The EU operates a single market (an economic zone designed to function with one set of regulations and no internal trade barriers). The EU also controls a visa-free area called the Schengen zone. Additionally, the modern European project coordinates labor laws to make working in other countries relatively seamless. Finally, the EU negotiates trade deals as a bloc, giving European countries more leverage when working with bigger economies.
In practical terms, the EU allows a German citizen to commute to work in the Netherlands. The EU also enables goods to travel over country borders as if they were moving inside a country. A train ride from Vienna to Paris requires no passport or currency exchange. Products developed in Estonia adhere to the same rules as those developed in Spain, and an Estonian company can easily sell in Spanish stores.
To govern all of this activity, the EU operates institutions that have varying jurisdiction over certain policy areas. Monetary policy, trade, and fishing, for example, are exclusively under the control of the EU. The European Court of Justice sets precedent for national judicial systems. Decisions over defense and security are shared between the EU and national governments. For example, the EU has collectively imposed
sanctions
on Russia in response to Russian
aggression
in Ukraine. Meanwhile in health care, education, and tourism, the EU merely supports national governments through funding or by setting guidelines.
What Do EU Members Get Out of This Arrangement?
EU member countries contribute to the EU budget, comply with EU laws, and vote to elect officials to its institutions. Why cede?or, to use the EU’s term, “pool”?
sovereignty
in this way? By cooperating closely and establishing some supranational policies, countries in the EU enjoy economic, political, and security benefits.?
Economic benefits
Goods and
services
are cheaper when border controls are eliminated, trade barriers are lifted, and only one set of regulations must be met. A 2019 study found that the average EU citizen is 840 euros richer per year as a result of the single market. Nineteen countries in the EU use a single currency, the euro, which encourages tourism. It also makes it cheaper for poorer countries to borrow money, as they need not worry about exchange rate fluctuations.
From a financial perspective, EU membership particularly benefits poorer countries. Here the EU provides significant funding for public investment projects, including those that improve childcare options, increase internet access, and create jobs. Across the continent, the EU also provides
agricultural subsidies
, amounting to approximately $65 billion each year, that keep many European farmers afloat.
Political benefits
EU countries gain political leverage by banding together. As the second-largest economy in the world, the EU negotiates better trade deals than a European country could if it were acting alone.
In doing so, the EU helps create global standards. Countries that want to enter into trade deals with the valuable bloc often have to abide by strict regulations on data privacy,
emissions
standards, and human rights.?
Security benefits
The
North Atlantic Treaty Organization (NATO)
, another post?World War II initiative, binds the United States, Canada, and much of Europe in the world’s largest security
alliance
. But a defense agreement is also baked into EU membership: members are required to provide aid and assistance when another member asks. However, security commitments are not required for countries with long-standing traditions of neutrality. Ireland or Sweden, for example, can get exemptions from defense arrangements. The EU has entered into a debate over whether it should continue to rely on the United States for its security. The alternative is that the EU becomes more self-dependent?a concept referred to as strategic autonomy.
Many smaller countries with unfriendly neighbors have rallied for ramped-up EU defense efforts. For instance, the EU introduced a military mobility initiative that allowed the union to quickly move troops and equipment across Europe to protect eastern European countries from Russian invasion. This initiative was adopted following Russia’s
annexation
of
Crimea
in 2014.
Drawbacks of Ceding Sovereignty
Despite its collective benefits, power-sharing can be a divisive endeavor. The 2016 Brexit vote made this clear. Several countries in Europe, such as Norway and Switzerland, have chosen not to join the EU (though they have coordinated in some policy areas, such as trade and travel). Some existing members, like Hungary, are deeply critical of it. The downsides affect member countries differently.?
Hazards of Economic Interdependence
With economic benefits come risks. The nineteen countries that use the euro are bound to the same monetary rules. However, such close economic integration does not mean those nineteen national governments have the same political priorities. Such conditions have made it difficult for the EU to create rules that work well for all economies.
It also means that one tanking economy can bring down the entire union. An economic crisis in one country can certainly amplify the effects of an economic downturn in another. In 2010, this scenario played out in the so-called eurozone crisis, when Greece’s cratering economy threatened the economic stability of much of the EU.
When One Country Becomes Too Powerful
Certain countries will always be more powerful than others, but sovereignty is supposed to be an equalizer. It prevents strong countries from changing the borders of their weak neighbors or meddling in their domestic politics and law (with specific exceptions).?
In the EU, countries cede some of the powers that sovereignty is designed to protect?national budget?making, monetary policy, and immigration and work authorization laws. Countries do so to reap the benefits discussed above and because they trust that the EU will use those powers to serve the interests of all members. But when one EU country exerts too much influence, it can set the bloc’s agenda to serve its own national interest more than that of the collective.?
Germany, the EU’s richest and most populous country, is considered to be the bloc’s most influential member; its longtime leader Angela Merkel is sometimes referred to as the chancellor of Europe. In 2015, more than one million
migrants
entered Europe, the largest influx of people since World War II. During this migration crisis, Germany agreed to take in thousands of
refugees
and expected that other EU countries would do so as well. When some refused, Germany enlisted the EU to introduce quotas to force countries to accept refugees. This demand was eventually dropped after years of EU deadlock on migration issues. Countries like Hungary accused Germany of attempting to impose its national policies upon the entire bloc, undermining the collective interests of the EU.?
When Sovereignty-Sharing and National Identity Struggle to Coexist
In addition to its simple, primal slogan, the red Brexit bus advertised an eyebrow-raising claim: “We send the EU £350 million a week,” it read. “Let’s fund the NHS,” referring to the UK’s widely beloved health-care system.
Fact-checkers later debunked the £350 million claim. However, that didn’t stop people from accepting that figure as true. It was an easy sell because the claim ?fit with their belief that EU membership came at the expense of domestic programs?and national identity. ?
To some critics, Brussels, where the executive branch of the EU is headquartered, evokes a nanny state?an overbearing authority that encroaches on sovereignty. Some still cling to the pervasive myths?essentially misinterpretations?like the EU forces Italians to make mozzarella from powdered milk or that it nitpicked on the name of a British snack mix. These complaints, though trivial, reflect larger questions about the balance of power between the EU and national governments.
In the 1950s, fiercely protecting national sovereignty was often considered distasteful compared to achieving regional peace. But recently this balance has undergone intense scrutiny. In the last several years, some politicians have gained traction?and votes?across Europe by pitting people against the EU elite. These messages have resonated in countries like Greece, where people mobilized against the EU’s demands to balance its budget; in Hungary, where leaders have rejected the EU’s migration quotas; and in Poland, where the far-right government has dismissed EU criticism of the country’s crackdown on the independence of its courts.?
Where Is the EU Headed?
The EU’s challenges are far from settled. Some are old: grouping countries with different financial, cultural, and geographic realities has inherent difficulties. Others are new: the UK’s exit dealt a harsh blow to the bloc. Some experts feared the departure?the first in EU history?would make the institution seem like a hotel that countries could check in or out of at will. But the fact that the UK’s departure took years of difficult negotiations (and agreements on post-Brexit trade and travel relations have yet to be made) has also revealed just how interconnected Europe has become. Amid the coronavirus crisis, the EU announced a $2 trillion stimulus plan to help the region’s economies recover. With the support of powerful members, including Germany and France, the massive package proved to knit the EU together even more tightly.
The EU stands alone as a sovereignty-pooling organization. No other region in the world operates such an ambitious endeavor. Indeed, while some international organizations have been unable to evolve as the world changes (e.g., the WTO has not agreed on comprehensive new trade rules since 1995), the EU has forged ahead, adding members and continuing to mostly deliver on its original promise: an enduring peace on the continent.