BBC ON THIS DAY | 1 | 1973: Britain joins the EEC 1973: Britain joins the EEC The United Kingdom has become a fully-fledged member of the European Economic Community. Ireland and Denmark also joined Britain in becoming the newest members of the community, bringing the total number of member states to nine. At midnight last night a Union Jack flag was raised at the EEC's headquarters in Brussels to mark the occasion. Celebrations were held in the city and one of Britain's new European Commissioners, George Thomson, joined revellers in a torch lit procession. Prime Minister Edward Heath is optimistic that Britain's membership of the community will bring prosperity to the country. He said: "It is going to be a gradual development and obviously things are not going to happen overnight. "But from the point of view of our everyday lives we will find there is a great cross-fertilisation of knowledge and information, not only in business but in every other sphere.

"And this will enable us to be more efficient and more competitive in gaining more markets not only in Europe but in the rest of the world." More than 1,000 Britons will relocate to Brussels over the coming months to take up their places as civil servants of the community. Britain will be given four votes within the council, which proposes policies on issues ranging from the environment to public health. Membership applications by the UK to join the EEC were refused in 1963 and 1967 because the French President of the time Charles de Gaulle doubted the UK's political will. It is understood, however, his real fear was that English would suddenly become the common language of the community. Britain and Europe: the essential guide | World news | theguardian.com Previous | Next | Index Britain and Europe: the essential guide If David Cameron wins a majority at the next general election he wants to offer the British people a referendum on a "new settlement" for UK membership of the European Union.

Study the issue in depth and learn all you need to know about what happens next with our essential guide theguardian.com , Friday 18 January 2013 06.00 GMT A European Union flag flies next to a union flag at the European parliament. Photograph: Martin Argles for the Guardian 12. One sentence killer dinner party lines 1. The issue at a glance Nobody under the age of 56 in Britain has been given a vote on Britain's membership of the EU because the first – and only – referendum took place in 1975. Britain is now one of the least enthusiastic members of the 27-strong union after a series of measures which have led to deeper integration. A majority of voters in a recent Observer/Opinium poll said Britain should leave. The 17 members of the eurozone are likely to integrate even further over the coming years, raising questions about the position of the 10 members – led by Britain – that remain outside the currency. • Back to the top 2. Why is it being talked about now?

David Cameron believes Britain's membership of the EU can only be stabilised by agreeing a "new settlement" in which some powers would be repatriated from Brussels back to Britain. He will seek a negotiating mandate in the Conservative general election manifesto. The new terms would be put to voters in a referendum. The prime minister believes he is acting in the national interest by achieving a goal that eluded Tony Blair – achieving a settled position on the EU. There is also a party interest – the vast majority of Tory MPs want a referendum. • Back to the top 3. A brief history Britain initially spurned the European Economic Community, founded in the Treaty of Rome in 1957, on the grounds that the UK was a global power with horizons beyond the European continent. When Britain applied to join in 1963, the then French president, Charles de Gaulle, said "non" – a view he repeated in 1967 – on the grounds that Britain was hostile to European integration. Britain eventually joined the EEC in January 1973. • Back to the top 4. What happens next?

The prime minister will have little room for manoeuvre until the next election because his coalition deputy, Nick Clegg, has described his plans to repatriate powers as a "false promise wrapped in a union jack" . Cameron will therefore have to wait at least two and a half years before he can table demands to repatriate powers in the areas of social and employment law in future EU negotiations on a revision of the Lisbon treaty. This could be necessary if the 17 members of the eurozone move towards creating a fiscal union. Britain will have a power of veto even though it has a legal opt-out from the euro. 5. The options – and key arguments Option Arguments against Who supports One: Give Britain a full opt-out from the Working Time Directive, which gives workers the right to a minimum number of holidays and rest. Britain has an opt-out from the 48-hour limit on the working week It is wrong for the EU to dictate the hours of hard-working people who want to increase their hours to earn more money, thereby helping the economy grow.

The medical profession has warned that the directive is undermining the training of doctors by preventing them from having more experience on the job The directive is one of the key elements of “social Europe”, promoted by the former European commission president Jacques Delors, which guaranteed basic rights for workers. It would also be wrong to give Britain an advantage over its competitors in the EU single market by allowing UK businesses to undercut rivals in France and Germany The Conservatives would like a complete opt-out. Labour supports calls for reform but is wary of undermining “social Europe” Two: Ensure Britain has a greater say over European justice measures. Decisions on this have to be made by next year Britain should not tie its hands by subsuming basic elements of criminal justice in pan-European arrangements. The Fresh Start group of Conservative MPs say the European arrest warrant has been used by some member states, such as Poland, to request the arrest of people in Britain on relatively trivial matters The Association of Chief Police Officers told a sub-committee of the House of Lords EU committee that pan-European measures, such as the arrest warrant, help in the fight against organised crime and terrorism The Conservatives would like to reduce the number of measures requiring British involvement.

Labour and the Liberal Democrats believe the government should be guided by the police and the intelligence services, who support European co-operation. The coalition is to opt out of around 130 justice measures. A battle is under way over the number of measures to which Britain will opt back in Three: Guarantee British interests in the EU single market to avoid “caucusing”, under which the 17 members of the eurozone work together to impose their will on the 10 EU members outside the euro The single market has liberalised trade across Europe and played a significant part in the strong economic growth across the continent until the economic crash in 2008. Its rules are decided by a process known as “qualified majority voting”, in which no country has a veto, to ensure that member states cannot impose protectionist restrictions. Safeguards are needed to ensure the 17 members of the eurozone could not form a blocking group Critics say Britain needs to be careful not to upset the level playing field in the single market by seeking to win special safeguards that could give it an unfair advantage over competitors The Conservatives believe major safeguards are needed.

Labour and the Liberal Democrats agree on the need to protect Britain’s interests but believe Britain cannot push its luck too far • Back to the top 6. What does it mean for me? Any eligible voter in the UK will be allowed to vote in a referendum – the first UK-wide vote since the AV referendum in 2011. Any powers repatriated to Britain would be a matter for the UK parliament, rather than the institutions of the EU. A question mark over Britain's future membership of the EU may threaten some jobs if inward investors are deterred from opening factories in Britain, which has marketed itself for 20 years as the "gateway" to the single market, in the words of the retired diplomat Sir Nigel Sheinwald . 7. Key players Photograph: Reuters David Cameron: The prime minister is an instinctive Eurosceptic who witnessed first-hand the dangers of European integration when he was special adviser to the former chancellor Norman Lamont on Black Wednesday – the day Britain tumbled out of the European exchange rate mechanism. Unlike some members of the cabinet, Cameron believes Britain should remain in the EU, but on different terms.

Photograph: Demotix/Corbis Angela Merkel: In the end, the prime minister's European strategy will be decided by the leader of Europe's largest economy, assuming she wins re-election in September. The German chancellor likes and respects Cameron – they have bonded over DVDs of Midsomer Murders at Chequers – and appreciates the political pressures on the prime minister. But her patience is not finite, as she demonstrated in December 2011 when she pressed ahead with a eurozone compact treaty outside the EU when Cameron wielded the British veto. Photograph: AFP/Getty Ed Miliband: The Labour leader will be a key figure in shaping the debate over the next two years even though he is not in government. He has rejected a referendum on the terms suggested by Cameron, citing Lord Heseltine who warned of an "unnecessary gamble" in calling a vote before negotiations have even started. But Miliband does not want to close off the option of a referendum because Labour could be vulnerable at the next election to Conservative attacks of denying people a say.

Photograph: AFP/Getty Nick Clegg: The deputy prime minister is the single reason why the Tories cannot fulfil the commitment in their manifesto for the last election to repatriate powers on criminal matters and on social and employment legislation in the Charter of Fundamental Rights. The compromise in the coalition agreement was to guarantee that a referendum would be held the next time any powers are passed from Britain to the EU. The Liberal Democrats had said in their manifesto for the last election that an in-or-out referendum should be held if Britain signs up "for fundamental change". Photograph: Guardian Andrea Leadsom: The backbench MP and former banker is fast emerging as a key voice among Tory Eurosceptics who want to remain within the EU but on radically different terms. One of the main driving forces behind the Fresh Start group, Leadsom is taken seriously by ministers because she is not working to take Britain out of the EU. The prime minister will need to retain the support of the Fresh Start group in any renegotiations if he is to hold his party together. • Back to the top 8. Glossary Repatriate powers: The process by which Britain would return some powers to Westminster that have been ceded by previous governments over the last 40 years.

Lisbon treaty: Signed in 2007, the treaty provides the legal basis for the functioning of the EU. This will have to be amended to provide a legal basis for greater fiscal co-ordination, giving Britain a chance to table its demands because all 27 members of the EU would have a power of veto. European council: The leaders of the 27 EU member states meet in the European council at least three times a year (March, June and December) though they have held more frequent meetings during the eurozone crisis. Their consent is usually needed to amend any EU treaty. Ordinary Revision Procedure (ORP) : The lengthy way of revising an EU treaty which involves the convening of an inter-governmental conference (IGC) – the European Council in a special session – and in some cases a convention comprising representatives of EU leaders, the European commission, members of the European parliament and national parliaments. Unanimous agreement is needed in the IGC. Simplified Revision Procedure (SRP): A new way of revising EU treaties established in the Lisbon treaty. Unanimity is required in the European council, though a convention and an IGC are not needed under this procedure.

It cannot be used to extend the "competences of the EU", boosting its powers. 9. FAQ • Why did Britain join the EEC in 1973? Ted Heath, the late Conservative prime minister who took Britain into the EEC, saw two broad reasons for joining an organisation initially spurned by the UK. First, he wholeheartedly agreed with the vision of Jean Monnet, the father of the EU, that political and economic integration was the best way of avoiding war on the continent. Heath also thought that Britain should anchor its economic future with its nearest neighbours. • Why was a referendum held in 1975, two years after Britain had joined? Harold Wilson pledged in the Labour manifesto for the February 1974 election , in which his party finished first, to "seek a fundamental re-negotiation of the terms of entry" after the Heath government made a "profound political mistake" in the entry terms. This was then to be put to the people in a general election or a consultative referendum. • What would withdrawal from the EU mean for Britain? Britain would notice an immediate difference on the diplomatic stage.

It would lose its membership of the quartet (US, Russia, UN and EU) which is the internationally recognised body for negotiating in the Middle East. But Britain would still retain its permanent seat on the UN security council. Britain would have the power to negotiate its own trade deals with other countries, rather than relying on the European trade commissioner. But Britain would enter such negotiations as a country of 62 million people and not as a member of a 500 million-strong bloc. • Would Britain cease to have any relationship with the EU if it left? If Britain made a clean break, known as the World Trade Organisation option, it would not be bound by any rules, other those the EU imposes on trading partners. If it went for one of the three other options – the Norway, Swiss or Turkish options – it would have to comply with varying degrees of rules to gain access to the single market. It would also have to pay an associate membership fee. • Why does the US want Britain to be a member of the EU? The US has believed that in the post-war period the best way to ensure stability on the European continent is for former warring countries to integrate. Washington also believes that Britain provides a special link into the EU.

• Would there be job losses if Britain left the EU? The Britain in Europe pressure group, set up in 1999 to lay the ground for British membership of the euro, faced embarrassment when it claimed that 3.5m jobs could be at risk if Britain left the EU. This was the number of jobs directly involved in, or related to, British trade with the EU. This number jobs would not disappear because the UK would continue to trade with its European partners. But the terms of trade would change: British firms would face new tariffs and overseas investors, who see Britain as the "gateway" to the single market, might take their investments elsewhere. • Back to the top 10. Some key figures • Amount of UK laws based on EU laws: From 1997-2009 in the UK 6.8% of primary legislation and 14.1% of secondary legislation was introduced to implement EU obligations. Source: How much legislation comes from Europe?

House of Commons research paper 10/62 • EU budget: The European commission would like to see the budget increase to €1,053.2bn in the next seven-year framework, due to run from 2014-20. The European council president has proposed cutting this to €973.2bn. 11. In greater depth Articles on Britain leaving the EU: • Daniel Hannan MEP's Daily Telegraph blog on how leaving "should hold no horrors for Britain" if acceptable new terms cannot be negotiated • Tory MP Douglas Carswell's blog on the advantages of leaving the EU Pro-European case for a referendum: • Financial Times leading article , 10 January 2013 • Gideon Rachman's FT column on why the US was right to voice concerns about the UK's European strategy, 12 January 2013 • James Forsyth's Spectator column on how Cameron could leave the EU by accident, 12 January 2013 • Back to the top 12.

the One sentence killer dinner party line on: Repatriation of powers and referendum: "The British people thought they were joining a common market in 1973 and have ended up in an organisation that has the characteristics of an undemocratic federal union." Treading carefully over repatriation of powers and a referendum: "Britain cannot lecture France and Germany on the need to integrate the eurozone and then threaten to veto the treaty that would achieve that goal." Britain’s EU membership: New insight from economic history | VOX, CEPR’s Policy Portal Is enlargement unlimited? Richard Baldwin Prime Minister Cameron is determined to change the relationship between the UK and the EU. If the Conservative party wins the May 2015 general election, he promised he will renegotiate membership terms and offer an ‘in or out’ referendum by the end of 2017 (Copsey and Naughton 2014). Life after the EU is a real option for the UK and an unfamiliar one for the EU, considering that no member has ever left. Economic history can throw valuable new light on the current re-examination of the rationale for membership.

This column argues that a fundamental yet relatively unappreciated feature of the relationship between Britain and the EU is a structural break.[1] The ratio of UK’s per capita GDP to the EU founding members’ declined steadily from 1945 until 1972 but was relatively stable between 1973 and 2010. Such prominent structural break (and to the best of our knowledge one not previously detected and analysed) suggests substantial benefits from EU membership especially considering that, by sponsoring an overpowered integration model, Britain joined too late, at a bad moment in time, and at an avoidably larger cost. Lost wars In purely economic terms, WWII was remarkable both by the extent of destruction and the speed of recovery. Economic historians normally refer to the period from 1950 to 1973 as the Golden Age of European economic growth. Reconstruction and catch-up with pre-war levels were broadly completed by 1950, so other factors were at play. Temin (2002) convincingly argues that structural change (labour shifts out of agriculture) was a leading factor. The UK was one of the few European economies that grew during WWII.

According to Maddison data, in 1945 GDP per capita in the UK was about 90% larger than the average for the six founding members of the EU.[2] Economic historians offer a detailed understanding of British relative economic decline that started circa 1870. Yet, such long-term perspective often discounts the WWII period as an outlier and downplays European integration (even the direct trade liberalisation gains and benefits from increased competition) as an important factor, albeit more recent, of this process (Crafts 2012.) Sometimes all roads lead to Rome The Marshall Plan aid required European countries to coordinate. The crucial 1947 conference revealed many areas of agreement but one of discord. The French favoured a customs union, the English a free trade area. The differences are substantial: customs unions entail deeper integration, they require a “huge political step” (Sapir 2011.) Also worth noting is that “the United States supported the idea of a customs union in 1947, and continue to give backing to French schemes for West European regional organizations.” (George 1994, p.

18.) In 1950, the British Labour government declined to join the Schuman Plan’s European Coal and Steel Community[3] (Dell 1995). With the EU6 catching-up almost finished, by 1950 the difference in per capita GDP between the UK and EU6 was 28%. Seven years later, when the Treaty of Rome was signed, it stood at 15% (Figure 1).4 There were notable failures and successes amidst. The main failures were the proposals for a political and a defence union. Rome was the major success. The Treaty added an atomic energy community and an economic community (EEC) to the coal and steel community. The British Conservative government declined to participate but in 1960 unveiled an organisation embodying rival ideals, the European Free Trade Area (EFTA.) Figure 1. Percentage difference between the UK's GDP per capita and EU founding members' (EU6) and EU5 (excludes Luxembourg) between 1950 and 2011 Data source: Penn World Tables 8.0.

Stockholm and two vetoes The 1960 Stockholm Treaty launched EFTA.5 Tellingly, in July 1961, the UK opened membership negotiations with the European Communities. In 1961 the difference in per capita GDP between UK and EU6 reached 10%. After long and difficult, yet somewhat successful, negotiations, De Gaulle vetoed the British application in 1963. This was the time when perception about the economic role of the Commonwealth started to turn.[6] As an export market it was less competitive, less sophisticated, and less demanding than markets in developed countries. Further, EFTA’s performance from the outset was clearly inferior to that of the EC (Aitken 1973, Bayoumi and Eichengreen 1997). The 1964 election returned the Labour party to power after thirteen years in opposition. Harold Wilson made another attempt at preserving the Commonwealth option. It failed: in 1967 Britain applied for membership for a second time (Tatham 2009.) Again, De Gaulle vetoed.

The difference in per capita GDP between the UK and the EU6 average was 6% in 1967. De Gaulle’s presidency was a victim of the 1968 student protests. One of Pompidou’s first foreign policy actions was to encourage the UK to apply for membership for the third time (Young 1998). Pompidou is also credited with establishing a system of individual country contributions to the Community budget. He did so before (i.e. without) the British. When the UK applied in 1969, per capita GDP was 2% below the EU6 average. Finally in, but at what cost? Among all UK Prime Ministers, Heath was the staunchest supporter of European integration. In 1973 when the UK joined, the Common Agricultural Policy was in place and so was a system to fund the Community (earmarking revenues from levies on food imports and the common external tariff on industrial goods as EC’s resources.) This would potentially disadvantage Britain because it imported relatively more from non-EC countries.[7] When the UK joined in 1973, per capita GDP was 7% smaller than the EU6 average.

The special relationship with the US, the Commonwealth, and the belief that purely economic integration (FTA) would be superior to deeper, politico-economic alternatives are often among the reasons for the delay in British membership. Special relation or not, the US was a resolute supporter of European integration from the outset. With the independence of India, the Suez crisis, and African decolonisation, Commonwealth links tapered (Darwin 2009, Garavini 2012). Applying for EC membership one year after the creation of EFTA reveals which alternative was perceived as superior. Today, advocates of Britain leaving the EU parade two economic alternatives, one based on the Commonwealth and another on bilateral free trade treaties. As shown above, these did not work as well, so it is unclear why they would now be superior to EU membership (Campos et al. 2014). Structural change may well be a more satisfactory explanation for Golden Age growth and catch-up with the US than EU membership. Yet, a stark structural break marked the trajectory of the per capita GDP ratio of Britain to the EU6.[8] For this alone, EU membership is an explanation that deserves more careful examination. Why did Britain join the European project?

Why did Britain join? For various reasons. Because De Gaulle left, the Commonwealth could not compete, Heath defeated Wilson, the free trade area integration model sunk. But above all, Britain joined because joining the European project was perceived to be a way to stop its relative economic decline. In 1950, UK’s per capita GDP was almost a third larger than the EU6 average; in 1973, it was about 10% below; it has been comparatively stable ever since. On this basis, joining the EU worked – it helped to halt Britain’s relative economic decline vis-à-vis the EU6. References Aitken, N (1973), “The Effect of the EEC and EFTA on European Trade: A Temporal Cross-Section Analysis,” The American Economic Review, 63(5): 881-892. Bayoumi, T and B Eichengreen (1997), “Is Regionalism Simply a Diversion? Evidence from the Evolution of the EC and EFTA,” in T Ito and A Krueger (Eds.), Regionalism vs. Multilateral Arrangements, NBER/University of Chicago Press.

Campos, N, Coricelli, F and L Moretti (2014), “ Economic Growth and Political Integration: Estimating the Benefits from Membership in the European Union ”, CEPR Discussion Paper 9968. Copsey, N and T Haughton (2014), “Farewell Britannia? ‘Issue Capture’ and the Politics of Cameron's 2013 EU Referendum Pledge,” Journal of Common Market Studies 52 (1): 74-89. Crafts, N (2012), “British Relative Economic Decline Revisited: The Role of Competition,” Explorations in Economic History, 49 (1), 17-29. Darwin, J (2011), The Empire Project: The Rise and Fall of the British World System 1830-1970, Cambridge University Press. Dell, E (1995), The Schuman Plan and the British Abdication of Leadership in Europe, Clarendon Press.

Eichengreen, B (2008) “European Integration” in D Wittman and B Weingast (Eds.), Oxford Handbook of Political Economy, Oxford University Press. Garavini, G (2012), After Empires: European Integration, Decolonization, and the Challenge from the Global South 1957-1986, Oxford University Press. George, S (1994), An Awkward Partner: Britain in the European Community, Oxford University Press (2nd edition). Gowland, D and A Turner (1999), Reluctant Europeans: Britain and European Integration 1945-1998, Routledge. Sapir, A (2011), “European Integration at the Crossroads: A Review Essay on the 50th Anniversary of Bela Balassa’s Theory of Economic Integration,” Journal of Economic Literature 49:4, 1200–1229. Tatham, A (2009), Enlargement of the European Union, Amsterdam: Kluwer European Law Collection.

Temin, P (2003), “The Golden Age of European Growth Reconsidered,” European Review of Economic History 6, 3-22. Young, H (1998), This Blessed Plot: Britain and Europe from Churchill to Blair, Overlook Press. Footnotes 1 We detect a structural break for the two series in Figure 1 around year 1969 using various tests (e.g., Chow, Bai-Perron, and Zivot-Andrews) and conventional levels of statistical significance. 2 For international comparisons, the Penn World Tables (PWT) is considered the superior data source. However, it starts in 1950. Data from Maddison goes back much further, so we use his estimate for 1945. Note that the behaviour of the UK-EU6 ratio of per capita GDPs between 1950 and 2010 is unsurprisingly similar in these two data sources and that, differently from PWT, the Maddison data set does not include Luxembourg.

3 The ECSC created a set of institutions to coordinate and integrate coal and steel production among the EU6: a “High Authority to monitor compliance with the terms of the agreement, a Common Assembly of parliamentarians to hold the High Authority accountable, and a Community Court to adjudicate disputes between the High Authority and member states” (Eichengreen 2008.) 4 Because Luxembourg was not such a significant financial centre before the 1980s, Figure 1 shows two series, one for the ratio of the UK per capita GDP to the EU6 and the other to the EU5 (EU6 excluding Luxembourg.) Despite broad similarities, without Luxembourg the decline is steeper before the 1973 and flatter afterwards. 5 EFTA founding members were the UK, Austria, Norway, Sweden, Denmark, Switzerland, and Portugal. These were often referred to as the Outer Seven so as to contrast with the Communities’ Inner Six. 6 Euro scepticism was then influential in both the Conservative and Labour parties.

During the 1961 parliamentary debate, Harold Wilson said famously on record : “if there has to be a choice we are not entitled to sell our friends and kinsmen down the river for a problematical and marginal advantage in selling washing machines in Dusseldorf” (Gowland and Turner 1999). Young (1998) argues that euro scepticism still resonates within the Conservative party, while for Labour it loses steam in the 1990s. 7 1973 also inaugurates a volatile period with the collapse of the Bretton Woods system and the first oil shock. 8 Notice that this has important implications for constructing counterfactuals because of the difficulty in finding pre-entry trajectories comparable to the UK’s (Campos et al.

2014) What Happened in 1973 including Pop Culture, Prices, Events and Technology Lake Cottage 400 ft lot on white river 2 bedroom cottage and boathouse OshKosh, Wisconsin $28,000 What Events Happened in 1973 OPEC Arab members of the Organization of Petroleum Exporting Countries (OPEC), announce they will restrict flow of crude oil to countries supporting Israel on October 17th causing price of oil to increase by 200% U.S. Alaska Oil Pipeline bill is passed to allow construction of a pipeline to access oil from the North Slope of Alaska OPEC Recession begins in Europe following OPEC Oil price increases U.S. Roe v. Wade makes abortion a US constitutional right European Union Britain Ireland and Denmark join the EEC Netherlands The Netherlands holds a number of car free Sunday's during the oil crisis to conserve oil. U.S. Chrysler and other US car makers close a number of plants affecting 100,000 workers Vietnam US Troops withdrawn from Vietnam and U.S. involvement in Vietnam War ends with the signing of peace U.S.

World Trade Center in New York becomes the tallest building in the world U.S. , the Whitehall, the Old Bailey and Manchester city center. U.S. Watergate Hearings begin in the United States Senate and President Richard Nixon tells the nation , “I am not a crook.” Israel Yom Kippur War - Fourth and largest Arab-Israeli conflict begins as Egyptian and Syrian forces attack Israel Australia Sydney Opera House is opened United States Armed members of the American Indian Movement occupy the town of Wounded Knee, South Dakota from February until May. More Information for the Occupation of Wounded Knee About 200 Oglala Lakota Native Americans and members of the American Indian Movement (AIM) began their occupation of Wounded Knee in South Dakota during February of 1973. AIM, a militant civil rights organization, was created in the late 1960s with the intention of bringing attention to injustices faced by Native Americans. Wounded Knee was located on the Pine Ridge Indian Reservation and in 1890 it was the site of a massacre of 300 unarmed Sioux by the U.S. Cavalry. At the start of their occupation AIM took 11 hostages and asked that The U.S.

Government start investigating broken treaties, the Bureau of Indian Affairs, and all of the South Dakota Sioux reservations. The occupation lasted 71 days during which they negotiated with U.S. Marshals and exchanged regular gunfire with federal agents. In May the group surrendered and government officials agreed to start investigations as demanded. United States -- Vice President Agnew Resigns Spiro Agnew, the Vice President of the United States under Richard Nixon, resigned during October of 1973. Agnew had been dealing with charges of tax evasion and receiving bribes prior to his resignation. After he left office he pleaded no contest to the criminal charges and was fined and given probation. He was replaced by Gerald Ford, who, less than a year later, would become the President after Nixon resigned. Spiro Agnew was the second US Vice President to resign, the first for criminal reasons. Basque Terrorists Kill Spanish Prime Minister Turkey The Bosporus Bridge is completed joining Europe and Asia in Istanbul Greece Following student rioting Marshal Law is imposed Chili Military coup in Chili led by General Augusto Pinochet. Israel Israel Shoots Down Libyan Passenger Plane U.S.

In a Tennis Match billed as the battle of the sexes Mrs Billy Jean King defeats Bobby Riggs Bangladesh Newly created Bangladesh Elects First Prime Minister Sheikh Mujib Rahman UK TUC brings 1.5 Million on Strike in UK as Day Of Protest at pay restraint policy UK Princess Anne, marries Captain Mark Phillips in Westminster Abbey UK In the UK, as a result of high coal and oil prices, the Three-Day Week officially comes into force. Belize Belize Gains Independence From Great Britain Northern Ireland A referendum in Northern Ireland results in a vote to stay as part of the United Kingdom U.S. Secretariat Wins Triple Crown first winner for 25 years U.S. The wide ranging Endangered Species Act of 1973 is signed into law to "protect species and the ecosystems upon which they depend." Bahamas The Bahamas Gains Independence From Great Britain Iceland Royal Navy Protect Trawlers in Cod War In Icelandic Waters U.S. The Mississippi River reaches its peak level in St. Louis during a record 77-day flood.

Technology Skylab, the United States' first space station, is launched Concorde cuts flying time across the Atlantic in half flying at average speed of 954 mph The Sears Tower opens in Chicago Inventions Invented by Inventors and Country ( or attributed to First Use ) Genetic Engineering USA by S Cohen and H Boyer Barcode USA Optical Fiber USA Space Station USA Skylab Jetski or Personal Watercraft USA Clayton Jacobson II ( Original was only stand up and difficult to stay on ) manufactured by Kawasaki United States NASA launches the Mariner 10 Mercury probe spacecraft. More Information for the Mariner 10 Spacecraft. The Mariner 10 spacecraft launched at the beginning of November in 1973. It had the mission of becoming the first probe to study the planet of Mercury. The Mariner 10 probe also became the first spacecraft to visit two planets during a single mission, as it passed Venus on its way to Mercury. The craft sent over 12,000 images of the two planets back to Earth. The mission was considered successful and ended in March of 1975 as it began its orbit around the Sun that it continues in to this day.

The total cost of the spacecraft was about $100 million which would be equivalent to nearly $500 million today. 1973 Mens and Womens Fashion Clothes The EEC and the Single European Act - UK Parliament The EEC and the Single European Act From the Treaty of Nice to the Treaty of Lisbon The EEC and the Single European Act The Conservative Prime Minister, Edward Heath, took the UK into the EEC in January 1973 after President de Gaulle of France had blocked UK membership twice in the 1960s. This brought EEC membership to nine. In a referendum in 1975 the UK electorate voted to stay in the EEC under renegotiated terms of entry. The first major Treaty change was the Single European Act, which created an internal market with voting by qualified majority (QMV) rather than unanimity. The Single Market was established at the end of 1992. It allowed over 280 pieces of legislation to be passed, paving the way for common EU laws based on the principle of mutual recognition among Member States. Britain and the EEC In 1961 Britain applied for membership of the EEC.

This was vetoed by French President Charles de Gaulle, who was concerned that British membership would weaken the French voice within Europe. He also feared that close Anglo-American relations would lead to the United States increasing its influence in Europe. Charles de Gaulle also vetoed a second application from Britain in1969. Britain joins the EEC Denmark, Ireland and Britain joined the EEC in 1973, after Charles de Gaulle’s resignation in 1969. Under the Labour Prime Minister, Harold Wilson, there was a UK referendum on continued membership of the EEC in 1975. The electorate voted ‘Yes’ by 67.2% to 32.8% to stay in Europe. European Monetary System The European Monetary System (EMS) was created in 1979 to try and bring about currency stability throughout Europe by encouraging countries to co-ordinate their monetary policies. It used an Exchange Rate Mechanism (ERM) to create stable exchange rates in order to improve trade between Member States and thus help the development of the single market. This laid the foundations for a single European currency. Britain was the only EEC Member State not to join the ERM.

Budget Rebate Britain, under the leadership of Margaret Thatcher, negotiated an EU budget rebate in 1984 after threatening to halt payments to the EU budget. Britain felt it was being unfairly treated as, despite being the third poorest EC Member State, it was set to become the biggest net contributor. This was largely due to farming subsidies, to which Britain was eligible for very little. The Fontainebleau Summit agreed that this was unfair and granted Britain a rebate. Single European Act The Single European Act (SEA) 1987 amended the Treaty of Rome. Its aim was to create a single internal market, which had been proving difficult under the existing Treaties. The SEA replaced many unanimous decision-making processes with Qualified Majority Voting (QMV), in order to facilitate the adoption of a raft of EU legislation by the end of 1992. Page last updated April 2013 BBC News - A timeline of the EU A timeline of the EU 1948 Plans for a peaceful Europe In the wake of World War II nationalism is out of favour in large parts of continental Europe and support for federalism is high.

The European Union of Federalists organises a Congress at The Hague in 1948 in the hope of drawing up a European constitution. But the UK rejects the federal approach and the result is the Council of Europe a loose grouping that becomes a guardian of Europe's human rights. 1949 Nato is born The Washington Treaty is signed by the USA Canada and 10 Western European states Britain France the Benelux countries Iceland Italy Norway and Portugal. The key feature of the pact is a mutual defence clause if one country is attacked the others will come to its defence. The US is supportive of European integration but it is another year before real progress is made in this field. 1950 The Schuman Declaration French Foreign Minister Robert Schuman announces a plan for France and Germany to pool coal and steel production and invites other states to join them. His plan is based on the idea that European unity is the key to peace. Solidarity in production he said would make war between France and Germany "not merely unthinkable but materially impossible." 1951 Treaty of Paris establishes European Coal and Steel Community ECSC Six countries sign the treaty France Germany the Benelux states and Italy.

It sets up a High Authority to manage the coal and steel industries and a Common Assembly a precursor of the European parliament. The Dutch supported by the Germans also insist on the creation of a Council of Ministers made up of ministers from member states to counterbalance the supranational High Authority. 1952 The ECSC begins work with Jean Monnet at its head The first president of the High Authority is Jean Monnet the inspiration behind the Schuman Declaration. The ECSC guarantees German coal to the French steel industry. It also provides funds to upgrade Belgian and Italian coal mines. Germany agrees to this and to the dismantling of its steel cartels in order to gain international respectability. 1954 The rise and fall of the European Defence Community In response to the Korean War the USA insists that Europe must contribute more to its own defence and that Germany must rearm. In 1952 the six ECSC members agree to create a European Defence Community which envisages German soldiers joining a European army. But the French parliament delays ratification and ultimately rejects the idea in 1954.

1957 The Treaty of Rome a first step towards the common market The six members of the ECSC sign the Treaty of Rome setting up the European Economic Community EEC and the European Atomic Energy Community Euratom. The EEC aims to create a common market a customs union plus free movement of capital and labour. To please France it also promises subsidies to farmers. Euratom's goal is the joint development of nuclear energy. 1958 The EEC takes off dominating the other European communities The EEC starts work and quickly establishes itself as the most important of the European communities. It has a commission a council of ministers and an advisory parliamentary assembly whose members are drawn from national parliaments. At the same time the European Court of Justice comes into existence to interpret the Treaty of Rome and rule in disputes over Community decisions. 1960 EFTA is launched another kind of Europe An alternative to the EEC emerges when Austria Denmark Norway Portugal Sweden Switzerland and the UK set up EFTA the European Free Trade Association. Like the EEC EFTA aims to establish free trade but it opposes uniform external tariffs and sees no need for supranational institutions.

1961 Britain Denmark and Ireland apply to join the EEC The UK's decision to apply for membership of the EEC was taken by the government of Harold Macmillan a Conservative. It was not welcomed by French President Charles de Gaulle who saw it as a threat to his goal of using the EEC to amplify France's voice in world affairs. He was also concerned about the UK's close ties with the US. 1963 French President Charles de Gaulle vetoes British membership France's nationalist leader Charles de Gaulle refuses to back the UK's application to join the EEC saying that the British government lacks commitment to European integration. 1967 Treaty creating a single Council and a Commission for the three communities comes into effect 1968 The European Community customs union is completed 1973 Britain Denmark and Ireland join the European Community The three countries and Norway had failed to join 10 years earlier because of General de Gaulle's veto on British membership. This time all sign an accession treaty in 1972 but Norwegians reject it in a referendum later in the year. Denmark and Ireland hold successful referendums.

The UK does not hold a referendum until 1975 after renegotiating its entry terms the result is twotoone in favour. 1979 The road to the euro begins with the EMS The European Monetary System EMS introduces the European currency unit Ecu and the exchange rate mechanism ERM. The Ecu a unit for the communitys internal budget also takes on some of the features of a real currency it is used for travellers cheques and bank deposits. The ERM gives national currencies an exchange rate band denominated in Ecus. All EC members join except the UK. 1981 Greece becomes the ECs 10th member 1984 The UK wins its budget rebate 1985 Jacques Delors becomes president of the European Commission Jacques Delors proposes that the European Community should by the end of 1992 remove a series of barriers to free trade and free movement of capital and labour creating a "single market". Delors believes the single market programme will revive European integration by spilling over from the economic into the political arena. It is widely seen as a necessity if Europe is to compete with the United States.

1986 Portugal and Spain join the EC and the European flag is unveiled 1987 The Single European Act enters into force The SEA modifies the Treaty of Rome aiming to complete the formation of a common market which the earlier treaty had begun. It abolishes national vetoes in a host of areas relating to the single market increases the legislative powers of the European parliament and makes the first commitment by member states to create a "European Union". 1988 Regional aid is doubled Market liberalisation is seen to work to the benefit of the more developed northern European member states so the poorer southern states demand compensation. This comes in the form of agreement to double the allocations for structural funds paid to poorer regions. 1990 The EU: so where did it all go wrong? - Telegraph EU The EU: so where did it all go wrong? It is exactly 40 years since a cautiously enthusiastic Britain joined the Common Market.

Today, few are celebrating When the Conservatives said Yes to Europe: Margaret Thatcher, with William Whitelaw and Peter Kirk, at a referendum conference in June 1975 Photo: Keystone/Getty Images By Andrew Gilligan 7:00AM GMT 30 Dec 2012 In the first week of 1973, the week Britain joined the Common Market, the Government put on a festival of European culture so that the British people could share what their Prime Minister, Edward Heath, called his “heart full of joy” at their country’s shiny new Euro-future. Alas, the “Fanfare for Europe”, though now entirely forgotten, ended up symbolising the ambivalence of the 40-year relationship that has followed. A plan to borrow the Bayeux Tapestry and show it in Westminster Hall was dropped after it was pointed out that the butchery of Saxons by Normans was hardly a suitable theme for the occasion. Instead, the centrepiece was a showcase of European treasures at the V&A – the French refused to lend the Mona Lisa, despite Heath’s personal plea, on the grounds that the British Museum had just refused them a loan of the Rosetta Stone.

As an alternative, with a certain unintended symbolism, they offered Georges de la Tour’s Le Tricheur, a picture of someone cheating at cards. There was also, among other things, an exhibition of European sweets at the Whitechapel Art Gallery; a “Dutch breakfast” and food festival at a London hotel; and co-ordinated demonstrations of “Continental cooking” at Scottish gas and electricity board showrooms. Three hundred anti-EEC demonstrators gathered outside the Royal Opera House, booing and chanting “Sieg Heil” as the Queen, Prince Philip and Heath arrived for a gala performance to celebrate the new dawn. Yet despite all the opposition – and it was serious – what also strikes one now is the strength of support. Every single national newspaper, including the Daily Mail, the Daily and Sunday Telegraphs and Rupert Murdoch’s Sun, was enthusiastic (the Express papers had been opposed, but came round). Most of the business community was fervently pro-EEC. Despite widespread doubts over whether Britain would ever actually join, and despite the opposition of the Labour Party to membership on the terms proposed, the key Commons vote had been won comfortably, 356 to 244.

Sixty-nine Labour rebels voted for entry; only 39 Tory rebels voted to stay out. And within two years, 67 per cent of the British people endorsed the UK’s membership in a referendum. The Labour leadership reversed its position – and one Margaret Thatcher, leader of the opposition, also took a prominent role in the Yes campaign. Related Articles Europe in 2013: economic strangulation and political tension 28 Dec 2012 The No forces were represented by the likes of Tony Benn and the Tory hard Right. In the end, only the Western Isles and Shetland voted against. Both on the political spectrum and geographically, it seemed that only people on the margins were against the EEC. So exactly 40 years on, with a substantial majority of the British people – and even members of the Cabinet – now apparently backing withdrawal, how did Britain’s relationship with Brussels go sour? Part of the difficulty had, of course, been sown decades before 1973, when Britain, still seeing itself as much a world as a European power, chose to stand apart from the Common Market, and its forebear, the European Coal and Steel Community.

So now we were entering a club whose rules were set long before we joined, without our involvement, and not necessarily in our favour. The terms of British membership were particularly poor. At the beginning, Britain – though one of the less prosperous members – was the second-biggest net contributor to the EEC, behind only the far richer Germans, pouring large sums into subsidising French farmers, butter mountains and wine lakes through the Common Agricultural Policy. Not until 1984, 11 years after joining, did Margaret Thatcher secure a permanent two-thirds rebate. “They say it’s their money, and I say it’s mine,” she remarked at the Brussels summit in March of that year. Yet this significant victory involved loss as well as gain for Britain: Thatcher’s grating personal negotiating style permanently damaged relationships between her and the other European leaders. She thought they were hypocritical, attacking her as “not a good European” for opposing a system from which they benefited. They thought she didn’t understand what Europe meant to them: their countries, devastated by war, had been given lasting peace and prosperity. One of the reasons Britain used to be keen on Europe was precisely that.

In the 1960s and 1970s, the Continent looked like it was doing a lot better than us: more modern, more prosperous, more socially harmonious. By contrast, throughout the power cuts and strikes of those decades, the UK was haunted by fears of terminal national decline. “For 25 years we’ve been looking for something to get us going again,” said Heath in the 1971 debates over membership. “Now here it is.” Unfortunately, Britain’s entry into the Common Market was swiftly followed by perhaps the worst few years its economy has ever known: the oil crisis, the three-day week and double-digit inflation. The EEC was (largely unfairly) blamed for quite a lot of this. The economic woes underlined another problem that was essentially of Britain’s, not Europe’s, making: the consistent failure of British politicians to be honest with the public about what membership actually involved. As Sir Stephen Wall, a senior Foreign Office diplomat closely involved in British European policy, put it, “ultimately misleading impressions” were given to voters over many years for reasons of “fear” that they would not accept the truth if told it. That is never a sustainable position in any open democracy.

Heath’s 1971 White Paper on entry had promised no “erosion of essential national sovereignty”. This, as many have conceded, was quite untrue: European law did and does override British law, and more and more of it was coming down the tracks from Brussels. In the late 1980s came three pivotal developments that changed the debate dramatically. Until then, the main hostility to Europe had been on the Left, and the main support for it on the Right. On the tenth anniversary of Britain’s accession, in 1983, Thatcher wrote that “the unity of Europe is a goal for which I pledge my government to work”. Labour, meanwhile, fought the election that year on a platform of withdrawal from the EEC. The arrival of Jacques Delors, a French socialist, as president of the European Commission turned that upside down. Delors was deeply ambitious for a more federal Europe, including a single currency. At a famous speech to the TUC in 1988, Delors won over large parts of the British Left with the argument that they could use Europe as a back-door way of achieving the kind of social-democratic state that they had not managed to win via the British electorate.

The Tories, the Right-wing press and the business world were horrified at Delors’ vision of a Europe where common social policies would be followed. As Thatcher put it in her famous Bruges speech, “We have not successfully rolled back the frontiers of the state in Britain only to see them reimposed at a European level, with a European superstate exercising a new dominance from Brussels.” But the second big development of the late Eighties — the fall of the Berlin Wall — put rocket-boosters under Delors’ ideas. It made the French much keener on European integration and a single currency, as a way of restraining what they believed would otherwise be a dominant, reunited Germany. The result, in 1991, was the Maastricht treaty, renaming the European Community the “European Union”, and paving the way for the euro and the “social chapter”, which extended Brussels’ powers into a swathe of new areas. The UK won opt-outs from both these things, but there, essentially, was sown the seeds of today’s arguments. It could be said that Britain did not move away from Europe, but that it moved away from us. The British people joined, and were happy to join, a common market.

They did not sign up to a social chapter, a single currency or any moves down the road to a superstate. It shouldn’t be forgotten, of course, that Margaret Thatcher fell in 1990 precisely because many Tories of the time thought her too inflexible over Europe. But in the years that followed, Euroscepticism came utterly to dominate the Conservative Party. The key event in that process was probably Black Wednesday, in 1992, when the markets forced John Major’s government out of the European exchange rate mechanism, under which the pound had shadowed the deutschemark. As Stephen Wall, Major’s private secretary at the time, puts it: “We linked our currency to those of our partners and were forced into what looked like a humiliating defeat. Thereafter, our economy prospered and for most people in Britain the logic of joining the euro looked very counter-intuitive.” Tony Blair came to power with much goodwill from our EU allies after the Thatcher and Major years, and with the clear wish to join the euro. But the fact was that Britain had stayed outside the single currency — launched in 1999, with notes and coins issued from 2002 – and the heavens had not fallen.

The economy continued to boom, and the City kept its place as the premier financial centre of Europe (far more euros are traded in London than in the eurozone itself). That is perhaps the key reason why the country has become more Eurosceptic. Even now, after four years of low-to-no growth, we are a more economically confident nation than we were in the 1970s. For Britain, continental Europe no longer looks like a model to follow. Delors-style regulation has on the whole produced fewer jobs and lower growth than British-style deregulation. Throughout the past decade, as the EU charged on blindly expanding its powers, even “good Europeans” such as Ireland, the Netherlands and even France started rejecting its treaties and constitutions in referendums. Above all, of course, there has been the debacle of the euro, the decisive wrong turn that changed the EU from a broadly successful institution into one that seems to have condemned many of its members to, at best, years of stagnation and misery. So far, the organisation’s leaders seem to have shown little recognition of the inherent structural flaws of the currency, preferring instead to prop up failure.

Across much of the continent, the EU’s fatal lack of real popular consent may be catching up with it. Yet the British impetus for full withdrawal may be dangerous: in the modern world, the very idea of “UK independence”, as promoted by the eponymous Eurosceptic party, is surely an illusion. Even if we left, given the amount of trade we do with the EU, we would still have to follow most of its rules – while no longer having any role in setting them. On that day in 1973 when we joined, an opinion poll asked the British people whether they wanted to see in their country Common Market “customs” such as “regular wine with meals”, “more pavement cafes”, “more shops open on Sunday”, “pubs open all day” and “coffee and a roll for breakfast, not bacon and eggs”. The poll respondents said no to all these dangerous foreign innovations (apart from the wine), but now, of course, along with Polish waitresses in London and British pensioners in Spain, they are standard parts of national life. For all our professed hostility to the EU, we are in some ways far more “European” than we were.

The Referendums of 1973 and 1975 The Referendums of 1973 and 1975 The 1998 referendum on the Good Friday Agreement was in fact the third referendum to be held in Northern Ireland. The first, held in 1973, was on the question of continued participation in the UK versus a united Ireland; the second, held in 1975, was part of a UK-wide referendum on continued participation in the European Economic Community. 8 March 1973: the "Border Poll" Self-determination is a rather limited concept. Introduced by Woodrow Wilson in the context of post-1918 Europe, ignored on almost every occasion that it suited the Great Powers to do so, it applied to Northern Ireland to the very limited extent that the Northern Ireland Parliament had the right to opt out of the Irish Free State when it was established in December 1922 (and it immediately did so). The 1949 Ireland Act, which recognised that the Irish Republic was outside the British Commonwealth, renewed the right of the Northern Ireland Parliament to opt out of the UK and join a united Ireland.

But there was no question of a referendum at this point (though a county-by-county referendum on participation in Home Rule had been mooted in 1914) and self-determination applies only in so far as Northern Ireland can choose which larger state to belong to, but not opt for independence. The abolition of the Northern Ireland Parliament in 1972 raised the question of whether or not a new Assembly should have the power to determine which state Northern Ireland should belong to. For whatever reason, the British government decided to put this question directly to the people every ten years by referendum, and the first (and so far only) referendum on this issue was held on 8 March 1973. The Unionist parties, and Alliance and the NILP, campaigned for a vote in favour of staying in the UK; the Nationalist parties urged their supporters to boycott the vote. The results were as follows: % valid votes 425,828 41.3% In 1983, the then Secretary of State, Jim Prior, decided not to hold another referendum on the ground that the likely outcome was obvious from other elections, ie that the pro-UK vote would win.

The 1998 referendum included of course the provision that Northern Ireland remains in the UK for the time being. The idea that a referendum at some future point might decide that Northern Ireland would join a United Ireland survived into the 1985 Anglo-Irish Agreement and the 1998 Good Friday Agreement, and Nationalists read the demographic runes with glee, pointing to the increased vote for Nationalist parties over the last few years. I am personally sceptical that there will be a referendum majority for a United Ireland in the near future for the following reasons: I suspect that the recent growth in the Nationalist vote is caused by the working through the system of a growth in the Catholic share of the population which largely happened in the 1970s. This was caused, first, by an easing of the situation for Catholics, both in terms of economic discrimination and in terms of stable and safe housing after the forced population movements of the early period, which meant they were more likely to make a living and therefore stay in NI, and second by differential emigration from Protestants getting the hell out of Northern Ireland in the early years of the troubles.

If I am right, we will see some growth in the Nationalist vote share in the next couple of elections and then it will level off at around 45%. As is clear from the 1998 referendum results , a referendum rather than an election will pull out many more voters in areas which are not really hotbeds of support for a united Ireland. Opinion polls likewise show that support for a united Ireland runs well behind support for Nationalist parties. One cannot exclude the kind of sudden mood change which hit Slovenia in 1991, but it hasn't happened yet. 5 June 1975: The Common Market Referendum Both the UK and Ireland joined the European Economic Community (then generally referred to as the Common Market) on 1 January 1973. Strange though it seems now, at that time the Conservative Party was generally in favour and the Labour Party generally against. Labour leader Harold Wilson promised a nationwide referendum on whether or not to stay in the EEC provided that he was able to renegotiate more favourable terms.

(Ireland, Denmark and Norway had all put the issue to the popular vote - unlike the UK - before joining, Norway voting against.) Wilson won both 1974 general elections, and declared that he had achieved the renegotiation he wanted in early 1975 and called the promised referendum, which is the first political event I remember in Northern Ireland. The referendum took place five weeks after the election to the Northern Ireland Constitutional Convention. Of the political parties, the SDLP, Alliance and, oddly enough, Vanguard were in favour of staying in; the DUP, Sinn Fein, and most of the UUP in favour of pulling out. The results were: Parliament has decided to consult the electorate on the question whether the UK should remain in the European Economic Community . DO YOU WANT THE UK TO REMAIN IN THE EEC? Put a cross (X) in the appropriate box. YES How rich nations benefit from EU membership | VOX, CEPR’s Policy Portal Is enlargement unlimited?

Richard Baldwin The possibility that the citizens of the UK will vote to leave the EU is worrying (HM Treasury 2016, Bank of England 2015.) Brexit is one of the many crises currently affecting the European integration project, but it is different. It is different because it raises fundamental questions about the integration project. Brexit ask questions about the value of being in the Union, about the value of membership, about the value of being integrated and interconnected in the world, about the dynamics and distribution of its benefits and costs, and about the type of integration that can sustain (or hopefully even increase) the benefits we have seen since the 1950s. These benefits from deep integration have been largely taken for granted and consequently their analysis has not been advanced, discussed, debated, improved or scrutinised enough. The time is ripe for doing so. Previously (Campos et al. 2014), we showed that the benefits from EU membership are large and substantially outweigh the costs. We warned that the attendant econometric evidence was (and still is) disconcertingly thin. We use a novel methodology to estimate that per capita incomes would have been approximately 12% lower without EU membership.

Focusing on the 1980s and 2004 enlargements, we reported that per capita incomes would have been smaller for every country, except Greece. We have subjected these results to various robustness checks with two being particularly noteworthy. One is that we use a differences-in-differences framework to assess the statistical significance of these estimates. These tests were carried for all countries, enlargements and all three time windows we report (the first five and the first ten years after joining, as well all the whole period of membership), and we find our estimates to also be significant statistically. The second substantial sensitivity check was to ignore the country pool selection and randomly generate the country donors for the counterfactuals. In simpler terms, the method we use optimally chooses the countries that enter our counterfactuals in a weighted fashion. One may worry that when there is a very good match (and very few countries are selected), these few countries drive the results. Recognising that a good match is what the method is striving for, we decided to randomise this choice and study the behaviour of the ensuing estimated benefits. We found the stability of our estimated benefits to be remarkable for both rich and poorer countries.

A legitimate concern is that poor countries may benefit more than rich countries – indeed, that advanced economies (like the UK) have little to gain from being a member of the EU. In other words, a critic may charge that our results are driven by the fact that the enlargements of the 1980s and 2004 were ‘poorer country’ enlargements and their ‘per capita income gaps at entry’ were hefty. The per capita income gap at entry is the percentage difference between the average per capita income of existing members and that of candidate countries in US dollar PPP for the official accession year. We calculate that candidate countries in 1973 had on average 96% of the per capita income of existing members; in the 1980s this was 63%; in 1995 it was 103%; while in 2004 it was 45%. Larger gaps should be associated with sizeable catch-up benefits from integration.

To put it bluntly, it may be easy to see why Portugal and Latvia, for example, benefit so much from joining the EU, but it may be harder to see how, say, Sweden or the UK could possibly benefit as much. This column shows that richer countries also benefit considerably but they may do so differently: while the benefits from EU membership to poorer countries tend to be mostly in terms of per capita income, for richer countries these benefits tend to mostly in terms of productivity. Is this a rich man’s world? In a recent paper, Campos et al. (2014), we use the synthetic counterfactuals method (SCM) pioneered by Abadie and Gardeazabal (2003) to estimate, on a country-by-country basis, the benefits from joining the EU in terms of economic growth and productivity. Figures 1 and 2 show SCM results for the 1973 and 1995 EU enlargements.1 The dark line is for actual per capita GDP (or labour productivity), and the red line for the estimated synthetic counterfactual. Figure 1.

Actual and synthetic real per capita GDP and real per worker GDP in the 1973 EU enlargement SCM estimates the effect of a given intervention (in this case, EU membership) by comparing the evolution of an outcome variable for a country affected by the intervention vis-à-vis that for an “artificial control group” (Imbes and Wooldridge 2009, p. 79). The latter is a weighted combination of other units (countries) chosen so as to match the treated country, before intervention, for a set of predictors of the outcome variable. Using SCM we estimate what would have been per capita GDP if a given country had not become a member of the EU. In the summer of 1961, Denmark, Ireland, and the UK submitted official applications for accession to the European Communities.2 When France vetoed the UK application, the other candidates withdrew (Bache et al. 2011). Applications were resubmitted and, in 1969, accepted with accession in 1973 (vertical dotted line in Figure 1). The results suggest that per capita GDP would be considerably lower in these countries had they not joined the EU in 1973.

The actual and the synthetic series are reasonably close before 1973 (more so for labour productivity than per capita GDP), while they since diverge, indicating that there was little anticipation of the effects from EU membership.3 In addition, the difference between actual and synthetic does not diminish, suggesting that the benefits from membership seem more likely to be permanent than temporary. The dynamics of these benefits is noteworthy. For example, the benefits from EU membership for the UK (although substantial throughout) may have slowed down in later years, while for Ireland they seem to have accelerated instead. This suggests that the UK benefited more from the single market while Ireland did benefit mostly from the common currency.4 There seems to be evidence of anticipation effects, particularly for Austria. It is widely acknowledged (e.g., Bache et al. 2011) that delays in EU accession of the three 1995 countries are largely explained by their neutrality during the Cold War (e.g., they were never NATO members). Austria officially applies for accession as early as 1989 (which seems, interestingly, reflected in our SCM results), Sweden in 1991, and Finland in 1992.

Figure 2 suggests that the countries that joined in 1995 may not have benefited as much from EU membership as did the 1973 class. Why are benefits relatively large for 1973, and relatively small for 1995? We conjecture that this is because the 1973 countries designed, implemented, and benefited from the single market (1986-1992) and – especially in the case of Ireland – from the common currency (as well as from attendant advances in financial integration). The main impediment for the 1995 countries to join was political (the Cold War), and their benefits from EU membership seem mostly in terms of labour productivity (and less in terms of per capita GDP). Future research should investigate fully the reasons for the relatively worse performance of the 1995 class. One line of inquiry we deem worth pursuing stresses institutions. If the bulk of the benefits the EU provide is to encourage institutional change, then one would expect the potential gains that membership could generate in Austria, Finland, and Sweden in 1995 to be indeed smaller than those in Denmark, Ireland, and the UK in 1973. Figure 2.

Actual and synthetic real per capita GDP and real per worker GDP in the 1995 EU enlargements How big are these benefits? A measure of the magnitude of the economic benefits from EU membership is given by the difference between the actual per capita GDP for each country (or labour productivity) and that of its SCM artificial control group. We find substantial benefits for the 1973, and modest benefits for the 1995 enlargement. For the first ten years post-accession, per capita incomes for the former would be approximately 12% lower, while that for the latter would be about 4% lower (without EU membership). Alternatively, if we consider all years since accession, the respective figures would be about 34% for the former, and 5% for the latter. We find that per capita incomes in the UK and Denmark would have been 25% lower (if they had not joined the EU in 1973), but that the benefits for Ireland are even larger. Our estimates suggest that per capita income in Ireland would have been about 50% lower if it had not joined the EU in 1973.

Conclusions This column presents new estimates of the economic benefits from EU membership focusing on the 1973 and 1995 enlargements. The main conclusion is that of substantial and positive pay-offs with benefits from EU membership clearly above direct costs, and with larger gains for the 1973 than for the 1995 enlargement.5 Moreover, the difference between the estimated benefits for 1973 and 1995 enlargements is considerable and, thus, should not be attributed solely to differences in per capita incomes at the time of joining. We conjecture that institutions may provide a more promising explanation of these differences if one believes that Austrian, Finnish, and Swedish institutions were better developed or aligned with the EU when these countries joined the European Union. References Abadie, A and J Gardeazabal (2003), “The Economic Costs of Conflict: A Case Study of the Basque Country”, American Economic Review, 93: 113–132.

Acemoglu, D, S Johnson, A Kermani, J Kwak, and T Mitton (2014), “The Value of Connections In Turbulent Times: Evidence from the US”, NBER Working Paper 19701. Bache, I, S George, and S Bulmer (2011), Politics in the European Union, Oxford University Press. Bank of England (2015), " EU membership and the Bank of England ", October. Billmeier, A and T Nannicini (2013), “Assessing Economic Liberalization Episodes: A Synthetic Control Approach”, Review of Economics and Statistics, 95(3): 983–1001. Campos, N, F Coricelli and L Moretti (2014), “Economic Growth and Political Integration: Synthetic Counterfactuals Evidence from Europe”, mimeo. Diamond, J (1997), Guns, Germs, and Steel: The Fates of Human Societies, W W Norton.

Imbens, G and J Wooldridge (2009), “Recent Developments in the Econometrics of Program Evaluation,” Journal of Economic Literature, 47: 5–86. Endnotes 1. Campos et al. (2014) find estimated benefits to be larger for the 1973 (UK, Ireland, and Denmark) and 2004 (transition countries) enlargements, mixed for the 1980s, and modest for the 1995 enlargements, with substantial differences across countries. 2. Recall that these three countries were founding members of the European Free Trade Area (EFTA). EFTA was successful at increasing trade among its members, but not as successful as the European Community. Also note that at the time of entry, Denmark was the richest of the three, with Ireland’s per capita GDP comparable to (slightly higher than) the UK’s. In terms of GDP size, the UK was, and remains, the (much) larger economy. 3.

This is generally true for all countries here, with the exception of Finland’s per capita GDP in Figure 2, but this is mostly due to the Finnish banking crisis of 1991-1993. 4. In spite of the sharp contraction of output that Ireland suffered during the Great Recession, its GDP per capita (in PPP) remains in 2014 10% higher than that of the UK (according to IMF WEO data). 5. A reason SCM is not as yet widely used is that “it does not allow assessing the significance of the results using standard (large-sample) inferential techniques” (Billmeier and Nannicini 2013, p. 987). One way of addressing this issue, based on jacknife estimation, was recently proposed by Acemoglu et al. (2014). Campos et al. (2014) propose a different approach based on the differences-in-differences estimator. Using this method, we find the impact of EU membership to be positive and statistically significant at conventional levels, for all enlargements.

Question: What group did the UK join in 1973?
Answer: EEC