The process of European integration was launched as early as May, 1950, by the proposal of France to establish “the first concrete foundation of a European federation” (EU official website. http://europa.eu.int/abc-en.htm). On April 8, 1965, the Treaty establishing a single Council of Ministers and a single Commission of the European Communities was signed in Brussels between the 6 original member countries of the three Communities: the European Coal and Steel Community (ECSC), the European Economic Community (EEC), and the European Atomic Energy Community (EURATOM). After four waves of accessions after that (1973: Denmark, Ireland and the United Kingdom; 1981: Greece; 1986: Spain and Portugal; 1995: Austria, Finland and Sweden), the EU now has 15 Member States. It is also preparing for the accession of 13 eastern and southern European countries.

2.Structure of EU.

The EU is run by the following five institutions:

(1). The European Parliament (directly-elected by the peoples of the Member States), which shares budgetary authority and the power to legislate with the Council and it exercises democratic supervision over the Commission.

(2). The Council of the European Union (known also as the Council of Ministers, which is composed of the governments of the Member States.), the consent of which the Commission must seek before it can implement policy.

(3). The European Commission, which formulates and implements policy. It is the Union's executive body and represents the Union on the international stage.

(4). The Court of Justice, which orders compliance with the law;

(5). The Court of Auditors, which implements sound and lawful management of the EU budget.

There are five other bodies in the institutional system:

(1). The European Economic and Social Committee, which expresses the opinions of organised civil society on economic and social issues;

(2). The Committee of the Regions, which expresses the opinions of regional and local authorities on regional policy, environment, and education;

(3). The European Ombudsman, which deals with complaints from citizens concerning mal-administration by an EU institution or body;

(4). The European Investment Bank, which contributes to EU objectives by financing public and private long-term investments;

(5). The European Central Bank, which is responsible for monetary policy and foreign exchange operations.

3.Functions of EU.

EU’s components, the three European communities of EEC, ECSC, and EURATOM, have functioned well in their individually focused aspects.

(1). Upon its establishment, the EEC was aimed to integrate the members’ economic resources other than coal and steel, into an economic union within which goods, labor, services, and capital will move freely. Common policies for foreign trade, agriculture, and transport will also be implemented. In the past, customs duties within EU have been abolished.

(2). The purpose of ECSC was to set up a common market for the member countries' resources of coal, steel, iron ore, and scrap.

(3). The role of EURATOM is to create the conditions necessary for the speedy establishment and growth of nuclear industries in the Community.

(4). In order to create a closer monetary cooperation leading to a zone of monetary stability in Europe, the European Council established the European Monetary System (EMS) in 1979. Later, the single market has opened new prospects for Economic and Monetary Union (EMU). The process of EMU includes the following three steps:

Stage One started on July 1, 1990. The European Community improved economic and monetary policy convergence and saw the removal of exchange controls in most member states.

Stage Two began on January 1, 1994. The European Monetary Institute (EMI) was created.