European Union

Definition

The European Union (EU) is a political and economic union of 27 member states located primarily in Europe. It is a unique partnership in which member countries have pooled a portion of their sovereignty to gain strength and influence globally that they would not have individually.

5 Must Know Facts For Your Next Test

1. The EU was established in 1993 by the Maastricht Treaty, which built upon earlier European communities and organizations.
2. The EU aims to promote peace, its values, and the well-being of its citizens through a single market, a customs union, and common policies on trade, agriculture, fisheries, and regional development.
3. Member states have pooled their sovereignty in many policy areas, allowing decisions to be made democratically at the European level.
4. The EU has developed a single market through a standardized system of laws that apply to all member states, ensuring the free movement of people, goods, services, and capital.
5. The EU has also established a common currency, the Euro, which is used by 19 of the 27 member states.

Review Questions

• Explain how the formation of the European Union has influenced economic globalization.
  • The creation of the European Union has been a significant driver of economic globalization. By establishing a single market with the free movement of goods, services, capital, and labor, the EU has facilitated increased trade, investment, and economic integration among its member states. This has allowed European businesses to operate more efficiently across borders, participate in global value chains, and compete on a larger international scale. Additionally, the adoption of a common currency, the Euro, by many EU members has further promoted economic integration and interdependence within the Eurozone, making it easier for businesses to conduct cross-border transactions and investments.
• Analyze how the economic policies and institutions of the European Union have impacted the global economy.
  • The European Union's economic policies and institutions have had a significant impact on the global economy. The EU's common market and customs union have facilitated the free flow of goods, services, capital, and labor within the bloc, enabling European businesses to participate more effectively in global trade and production networks. The European Central Bank's monetary policy decisions and the use of the Euro as a major international currency have also influenced global financial markets and exchange rates. Furthermore, the EU's regulations and standards, such as those related to product safety, environmental protection, and labor rights, have often been adopted as global benchmarks, shaping business practices and trade patterns worldwide. The EU's role as the world's largest single market and one of the largest economies has given it significant influence in global economic governance, allowing it to shape international rules and norms.
• Evaluate the extent to which the European Union's economic integration has contributed to increased globalization and interdependence among national economies.
  • The European Union's economic integration has been a significant contributor to increased globalization and interdependence among national economies globally. By establishing a common market, customs union, and shared policies, the EU has facilitated the free movement of goods, services, capital, and labor within its borders, enabling European businesses to operate more efficiently across national boundaries and participate in global value chains. The adoption of a common currency, the Euro, by many EU members has further promoted economic integration and interdependence within the Eurozone. Additionally, the EU's regulations, standards, and economic policies have often been adopted as global benchmarks, shaping business practices and trade patterns worldwide. The EU's role as the world's largest single market and one of the largest economies has also given it significant influence in global economic governance, allowing it to shape international rules and norms that have contributed to increased globalization. Overall, the EU's economic integration has been a driving force behind the growing interconnectedness and interdependence of national economies globally.

Related terms

Eurozone: The Eurozone refers to the group of 19 EU member states that have adopted the Euro as their official currency.

European Commission: The European Commission is the executive branch of the European Union, responsible for proposing legislation, implementing decisions, upholding the EU treaties, and managing the day-to-day business of the EU.

European Parliament: The European Parliament is the only directly-elected EU institution, representing the citizens of the European Union. It acts as a co-legislator, sharing power with the Council of the European Union to pass laws and approve the EU budget.