European Union and Schengen

European Union

The European Union (EU) is an economic and political union of 28 member states that are located primarily in Europe.The EU operates through a system of supranational independent institutions and intergovernmental negotiated decisions by the member states. The European Parliament is elected every five years by EU citizens. The EU's de facto capital is Brussels, Belgium.

The EU has developed a single market through a standardised system of laws that apply in all member states. Within the Schengen Area (which includes 22 EU and 4 non-EU states) passport controls have been abolished. EU policies aim to ensure the free movement of people, goods, services, and capital,enact legislation in justice and home affairs, and maintain common policies on trade,agriculture, fisheries, and regional development.

The eurozone, a monetary union, was established in 1999 and came into full force in 2002. It is currently composed of 17 member states.

List of EU states : Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, United Kingdom.

Note:

Twenty-two of the European Union (EU) member states and the four European Free Trade Association (EFTA) member states participate in the Schengen Area. Of the six EU members that do not form part of the Schengen Area, four– Bulgaria, Croatia, Cyprus and Romania – are legally obliged to join the area, while the other two – Ireland and the United Kingdom – maintain opt-outs. Four non-members of the EU, but members of EFTA – Iceland, Liechtenstein, Norway, and Switzerland – participate in the Schengen Area while three European microstates – Monaco, San Marino, and the Vatican – can be considered as de facto parts of the Schengen Area as they do not have border controls with the Schengen countries that surround them.

Schengen

The Schengen Area is a group of 26 European countries that have abolished passport and immigration controls at their common borders. It functions as a single country for international travel purposes, with a common visa policy. The Area is named after the village of Schengen in Luxembourg where the Schengen Agreement, which led to the Area's creation, was signed. Joining Schengen entails eliminating internal border controls with the other Schengen members, while simultaneously strengthening external border controls with non-Schengen states.

Italy is part of European Union, and also part of Schengen. If you apply a visa from the Italian Embassy, you will get a Schengen visa. It is a visa that is issued by one of country in the Schengen area, normally you must obtain a visa from the country you will visit the longest during your travel in Europe. With a visa issued by one of the Schengen country, you can visit all countries in the Schengen area. For example, if you will travel as a tourist in Europe for less than 90 days, and you will spend most of your time in Italy, you need to apply a visa from Italian Embassy. Italian Embassy will issued a tourist visa, with that visa you can also visit other Schengen countries. 

The following countries adhere to the Schengen Agreement and their territory is in the Schengen Area:

Austria, Belgium, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland (not a EU member state), Italy, Latvia, Liechtenstein (not a EU member state), Lithuania, Luxembourg, Malta, Netherlands, Norway (not a EU member state), Poland, Portugal, Slovenia, Slovakia, Spain, Sweden, Swiss (not a EU member state).

Note : 

Some of Schengen countries are not part of European Union States. There are also some countries that are part of EU but are not part of Schengen. For example : United Kingdom is part of EU, but is not part of Schengen. If you are Indonesian, and you have your Schengen visa, you cannot enter England. If you want to enter England, you must first obtain a visa from the British Embassy. 

Some of above info were taken from Wikipedia and different online resources.