The endangered European Union

Britain's vote to leave the European Union shocked Europe, and has other countries thinking about quitting, too. Here's everything you need to know about the EU:

What does the EU do?

The union has dramatically changed how — and where — Europeans live and work. The EU's core principles are the "four freedoms" — the free movement of goods, services, people, and money. Citizens of the 28 member countries can live and work anywhere in the union, confident that they have access to health insurance and social benefits, and the same legal rights they enjoyed in their birth countries. EU citizens still vote for their own national governments, but every five years they vote directly for their representatives to the European Parliament. The bureaucracy in Brussels is largely anonymous and invisible, but the hundreds of thousands of regulations it issues touch every aspect of life, from requiring booster seats for 11-year-olds to banning vacuum cleaners that use too much electricity to a requirement that bananas sold in stores be free from "abnormal curvature."

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How does it govern?

In a cumbersome, complex manner. France was a major player in forging the EU, and its legacy of overlapping layers of bureaucracy permeates the organization. Legislation is proposed by the executive body, the European Commission, which is made up of 28 representatives, one appointed by the government of each member state. Those bills are amended and voted on by the European Parliament, which is elected by the people. Then the amended laws must be approved by the Council of Ministers, which consists of one government cabinet member from each country, with votes weighted by population. When discrepancies arise between EU law and national laws, the European Court of Justice has the final say.

Why do critics call it undemocratic?

For several reasons. First, only the Parliament is directly elected, and the Parliament has little power. Then, too, the EU court can strike down any member state's law — for example, it overruled a British decision to bar entry to a French national who had terrorist ties, and it overturned a German law making it easier to fire workers under 25. And the 2007 Lisbon treaty has made the entire apparatus even more remote from the people. It added an EU president and a foreign minister, neither of whom is directly elected. It also made the EU's Charter of Fundamental Rights legally binding on all states, forcing changes in national law across the board, and abolished the crucial rule that all decisions by the Council of Ministers must be unanimous. Now the EU can pass a law strongly opposed by a member state, yet that state's citizens must abide by it.

How does the euro work?

Not all EU countries adopted the common currency — the U.K. and Denmark did not, for example — but among those that do use the euro, there is a huge imbalance between poor and rich countries. The European Central Bank controls monetary policy, so no Eurozone state can devalue its currency — which some need to do to reduce sovereign debt. After the global financial crisis hit in 2008, several countries, notably Greece, Ireland, and Portugal, fell deeply into debt they could not pay off, and the richer EU countries had to bail them out to the tune of hundreds of billions of dollars. That caused resentment in Germany and other more affluent countries. Just when the EU got the euro under control, though, a greater threat to unity emerged: the migrant crisis.

How many migrants have come?

The massive influx last year of more than 1 million refugees from Syria, Afghanistan, Iraq, and North Africa poses an enormous challenge to the very foundation of the EU: the free movement of people. Last fall, after a summer of heart-wrenching images of drowned toddlers and desperate families pouring into a collapsing Greece, German Chancellor Angela Merkel announced that her country would accept about 1 million migrants. That encouraged more people to flee war-torn, chaotic countries. First Greece and Italy, then Hungary and Austria were overwhelmed by crowds marching toward the promised land of Germany. Faced with this chaos, Bulgaria, Hungary, Austria, and Slovenia reinstated border controls, and far-right, xenophobic parties gained strength across the Continent. That backlash intensified after a series of violent attacks on Germans by recent Muslim immigrants, including a mass sexual assault on hundreds of women in Cologne last New Year's Eve. Fear of unchecked immigration was a major factor in Britain's decision to exit the EU — and the U.K. may not be the only country to go.

Could the union fall apart?

Not in the near future, but the migrant issue has caused large cracks. Merkel managed to force through a quota system to resettle the migrants across the EU, but did so against fierce opposition from Poland, Hungary, and the Czech Republic. Hungary has scheduled a referendum on whether to comply with its quota, and anti-EU movements have gained momentum in the Netherlands, France, Sweden, and other countries. "The concept of Europe that our founding fathers had," said French Prime Minister Manuel Valls, "is in very grave danger."

Birth of the union

After two devastating world wars, European leaders sought to bind their countries' economies together to make war unthinkable. Winston Churchill envisioned what he called a "United States of Europe" that would "re-create the European Family, or as much of it as we can, and provide it with a structure under which it can dwell in peace, in safety, and in freedom." In 1957, France, West Germany, Italy, Belgium, Luxembourg, and the Netherlands formed the European Community, a free-trade bloc. The U.K. held off at first, but eventually it and other nations joined, and in 1992, the bloc adopted the Maastricht Treaty, which birthed the European Union and committed it to ever-deeper political integration and monetary union. But the EU has brought more than peace among member nations: By encouraging free trade and the free movement of labor, it has made them richer. One study found that over a 10-year period, the single market boosted the EU's GDP by about $980 billion — more than $6,000 per household.