Competition, Integration and Economic Efficiency in the EEC from the Point of View of the Private Firm

As early as 1956, experts appointed by the six original Member State governments to investigate measures to pursue integration after the failure of the European Defence Community clearly established this link between the abolition of barriers to trade and an increase in the intensity of competition. In what has come to be known as the "Spaak Report," the experts noted the technology gap then separating Europe from the United States and proposed, as a remedial measure, the creation of a ''vast zone of common economic policy, constituting a powerful production unit, and allowing a continued expansion, and increased stability, an accelerated raising of the standard of living and the development of harmonious relations between the States belonging to it." The authors of the Spaak Report envisioned an enlarged market in which firms would be able to grow to optimum size without acquiring a de facto monopoly: ''The strength of a vast market is to allow the combination of mass production with the absence of monopoly." Moreover, it was felt that this wider market would compel firms to do away with obsolete production methods and to increase the quantity and quality of their goods. Thus, free movement of goods was seen as a means of increasing competition, which itself was seen as a means of enhancing economic efficiency.