What does an Economic Union entail compared to a Common Market?

An Economic Union involves a deeper level of integration among member countries than a Common Market. Specifically, it entails the harmonization of macroeconomic and regulatory policies, which is a critical characteristic distinguishing it from a Common Market. In a Common Market, while there is free movement of goods, services, labor, and capital, member states retain their individual national policies regarding tariffs and regulations.

In contrast, an Economic Union requires that member countries coordinate their economic policies, including fiscal and monetary policies, as well as adherence to common regulations in various sectors. This integration aims to enhance economic stability and foster closer collaboration among member nations. The harmonization aspect ensures that countries not only adopt a collective approach to trade but also align their broader economic strategies, reducing disparities that might hinder smooth economic interactions.

The other options reflect components that might be present in either economic arrangements but do not capture the comprehensive integration characteristic of an Economic Union. For instance, free trade among member countries is a basic requirement shared with Common Markets and does not encapsulate the additional layers of policy coordination present in an Economic Union. Similarly, common tariffs are features of customs unions, not Economic Unions, while free movement of services across borders pertains to elements of the Common Market framework but lacks the depth of policy