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European Union

The Single Act of Luxembourg, which, by 1987, had been ratified by all EEC member countries, is the vehicle which is designed to bring about increased European economic integration. Should all go as planned, all of the economic barriers which continue to separate the member countries of the EEC will disappear on 1 January 1992 (Tully, 1988). The advent of more complete economic integration in the EEC is intended to bring about the free movement of goods, services, capital, and labor within the Community, and provide more than 320 million Europeans with free commerce similar to interstate commerce enjoyed in the United States (Doyle, 1987).

Although details of taxation programs and welfare schemes are not specifically addressed in the Single Act, the Act does 5

proscribe the use of such factors to deny the free movement of goods and services within the Community (Gelb, 1988). The Single Act also prescribes reciprocity between member countries. Thus, persons who work in a member country other than their citizenship country will be entitled to all of the social benefits of the host country, and will be taxed the same as host country citizens. Further, business firms will be treated in a similar manner.

While tax levels are not prescribed, a levelling will likely occur, as a means of precluding industry flight to lowertax countries (Taxing work, 1988). Similarly, member countries with lower levels of social services will likely attempt to raise standards to preclude labor flight (Wooing winners, 1988).

The EEC has declared that the Single Act is not intended to create a fortress Europe. The statement is likely true on its face; however, the potential for the development of a more closed economic community is clearly present (A United States of Europe, 1988). An inability to reach agreement with the United States on agricultural subsidies, as an example, would not be as problematic to an EEC characterized by complete ec...

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European Union. (1969, December 31). In Retrieved 20:48, July 23, 2017, from
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