This book examines the political economy of the European Union and the process of economic integration in Western Europe. It argues that a regional economy is rapidly taking shape and that, in the process, economic order in Europe is also changing. It identifies the distinguishing features of this new European economy and the main challenges for the future.This third, revised edition contains a full discussion of the enlargement of the EU and its recent incorporation of new nations. It examines aspects of this enlargement in a new chapter on regional and structural issues, with a complete explanation of EU regional policy. In addition, the coverage of monetary union issues is fully revised to include events up to the end of 1995, and provides a considered analysis of the probability of monetary union and its likely timescale. Finally, a new section on EU social policy enables students to receive an introduction to an increasingly important aspect of the EU impact on the lives of its citizens.