Answer: (B) European Union
The passage states: "When many countries of Europe came together to form the European Union, Brussels was chosen as its headquarters."
Source: Accommodation in Belgium, Chapter 1
The passage directly mentions Brussels as the headquarters of the European Union. For MCQ questions, always look for the exact fact in the source passage. The other options — UNO (New York), NAM (no permanent HQ), and SAARC (Kathmandu) — are not mentioned in connection with Brussels.