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Q.(a) Assess the economic importance of the European Union.

(OR)
(b) Analyse the role of the European Union as a supranational organisation with the help of examples.
CBSECBSE Class XII Board 2024Subjective· 4mImportance★★★★★
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Part (a): The EU's economic importance rests on its single market with free movement of goods, services, capital and people, its common currency the euro, and its standing as one of the world's largest economies and trading blocs.

Part (b): The EU is a supranational organisation because its institutions can make binding decisions over member states — shown by competition fines, binding Court of Justice rulings, and the common euro managed by the ECB.

The European Union is one of the most significant economic actors in the world, and its economic importance can be assessed on several counts.

At its heart lies the single market, which allows goods, services, capital and people to move freely across member states. By removing tariffs and internal barriers, this integration has lowered transaction costs, created economies of scale, and dramatically increased trade among European countries. A manufacturer can source parts in one member state, assemble in another, and sell tariff-free across the continent.

The EU also has a common currency, the euro, used by many members and managed by the European Central Bank. The euro removes exchange-rate risk within the eurozone, facilitates cross-border investment, and has become one of the world's most important reserve currencies, second only to the US dollar.

Collectively, the EU is among the largest economies and biggest trading blocs in the world. Because it negotiates trade as a single unit rather than as separate nations, it commands bargaining power that dwarfs what any individual member could exercise. Its large share of world trade allows it to adopt a more assertive posture in international economic negotiations and to shape global standards that companies everywhere must follow.

Note

This economic weight also underpins the EU's wider political and diplomatic influence — economic power gives it leverage in world affairs.

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