The European Union

In short, the EU is both.

The European Union originated as an economic entity. It was believed that economic interdependence would discourage conflict on the scale of the World Wars, in the aftermath of WW2. Its origins were as the European Economic Community (EEC) and to a lesser extent, the European Coal and Steel Community- some explicitly economic unions, after all. The euro indicates the EU's current status as an economic union.

However, it has evolved into just as much, if not more of a political union- when the EU is mentioned, most people immediately think of European Parliament, or the European Commission. This owes partly to the Maastricht treaty in 1991, when the EEC turned into the EU: it included a chapter on social policy, and gave EU citizens the right to work and vote in any EU country.

You might find this useful: http://news.bbc.co.uk/1/hi/world/europe/3583801.stm