Abstract
The idea of creating a huge integrated area in Europe, known as the European Economic Community, was born in 1954. Almost half a century later, the European Monetary Union became the most well-known example of financial and monetary integration in the world. According to Bela Belassa, a Hungarian economist, who is one of the most productive students of economic integration, the five levels of economic integration can be distinguished as follows: Firstly, by establishing a Free-trade union where tariffs and trade restrictions are abolished among the participants, while each country retains its own tariffs against non-member states. Secondly, a Customs union should be set up that aims at equalization of tariffs in trade with non members. Thirdly, a Common market which enables mobility of production factors within the states is needed. The fourth level is the establishment of an Economic union that endeavors to achieve harmonization of the economic policies of the state members.
