What is the Single European Act?

The Single European Act established the European Community, which was dedicated to establishing a single, common European market, which eventually became known as the European Union. The act was finalized on 28 February 1986 and went into effect on 1 July 1987. It was the first major revision to the Treaty of Rome, which was 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 the countries, specifically regarding atomic energy and steel and coal resources. The Single European Act was enacted largely because of growing discontent among European nations over the lack of free trade.

Business and political leaders sought to streamline the laws of member countries in order to increase cooperation and resolve discrepancies in the policies of member nations. They employed a committee to determine whether the common market was even possible. If it was, the committee also would determine what steps would need to be taken.

The committee determined that bureaucratic barriers needed to be removed in each member country, and steps were taken to increase competitiveness in each country, because some of the nations had economic systems that were hundreds of years old. There also was a great need for harmonization between the countries. For example, a German merchant traditionally would face a different set of rules and regulations when selling his product in France as opposed to Belgium. Also, merchants needed to receive a uniform price for their goods.

As the system was set up before the Single European Act, the prosperous countries became more prosperous. Meanwhile, those countries that needed to catch up economically were never given the chance, because the prosperous nations traded amongst themselves. The committee determined that this was merely a function of inefficient governance, and a set of well-thought out processes could be implemented to ensure that all member nations were competitive, not only with each other, but in an increasingly global economy.

The committee's findings eventually became the Single European Act. It was signed by the United Kingdom, France, Spain, Italy, West Germany, Belgium, Denmark, Greece, Ireland, The Netherlands, Portugal and Luxembourg. As a provision of the act, 1992 was set as the date when the European Single Market would be established. The Single European Act was followed by the Treaty of Maastricht in 1993 which formally established the European Union and the single currency, the Euro. The United Kingdom eventually declined to adopt the single currency, and it maintained the British Pound instead.