European Union

The EU or, in other words, the European Union is a union on political and economic bases, which comprises twenty-seven countries. Among its main aims are peace and science promotion and achieving a sustainable development level. Also, the EU is a most powerful and known trade block in the world. The European Union strives to establish a union, in which the only currency is euro, at the moment more than half countries use the euro as the official currency.

The EU origin is hidden in the hope to grow economic and political strength and power through uniting European countries after the Second World War.

Origin of the European Union 

The first prototype of the European Union may be seen in the organization named the European Coal and Steel Community. It was created right after the Second World War in 1950 in order to regulate the industries of steel and coal. That time it comprised only 6 countries (the Netherlands, Luxembourg, Italy, Germany, France, Belgium). After seven years in accordance with the Treaty of Rome this union turned into the European Economic Community and eventually became known as the European Community (EC).

Creation of unions and signing the treaty helped to make the connection between countries deeper and improve security and develop affairs policies inside the Union. In order to create free movement of goods and make it flourish the Union initiated a common market.

That time the EC paid more attention to the creation of the unified agricultural policy and. Moreover, it strived to eliminate customs barriers. The year 1973 turned out to be a year of great growth since the three countries (the U.K., Ireland, Denmark) became members of the EC. Six years later first direct elections to the European Parliament were carried out.

Common market formation

In the mid-80s the Single European Act, which was the revised Treaty of Rome, started to move the six-year plan of common market formation.

The year 1993 became the year of appearing of the current name, thus, the name Economic Community was displaced by the new one, which is the European Union. Six years later a common currency was created, it was euro. However, two countries (Denmark, the U.K.) negotiated "opt-out" provisions, which gave them the opportunity to continue to use their national currencies in case they wanted to keep it. Nowadays, there are still some countries that haven’t started to use the euro as a national currency.

Crisis of 2007-2008 and the European Union

After the crisis the EU had to deal with its consequences. The European Central Bank (ECB) tried to diminish the negative influence of the crisis, such as high sovereign debt, while several countries (Greece, Ireland, Portugal, Spain, Italy) had their own troubles as slow-moving development.

In 2010 two countries (Greece, Ireland) got financial support (i.e. bailout) from the EU. However, they also needed to impose fiscal austerity measures, which consist of reducing spending and increasing frugality. The next to receive a bailout was Portugal. It took place in 2011. A year later Greece asked for the second financial rescue.

Only after taking measures to support debt, both sovereign and banking-sector, the European Union and the European Central Bank managed to lessen the negative impact of the crisis.

Measures that were taken by the European Union and the European Central Bank in order to reduce the influence of the crisis:

• Establishment of the European Stability Mechanism (ESM). The organization helps the Union countries to cope with financial problems. The organization was established in 2012.
• A series of “targeted longer-term refinancing operations” was carried out in order to create good conditions for EU financial institutions. It was conducted several times in 2014, 2016, 2019.
• Loosening of the 2011 Stability and Growth Act in 2015.
• The Single Resolution Board took all the responsibility for the bank failures in the Union in 2015.

Disparity in the European Union

The European Union more or less successfully handled the crisis, however, the main cause of it, which brought about the crisis, wasn't tackled at all. The cause is the disparity between two parts of Europe, south and north. While Northern Europe is highly industrialized, the south part of it still remains mostly agricultural and more dependent on farming.

Since the difference in living is so dramatic, southern companies and producers don’t even get a chance to take advantage of currency depreciation in order to become a competitive opponent in business.

Brexit

In the U.K. the idea of leaving the European Union was gaining popularity throughout the 2010s. Prime Minister David Cameron arranged a vote in 2016. The vote showed the great desire to leave the Union. Staying in the Union was opposed by more than fifty percent of voters. Thus, January 31, 2020 became the day of the U.K. official leaving the European Union.

However, in July of the same year the Intelligence and Security Committee of the U.K. Parliament published the report where two main ideas were stated. The first is that Russia was the one who caused the leaving, the second is that the government failed to investigate Russian involvement in the proper way.

The U.K. withdrawal from the European Union was called Brexit, which is short from British exit.