The evolution of the European Union (EU) from a regional economic agreement among six neighboring states in 1951 to today's supranational organization of 25 countries across the European continent stands as an unprecedented phenomenon in the annals of history. Dynastic unions for territorial consolidation were long the norm in Europe. On a few occasions even country-level unions were arranged - the Polish-Lithuanian Commonwealth and the Austro-Hungarian Empire were examples - but for such a large number of nation-states to cede some of their sovereignty to an overarching entity is truly unique. Although the EU is not a federation in the strict sense, it is far more than a free-trade association such as ASEAN, NAFTA, or Mercosur, and it has many of the attributes associated with independent nations: its own flag, anthem, founding date, and currency, as well as an incipient common foreign and security policy in its dealings with other nations. In the future, many of these nation-like characteristics are likely to be expanded. Thus, inclusion of basic intelligence on the EU has been deemed appropriate as a new, separate entity in The World Factbook. However, because of the EU's special status, this description is placed after the regular country entries.
Following the two devastating World Wars of the first half of the 20th century, a number of European leaders in the late 1940s became convinced that the only way to establish a lasting peace was to unite the two chief belligerent nations - France and Germany - both economically and politically. In 1950, the French Foreign Minister Robert SCHUMAN proposed and eventual union of all Europe, the first step of which would be the integration of the coal and steel industries of Western Europe. The following year the European Coal and Steel Community (ECSC) was set up when six members, Belgium, France, West Germany, Italy, Luxembourg, and the Netherlands, signed the Treaty of Paris. The ECSC was so successful that within a few years the decision was made to integrate other parts of the countries' economies. In 1957, the Treaties of Rome created the European Economic Community (EEC) and the European Atomic Energy Community (Euratom), and the six member states undertook to eliminate trade barriers among themselves by forming a common market. In 1967, the institutions of all three communities were formally merged into the European Community (EC), creating a single Commission, a single Council of Ministers, and the European Parliament. Members of the European Parliament were initially selected by national parliaments, but in 1979 the first direct elections were undertaken and they have been held every five years since. In 1973, the first enlargement of the EC took place with the addition of Denmark, Ireland, and the United Kingdom. The 1980s saw further membership expansion with Greece joining in 1981 and Spain and Portugal in 1986. The 1992 Treaty of Maastricht laid the basis for further forms of cooperation in foreign and defense policy, in judicial and internal affairs, and in the creation of an economic and monetary union - including a common currency. This further integration created the European Union (EU). In 1995, Austria, Finland, and Sweden joined the EU, raising the membership total to 15. A new currency, the euro, was launched in world money markets on 1 January 1999; it become the unit of exchange for all of the EU states except the United Kingdom, Sweden, and Denmark. In 2002, citizens of the 12 euro-area countries began using the euro banknotes and coins. Ten new countries joined the EU in 2004 - Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia, and Slovenia - bringing the current membership to 25. In order to ensure that the EU can continue to function efficiently with an expanded membership, the 2003 Treaty of Nice set forth rules streamlining the size and procedures of EU institutions. An EU Constitutional Treaty, signed in Rome on 29 October 2004, gave member states two years to ratify the document before it was scheduled to take effect on 1 November 2006. Referenda held in France and the Netherlands in May-June 2005 that rejected the constitution suspended the ratification effort. Despite the expansion of membership and functions, "Eurosceptics" in various countries have raised questions about the erosion of national cultures and the imposition of a flood of regulations from the EU capital in Brussels. Failure by all member states to ratify the constitution or the inability of newcomer countries to meet euro currency standards might force a loosening of some EU agreements and perhaps lead to several levels of EU participation. These "tiers" might eventually range from an "inner" core of politically integrated countries to a looser "outer" economic association of members.