What Is the European Customs Union? The European Customs Union is a trade alliance formed by members of the European Union (EU), allowing them to work as a single unit. Formed in the late 1960s, the organization allows the free movement of goods within the union without any tariffs and implements standardized rates of customs
What Is the European Financial Stability Facility? The European Financial Stability Facility (EFSF) was created in 2010 as a temporary crisis resolution measure in the wake of the financial and sovereign debt crisis in the euro area (eurozone). It provided assistance to Ireland, Portugal, and Greece. It no longer provides new financial assistance, with this
What Is the European Investment Bank? The European Investment Bank (EIB) is a nonprofit European Union institution based in Luxembourg. The EIB makes loans and guarantees and also provides technical assistance and venture capital for business projects that are expected to further EU policy objectives. While almost 90% of EIB lending occurs within the EU, most of the
What Is the European Medicines Agency (EMA)? The European Medicines Agency (EMA) is a decentralized agency of the European Union (EU) whose goal is to promote and protect human and animal health. The EMA is the European Union’s equivalent to the U.S. Food and Drug Administration (FDA). The EMA is sometimes called the European Medicines
What Is the European Union (EU)? The European Union (EU) is a political and economic alliance of 27 countries. The EU promotes democratic values in its member nations and is one of the world’s most powerful trade blocs. Nineteen of the countries share the euro as their official currency. The EU grew out of a
What Is Eurosclerosis? The term “Eurosclerosis” was popularized by German economist Herbert Giersch in a 1985 paper of the same name. He used it to refer to the economic stagnation that can result from excessive regulation, labor market rigidities, and overly generous welfare policies. Eurosclerosis (which stems from the medical term sclerosis, meaning the hardening
What Is a Eurostrip? A eurostrip, short for “eurodollar futures strip,” is a type of interest rate derivative that allows the holder to hedge against changes in interest rates. It consists of buying a series of three-month futures contracts known as eurodollars. Therefore, if a trader wishes to hedge their risk for one year, they would
What Is an Employee Stock Option (ESO)? The term employee stock option (ESO) refers to a type of equity compensation granted by companies to their employees and executives. Rather than granting shares of stock directly, the company gives derivative options on the stock instead. These options come in the form of regular call options and
What Is an Employee Stock Ownership Plan (ESOP)? An employee stock ownership plan (ESOP) is an employee benefit plan that gives workers ownership interest in the company in the form of shares of stock. ESOPs give the sponsoring company—the selling shareholder—and participants various tax benefits, making them qualified plans, and are often used by employers
What Is an Employee Stock Purchase Plan? An employee stock purchase plan (ESPP) is a company-run program in which participating employees can purchase company stock at a discounted price. Employees contribute to the plan through payroll deductions which build up between the offering date and the purchase date. At the purchase date, the company uses
