Regional Economic Integration in Europe

Regional economic integration removes trade barriers in a region, allowing for the free flow of goods, services, and people. The European Union is a perfect example of this type of structure. Other parts of the world also have started to integrate their own economic systems. As you read this section, think about what opportunities neighboring countries can offer one another when trade barriers are removed. What did European trade look like before the EU? How has economic integration benefitted European nations, and what new challenges has it created?

Reading: European Union

The European Union (EU) is an economic and political union made up of 27 member states that are located primarily in Europe.


KEY TAKEAWAY

  • The European Union (EU) is an economic and political union made up of 27 member states that are located primarily in Europe.
  • Members of the EU include Austria, Belgium, Bulgaria, Cyprus, the Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, and the United Kingdom.
  • The EU operates through a system of supranational independent institutions and intergovernmental negotiated decisions by the member states.
  • Within the Schengen Area (which includes EU and non-EU states) passport controls have been abolished.
  • The creation of a single currency became an official objective of the European Economic Community (EEC) in 1969. On January 1, 2002 euro notes and coins were issued and national currencies began to phase out in the eurozone.
  • The ECB is the central bank for the eurozone, and thus controls monetary policy in that area with an agenda to maintain price stability. It is at the center of the European System of Central Banks, which comprises all EU national central banks and is controlled by its General Council, consisting of the President of the ECB, who is appointed by the European Council, the Vice-President of the ECB, and the governors of the national central banks of all 27 EU member states.


Terms
  • Euro: The currency unit of the European Monetary Union. Symbol: €
  • Transparency: Open, public; having the property that theories and practices are publicly visible, thereby reducing the chance of corruption.
  • European Union: A supranational organization created in the 1950s to bring the nations of Europe into closer economic and political connection. At the beginning of 2012, 27 member nations were Austria, Belgium, Bulgaria, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, The Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, United Kingdom.

Examples
  • The euro is designed to help build a single market by easing travel of citizens and goods, eliminating exchange rate problems, providing price transparency, creating a single financial market, stabilizing prices, maintaining low interest rates, and providing a currency used internationally and protected against shocks by the large amount of internal trade within the eurozone. It is also intended as a political symbol of integration.

Source: Lumen Learning, https://courses.lumenlearning.com/suny-internationalbusiness/chapter/reading-european-union/
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