European Union (EU) | IAS Target IAS Target

European Union

It is a political and economic union of 27 member states that are located primarily in Europe. The EU has developed an internal single market through a standardised system of laws.

EU policies aim:

  • to ensure the free movement of people, goods, services and capital within the internal market,
  • enact legislation in justice and home affairs
  • maintain common policies on trade, agriculture, fisheries and regional development.

Schengen Area

It is an area comprising 26 European countries that abolished all passport and other types of border control at their borders. The Schengen area functions as a single jurisdiction for international travel purposes, with a common visa policy.
States in the Schengen Area have strengthened border controls with non-Schengen countries.
  • Iceland, Liechtenstein, Norway, and Switzerland are member of European Free Trade Association (EFTA)
  • Iceland, Liechtenstein, Norway, and Switzerland not members of the EU but have signed agreements in association with the Schengen Agreement.

A monetary union was established in 1999, coming into full force in 2002, and is composed of 19 EU member states which use the euro currency. The EU and European citizenship were established when the Maastricht Treaty came into force in 1993.

The original members of the European Communities were:

Belgium Italy The Netherlands
France Luxembourg West Germany

Recently on, 31 January 2020, the United Kingdom became the first member state to leave the EU. Earlier three other territories of member states had left the EU and they were:
  • French Algeria
  • Greenland
  • Saint Barthélemy

Important Facts

  • Around 6% of world population
  • Around 20 trillion $ GDP (25% of world)
  • High HDI
  • Members of UN, WTO, G7, G20 etc

Treat of Rome

The Treaty of Rome or Treaty establishing the European Economic Community (EEC Treaty) brought about the creation of the European Economic Community (EEC), the best-known of the European Communities (EC). Rome Treaty was signed on 25 March 1957 by Belgium, France, Italy, Luxembourg, the Netherlands and West Germany and came into force on 1 January 1958. They also signed another pact creating the European Atomic Energy Community (Euratom) for co-operation in developing nuclear energy. Rome Treaty remains one of the two most important treaties in the modern-day European Union (EU). It proposed the reduction of customs duties and the establishment of a customs union and to create a single market for goods, labour, services, and capital across the EEC's member states. In 1986, the European flag began to be used by the EEC and the Single European Act was signed.
It also proposed
  • the creation of a Common Agriculture Policy,
  • a Common Transport Policy
  • a European Social Fund,
  • establishment of European Commission.

  • The Maastricht Treaty of 1992 removed the word "economic" from the Treaty of Rome's
  • In 2009, the Treaty of Lisbon renamed it the "Treaty on the Functioning of the European Union".

Maastricht Treaty

The Maastricht Treaty or the Treaty on European Union, is the international agreement responsible for the creation of the European Union (EU) signed in 1991 and became effective in 1993. The EU is a group of 28 countries that function as a economic and political union. Nineteen countries use the euro as their official currency.
The Maastricht Treaty, was responsible for the establishment of the European Union (EU). The treaty created the Euro, which was intended to be the single common currency for the EU and monetary policy set by the European Central Bank (ECB).

The European Union (EU):

  • is a European free trade
  • economic cooperation zone
  • shared political aims
  • European citizenship.

The Maastricht Treaty was signed on February 7, 1992, by the leaders of 12 member nations:

Belgium France Denmark Greece
Italy Netherlands Ireland Portugal
Luxembourg West Germany United Kingdom Spain

The Maastricht Treaty's priorities was

  • economic policy
  • the convergence of EU member state economies.
  • treaty established a timeline for the creation and implementation of the EMU (Economic and Monetary Union).

The EMU was to include:
  • a common economic and monetary union,
  • a central banking system (In 1998, the European Central Bank (ECB) was created)
  • a common currency

Criteria for countries interested in joining the EMU include:

  • reasonable price stability,
  • sustainable and responsible public finance,
  • reasonable and responsible interest rates,
  • stable exchange rates.

In 1995, Austria, Finland, and Sweden joined the EU. In 2002, euro banknotes and coins replaced national currencies in 12 of the member states and currently eurozone has increased to encompass 19 countries. The euro currency became the second largest reserve currency in the world. In 2004, the EU joined by many countries:
Cyprus Lithuania The Czech Republic Malta Estonia
Poland Hungary Slovakia Latvia Slovenia

Treaty of Lisbon

The Treaty of Lisbon or the Reform Treaty is an international agreement that amends the two treaties which form the constitutional basis of the European Union (EU). The Treaty of Lisbon was signed by the EU member states on 13 December 2007, and entered into force on 1 January 2009.
These two treaties were:
  • Maastricht Treaty
  • Rome Treaty
It also amends:
  • the attached treaty protocols
  • the Treaty establishing the European Atomic Energy Community (EURATOM).

Prominent changes under this treaty included

  • the move from unanimity to qualified majority voting
  • a more powerful European Parliament
  • a consolidated legal personality for the EU
  • the creation of a long-term President of the European Council

The Treaty also made the Union's bill of rights, the Charter of Fundamental Rights, legally binding. For the first time, the treaty gave member states the explicit legal right to leave the EU.

  • Opponents of the Treaty of Lisbon, argued that it would centralize the EU and weaken democracy by "moving power away" from national electorates.
  • Supporters argue that it brings more checks and balances into the EU system, with stronger powers for the European Parliament and a new role for national parliaments.

From the beginning of the 2010s, the European Union faced several issues:

  • a debt crisis in some of the Eurozone countries,
  • increasing migration from Africa and Asia,
  • the United Kingdom's withdrawal from the EU.


On 1 February 2020, the United Kingdom left the European Union in accordance with Article 50 of the Treaty on European Union. A transition period is in operation that keeps in place all other aspects of the relationship to allow businesses to prepare and for a free trade agreement to be negotiated.

Member states

Six founding members:

Belgium West Germany Luxembourg
France Italy The Netherlands

Currently 27 are members of EU. Countries accede to the union by becoming party to the founding treaties, thereby subjecting themselves to the privileges and obligations of EU membership. To become a member, a country must meet the Copenhagen criteria. Article 50 of the Lisbon Treaty provides the basis for a member to leave the Union.
These Copenhagen criteria are:
  • require a stable democracy that respects human rights and the rule of law;
  • a functioning market economy;
  • the acceptance of the obligations of membership, including EU law.

There are six countries that are recognised as candidates for membership:

Albania North Macedonia Serbia
Iceland Montenegro Turkey

There are also a number of ancillary bodies which advise the EU or operate in a specific area.

the European Council which sets the general political directions and priorities of the Union by gathering together its member states' heads of state/government (elected chief executives). The conclusions of its summits are adopted by consensus.
the European Commission the only institution empowered to propose legislation, serves as the "Guardian of the Treaties". It consists of an executive cabinet of public officials, led by an indirectly elected President. This College of Commissioners manages and directs the Commission's permanent civil service. It turns the consensus objectives of the European Council into legislative proposals.
the Council of the European Union It brings together ministers of member states governments' departments. It serves to represent the various governments directly and its approval is required for any proposal to enter into law.
the European Parliament consists of 705 directly elected representatives. It shares with the Council of the EU equal legislative powers to amend, approve or reject Commission proposals for most areas of EU legislation. It elects the Commission's president, must approve the College of Commissioners, and may vote to remove them collectively from office.
the Court of Justice the European Union ensures the uniform application of EU law and resolves disputes between EU institutions and member states, and against EU institutions on behalf of individuals.
the European Central Bank It is responsible for monetary stability within member states.