An economic union is the last step in an economic integration process. The previous ones are: free trade area, customs union and common market. In addition to free movement of goods, services and production factors, it also requires integration of economic policies, both monetary and fiscal. Under an economic union members harmonized monetary policies, taxation and government spending. In addition, a common currency is used by members and this could involve a system of fixed exchange rates. Clearly the formation of a economic union requires the surrender of a large measure of national sovereignty to a supranational body. Such a union is the previous and last step to political unification. See economic integration.