This is an updated edition of Tsoukalis' general introduction to the political economy of the European Community. The book examines the process of economic integration in Western Europe and 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. The book emphasizes policy issues and the interaction between economics and politics. This revised edition contains an analysis of the Maastricht treaty and its likely implications in different areas of policy, most notably economic and monetary union and social policy. It also examines the development of the external policies of the EC in the light of rapid changes in Central and Eastern Europe. The link between the accession of new members and further internal reforms constitutes an important theme of this new edition.