Trade barriers and changing currencies are things most Americans don't have
to think about. But across the Atlantic Ocean, several countries have
established the European Union to link themselves together economically and
politically. Now in its late stages of development, the European Union will
dramatically change the lives of many Europeans.
While most Americans ignore the European Union, it represents a very real
economic competitor with the United States. The 1999 GDP of the United
States was $9.3 trillion, according the
CIA World Factbook. The combined
1999 GDP of the 15 European Union nations is about $8 trillion, making it
the second largest economy in the world.
History and Institutions
In the aftermath of the Second World War, Winston Churchill and other
European leaders advocated forming a "united states" of Europe. If European
countries were united economically, these leaders thought, they would be
less likely to go to war with each other again.
The European Union formed in 1957 as a
coalition between France, Italy, West Germany, Belgium, the Netherlands and
Luxemburg. With the addition of Denmark, the United Kingdom, Ireland,
Greece, Spain, Portugal, Austria, Finland and Sweden there are now 15
nations in the EU. Read a year-by-year account of the
History of the European Union to learn more.
Norway and Switzerland are the only two western European nations that have not joined the EU.
The EU has three governing bodies, the
European Commission, the
European Parliament and the
Council of the
European Union. These
three groups determine the economic policies of the EU. To find out more
about their functions, read the
Institutions of the European Union.
The goals of the union are to establish a common market, a common currency
and a European citizenship that would complement national citizenship. The
Common Market, launched in 1968, allows free trade between the nations in
the union.
However, some skeptics of the union fear that European countries will lose their separate cultural identities
with economic integration.
Expansion
The EU is now preparing to expand to include countries such as Turkey,
Poland, the Czech Republic and Hungary. Applicant countries must meet
certain requirements, such as a stable economy and a working democracy, to
join the union. These requirements encourage countries to make economic and
social reforms. Read news and reports about the
Enlargement, including profiles of the
13 applicant countries.
Euro
A single currency is one of the last steps in the process of unifying the
countries' economies. While most EU nations accepted the currency, known as
the euro, the United Kingdom, Denmark and Sweden decided to observe the euro
for a few years before joining.
One euro is worth about 88 cents. The euro was launched in 1999 for business and credit card transactions.
Euro currency and coins became legal tender Jan. 1, 2002. The nations' separate currencies were phased
out within two months. To learn more about the euro, read the
Frequently Asked Questions and browse the
euro conversion rates. You can
see the
design of euro bank notes at the
European Central Bank.
News
For news on the EU economy, read
The Economist,
EUbusiness and
EU Integration News.
--- J. Britten
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