An economic union builds upon the elimination of the internal tariff barriers and the establishment of common external barriers. It seeks to coordinate economic and social policy within the union to allow free of capital and labor from country to country. Thus an economic union is a common market place not only for goods but also for services and capital.
The full evolution of an economic union would involve the creation of a unified central bank, the use of a single currency and common policies on agriculture, social services and welfare, regional development, transport, taxation, competition and mergers. A fully developed economic union requires extensive political unity, which makes it similar to a nation. The further integration of nations that were members of fully developed economic unions would be the formation of a central government that would bring together independent political states into a single political framework. The European community is approaching its target of completing most of the steps required to create a full economic union. Much remains including the creation of a single currency which is now targeted for implementation before year end 1999.