Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands,

I – Objectives : To be able to know The European Union, How It Works, and

Poland, Portugal, Romania, Slovakia, Slovenia, Spain, and Sweden.1
Its History and
C. How It Is Governed
How Europe Became an Economic Powerhouse.
Three bodies run the EU. The EU Council represents national governments.
The Parliament is elected by the people. The European Commission is the
II – DISCUSSION :
EU staff. They make sure all members act consistently in regional,
A. European Union   agricultural, and social policies. Contributions of 120 billion euros a year

The European Union is a unified trade and monetary body of 27 member from member states fund the EU.

countries.1 It eliminates all border controls between members. The open Here's how the three bodies uphold the laws governing the EU. These are
border allows the free flow of goods and people. There may be police spelled out in a series of treaties and supporting regulations:5
checks, based on police information and experience, that are not equivalent 1. The European Commission proposes new legislation. The
to border checks.2 commissioners serve a five-year term.6
Any product manufactured in one EU country can be sold to any other 2. The European Parliament gets the first read of all laws the
member without tariffs or duties.3 Practitioners of most services, such as Commission proposes. Its members are elected every five years.7
law, medicine, tourism, banking, and insurance, can operate a business in 3. The European Council gets the second read on all laws and can
all member countries.4 accept the Parliament’s position, thus adopting the law. The council
B. Purpose is made up of the Union’s 27 heads of state, plus a president.
The EU's purpose is to be more competitive in the global marketplace. At D. Currency

the same time, it must balance the needs of its independent fiscal and The euro is the common currency for the EU area. It is the second most
political members. commonly held currency in the world, after the U.S. dollar. It replaced the

Its 27 member countries are Austria, Belgium, Bulgaria, Croatia, Cyprus, Italian lira, the French franc, and the German Deutschmark, among others.9

Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece,

The value of the euro is free-floating instead of a fixed exchange rate.1 0 As a One EU country, Ireland has declined the Schengen benefits. Four non-EU
result, foreign exchange traders determine its value each day. The most countries, Iceland, Liechtenstein, Norway, and Switzerland have adopted
widely-watched value is how much the euro's value is compared to the U.S. the Schengen Agreement. Three territories are special members of the EU
dollar.1 1 The dollar is the unofficial world currency.1 2 and part of the Schengen Area: the Azores, Madeira, and the Canary
The Difference Between the Eurozone and the EU Islands. Three countries have open borders with the Schengen Area:
The eurozone consists of all countries that use the euro. All EU members Monaco, San Marino, and Vatican City.1 5
pledge to convert to the euro, but only 19 have so far. They are Austria, This chart shows which countries are members of the EU, the eurozone, and
Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, the Schengen Area:
Latvia, Lithuania, Luxembourg, Malta, Netherlands, Portugal, Slovakia, EU Eur
Countries Member Schengen o
Slovenia, and Spain.
Austria, Belgium, Estonia, Finland, France, Yes Yes Yes
The European Central Bank is the EU's central bank. It sets monetary Germany, Greece, Italy, Latvia, Lithuania,
policy and manages bank lending rates and foreign exchange reserves. Luxembourg, Malta, Netherlands, Portugal,
Slovakia, Slovenia, and Spain
Its target inflation rate is less than 2%.1 4
The Schengen Area Czech Republic, Denmark, Hungary, Poland, Yes Yes No
The Schengen Area guarantees free movement to those legally residing Sweden
within its boundaries. Residents and visitors can cross borders without Ireland Yes No Yes
getting visas or showing their passports.2
Bulgaria, Croatia, Romania Yes Pending No
In total, there are 26 members of the Schengen Area. They are Austria,
Cyprus Yes Pending Yes
Belgium, Czech Republic, Denmark, Estonia, Finland, France, Germany,
Iceland, Liechtenstein, Norway, Switzerland No Yes No
Greece, Hungary, Iceland, Italy, Latvia, Liechtenstein, Lithuania,
United Kingdom No No No
Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Slovakia,
Slovenia, Spain, Sweden, and Switzerland.
 E. Economy
D. History
The EU's trade structure has propelled it to become the world's second-
In 1950, the concept of a European trade area was first established. The largest economy after China. In 2018, its gross domestic product was $22
European Coal and Steel Community had six founding members: Belgium, trillion, while China's was $25.3 trillion.
France, Germany, Italy, Luxembourg, and the Netherlands.
These measurements use purchasing power parity to account for the
In 1957, the Treaty of Rome established a common market. It eliminated discrepancy between each country's standard of living. The United States
customs duties in 1968. It put in place standard policies, particularly in trade was third, producing $20.5 trillion.
and agriculture. In 1973, the ECSC added Denmark, Ireland, and the United
The EU's top three exports in 2018 were petroleum, medication, and
Kingdom. It created its first Parliament in 1979. Greece joined in 1981,
automobiles; while its top imports are petroleum, communications
followed by Spain and Portugal in 1986.
equipment, and natural gas.
In 1993, the Treaty of Maastricht established the European Union common
Its top export partner is the United States and its top import partner is China.
market. Two years later, the EU added Austria, Sweden, and Finland. In 16

2004, twelve more countries joined: Cyprus, Czech Republic, Estonia,

ACTIVITY
Hungary, Latvia, Lithuania, Malta, Poland, Slovakia, and Slovenia. Bulgaria
1. What is European Union and its purpose?
and Romania joined in 2007.1 7
2. What is the European Union trade Agreements?
In 2009, the Treaty of Lisbon increased the powers of the European
Parliament. It gave the EU the legal authority to negotiate and sign 3. What is the EU’s exports in 2021?

international treaties. It increased EU powers, border control, immigration, 4. How is the economy of European Union in this time of pandemic?
judicial cooperation in civil and criminal matters, and police cooperation. It
abandoned the idea of a European Constitution. European law is still
established by international treaties.1 8