The political, social, and economic structures of Europe are complex and unmatched anywhere else in the world. Let's explore how these different pieces work together to create modern Europe.
The European Union
Europe is often equated with the European Union, a political and economic union between countries. In fact, not all countries in Europe are members of the EU, such as Switzerland and Norway. Switzerland in particular has a strong history and identity of independence and neutrality. The EU appears similar to a confederation, since member states retain sovereignty, but it has some federal elements too. The governmental structures of the EU are complex, but can be divided into executive, legislative, and judicial branches similar to other democratic systems (more details).
The Schengen Area
Named after the town in Luxembourg where the treaty was signed, the Schengen Area is a group of countries where border controls have been eliminated; people and goods can cross borders freely, similar to crossing between states in the United States. Countries that are not part of the EU, such as Switzerland, also participate in the Schengen Area treaty. Conversely, Ireland is part of the EU but not part of the Schengen Area.
EEA, EFTA, and EHIC
While the Schengen Area is mostly focused on the movement of people, the European Economic Area (EEA) includes EU and non-EU member countries and exists to promote the free movement of goods and trade. Moreover, the European Free Trade Association (EFTA) also includes Switzerland, which has its own set of bilateral agreements with the EU (instead of joining the EEA) for the same purposes. In addition to trade, the European Health Insurance Card allows citizens of any of these countries to access healthcare services in any other participating country.
Eurozone
Another barrier to trade and the movement of people and goods is a common currency. A subset of the EU countries, called the Eurozone, all share the Euro (€) as their common currency. More countries have committed to adopting the Euro in the years to come too.
The Future
The political, social, and economic structures of Europe have been constantly evolving since WWII. The future likely holds further integration, with the potential for the eventual formation of a federal state. With the great diversity of cultures and history of conflict in Europe, the EU and all of these structures are an impressive demonstration of cooperation and unity while retaining individual culture and autonomy in the member states.