with the market-building policies, then move on to
those designed to mitigate the consequences of market forces.
The Treaty of Rome provided for the creation of a ‘common market’ based on the free movement of food, persons, services and capital. To this end, it established deadlines for the removal of customs duties or taxes on imports. These were met within the allotted time, so that – in most cases – by the late 1960s goods bought in one member state could be exported free of duty to another. Member countries were banned from restricting imports from other member countries, unless they were able to gain exemption under limited powers granted by the Treaty.
But by the early 1980s there was concern that some fifteen years after the creation of the Community, it was still far from being the common or single market that had been envisaged. A range of barriers to trade had developed: fiscal, physical and technical. Some of the obstacles were associated with enlargement. But they had also come about because at a time of recession in the 1970s, member governments had introduced hidden barriers. In some cases, they had subsidised firms and introduced regulations ostensibly designed to promote safety or consumer protection but in fact protectionist devices intended to protect hardpressed industrial sectors. Such obstacles prohibited the development of a genuinely free Community market. Its leaders concluded that it was failing to reap the benefits which a unified market should provide.
A further important factor that created a need for action to secure the internal market was a Court of Justice ruling in the Cassis de Dijon case. A German law prevented this French blackcurrant-based liqueur from being sold in Germany, because its alcohol content was below the minimum laid down by German law. To the Court, this was an unacceptable interference with trade. Their ruling to this effect secured the idea that goods which could be legally sold in one member country could be legally sold in all of them. This was an example of how the Court assumed a role in furthering the objects of the Community, in