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What Is the European Union? Members, Purpose and How It Works

The EU is a treaty-based union of 27 countries, not a country or another name for Europe. Here is how its goals, institutions, membership and authority work.
From TheFinanceBase Team4 min to read
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The European Union (EU) is a treaty-based union of 27 countries that cooperate on shared goals and have given defined powers to common institutions. It is not a country and is not the same as Europe, the broader geographic region. EU membership also does not automatically mean using the euro.

What is the European Union?

The EU is a political project and legal organisation built through treaties. Its member states cooperate in areas they have agreed to handle together, while retaining authority over matters not conferred on the EU. The treaty framework, rather than a general claim to govern Europe, defines what EU institutions can do.

Europe is a geographic region; the EU is a specific membership-based union within it. Some European countries are not EU members, and the EU should not be described as the continent or as a single country. The European Union’s country overview lists 27 member states, a figure verified on 2 October 2026.

What are the EU’s goals and values?

The treaties set out the EU’s aims, including promoting peace and citizens’ well-being, establishing an internal market, supporting sustainable development and social progress, protecting the environment, combating exclusion and discrimination, and pursuing economic and monetary union. They also include an area of freedom, security and justice. These are objectives the EU is meant to pursue, not a guarantee that every aim has been fully achieved.

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The EU’s foundational values include human dignity, freedom, democracy, equality, the rule of law and human rights. The legal framework for its aims and values is described in the EU treaties’ aims and values summary. The EU’s official aims and values page also states that the EU received the 2012 Nobel Peace Prize for advancing peace, reconciliation, democracy and human rights in Europe.

How many countries are in the EU, and which use the euro?

The EU has 27 member states. As of the European Union’s live overview consulted on 2 October 2026, 21 EU countries use the euro as their official currency. Both are live figures and may change; the euro is not the currency of every EU member. The official country overview is the source for these counts.

EU membership and euro-area membership are related but distinct. A country can be an EU member without using the euro as its official currency, so the two groups should not be treated as interchangeable.

How did the EU develop?

European integration began with post-war cooperation among Belgium, France, Germany, Italy, Luxembourg and the Netherlands. The European Union took shape in 1992 through the Maastricht Treaty process, building on earlier communities and successive treaties. The United Kingdom left the EU on 31 January 2020.

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The EU’s official history overview outlines that development. The union’s current form is the result of treaty changes over time, rather than a single founding event that created all of its present institutions and responsibilities at once.

How does the EU make decisions?

The treaties establish seven EU institutions. Four are central to political direction and decision-making: the European Parliament, the European Council, the Council of the European Union and the European Commission. They have different roles; “Brussels” is not one decision-maker.

Institution Main role
European Parliament Represents EU citizens and, in most cases, acts as a legislator with the Council of the EU.
European Council Brings together heads of state or government to set the EU’s general political direction; it generally does not make laws.
Council of the European Union Brings together national ministers by policy area and, in most cases, acts as a legislator with Parliament.
European Commission Develops and coordinates policy and law-making.

The names of the European Council and the Council of the European Union are easy to confuse. The first consists of national leaders setting broad direction; the second consists of ministers meeting on specific policy areas. The full list of seven institutions also includes the Court of Justice of the European Union, the European Central Bank and the European Court of Auditors. Each institution acts within powers and procedures set by the treaties. See the EU’s institution profiles for their official descriptions.

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What limits the EU’s authority?

EU institutions can act only in areas where member countries have granted authority through the treaties. The EU has exclusive powers in some areas, shares powers with member states in others, and can support or coordinate national action in additional fields. It does not have general authority over every issue handled by national governments.

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  • Conferral: EU powers must come from authority granted in the treaties.
  • Subsidiarity: In shared areas, EU-level action is appropriate only when the objective can be achieved more effectively at that level than by national action.
  • Proportionality: EU action must not go beyond what is necessary to achieve the treaty objective.

The European Commission explains these principles in its overview of applying EU law.

What this means for residents and consumers

For everyday life, the EU is best understood as a system for cooperation on matters its members have assigned to it, including the internal market and common policy objectives. The details depend on the relevant treaty powers and laws; membership alone does not mean every rule or public service is set centrally by the EU. Likewise, having the euro depends on a country’s currency arrangements, not simply on being in the union.

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