What is the European Union? The European Union (EU) is a group of 28 countries that operates as a cohesive economic and political block. Nineteen of the countries use the euro as their official currency. The EU grew out of a desire to form a single European political entity to end the centuries of warfare among European countries that peaked with World War II. The European Single Market was established by 12 countries in 1993 to ensure the four freedoms: the movement of goods, services, people and money.

European Union Breakdown The EU had its beginning in the European Coal and Steel Community, which was founded in 1950 and had just six members: Belgium, France, Germany, Italy, Luxembourg and the Netherlands. It became the European Economic Community (EEC) in 1957 under the Treaty of Rome, and subsequently became the European Community (EC). The early focus of the Community was a common agricultural policy as well as the elimination of customs barriers. The EC first expanded in 1973 when Denmark, Ireland, the United Kingdom, Greece and Spain joined.

Continued The Maastricht Treaty took effect on Nov. 1, 1993, and the EC was replaced by the EU. The Treaty provided for the creation of the euro, which is intended to be the single currency for the EU. It debuted on Jan. 1, 1999. Denmark and the United Kingdom negotiated "opt out" provisions that permitted them to retain their own currencies. In 2014, the GDP of the EU totaled $13.8 billion, which is larger than that of the United States.

European Union Crisis The EU and the European Central Bank has struggled since the global financial market collapse of 2008 to deal with very high sovereign debt and collapsing growth in Portugal, Ireland, Greece and Spain. Greece and Ireland received financial bailouts from the community in 2009, which were accompanied by fiscal austerity. Portugal followed in 2011, along with a second Greek bailout. Multiple rounds of interest rate cuts and economic stimulus failed to resolve the problem. Northern countries such as Germany, the United Kingdom and the Netherlands increasingly resent the financial drain from the south.

What is Brexit? A popular term that combines the words Britain and Exit. It’s used to described Britain's departure from the European Union.

The United Kingdom Referendum The UK has voted to leave the European Union. It is scheduled to depart at 11pm UK time on Friday 29 March, 2019. Now, how much the UK owes the EU, what happens to the Northern Ireland border and what happens to UK citizens living elsewhere in the EU and EU citizens living in the UK must be determined. The UK wants to talk about future trade relations - and a plan for a two year "transition" period to smooth the way to post-Brexit relations.

Article 50 A plan for any country that wishes to exit the EU. It was created as part of the Treaty of Lisbon - an agreement signed up to by all EU states which became law in 2009. Before that treaty, there was no formal mechanism for a country to leave the EU. It states that any EU member state may decide to quit the EU, that it must notify the European Council and negotiate its withdrawal with the EU, that there are two years to reach an agreement - unless everyone agrees to extend it. The exiting state cannot take part in EU internal discussions about its departure.

Brexit: Currency Impact The pound weakened sharply, and remains substantially below its pre-referendum level. One effect of this reduction is higher shop prices. In 2016, the pound sterling fell to its lowest level against the US dollar since 1985, marking the pound down 10% against the US dollar and 7% against the euro. The drop from $1.50 to $1.37 was the biggest move for the currency in any two-hour period in history. Inflation currently stands at 1.8%, up from 1.6% earlier this year.

Brexit: Economic Impacts A survey by the Institute of Directors suggested that two-thirds of businesses believed that the outcome of the referendum would produce negative results as well as falls in the value of sterling and the FSTE 100 index. The UK-based economic forecasting group EY ITEM club suggested the country would experience a "short shallow recession" and cut its economic growth forecasts for the UK from 2.6% to 0.4% in 2017, and 2.4% to 1.4% for 2018. Interest rates have been kept at at 0.5%, where they have been since May 2009.

Brexit: Trade Impacts Prior to the referendum, the UK treasury estimated that leaving the EU would be bad for the UK's trade. The Institute for Fiscal Studies published a report funded by the Economic and Social Research Council which warned that Britain faced some very difficult choices as it couldn't retain the benefits of full EU membership whilst restricting EU migration. The reduced economic growth would cost the UK around £70 billion, more than the £8 billion savings in membership fees.

Brexit: Societal Impact The most recently published unemployment figures show there were 31.7 million people in work and 1.65 million people unemployed. UK house prices accelerated in February rising by 4.5% in a year, according to the Nationwide, and by 5.1%, according to the Halifax. Net migration to the UK dropped to 273,000 in the year to September 2016, down 49,000 from the previous year. Wages have been growing faster than inflation in recent months, though the gap is narrowing, leading to warnings of squeezed incomes.