Economy of Europe: Encyclopedia II - Economy of Europe - Trade blocs

Economy of Europe - Trade blocs

In general European nations are members of larger and more powerful trade blocs than anywhere in the world. Many credit this with Europe's reduced gap between the rich and poor. However, the rigidity of the European labour market has also been blamed for the higher unemployment and slower growth than North America.

Economy of Europe - European Union

The European Union or EU is a supranational union of 25 European states + 2 acceding countries Romania and Bulgaria which already signed the adherence treaty in early 2005. They are to become full members in January 1, 2007. It has many activities, the most important being a common single market, consisting of a customs union, a single currency (adopted by 12 of the original 15 member states), a Common Agricultural Policy and a Common Fisheries Policy. The European Union also has various initiatives to co-ordinate activities of the member states.

The European Union has the largest economy in the world. The EU economy is expected to grow further over the next decade as more countries join the union - especially considering that the new States are usually poorer than the EU average, and hence the expected fast GDP growth will help achieve the dynamic of the united Europe. However, It's estimated that the Eurozone will only grow around 0.3 per cent (Q2 2005)1, while other industrialized nations such as the United States is estimated to grow three times as much at around 3.2%. (Q2 2005) 2

The union has evolved over time from a primarily economic union to an increasingly political one. This trend is highlighted by the increasing number of policy areas that fall within EU competence: political power has tended to shift upwards from the Member States to the EU.

Economy of Europe - European Free Trade Association

The European Free Trade Association (EFTA) was established on 3 May 1960 as an alternative for European states that did not wish to join the European Union, creating a trade bloc with fewer central powers.

Today only Iceland, Norway, Switzerland and Liechtenstein remain members of EFTA, as the other members have gradually left to join the EU.

Economy of Europe - European Economic Area

The European Economic Area (EEA) came into being on 1st January 1994 following an agreement between the European Free Trade Association (EFTA) and the European Union (EU). It was designed to allow EFTA countries to participate in the European Single Market without having to join the EU.

In a referendum, Switzerland (ever keen on neutrality) chose not to participate in the EEA (although it is linked to the European Union by bilateral agreements similar in content to the EEA agreement), so the current members are the EU states plus Norway, Iceland and Liechtenstein.

A Joint Committee consisting of the non EU members plus the European Commission (representing the EU) has the function of extending relevant EU Law to the non EU members.

Economy of Europe - Commonwealth of Independent States

The Commonwealth of Independent States (CIS) is a confederation consisting of 12 of the 15 states of the former Soviet Union, (the exceptions being the three Baltic states). Although the CIS has few supranational powers, it is more than a purely symbolic organization and possesses coordinating powers in the realm of trade, finance, lawmaking and security. The most significant issue for the CIS is the establishment of a full-fledged free trade zone / economic union between the member states, to be launched in 2005. It has also promoted cooperation on democratization and cross-border crime prevention.

Economy of Europe - Central European Free Trade Agreement

The Central European Free Trade Agreement (CEFTA) is a trade bloc of former Communist countries in central and eastern Europe. The countries that participated and the few that continue to participate in CEFTA have used this form of integration to help them prepare for full membership in the European Union.

Adapted from the Wikipedia article "Trade blocs", under the G.N U Free Docmentation License. Please also see http://en.wikipedia.org/wiki