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I'd like to see multiple smaller unions, each with varying degrees of integration, and with various deals between themselves.

Examples could be:

North - Ireland, Iceland, UK, Norway, Sweden, Finland, Denmark
West - France, Netherlands, Luxembourg, Belgium, (Andorra / Liechtenstein)
South - Spain, Portugal, Italy, Greece, Cyprus
Central - Germany, Poland, Austria, Switzerland
North East - Estonia, Latvia, Lithuania
South East - Hungary, Romania, Bulgaria, Croatia

I could imagine the Western union being most integrated (common currency, shared political institutions, etc)

That, to me, would be the best outcome