What's EU? Why will EU Eventually DISSOLVE? | Investing 101 ANIMATION

The European Union (EU) is a political and economic union of 28 member states that are located primarily in Europe. Including the UK, Germany, and France. So Why was the EU formed? Let’s look back at the situation before the EU was formed and you will understand why countries are exiting the EU today.
Before forming the EU, due to the different law systems and policies between the countries, the people in Europe has a lot of hassles in visiting each other, moving to another country is even more difficult.

Jack is an Italian and he has a friend Francis which lives in the UK. Francis has a better well-off living in the UK and Jack really wishes to move to the UK as well. Even just to work there not having a citizenship. However, the UK would not let anyone comes into the country easily. There is no trust that ties between the two countries and it is difficult to even just visiting each other let alone for immigration. Besides the trading between the countries has a lot of troubles as well. Jack could not move to live in the UK and he could not sell his home-made spaghetti to the UK as well because they are going to be taxed heavily. Of course, this situation is actually mutual for both countries, which means the products made in the UK such as luxury cars would like to be exported to Italy, they are going to be taxed heavily as well. Due to the trade protection policies, people in both countries need to pay higher prices for imported goods, some of those are daily needed therefore influencing their daily lives directly.

Some countries were weak in protecting their currencies and policies as well before forming the EU. Take the UK as an example, the pound had been attacked by Soros before the EU has formed and the UK took their last breath to protect it. If it happens after forming the EU, the situation would be so much different. That’s why the EU was formed in 2002.

The EU brings mainly five advantages for the member states. First, Up to a population of 600 million people of the member states could have the freedom to visit study and even immigrate to other member states.
Second, the forming of the EU creates a lot of jobs, so far there are nearly 3.5 million of work position created. Third, the abolished of the trade protection lower the prices of the imported goods and the people would benefit from it. Fourth, the member states especially those smaller countries could, therefore, improve their influence now and become more powerful in bargaining with other countries in trades and other affairs. Also, could avoid the probability of violence happening in their regions. Fifth, the Union of their economic systems could make them stronger against the impact of the currency and economic shocks.

One thing must be noted that is the European Union does not equal to Eurozone, Jack once travelled to other European countries and he has a great time there in Germany, Italy and France. However, when he was visiting Denmark he found out that Denmark is not using Euro as their settlement currency and this bothered him quite a lot. There are 28 member states in the European Union and only 19 of them are using Euro. The Euro is managed by the European Central Bank. Today, the UK and Denmark are still using their own currencies respectively as their settlement currencies instead of the Euro.

In 2016 the UK has decided to leave the EU, that is so called the Brexit. Francis as a British is very supportive of this idea. The EU has so many advantages as mentioned before why would people still want to leave? There are several reasons for it. First, the members need to pay quite a lot of membership fee to the EU to help the poorer member state such as Greece developing their economic, mainly help to build their infrastructure. So leaving the EU could lessen their financial burden. Actually it's always good to be able to help others, however, the EU has a lot of restrictions that impose on the member states. Those restrictions impose on different fields, from trading, health care, laws, housewares, stationery to food. Even the shapes/camber angles of the bananas are being restricted to a specific standard. Thus leaving the EU allows you to have your own decision making based on your will.
Lastly, the new immigration rules lead to a lot of refugees to flood into the UK which becomes a burden to the country. on top of that the negative information that is covered by the media, British resident such as Francis feels like being threatened and they have decided to leave the EU as a result, they will lose the advantages they have had when they joined the EU as well. It is pretty normal the country would weigh out the pros and cons making any decisions. If you are always paying more than gaining, it is no wonder you will quit the game at the end of the day.

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