After the Second World War, countries in Europe saw the benefit of greater cooperation. It made economic recovery easier and discouraged the discord of previous years. In 1958, the six-member European Economic Community (EEC) established a tariff-free common market. This developed into the close cooperation of the European Union (EU) with its 27 members and a common currency: the euro.
In 1944, towards the end of the Second World War, the exiled governments of Belgium, the Netherlands and Luxembourg concluded an agreement in London. They created a customs union allowing free transport of goods within their borders. They also maintained a uniform tariff for goods imported into Benelux. In 1958, Benelux became a single economic unit and in 2010 the three countries began working together on sustainable development and justice. Alongside Benelux, the Netherlands also joined a larger commercial union. In 1951, the Netherlands, Belgium, Luxembourg, France, Germany and Italy formed the European Coal and Steel Community (ECSC), establishing a free-trade zone for coal and steel. Coal was still the principal fuel and steel was in huge demand as Europe rebuilt itself..
In 1957, the three Benelux countries and Germany, France and Italy signed the Treaty of Rome, forming the European Economic Community (EEC). This customs union guaranteed free trade on all products within the region. The EEC also pursued a common agricultural policy and set up a European atomic energy community (Euratom) to develop peaceful nuclear technology. The European Coal and Steel Community (ECSC), the EEG and Euratom eventually merged to form an expanded European Community (EC). After the Treaty of Maastricht was agreed in 1992, this expanded yet further and became the European Union (EU). Eventually it encompassed 27 countries, with constantly increasing areas of cooperation. A European constitution was proposed. Its ratification would seal the replacement of the European Community by the European Union. However, France and the Netherlands rejected the proposal in national referendums.
The negotiators at Maastricht had also planned for the introduction of a single European currency. On 1 January 2002, the euro was launched simultaneously in 12 of the 27 member states. Later, other member states adopted the currency too, bringing the total to 17, although a key EU member, the UK, refused to abandon its currency. To encourage citizens to accept the change, the Dutch government distributed a free set of euro coins. The countries that adopted the euro coordinate their economic and financial policies through the European Economic and Monetary Union (EMU), while the European Central Bank (ECB) controls the money supply and exchange rate mechanism. Strict rules, particularly on national budget deficits, maintain the stability of the European currency. In the recent economic recession several countries have had difficulty meeting these requirements.