European Economy Today The European Union

Before the EU…

Before the EU there were many forms of currency in Europe.

Currency Controversy… Traveling to different countries was difficult because you had to exchange your money. Some countries’ money was worth more than others.

Solution: The Euro The European Union’s solution to the currency problem was to introduce the Euro, a currency that all members of the EU would use.

Before the EU, trade between countries was difficult. Some countries had powerful economies (Great Britain, France, Germany). Some countries had weak economies. It was expensive to trade with some countries. These are called trade barriers.

Trade Barriers Before the EU Before the EU, some countries had to pay a tax to sell their goods in another country. This tax is called a tariff. If Germany had a car they wanted to sell in France, they would have to pay a tariff. This added cost would make the cost of their car increase in France. It was more expensive to sell the car in France than Germany.

Trade Barriers Before the EU Before the EU, some countries would get upset with each other and refuse to trade. This is called an embargo. If Germany was mad at the United Kingdom, they could choose to not trade at all with them. They would impose an embargo.

Trade Barriers Before the EU Before the EU, some countries would not import goods because of their low quality. This is called a standard. If Lithuania produced cars that were not safe, the United Kingdom could choose to not trade with Lithuania because of its car standards.

Trading Within the EU Now, the EU members are guaranteed Free Trade. This means that the members can trade with each other without tariffs and embargos. However, countries can still set standards for imported goods.

The EU’s Global Power Now that the EU uses the same currency and trades freely, they have a lot of power in the global economy. The EU makes decisions about trading with other countries (like America and China) based on whether or not it will benefit EU countries. Working together makes the EU powerful.

The EU’s Global Power

Benefits of the EU 1.One currency allows travelers and businesses to use the Euro, instead of exchanging money. 2.Free trade allows countries to easily trade with each other without trade barriers like tariffs and embargos. 3.The EU has a lot of power in the global market because they work together to make decisions that benefit their members.