ADVANTAGES AND DISADVANTAGES OF EUROPEAN UNION

HISTORY ON EUROPEAN UNION

The EUROPEAN UNION (EU) is a political organization of 27 independent member’s states which are located in Europe. It originated in 1958 from the European Coal and Steel Community (ECSC) and the European Economic Community (EEC), formed by six countries in 1958. In the intervening period, the EU has expanded in size by the accession of new member states. The Maastricht Treaty as it known was established in 1993 by the European Union under its current name in 1993. The last amendment to the constitution of the basis of the EU, the TREATY OF LISBON, came into force in 2009.

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The EU has a single market through a standard system of laws which apply in all member states. Within the Schengen Area (which includes EU and non-EU states) passport controls was abolished. EU policies aim to ensure the free movement of people, goods, services, capital and make laws and common policies on trade. The monetary union known as the “EUROZONE” was established in 1999 and is currently composed of 17 member states.

THE ADVANTAGES AND DISADVANTAGES

Trade and everything else should operate more effectively and efficiently with the Euro. Single currency in a single market seems to be the way forward but major disadvantages of the EU, households sometimes find it difficult to correctly compare the prices of goods, services and resources across the EU because of the resulting effects of exchangeable rates.

This discourages trade. According to economic theory, prices should act as a mechanism to allocate resources in an optimal way, so as to improve economic efficiency. There is a far greater chance of this happening across an area where E.M.U exists.      

There is also a political agenda to European bank (the European System of Central Banks -ESCB), the complete removal of national control over monetary policy and the partial removal of control over fiscal policy. Individual nation states will lose sovereignty (i.e. the ability to control their own affairs). It will be a considerable step down the road towards political union. There are many in the EU who favours economical and political union and they are very much in the EMU. There are also many who wish to keep national sovereignty and are struggling to prevent EMU, whatever its merits might be, from going ahead.

The difference in rate of growth, economic foundation, economic management and system are real disadvantages. It will cost the EU more money as subsidy. This money is collected from the old members. But the benefit of peaceful Europe and trade creation is more than the cost.  

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