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The concept of a common European trade area was first proposed around 5 years after the World War II by France and Germany. The purpose for the creation of such a union was to create a peaceful region in Europe, that collaborated in economic terms. Later in 1957, the Treaty of Rome was signed by six founding members: Belgium, France, Germany, Italy, Luxembourg, and the Netherlands, thus creating the common European market. In 1972 Denmark, Ireland and the United Kingdom joined. Seven years later, the first European Parliament was created. In 2009, the EU countries signed the Treaty of Lisbon, which increased the powers of the European Parliament. Moreover, the treaty gave more powers to the EU on issues of border control, immigration, judicial cooperation in civil and criminal matters, and police cooperation.

The EU functions based on rule of laws agreed on by all member countries, which together run the four key EU institutions. These institutions are: 1. The Council of the European Union– It consists of the Heads of State or Government of the EU Member States and is responsible for setting the policies and the new legislation. 2. The European Parliament –where the laws proposed by the Council are debated and approved. It represents the EU’s citizens and the MEPs are directly elected by citizens. 3. The European Commission – Represents the interests of the EU as a whole and is responsible for executing the laws. 4. The Court of Justice– interprets EU laws to make sure they are applied in the same way in all EU countries. It also settles legal disputes between national governments and EU institutions.

The EEAis a Single Market of member states, which have to implement all EU legislation in the field of the Single Market. In terms of membership, the sole difference between the EU and the EEA is that the latter consists of three more countries, which are: 1. Iceland 2. Liechtenstein 3. Norway While the purpose of the EEA is to extend the EU’s internal market to countries in the European Free Trade Area (EFTA), the EEA members are not obliged to implement EU policies on common agriculture and fisheries, customs union, the common trade policy, foreign and security policy, etc.

EFTA stands for the European Free Trade Association, which has four member states. These members are: 1. Iceland 2. Liechtenstein 3. Norway 4. Switzerland None of the EFTA members are part of the EU.However, EFTA has negotiated access to the EU single market and has partially accepted EU laws relating to single market access. The EFTA doesn’t have EU style common policies, such as agriculture, fishing, transport and regions and it has no plans for the sort of economic and political integration implied by Eurozone membership.

While there are 27 European Union countries, the Schengen Areaconsists of 22 members of the EU and the four EFTA countries. The EU is more about internal tariff-free single market and ensures the free movement of all EU citizens between the 27 countries. Whereas the Schengen area provides foreign nationals with access to the member states upon meeting the criteria set by the Schengen countries. The Republic of Ireland is the only European Union country that refused to sign the Schengen Agreement. On the other hand, EU members, Cyprus, Bulgaria, Romania and Croatia — have not yet been admitted to the Schengen Area due to technical or internal issues.

The Eurozone is a subgroup of the European Union, consisting of the member states that use the same currency, the Euro. These countries are as follows: 1. Austria 2. Belgium 3. Cyprus 4. Estonia 5. Finland 6. France 7. Germany 8. Greece 9. Ireland 10. Italy 11. Latvia 12. Lithuania 13. Luxembourg 14. Malta 15. The Netherlands 16. Portugal 17. Slovakia 18. Slovenia 19. Spain