Europe: Economy, Integration, and Current Issues

The European Union (EU) is a supranational organization -- one where member countries voluntarily share some authority above the national level -- built to integrate Europe's economies and reduce the risk of the conflicts that devastated the continent twice in the twentieth century. Most of its members share a single market, allowing goods, people, capital, and services to move freely across internal borders, and most (though not all) members also share a common currency, the euro. This integration has helped make Western and much of Central Europe among the most developed regions in the world by measures like GDP per capita and HDI.

Europe faces serious demographic pressure: many countries have low birth rates and aging populations, which strains pension systems and healthcare. This has made immigration -- both labor migration from within the EU and the arrival of refugees and migrants from outside it -- a major and often politically divisive issue, as countries balance labor needs against questions of integration and capacity. The United Kingdom's 2016 vote to leave the EU ("Brexit"), completed in 2020, is a notable example of a member state choosing to step back from supranational integration, trading some economic integration for restored national control over policies like immigration and trade. Europe's dependence on imported energy became especially visible after Russia's 2022 invasion of Ukraine disrupted natural gas supplies that many European countries had relied on, pushing several nations to accelerate a shift toward alternative energy sources and suppliers.