This study examines economic integration within the European Union as a factor in conflict transformation and peace-building. European responses to causes of frequent conflict and wars after the end of WWII focused on the search for peace, economic cooperation and prosperity. This thesis will focus on three elements: economic interdependence, the expansion of the free market, and economic integration. In-depth examination of these factors reveals that economic interdependence or the exchange of goods and services across inter-state and international boundaries only, is not sufficient to bring peace among states. Economic interdependence may reduce the impact of war, but cannot maintain sustainable peace. Unfair competition fanned by economic nationalism was a strong obstacle to free trade in Europe in the early 19th century. In the 21st century, the expansion of the free trade, with increased understanding has enhanced reduction in interstate conflicts. However, free trade, in and of itself does not constitute a strong factor for a sustainable peace. Free trade may encourage democracy, but the expansion of free trade coupled with interdependence, does not bring sustainable peace. The EU has successfully established sustainable peace through economic integration-the creation of the single market that establish freedom of movement, people, goods, services; and a single currency that facilitates easy transactions. The single market also abolished tariffs and custom duties. By and large, economic integration within the EU has been successful in creating sustainable peace because economic interdependence, and the expansion of the free market have been combined with political integration by building democratic institutions at the intergovernmental and transnational levels.ii
