The EU came into existence on 1st January 1958 with the Treaty of Rome signed by six countries. Now there are 28 member countries, including; France, Italy, Germany, the Netherlands, Belgium, Luxembourg, Spain, Greece, Portugal, the UK, Denmark, Ireland, Austria, Finland and Sweden.
Aims of the European Union
- To remove trade restrictions and to encourage free trade among the member countries
- To apply Common External Tariff and a common commercial policy in their trade with non-member countries
- To allow free movement of factors of production between member countries
- To pursue common policies on agriculture and transport
- To allow member countries to compete freely
- To create European Economic and Monetary Union (EMU) including the creation of Euro
- To increase trade and development of member countries
- To develop a common foreign, security and defense policy
Advantages of EU Membership
- It enables countries to enjoy the benefits of a ‘larger home market’ for their products
- A larger home market enables countries to specialize according to Comparative Advantage
- Countries enjoy economies of scale due to specialization
- Member countries can enjoy the advantages of competition in the form of better quality and lower prices
- It facilitates increased exports due to competition and large scale production
- It assists poor regions within the bloc
- It promotes friendship and cooperation among the member countries
- Member countries can restrict import from non-member countries
Disadvantages of EU Membership
- Member countries have to use EU produced expensive foods while it could have obtained from other countries at a very lower price
- Member countries loose sovereignty as most of the important economic decisions are taken by the headquarters and not by the respective countries
