The EU is a unique blend of 27 nations working together politically and economically. This union is one of the world's most powerful commercial groupings due to its democratic values. A significant part of this alliance is the euro, which 19 member nations utilize.

The European Union (EU) resulted from an effort for long-term peace and stability after the Second World War, whereby member states collaborated economically and politically in Europe. The EU’s GDP amounted to €14.45 trillion in 2021. The amount is equivalent to about $15.49 trillion US dollars. The US GDP amounted to $23 trillion within this period.

The birth of the history of the EU began with the European Coal and Steel Community, founded in 1950. This community included France, Belgium, Luxembourg, Italy, Germany, and the Netherlands. This was called the Treaty of Rome in 1957, and thus, it became a European Economic Community, which later formed a European Committee.

EC development constituted a significant stride in integrating member nations' foreign, security, and domestic policy. Another critical step was forming a single market in the same year to allow the free movement of commodities, services, people, and money inside the union.

The EC first prioritized a single agriculture policy and customs liberalization. Denmark, Ireland, and the U.K. joined the union in 1973, starting this growth and integration. 1979, direct European Parliament elections began, signaling a shift toward increased democratic involvement in the EU.

Common Market Creation

The Single European Act advanced the search for a single European market in 1986. This legislation launched a six-year strategy to integrate European national rules, creating a more unified economy.

The 1993 Maastricht Treaty advanced European integration. This treaty transformed the EC into the EU. On January 1, 1999, EU member states adopted the euro as a common currency, a significant step. However, not every member embraced this change; Denmark and the United Kingdom negotiated terms that allowed them to maintain their national currencies if they chose to do so. Additionally, some of the newer European Union members have either not met the necessary criteria to adopt the euro or have opted out of using it.

EU Laws

EU law plays a fundamental role in the governance of the Union and can be categorized into two main types: primary and secondary (derived) law.

Primary law in the EU encompasses the foundational treaties that form the bedrock of all Union actions. These treaties are binding agreements between member nations that define the EU's goals, institutions' operations, decision-making, and member-state relations. These accords allow EU institutions to pass laws that member nations execute.

Secondary law derives from the principles and objectives of these treaties. It includes regulations, directives, and decisions. Regulations are binding legislative acts and must be applied uniformly across the Union upon publication. On the other hand, the directives set objectives that all EU countries must achieve but leave the implementation specifics to the individual countries' legislations. Decisions are binding on their specific recipients, whether an EU country or a particular company. Lastly, the EU also issues non-binding legal acts such as Recommendations and Opinions, which, while influential, do not carry the same mandatory weight as regulations, directives, and decisions.

European Debt Crisis

The EU has a massive debt issue after the 2007-2008 global financial crisis. Italy, Spain, Portugal, Ireland, and Greece confronted the EU and ECB with high debt and weak growth.

Greece and Ireland needed EU bailouts in 2010. These rescues required extreme budgetary restraint. Portugal entered a similar situation in 2011, and Greece needed a second bailout by 2012.

The severity of the crisis began to lessen after the European Union and the European Central Bank introduced a series of supportive measures. These measures aimed to stabilize the sovereign and banking sector debts in the affected countries.

Long-term crisis measures were taken. In October 2012, the ESM was created. Its purpose was to assist European Union members grappling with severe financial difficulties, including those unable to access bond markets. After 2010, the ESM replaced the temporary European Financial Stability Facility.

The ECB's 2014, 2016, and 2019 "targeted longer-term refinancing operations" were essential. These operations provided financing under favorable conditions to EU financial institutions.

Significant changes were made 2015 to the Stability and Growth Act, initially passed in 2011. The amendments relaxed earlier requirements, such as targeting public debt below 60% of gross domestic product and maintaining annual government budget deficits under 3% of GDP over the medium term.

That same year, a new EU agency, the Single Resolution Board, addressed bank failures within the eurozone.

However, these measures did not fully address the underlying structural issues within the EU, particularly the economic disparity between the industrially robust north and the comparatively less affluent southern region, which remains more rural and reliant on agriculture. Using a common currency across these diverse economies presents its challenges. Southern economies, without the option of currency depreciation, find it difficult to enhance their international competitiveness. Due to currency inflexibility, southern exporters struggle to keep up with northern peers, who have higher productivity growth and better industrial bases.

Workings in the U.S.

Federal transfer payments alleviate economic imbalances between US regions and states. These payments redistribute wealth nationwide. States with higher average incomes pay more to national revenue. Conversely, lower-income states get more federal funding. This method tries to balance economic disparities nationwide.

The COVID-19 epidemic in the EU led to cooperative spending measures, which some experts believe might lead to a more integrated fiscal union but is currently weak.

Brexit changed EU membership in the UK. First, Conservative Prime Minister David Cameron rejected a European Union referendum. 2013, Cameron pledged a referendum as the U.K. Independence Party gained momentum against EU membership. A referendum on EU independence was conducted in 2016 while the movement grew.

Despite late polls, the June 23, 2016 referendum narrowly favored Brexit, with about 52% of voters voting yes. Prime Minister Cameron resigned the next day. The UK left the EU on January 31, 2020.

After Brexit, the U.K. Intelligence and Security Committee said in July 2020 that Russian influence in the Leave campaign garnered media attention. The study chastised the government for not investigating Russia's participation in British politics, notably the Brexit vote. This complicated the already acrimonious Brexit process.