ABSTRACT
This chapter describes the progress of economic integration for five periods. It focuses on the structural adaptations of the economy and the institutional arrangements that accompanied integration. Economic integration of Europe has been not so much an objective as a by-product of technological progress, on the one hand, and aspirations to political unity, on the other. Integration of goods and factor markets and of macro-economic and monetary policy making is most effective in a strong institutional setting. The successful coalition of economists and politicians opened a new era of closer integration of European economic life, in which governments took conscious decisions to open out the opportunities to international trade and competition. The generally felt need for economic integration soon generated a favourable climate to create, with American support, an international organisation covering all Western Europe, an intergovernmental set-up and a wide range of policy objectives: the Organisation for European Economic Cooperation.
