From storied Malta in the heart of the Mediterranean Sea to the remote northern reach of Finland in the Arctic Circle and from Ireland’s emerald perch on the Atlantic wall to the Black Sea coastline of Bulgaria, since World War II Europe has embraced an unprecedented spirit of voluntary unification.

The European Union (EU) has been a grand experiment in breaking down the barriers between nations and achieving prosperity through economic integration. Yet the process has been characterized by friction, contradictions, and competing visions of the goals of union.

The most recent example of tensions within the EU were on full display when fireworks lit up the sky and Beethoven’s “Ode to Joy” (the EU anthem) rang through the ancient cobbled streets of Zagreb on July 1, 2013 welcoming Croatia as the 28th member of the EU.

Even as states such as the United Kingdom contemplate leaving the EU altogether, the president of the European Council “wholeheartedly” welcomed Croatia’s citizens declaring membership would “change the life of the nation for good.”

Croatia’s president, Ivo Josipovic, replied that the “accession of Croatia to the European Union is confirmation that each of us belongs to the European democratic and cultural set of values.” The celebration of shared values and a common future was nevertheless lukewarmly greeted by the 42 percent of Croatians unimpressed by joining the EU.

Europe’s current economic crisis and political disagreements have renewed debate about the meaning of the EU. And many Europeans have voiced concern that the sacrifices are greater than the benefits of membership.

The EU project has wrestled from its very beginnings with tensions between national sovereignty and greater integration.

Greece’s financial meltdown, stagnating economies in southern and western Europe, and the United Kingdom’s proposed referendum to end its 40-year membership dominate the headlines. Yet such developments are nothing new.

Euro-skeptics—those who reject all or part of ever-greater European integration—have long challenged the assertion made by Jean Monnet, the French businessman considered by many to be the modern father of the EU, that “there is no future for the people of Europe other than in Union.” Born from the ashes of World War II, the continent’s most destructive war, the idea of European unity grew in fits and starts through the Cold War.

Amid new realities of sovereign debt crises and referendums on continued membership, the EU now faces some of the most daunting challenges to its core agenda of economic stability and regional harmony.

The EU has transformed its goals and structures in dramatic and unpredicted ways over the course of its existence: from a coal and steel community of six states to a single market and global trading bloc of 28 states; and from an effort to foster peace and prosperity to an institution that strives to define and enhance European values.

As it faces its current challenges and discussions of disunion, the EU will once again redefine itself.

Peace through Business

After World War II, European leaders looked for new ways to promote regional peace and security, hoping above all else to avert another cataclysmic war.

The idea of European integration was not entirely new to the post-Second World War era.

Over the centuries, many had attempted to unify large parts of Europe by force, as in Napoleon’s rapid conquest of much of the continent in the early 19th century. But European leaders in the post-World War II period chased the idea of voluntary integration and peaceful transnational bonds.

Various schemes for regional unification later in the 19th century such as the pan-Germanic and pan-Slavic movements garnered some intellectual, political, and popular support but rarely amounted to more than an academic exercise.

In the volatile decades between the World Wars, calls for a wider pan-European concept grew louder. The 1923 publication of Count Richard von Coudenhove-Kalergi’s Paneuropa launched a Pan-European Movement that captured the support of many influential public figures, including Albert Einstein and Winston Churchill.

Despite a reasoned intellectual foundation and moderate support, the idea of a politically and economically unified Europe stumbled over the tension between national sovereignty and collective security. The utter devastation of the Second World War and the need for rapid rebuilding and global competitiveness helped to overcome those tensions.

Robert Schuman articulated the sweeping, utopian goals of the EU’s founders in a speech in Strasbourg in 1949.

“We are carrying out a great experiment, the fulfillment of the same recurrent dream that for ten centuries has revisited the peoples of Europe: creating between them an organization putting an end to war and guaranteeing an eternal peace … The European spirit signifies being conscious of belonging to a cultural family and to have a willingness to serve that community in the spirit of total mutuality, without any hidden motives of hegemony or the selfish exploitation of others.”

Believing that countries with integrated economies would find no benefit in going to war with one another, European statesmen after World War II sought an economic as much as a political solution to continental conflict. This new approach to collective security recognized that Europe’s more recent history had been dominated by an ongoing contest for the resources that drove the industrial economies of Western and Central Europe.

The first small step in the thousand-mile journey to bring a European union to life came in 1952, when the European Coal and Steel Community (ECSC) sprang to life. It bound together the coal and steel industries of France, West Germany, Belgium, the Netherlands, Luxembourg, and Italy—the six founding countries of what is now the EU.

Their newly formed economic bonds based on coal and steel eliminated temptation to territorial conquest and encouraged cooperation and mutual respect. The Schuman Declaration forthrightly acknowledged that “world peace cannot be safeguarded without the making of creative efforts proportionate to the dangers which threaten it.”

The ECSC was a very small beginning to the EU, but actually its limited nature rendered it politically possible.

The proponents of broader European integration realized that they could not unite everything all at once without raising concerns over sovereignty. Bringing together selected industries in a handful of interested nations was a necessary stepping stone to an integrated, if not entirely unified, Europe.

Within its first decade, steel production in the ECSC countries increased 75 percent and industrial production rose by 58 percent. Joint labor and welfare policies also improved the working and living conditions of coal miners, suggesting potential in areas beyond solely economic policies.

Growth and Growing Pains

Success and prosperity prompted ECSC members to integrate more fully additional aspects of their economies and to expand the number of member countries.

In 1957, the six members signed the Treaties of Rome establishing the European Economic Community (EEC) and the European Atomic Energy Community (Euratom). The EEC sought to establish a common market among its members while Euratom encouraged the peaceful use of atomic energy.

The Rome Treaty seemed to acknowledge Schuman’s observation that Europe would “be built through practical achievements that first establish a sense of common achievement.” Throughout the 1960s, this sense of common achievement was hammered out through shared trade and agriculture policies, and in 1968 all customs barriers between the six EEC members were abolished.

As this deeper integration unfolded, other West European states began to acknowledge the advantages associated with the common-market model. Denmark, Ireland, and the United Kingdom joined in 1973, bringing the total number of EEC member states to nine.

While the 1960s saw the growth of common agricultural and trade policies, the 1970s witnessed the implementation of regional social and environmental policies. EEC members increasingly recognized the need for a common monetary policy over the course of the decade.

In 1979, the EEC introduced the European Monetary System (EMS), a first step toward establishing joint fiscal policies and stabilizing exchange rates among member states. The new monetary system demanded greater institutional and bureaucratic support, such as the European Council and the European Regional Development Fund.

These structures proved helpful as the EEC continued to expand, first in 1981 with the inclusion of Greece and then again in 1986 will the addition of Spain and Portugal. In 1986, the twelve member states signed the Single European Act, becoming simply the European Community (EC).

This period of gradual expansion, however, was not universally embraced. Wariness and opposition surfaced, especially within the United Kingdom.

Despite Margaret Thatcher’s claim that Britain’s destiny was “in Europe, as part of the Community,” the United Kingdom has long struggled to reconcile such rhetoric with widely-held concerns over the loss of national sovereignty. As the EC moved ever closer in the 1980s to adopting a single currency, the UK laid the foundation for an ‘opt-out’ clause that has permitted EU membership without the requirement to join the monetary union of the continent.

A Watershed: 1989, the EC, and the Maastricht Treaty

Just three short years after the Single European Act, shockwaves emanating from the demolition of the Berlin Wall in 1989 were felt around the world.

The unexpected end of the Cold War was simultaneously a moment of promise and apprehension. The fledgling EC confronted the problem of how to respond to economically and environmentally devastated states immediately to its east.

Once an integral part of Europe, this region had been cut off, abused, and isolated for the same half-century that had seen the birth and gradual expansion of the EC. While EC members contemplated the meaning of 1989 with trepidation, the newly liberated states of Eastern Europe identified membership in the European “club” as a necessary objective for prosperity and security.

EC membership symbolized a “return” to Europe, but more importantly for East European policy-makers, it provided access to much-needed development funds. Decades of communist rule had neglected infrastructure development and stunted economic growth. East European states identified EC membership as a necessary component of their various economic recovery plans.

Suddenly, the European project took on a new meaning in different parts of Europe. If the EU had begun with the promise of forging peace and stability from the ashes of World War II, it now signaled acceptance and rehabilitation for those East European countries that had found themselves caught in the Cold War.

While Eastern Europe wrestled with the immediate challenges post-Communism, the EC tackled other important issues.

In December 1991, EC members signed the Maastricht Treaty, which paved the way for the establishment of the Common European Market and the creation of the European Union (EU) to replace the EC in 1993. Despite concerns that the treaty took too much power out of the hands of individual member states, two years later, the EU grew to fifteen members with the inclusion of Austria, Finland, and Sweden.

The Maastricht Treaty also set forth ambitious goals. It sought the creation of a monetary union by the end of the century and the historic introduction of a single European currency: the euro (€). It also pushed forward a common foreign and security policy for all member states.

In addition to serving as a symbol of European identity, the euro was supposed to promote greater economic stability and increase market efficiency. By adopting the common currency, member states were agreeing to keep budget deficits below 3 percent of GDP, maintain a debt ratio of less than 60 percent of GDP, and keep interest rates close to the EU average.

By overseeing compliance, the European Central Bank (ECB) could take monetary policy out of the hands of politicians at the national level and make trade within the Eurozone (states adopting the euro) easier and less expensive. Former French Finance Minister Dominique Strauss-Kahn argued that the euro was “a tool to help us … resist irrational shifts in the market” that were detrimental to all.

Opponents to the euro doubted that all member states could abide by the rules and regulations and feared that improper regulation by the ECB could lead to high unemployment and periods of intense inflation.

The United Kingdom and Denmark also asserted that the EU was a political, not an economic project and that a common currency was a serious infringement on national sovereignty. As a result, both states were allowed to opt out of the euro while still maintaining their EU membership—an exception not afforded any other member state.

Despite these concerns and a belief that the recent economic crisis vindicates them, the euro has given its proponents cause for celebration. Since its introduction in 1999, the euro has become a major world currency, it has gained strength as a reserve currency, and many states around the globe now peg their own currencies to the euro. Hence, EU Commission President José Manuel Barroso’s promise to “defend the euro, whatever it takes.”

Beyond the euro, the EU also enabled European citizenship, complete with commonly accepted rights and privileges, to accompany citizens as they travelled across the borders within the Union.

EU Commission President Jacques Delors praised Maastricht, “We’re not just here to make a single market, but a political union,” and German Chancellor Helmut Kohl declared, “The European Union Treaty … will lead to the creation of what the founding fathers of modern Europe dreamed of after the war, the United States of Europe.”

In shifting control over currency and monetary policy, foreign policy, and citizenship to the trans-national EU, the Maastricht Treaty represents an almost unprecedented voluntary shift of sovereignty from individual countries to a larger, cross-continental union of peoples.

Anatomy of a Union

In the process, Maastricht also exacerbated concerns over the balance of power between the sovereign member states, the citizens of those sovereign states, and the EU.

If greater union was to achieve the objectives of its architects, it had to strike the right balance between the different levels of governance involved at the national and supranational levels. The structure of the EU had to ensure that the political rights of its citizens and member states were maintained and their voices heard without devolving into a chaos of competing agendas.

The European Union implemented after Maastricht is best described as an institutional triangle based in Brussels, Belgium. The three corners of this triangle—the European Parliament, the Council of Ministers, and the European Commission— help disseminate power between the EU, member states, and citizens.

EU citizens elect representatives to the European Parliament. Each state appoints ministers to the Council of Ministers, the decision-making institution of the EU. The European Commission is the executive body of the EU and represents the interests of the Union as a whole.

The Commission typically proposes legislation, which is then passed by the Parliament and Council. Member states implement the legislation and the Commission ensures compliance. Together with the European Court of Justice, this triangle produces and enforces EU policies.