The European Union (EU) is a political and economic association made up of a majority of European countries. Built upon years of bilateral trade agreements and unions, the EU was formally established in 1993. As of 2010, 27 countries are members of the Union. Among its important functions, the EU has established a common currency (the Euro) between most of its members, has abolished the passport requirements to move throughout the union, and has established a common market and a mutual economic policy.
Any potential applicant seeking to join the EU must meet various criteria before being accepted. The broad-based conditions include being a market-based economy, a stable democracy, the rule of law and the respect of human rights. The nation must also ratify all applicable treaties governing the Union and accept all laws and institutions of the EU. Any new applicants are also legally bound to join the monetary union provided they are able to meet the necessary economic criteria to do so.
The European Union maintains three primary branches that make up its governing apparatus. The European Commission is made up of cabinet-level members who are responsible for the everyday matters of running the EU. The European Parliament and the Council of the European Union together form the legislative bodies. The EU also operates courts to interpret and apply the regulations and law. Members of the EU government are elected representatives of the member countries, separately elected parliamentarians, or appointment by one of the previous two groups.
If considered a common market, the EU is the world’s largest economy by measure of nominal gross domestic product (GDP). One of the original principal purposes of the EU was to establish a single market, which would allow for the free movement of goods, people, and businesses across national lines within the EU. Members of the Union are not allowed to impose tariffs, quotas, restrictions or other barriers to trade apart from those set by the EU as a whole.
As part of its economic mandate, the EU heavily subsidizes and regulates agricultural production. Often one of the most criticized policies of the EU, the heavy subsides have been blamed for distorting international trade and encouraging overproduction of products that depress world prices, especially for producers in poorer nations.
Sixteen members of the European Union are formed into a common monetary union. The common currency, the Euro, is maintained and issued by the European Central Bank (ECB). The common currency helps facilitate the EU’s goal of a single market. By multiple countries accepting the same currency, it vastly simplifies the movement of goods through the Union, makes it easier for citizens to travel, creates a single financial market, and eliminates the needs for and risks of multiple exchange rates.
The Euro has become a popular world reserve currency due to its stability and strength. The monetary policy of the Euro is also controlled by the ECB, which determines the money supply of the Euro, and thereby controls interest rates of the Euro.
The European Union, in its broad international role, is also a significant player in international relations and diplomacy, cross-border infrastructure projects between member countries, as well as scientific endeavors.
Due to its large population, geographic size, and economic power, the European Union is a major player on the world stage. By binding together into the EU, the member nations exert greater influence and market power than they would be able to separately.
For more information on the European Union, visit http://eu.tv