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The European Union (EU) is a political and economic union of twenty-seven member states, located primarily in Europe. It was established by the Treaty of Maastricht in 1993 upon the foundations of the pre-existing European Community. With almost 500 million citizens, the EU combined generates an estimated 30% share of the world's nominal gross domestic product (US$16.8 trillion in 2007).

The EU has developed a single market through a standardised system of laws which apply in all member states, guaranteeing the freedom of movement of people, goods, services and capital. It maintains a common trade policy, agricultural and fisheries policies, and a regional development policy. Fifteen member states have adopted a common currency, the euro. It has developed a role in foreign policy, representing its members in the World Trade Organisation, at G8 summits and at the United Nations. Twenty-one EU countries are members of NATO. It has developed a role in justice and home affairs, including the abolition of passport control between many member states under the Schengen Agreement.

The EU operates through a hybrid system of intergovernmentalism and supranationalism. In certain areas it depends upon agreement between the member states. However, it also has supranational bodies, able to make decisions without the agreement of members. Important institutions and bodies of the EU include the European Commission, the European Parliament, the Council of the European Union, the European Council, the European Court of Justice and the European Central Bank. EU citizens elect the Parliament every five years.

The EU traces its origins to the European Coal and Steel Community formed among six countries in 1951 and the Treaty of Rome in 1957. Since then the EU has grown in size through the accession of new member states and has increased its powers by the addition of new policy areas to its remit.

History

Main article: History of the European Union

Robert Schuman proposing the Coal and Steel Community in  1950
Robert Schuman proposing the Coal and Steel Community in 1950

After the end of the Second World War the political climate favoured the unification of Europe. It was seen by many as an escape from the extreme forms of nationalism which had devastated the continent. One such attempt to unite Europeans was the European Coal and Steel Community which while having the modest aim of centralised control of the previously national coal and steel industries of the its member states was declared to be "a first step in the federation of Europe". The founding members of the Community were Belgium, France, Italy, Luxembourg, Netherlands and West Germany.

Two additional communities were created in 1957: the European Economic Community (EEC) establishing a customs union and the European Atomic Energy Community (Euratom) for cooperation in developing nuclear energy. In 1967 the Merger Treaty created a single set of institutions for the three communities, which were collectively referred to as the European Communities, although more commonly just as the European Community (EC).

The 1957 Rome Treaty created the European Economic Community.
The 1957 Rome Treaty created the European Economic Community.

In 1973 the Communities enlarged to include Denmark, Ireland and the United Kingdom.[10] Norway had negotiated to join at the same time but a referendum rejected membership and so it remained outside. In 1979 the first direct, democratic elections to the European Parliament were held.

Greece, Spain and Portugal joined in the 1980s. In 1985 the Schengen Agreement created largely open borders without passport controls between most member states.[13] In 1986 the European flag began to be used by the EC and leaders signed the Single European Act.

The Iron Curtain's fall enabled eastward enlargement. (Berlin Wall)
The Iron Curtain's fall enabled eastward enlargement. (Berlin Wall)

In 1990, after the fall of the Iron Curtain, the former East Germany became part of the Community as part of a newly united Germany.[14] With enlargement toward eastern Europe on the agenda, the Copenhagen criteria for candidate members to join the European Union were agreed.

The European Union was formally established when the Maastricht Treaty came into force on 1 November 1993.[15] and in 1995 Austria, Sweden and Finland joined the newly established EU. In 2002, euro notes and coins replaced national currencies in 12 of the member states. Since then, the Eurozone has increased to encompassing fifteen countries. In 2004, the EU saw its biggest enlargement to date when ten new countries, most of which former parts of the Eastern Bloc, joined the Union.[16]

On 1 January 2007, Romania and Bulgaria became the EU's newest members and Slovenia adopted the euro.[16] In December of that year European leaders signed the Lisbon Treaty which was intended to replace the earlier, failed European Constitution, which never came into force after being rejected by French and Dutch voters. However, uncertainty clouds the prospects of the latter treaty's coming into force as result of its rejection by Irish voters in June 2008.

Member states

Main articles: European Union member state and Enlargement of the European Union

The European Union

The European Union is composed of 27 independent sovereign countries which are known as member states: Austria, Belgium, Bulgaria, Cyprus, the Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, and the United Kingdom.

There are three official candidate countries, Croatia, the former Yugoslav Republic of Macedonia, and Turkey; the western Balkan countries of Albania, Bosnia and Herzegovina, Montenegro, and Serbia are officially recognised as potential candidates.[18] Kosovo has been granted similar status.

To join the EU, a country must meet the Copenhagen criteria, defined at the 1993 Copenhagen European Council. These require a stable democracy which respects human rights and the rule of law; a functioning market economy capable of competition within the EU; and the acceptance of the obligations of membership, including EU law. Evaluation of a country's fulfillment of the criteria is the responsibility of the European Council. The current framework does not specify how a country could exit the Union (although Greenland withdrew in 1985), but the proposed Treaty of Lisbon contains a formal procedure for withdrawing.

Four Western European countries that have chosen not to join the EU have partly committed to the EU's economy and regulations: Iceland, Liechtenstein, and Norway are a part of the single market through the European Economic Area, and Switzerland has similar ties through bilateral treaties. The relationships of the European microstates Andorra, Liechtenstein, Monaco, San Marino, and Vatican City include the use of the euro and other co-operation.

Geography

Main article: Geography of the European Union

Mont Blanc in the Alps is the highest peak in the EU.
Mont Blanc in the Alps is the highest peak in the EU.

The territory of the EU consists of the combined territories of its 27 member states with some exceptions outlined below. The territory of the EU is not the same as that of Europe, as parts of the continent are outside the EU, such as Iceland, Switzerland, Norway, and European Russia. Some parts of member countries are not part of the EU, despite forming part of the European continent (for example the Channel Islands and Faroe Islands). Several territories associated with member states that are outside geographic Europe are also not part of the EU (such as Greenland, Aruba, the Netherlands Antilles, and all the non-European territories associated with the United Kingdom). Some overseas territories are part of the EU even if they are not geographically part of Europe, such as the Azores, the Canary Islands, French Guiana, Guadeloupe, Madeira, Martinique, Reunion, Saint Barthelemy, and Saint Martin.

The EU's climate is influenced by its 69,000 km coastline. (Crete)
The EU's climate is influenced by its 69,000 km coastline. (Crete)

The EU's member states cover a combined area of 4,422,773 square kilometres (1,707,642 sq mi). The total territory of the EU is larger than all but six countries and its highest peak is Mont Blanc in the Graian Alps, 4807 metres above sea level. The landscape, climate, and economy of the EU are influenced by its coastline, which is 69,342 kilometres (43,087 mi) long. The EU has the world's second longest coastline, after Canada. The combined member states share land borders with 21 non-member states for a total of 12,441 kilometres (7,730 mi), the fifth longest border in the world.

Including the overseas territories of member states, the EU experiences most types of climate from Arctic to tropical, rendering meteorological averages for the EU as a whole meaningless. In practice, the majority of the population lives either in areas with a Mediterranean climate (Southern Europe), a temperate maritime climate (Western Europe), or a warm summer continental or hemiboreal climate (Eastern Europe).

Governance

European Community Common Foreign and Security Policy Police and Judicial Co-operation in Criminal Matters

The three pillars constituting the European Union
The three pillars constituting the European Union

The EU is often described as being divided into three areas of responsibility, called 'pillars'. The original European Community policies form the first pillar, while the second consists of Common Foreign and Security Policy. The third pillar originally consisted of Justice and Home Affairs, however owing to changes introduced by the Amsterdam and Nice treaties, it currently only consists of Police and Judicial Co-operation in Criminal Matters. Broadly speaking, the second and third pillars can be described as the intergovernmental pillars because the supranational institutions of the Commission, Parliament and the Court of Justice play less of a role or none at all, while the lead is taken by the intergovernmental Council of Ministers and the European Council. Most activities of the EU come under the first, Community pillar. This is mostly economically oriented and the supranational institutions have more influence.

The activities of the EU are regulated by a number of institutions and bodies. They carry out the tasks and policies set out for them in the treaties. The EU receives its political leadership from the European Council, which is composed of one representative per member state — either its President or Prime Minister — plus the President of the Commission. Each member states' representative is assisted its Foreign Minister. The Council uses its leadership role to sort out disputes which have arisen between member states and the institutions, and to resolve political crises and disagreements over controversial issues and policies.

The Council is headed by a rotating presidency, with every member state taking the helm of the EU for a period of six months during which that country's representatives chair meetings of the European Council and the Council of Ministers. The member state holding the presidency typically uses it to drive a particular policy agenda such as economic reform, reform of the EU itself, enlargement or furthering European integration. The Council usually meet four times a year at European Summits.

The European Council should not be mistaken for the Council of Europe, an international organisation independent from the EU.

Institutions

Main article: Institutions of the European Union

The Berlaymont in Brussels houses the European Commission.
The Berlaymont in Brussels houses the European Commission.

The European Commission acts as the EU's executive arm and is responsible for initiating legislation and the day-to-day running of the EU. It is intended to act solely in the interest of the EU as a whole, as opposed to the Council which consists of leaders of member states who reflect national interests. The commission is also seen as the motor of European integration. It is currently composed of 27 commissioners for different areas of policy, one from each member state. The President of the Commission and all the other commissioners are nominated by the Council. Appointment of the Commission President, and also the Commission in its entirety, have to be confirmed by Parliament.

The hemicycle of the Parliament's Louise Weiss building in Strasbourg
The hemicycle of the Parliament's Louise Weiss building in Strasbourg

The European Parliament forms one half of the EU's legislature. The 785 Members of the European Parliament (MEPs) are directly elected by EU citizens every five years. Although MEPs are elected on a national basis, they sit according to political groups rather than their nationality. Each country has a set number of seats. The Parliament and the Council form and pass legislation jointly, using co-decision, in certain areas of policy. This procedure will extend to many new areas under the proposed Treaty of Lisbon, and hence increase the power and relevance of the Parliament. The Parliament also has the power to reject or censure the Commission and the EU budget. The President of the European Parliament carries out the role of speaker in parliament and represents it externally. The president and vice presidents are elected by MEPs every two and a half years.

The Council of the European Union forms the other half of the EU's legislature. It is an organised platform where national ministers responsible for the area of policy being addressed, meet. Although the Council meets in different compositions, it is considered to be one single body. In addition to its legislative functions, the Council also exercises executive functions in relations to the Common Foreign and Security Policy.

The judicial branch of the EU consists of the European Court of Justice (ECJ) and the Court of First Instance. Together they interpret and apply the treaties and the law of the EU. The Court of First Instance mainly deals with cases taken by individuals and companies directly before the EU's courts, and the ECJ primarily deals with cases taken by member states, the institutions and cases referred to the EU's courts by the courts of member states. Decisions from the Court of First Instance can be appealed to the Court of Justice but only on a point of law.

Legal system

Further information: Law of the European UnionTreaties of the European Union, and European Union legislative procedure

The EU is based on a series of treaties. These first established the European Community and the EU, and then made amendments to those founding treaties. These are power giving treaties which set broad policy goals and establish institutions with the necessary legal powers to implement those goals. These legal powers include the ability to enact legislation which can directly affect all member states and their inhabitants. National courts are required to enforce the treaties that their member states have ratified, and thus the laws enacted under them, even if doing so requires them to ignore conflicting national law, and (within limits) even constitutional provisions.

The ECJ in Luxembourg can judge member states over EU law.
The ECJ in Luxembourg can judge member states over EU law.

The main legislative acts of the EU come in two forms: Regulations and Directives. Regulations become law in all member states the moment they come into force, without the requirement for any implementing measures, and automatically override conflicting domestic provisions. Directives require member states to achieve a certain result while leaving them discretion as to how to achieve the result. The details of how they are to be implemented are left to member states. When the time limit for implementing directives passes, they may, under certain conditions, have direct effect in national law against Member States. Decisions offer an alternative to the two above modes of legislation. They are legal acts which only apply to specified individuals or companies. They are most often used in Competition Law, or on rulings on State Aid, but are also frequently used for procedural or administrative matters within the institutions. Regulations, directives and decisions are of equal legal value and apply without any formal hierarchy.

One of the complicating features of the EU's legal system is the multiplicity of legislative procedures used to enact legislation. The treaties micro-manage the EU's powers, indicating different ways of adopting legislation for different policy areas and for different areas within the same policy areas. A common feature of the EU's legislative procedures, however, is that almost all legislation must be initiated by the Commission, rather than member states or European parliamentarians. The two most common procedures are co-decision, under which the European Parliament can veto proposed legislation, and consultation, under which Parliament is only permitted to give an opinion which can be ignored by European leaders. In most cases legislation must be agreed by the council.

National courts within the Member States play a key role in the EU as enforcers of EU law, and a "spirit of cooperation" between EU and national courts is laid down in the Treaties. National courts can apply EU law in domestic cases, and if they require clarification on the interpretation or validity of any EU legislation related to the case it may make a reference for a preliminary ruling to the ECJ. The right to declare EU legislation invalid however is reserved to the EU courts.

Political issues

See also: European integration and Enlargement of the European Union

Commission President Jose Manuel Barroso
Commission President Jose Manuel Barroso

Two major political issues for the EU are European integration and enlargement. Enlargement, the accession of new states to the EU, is a highly politicised issue. Supporters such as the European Commission, argue it aids democracy in new members, as well as supporting the European economy as a whole. Opponents[who?] fear the EU is expanding beyond its current political capabilities, and/or cultural boundaries. Public opinion[citation needed], and hence some political party viewpoint, has been more sceptical towards enlargement since the simultaneous accession of 10 members in 2004.[citation needed] This is most acute in relation to the candidacy of Turkey.

Integration is another political issue, where the public view is sometimes that national interest conflicts with that of the Union as a whole.[citation needed] The aim of increasing harmonisation between states has meant that national powers have been pooled at the European level. This aim is criticised by eurosceptics who fear the loss of national democracy.

Foreign relations

Further information: Foreign relations of the European Union and Common Foreign and Security Policy

Javier Solana is the EU's High Representative in foreign policy.
Javier Solana is the EU's High Representative in foreign policy.

Foreign policy cooperation between member states dates from the establishment of the Community in 1957, when member states negotiated as a block in international trade negotiations under the Common Commercial Policy. Steps for a more wide ranging coordination in foreign relations began in 1970 with the establishment of European Political Cooperation which created an informal consultation process between member states with the aim of forming common foreign policies. It was not, however, until the 1987, when European Political Cooperation was introduced on a formal basis by the Single European Act. EPC was renamed as the Common Foreign and Security Policy (CFSP) by the Maastricht Treaty.

The Maastricht Treaty gives the CFSP the aims of promoting both the EU's own interests and those of the international community as a whole. This includes promoting international co-operation, respect for human rights, democracy, and the rule of law.

The Amsterdam Treaty created the office of the High Representative for the Common Foreign and Security Policy (currently held by Javier Solana) to co-ordinate the EU's foreign policy. The High Representative, in conjunction with the current Presidency, speaks on behalf of the EU in foreign policy matters and can have the task of articulating ambiguous policy positions created by disagreements among member states. The Common Foreign and Security Policy requires unanimity among the now 27 member states on the appropriate policy to follow on any particular policy. The unanimity and difficult issues treated under the CFSP makes disagreements, such as those which occurred over the war in Iraq, not uncommon.

The EU participates in all G8 summits. (Heiligendamm, Germany)
The EU participates in all G8 summits. (Heiligendamm, Germany)

Besides the emerging international policy of the European Union, the international influence of the EU is also felt through enlargement. The perceived benefits of becoming a member of the EU act as an incentive for both political and economic reform in states wishing to fulfil the EU's accession criteria, and are considered a major factor contributing to the reform of former Communist countries in Eastern Europe. This influence on the internal affairs of other countries is generally referred to as "soft power", as opposed to military "hard power".

Besides the CFSP, the Commission also has its own representation in international organisations. This is primarily through the European Commissioner for External Relations, who works alongside the High Representative. In the UN the EU has gained influence in areas such as aid due to its large contributions in that field (see below). In the G8, the EU has rights of membership besides chairing/hosting summit meetings and is represented at meetings by the presidents of the Commission and the Council. In the World Trade Organisation (WTO), where all 27 member states are represented, the EU as a body is represented by Trade Commissioner Peter Mandelson.

Humanitarian aid

Further information: ECHO (European Commission)

The EU member states and the EU collectively are the largest contributor of foreign aid in the world.></td>
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<tr><td align=The EU member states and the EU collectively are the largest contributor of foreign aid in the world.

The European Community humanitarian aid office, or "ECHO", provides humanitarian aid from the EU to developing countries. In 2006 its budget amounted to 671 million euros, 48% of which went to the ACP countries. Counting the EU's own contributions and those of its member states together, the EU is the largest aid donor in the world.

The EU's aid has previously been criticised by the eurosceptic think-tank Open Europe for being inefficient, mis-targeted and linked to economic objectives. Furthermore, some charities have claimed European governments have inflated the amount they have spent on aid by incorrectly including money spent on debt relief, foreign students, and refugees. Under the de-inflated figures, the EU did not reach its internal aid target in 2006 and the EU would not reach the international target of 0.7% of GNP until 2015. However, only a few countries have reached that target. In 2005 EU aid was 0.34% of the GNP which was higher than that of the United States and Japan. The current commissioner for aid, Louis Michel, has called for aid to be delivered more rapidly, to greater effect, and on humanitarian principles.

Military and defence

Main articles: European Security and Defence Policy and Military of the European Union

CFSP forces are peacekeeping in parts of the Balkans and Africa.
CFSP forces are peacekeeping in parts of the Balkans and Africa

Member states are responsible for their own territorial defence. Many EU members are also members of NATO although some member states follow policies of neutrality. The Western European Union (WEU) is a European security organisation related to the EU. In 1992, the WEU's relationship with the EU was defined, when the EU assigned it the "Petersberg tasks" (humanitarian missions such as peacekeeping and crisis management). These tasks were later transferred from the WEU to the EU by the Amsterdam Treaty; they formed part of the new CFSP and the European Security and Defence Policy. Elements of the WEU are currently being merged into the EU's CFSP, and the President of the WEU is currently CFSP High Representative.

Following the Kosovo War in 1999, the European Council agreed that "the Union must have the capacity for autonomous action, backed by credible military forces, the means to decide to use them, and the readiness to do so, in order to respond to international crises without prejudice to actions by NATO". To that end, a number of efforts were made to increase the EU's military capability, notably the Helsinki Headline Goal process. After much discussion, the most concrete result was the EU Battlegroups initiative, each of which is planned to be able to deploy quickly about 1500 men. EU forces have been deployed on peacekeeping missions from Africa to the former Yugoslavia and the Middle East. EU military operations are supported by a number of bodies, including the European Defence Agency, satellite centre and the military staff.

Justice, freedom, and security

Further information: Police and Judicial Co-operation in Criminal Matters and European Commissioner for Justice, Freedom & Security

The Schengen Agreement has ensured open borders between most member states. (Austro-German border)
The Schengen Agreement has ensured open borders between most member states. (Austro-German border)

Much of the EU's competence in the justice and home affairs area originates from the signing of the Schengen Agreement in 1985 on the gradual abolition of border controls between six of the then ten European Community member states. In order to implement the Schengen Agreement, the signatory states included measures designed to compensate for the effect of reduced border controls in the areas of asylum, immigration and criminal justice.

The Maastricht Treaty transferred many of these competences (although not those on the abolition of border controls) into the European Union, along with new competencies to facilitate the freedom of movement of people by adopting common rules in civil matters, such as contract and family law. The Maastricht Treaty also introduced the concept of citizenship of the European Union, which is complementary to national citizenship.

The Amsterdam Treaty gave the EU the new aim of creating an "area of freedom, security and justice". That treaty also made it easier to pass laws in the justice and home affairs area and more difficult for member states to veto them. It also increased the powers of the European Parliament in relation to Justice and Home affairs' measures, with decisions in certain matters coming to be decided by codecision. Recent legislation includes the European Arrest Warrant and directives on family law.

The EU has established agencies to co-ordinate its actions in the justice and home affairs area: Europol for co-operation of police forces, Eurojust for co-operation between prosecutors, and Frontex for co-operation between border control authorities. The EU also operates the Schengen Information System which provides a common database for police and immigration authorities.

Fundamental rights

The EU has developed a role in human rights protection. Prohibitions against sexual and nationality discrimination have a long standing in the treaties. The Amsterdam Treaty supplemented these, by supporting further legislation against discrimination based on race, religion, disability, age and sexual orientation. Using these powers the EU has enacted legislation on sexual discrimination in the work-place, age discrimination and racial discrimination. All EU states have abolished capital punishment for all crimes and the EU has been a prominent campaigner for global abolition.

Although signing the European Convention on Human Rights (ECHR) is a condition for EU membership, the EU itself is not covered by the convention as it is neither a state nor has the competence to accede. Nonetheless the Court of Justice and Court of Human Rights co-operate to ensure their case-law does not conflict.

In 2000 the EU drew up the Charter of Fundamental Rights which is based in part on the Convention but also other international human rights documents. The Charter is not legally binding at present and would only become so if the Lisbon Treaty comes into force. Under that treaty the EU would be required to accede to the ECHR.

Economy

Further information: Economy of the European Union

163 of the world?s 500 largest corporations are headquartered in EU countries. (Nokia, Finland)
163 of the world?s 500 largest corporations are headquartered in EU countries. (Nokia, Finland)

Since its origin, the EU has established a single economic market across the territory of all its members. Currently, a single currency is in use between the 15 members of the eurozone. Considered as a single economy, the EU generated an estimated nominal gross domestic product (GDP) of US$16,830 billion in 2007, amounting to 31% of the world's total economic output, which makes it the largest economy in the world by nominal GDP and the second largest trade bloc economy in the world by PPP valuation of GDP. It is also the largest exporter of goods, the second largest importer, and the biggest trading partner to several large countries such as India, and China. 163 of the top 500 largest corporations measured by revenue (Fortune Global 500) have their headquarters in the EU. In May 2007 unemployment in the EU stood at 7% while investment was at 21.4% of GDP, inflation at 2.2% and public deficit at -0.9% of GDP.

Single market

Further information: Four Freedoms (European Union)

Two of the original core objectives of the European Economic Community were the development of a common market, subsequently renamed the single market, and a customs union between its member states. The single market involves the free circulation of goods, capital, people and services within the EU, and the customs union involves the application of a common external tariff on all goods entering the market. Once goods have been admitted into the market they can not be subjected to customs duties, discriminatory taxes or import quotas, as they travel internally. The non EU member states of Iceland, Norway, Liechtenstein and Switzerland participate in the single market but not in the customs union. Half the trade in the EU is covered by legislation harmonised by the EU.

EU member states have a standardised passport design with the relevant national emblem at the centre, and with the name of the state and 'European Union' given in the national language(s).
EU member states have a standardised passport design with the relevant national emblem at the centre, and with the name of the state and "European Union" given in the national language(s).

Free movement of capital is intended to permit movement of investments such as property purchases and buying of shares between countries. Until the drive towards Economic and Monetary Union the development of the capital provisions had been slow. Post-Maastricht there has been a rapidly developing corpus of ECJ judgments regarding this initially neglected freedom. The free movement of capital is unique insofar as that it is granted equally to non-member countries.

The free movement of persons means citizens can move freely between member states to live, work, study or retire in another country. This required the lowering of administrative formalities and recognition of professional qualifications of other states. Traditionally the economically active were granted a much greater level of freedom than others. The extension to the non-economically active was first recognised in 1993 when the concept of Community Citizenship was introduced to the EU. In addition to extending the scope of the free movement of persons, it also grants certain social and political rights to the citizens of the EU.

The free movement of services and of establishment allows self-employed persons to move between member states in order to provide services on a temporary or permanent basis. Services account for between sixty and seventy percent of GDP, although legislation is not as developed as in other sectors. This has been addressed by the recently passed Directive on services in the internal market which aims to liberalise this area of the market. According to the Treaty the provision of services is a residual freedom that only applies if no other freedom is being exercised.

The freedoms are not absolute in nature. Member states may limit the exercise of the freedoms in accordance with the specific grounds laid down in the Treaty. For example, the Treaty allows member states to restrict movements that would pose a real threat to public policy or public security. In the absence of Community legislation it is for the member states to decide the scope of the exceptions. The European courts arbitrate as to whether the actions of the member state are proportionate and in conformity with Community law.

Monetary union

Further information: Euro and Economic and Monetary Union of the European Union

The European Central Bank in Frankfurt governs the Eurozone monetary policy.
The European Central Bank in Frankfurt governs the Eurozone monetary policy.

The creation of a European single currency became an official objective of the EU in 1969. However, it was only with the advent of the Maastricht Treaty in 1993 that member states were legally bound to start the monetary union no later than 1 January 1999. On this date the euro was duly launched by eleven of the then fifteen member states of the EU. It remained an accounting currency until 1 January 2002, when euro notes and coins were issued and national currencies began to phase out in the Eurozone, which by then consisted of twelve member states. The Eurozone has since grown to fifteen countries, the most recent being Cyprus and Malta which joined on 1 January 2008.

All other EU member states, except Denmark and the United Kingdom, are legally bound to join the euro when the economic conditions are met. Public opinion in these countries is, however, mostly against joining, with only the Danes and Romanians in favour. Sweden has circumvented the requirement to join the euro area by not meeting the membership criteria. Slovakia is scheduled to introduce the euro on 1 January 2009.

A number of other countries outside the EU, such as Montenegro, use the euro unofficially. The euro, and the monetary policies of those who have adopted it, are under the control of the European Central Bank (ECB). There are twelve other currencies used in the EU.

The euro is designed to help build a single market by, for example: easing travel of citizens and goods, eliminating exchange rate problems, providing price transparency, creating a single financial market, price stability and low interest rates, and providing a currency used internationally and protected against shocks by the large amount of internal trade within the eurozone. It is also intended as a political symbol of integration and stimulus for more.

Competition

Further information: European Community competition law and European Commissioner for Competition

The EU operates a competition policy intended to ensure undistorted competition within the single market. The Commission as the competition regulator for the single market is responsible for antitrust issues, approving mergers, breaking up cartels, working for economic liberalisation and preventing state aid.

The Competition Commissioner, currently Neelie Kroes, is one of the most powerful positions in the Commission, notable in effecting trans-national corporations. For example, in 2001 the Commission for the first time prevented a merger between two companies based in the United States which had already been approved by their national authority. Another high profile case, European Union v. Microsoft, resulted in the Commission fining Microsoft over €777 million following nine years of legal action.

In negotiations on the Treaty of Lisbon, French President Nicolas Sarkozy succeeded in removing the words "free and undistorted competition" from the treaties. However, the requirement is maintained in an annex and it is unclear whether this will have any practical effect on EU policy.

Budget

Main article: Budget of the European Union

2006 EU total expenditure. Agriculture: 46.7% Structural Actions: 30.4%      Internal Policies: 8.5%      Administration: 6.3% External Actions: 4.9% Pre-Accession Strategy: 2.1% Compensations: 1.0% Reserves: 0.1%
2006 EU total expenditure.
     Agriculture:46.7%
     Structural Actions: 30.4%
     Internal Policies: 8.5%
     Administration: 6.3%
     External Actions: 4.9% 
     Pre-Accession Strategy: 2.1%
     Compensations: 1.0%
     Reserves: 0.1%

The twenty-seven member state EU had an agreed budget of €120.7 billion for the year 2007 and €864.3 billion for the period 2007-2013, representing 1.10% and 1.05% of the EU-27's GNI forecast for the respective periods. By comparison, the UK's expenditure for 2004 was estimated to be €759 billion, and France was estimated to have spent €801 billion. In 1960, the six member state EEC (the predecessor of the EU) budget was 0.03% of GDP.

In the 2006 budget, the largest single expenditure item was agriculture (direct aid, export refunds, storage, rural development and other) with around 46.7% of the total budget. Next came structural actions (Objective 1, Objective 2, Objective 3, other structural measures, community initiatives, innovatory measures and technical assistance, other specific structural operations and the cohesion fund) with approximately 30.4% of the total. Internal policies (training, youth, culture, audiovisual, media, information, energy, Euratom nuclear safeguards and environment, consumer protection, internal market, industry and Trans-European networks, research and technological development, other internal policies) took up around 8.5%. Administration accounted for around 6.3%. External actions, the pre-accession strategy, compensations and reserves brought up the rear with approximately 4.9%, 2.1%, 1% and 0.1% respectively.

Development

Agriculture

Main article: Common Agricultural Policy

The Common Agricultural Policy (CAP) is one the oldest policies of the European Community and was one of its core aims. The policy has the objectives of increasing agricultural production, providing certainty in food supplies, ensuring a high quality of life for farmers, stabilising markets and ensuring reasonable prices for consumers (article 33 of the Treaty of Rome). It was, until recently, operated by a system of subsidies and market intervention. Until the 1990s the policy accounted for over 60% of the then European Community's annual budget, and still accounts for around 35%.

EU farms are supported by the CAP, the largest budgetary expenditure. (Vinyard in Spain)
EU farms are supported by the CAP, the largest budgetary expenditure. (Vinyard in Spain)

The policy's price controls and market interventions led to considerable overproduction, resulting in so-called butter mountains and wine lakes. These were intervention stores of produce bought up by the Community to maintain minimum price levels. In order to dispose of surplus stores, they were often sold on the world market at prices considerably below Community guaranteed prices, or farmers were offered subsidies (amounting to the difference between the Community and world prices) to export their produce outside the Community. This system has been criticised for under-cutting farmers in the developing world. The overproduction has also been criticised on environmental grounds in that it encourages environmentally unfriendly intensive farming methods. Supporters of CAP say that the economic support which it gives to farmers provides them with a reasonable standard of living, in what would otherwise be an economically unviable way of life. However, the EU's small farmers only receive 8% of CAP's available subsidies.

Since the beginning of the 1990s the CAP has been subject to a series of reforms. Initially these reforms included the introduction of set-aside in 1988, where a proportion of farm land was deliberately withdrawn from production, milk quotas (by the McSharry reforms in 1992) and more recently, the 'de-coupling' (or disassociation) of the money farmers receive from the EU and the amount they produce (by the Fischler reforms in 2004). It is intended to move away from subsidy payments linked to specific produce, toward direct payments based on farm size. This is intended to have the effect of allowing the market to dictate production levels while maintaining agricultural income levels. The most recent reform entailed the abolition of the EU's sugar regime which previously involved the carving up of the sugar market between member states and certain African-Caribbean nations with a privileged relationship with the EU.

Energy

Main article: Energy policy of the European Union

Many EU members import oil and gas from Russia.
Many EU members import oil and gas from Russia.

The EU has been a legislative power in the area of energy policy for most of its existence: this has its roots in the original European Coal and Steel Community. The introduction of a mandatory and comprehensive European energy policy was approved at the meeting of the European Council in October 2005, and the first draft policy was published in January 2007.

The Commission has five key points in its energy policy: increase competition in the internal market, encourage investment and boost interconnections between electricity grids; diversify energy resources with better systems to respond to a crisis; establish a new treaty framework for energy co-operation with Russia while improving relations with energy-rich states in Central Asia and North Africa; use existing energy supplies more efficiently while increasing use of renewable energy; and finally increase funding for new energy technologies.

The EU currently imports 82% of its oil and 57% of its gas, making it the world's leading importer of these fuels. There are concerns that the EU is largely dependent on other countries, primarily Russia, for its energy. This concern has grown following a series of clashes between Russia and its neighbours, threatening the flow of gas. As a result the EU is attempting to diversify its energy supply.

Infrastructure

Further information: European Commissioner for Transport and European Commissioner for Enterprise and Industry

The Oresund Bridge between Denmark and Sweden is part of the Trans-European Networks
The Oresund Bridge between Denmark and Sweden is part of the Trans-European Networks

The EU is working to improve cross-border infrastructure within the EU, for example through the Trans-European Networks (TEN). Projects under TEN include the Channel Tunnel, LGV Est, the Frejus Rail Tunnel, the Oresund Bridge and the Brenner Base Tunnel. In 2001 it was estimated that by 2010 the network would cover: 75,200 kilometres (46,700 mi) of roads; 78,000 kilometres (48,000 mi) of railways; 330 airports; 270 maritime harbours; and 210 internal harbours.

The developing European transport policies will increase the pressure on the environment in many regions by the increased transport network. In the pre-2004 EU members, the major problem in transport deals with congestion and pollution. After the recent enlargement, the new states that joined since 2004 added the problem of solving accessibility to the transport agenda. The Polish road network in particular was in poor condition: at Poland's accession to the EU, 4,600 roads needed to be upgraded to EU standards, demanding approximately 17 billion euros.

Another infrastructure project is the Galileo positioning system. Galileo is a proposed Global Navigation Satellite System, to be built by the EU and launched by the European Space Agency (ESA), and is to be operational by 2010. The Galileo project was launched to reduce the EU's dependency on the US-operated Global Positioning System, which will extend to nations outside the EU. It has been criticised by some due to costs, delays, and their perception of redundancy given the existence of that system.

Regional development

Further information: Regional policy of the European Union

EU funds finance infrastructure such as the motorway Prague-Berlin. (Lovosice, Czech Republic)
EU funds finance infrastructure such as the motorway Prague-Berlin. (Lovosice, Czech Republic)

There are substantial economical disparities across the EU. Even corrected for purchasing power, the difference between the richest and poorest regions (NUT-2 and NUT-3 of the Nomenclature of Territorial Units for Statistics) is about a factor of ten. On the high end Frankfurt has €68,751 PPP per capita, Paris €67,980, and Inner London €65,138, while Romania's Nord-Est has €5,070 PPP per capita and Bulgaria's Severozapaden has €5,502 PPP per capita. Compared to the EU average, the United States GDP per capita is 35% higher and the Japanese GDP per capita is approximately 15% higher.

There are a number of Structural Funds and Cohesion Funds to support development of underdeveloped regions of the EU. Such regions are primarily located in the new member states of eastern Europe. Several funds provide emergency aid, support for candidate members to transform their country to conform to the EU's standard (Phare, ISPA, and SAPARD), and support to the former USSR Commonwealth of Independent States (TACIS). TACIS has now become part of the worldwide EuropeAid programme. The EU Seventh Framework Programme (FP7) sponsors research conducted by consortia from all EU members to work towards a single European Research Area.

Environment

Further information: European Commissioner for the Environment and European Climate Change Programme

The first environmental policy of the European Community was launched in 1972. Since then it has addressed issues such as acid rain, the thinning of the ozone layer, air quality, noise pollution, waste and water pollution. The Water framework directive is an example of a water policy, aiming for rivers, lakes, ground and coastal waters to be of "good quality" by 2015. Wildlife is protected through the Natura 2000 programme and covers 30,000 sites throughout Europe. In 2007, the Polish government sought to build a motorway through the Rospuda valley, but the Commission has been blocking construction as the valley is a wildlife area covered by the programme.

The Commission is trying to protect the Rospuda valley in Poland.
The Commission is trying to protect the Rospuda valley in Poland.

The REACH regulation was a piece of EU legislation designed to ensure that 30,000 chemicals in daily use are tested for their safety. In 2006, toxic waste spill off the coast of Cote d'Ivoire, from a European ship, prompted the Commission to look into legislation regarding toxic waste. With members such as Spain now having criminal laws against shipping toxic waste, the Commission proposed to create criminal sentences for "ecological crimes". Although the Commission's right to propose criminal law was contested, it was confirmed in this case by the Court of Justice.

In 2007, member states agreed that the EU is to use 20% renewable energy in the future and that is has to reduce carbon dioxide emissions in 2020 by at least 20% compared to 1990 levels. This includes measures that in 2020, one-tenth of all cars and trucks in EU 27 should be running on biofuels. This is considered to be one of the most ambitious moves of an important industrialised region to fight global warming.

At the 2007 United Nations Climate Change Conference, dealing with the successor to the Kyoto Protocol, the EU has proposed at 50% cut in greenhouse gases by 2050. The EU's attempts to cut its carbon footprint appear to have also been aided by an expansion of Europe's forests which, between 1990 and 2005, grew 10% in western Europe and 15% in Eastern Europe. During this period they soaked up 126 million metric tons of carbon dioxide, equivalent to 11% of EU emissions from human activities.

Education and research

Further information: Educational policies and initiatives of the European Union and Framework Programmes for Research and Technological Development

Renewable energy is one priority in transnational research activities such as the FP7.
Renewable energy is one priority in transnational research activities such as the FP7

Education and science are areas where the EU's role is limited to supporting national governments. In education, the policy was mainly developed in the 1980s in programmes supporting exchanges and mobility. The most visible of these has been the ERASMUS programme, a university exchange programme which began in 1987. In its first 20 years it has supported international exchange opportunities for well over 1.5 million university and college students and has become a symbol of European student life. There are now similar programmes for school pupils and teachers, for trainees in vocational education and training, and for adult learners in the Lifelong Learning Programme 2007–2013. These programmes are designed to encourage a wider knowledge of other countries and to spread good practices in the education and training fields across the EU. Through its support of the Bologna process the EU is supporting comparable standards and compatible degrees across Europe.

Scientific development is facilitated through the EU's Framework Programmes, the first of which started in 1984. The aims of EU policy in this area are to co-ordinate and stimulate research. The independent European Research Council allocates EU funds to European or national research projects. The Seventh Framework Programme (FP7) deals in a number of areas, for example energy where it aims to develop a diverse mix of renewable energy for the environment and to reduce dependence on imported fuels.

Since January 2000 the European Commission has set its sights on a more ambitious objective, known as the European Research Area, and has extensively funded research in a few key areas. This has the support of all member states, and extends the existing financing structure of the frameworks. It aims to focus on co-ordination, sharing knowledge, ensuring mobility of researchers around Europe, improving conditions for researchers and encouraging links with business and industry as well as removing any legal and administrative barriers. The EU is involved with six other countries to develop ITER, a fusion reactor which will be built in the EU at Cadarache. ITER builds on the previous project, Joint European Torus, which is currently the largest nuclear fusion reactor in the world. The Commission foresees this technology to be generating energy in the EU by 2050. It has observer status within CERN, there are various agreements with ESA and there is collaboration with ESO. Theses organizations are not under the framework of the EU, but membership heavily overlaps between them.

Demographics

Main article: Demographics of the European Union

Population of the 5 largest cities in the EU
City City limits
(2006)
Density
/km2
(city limits)
Density
/sq mi
(city limits)
Urban area
(2005)
LUZ
(2001)
Berlin 3,410,000 3,815 9,880 3,761,000 4,935,524
London 7,512,400 4,761 12,330 9,332,000 11,624,807
Madrid 3,228,359 5,198 13,460 4,858,000 5,372,433
Paris 2,153,600 24,672 63,900 9,928,000 10,952,011
Rome 2,708,395 2,105 5,450 2,867,000 3,700,424

The combined population of all 27 member countries has been estimated at 495,128,529 in January 2007, this in comparison to approximately 710 million Europeans on the continent as a whole. There is some increase in population expected, primarily due to net immigration, present in most European countries.

The EU's population is 7.3% of the world total, yet the EU covers just 3% of the earth's land, amounting to a population density of 114 /km? (300 /sq mi) (2006) making the EU one of the most densely populated regions of the world. One third of EU citizens live in cities of over a million people, rising to 80% living in urban areas generally. The EU is home to more global cities than any other region in the world. It contains 16 cities with populations of over one million.

Besides many large cities, the EU also includes several densely populated regions that have no single core but have emerged from the connection of several cites and are now encompassing large metropolitan areas. The largest are Rhine-Ruhr having approximately 10.5 million inhabitants (Cologne, Dortmund, Dusseldorf et al.), Randstad approx. 7 million (Amsterdam, Rotterdam, The Hague, Utrecht et al.), Frankfurt Rhein-Main Region approx. 5.8 million (Frankfurt, Wiesbaden et al.), the Flemish diamond (urban area in between Antwerp, Brussels, Leuven and Ghent), approx. 5.5 million inhabitants, and the Upper Silesian Industrial Region approx. 3.5 million (Katowice, Sosnowiec et al.).

Languages

Main article: Languages of the European Union

Languages (2006)
Language L1 Total
English 13% 51%
German 18% 32%
French 13% 26%
Italian 13% 16%
Spanish 9% 15%
Polish 9% 10%
Romanian 7% 8%
Dutch 5% 6%
Greek 3% 3%
Hungarian 3% 3%
Swedish 2% 3%
Czech 2% 3%
Portuguese 2% 2%
Bulgarian 2% 2%
Slovak 1% 1%
Other EU Languages ~6%
Minority Languages ~16%
L1: Native language
Total: EU citizens able to conduct
conversation in this language

Among the many languages and dialects used in the EU, it has 23 official and working languages: Bulgarian, Czech, Danish, Dutch, English, Estonian, Finnish, French, German, Greek, Hungarian, Italian, Irish, Latvian, Lithuanian, Maltese, Polish, Portuguese, Romanian, Slovak, Slovenian, Spanish, and Swedis. Important documents, such as legislation, are translated into every official language. The European Parliament provides translation into all languages for documents and its plenary sessions. Some institutions use only a handful of languages as internal working languages. Language policy is the responsibility of member states, but EU institutions promote the learning of other languages.

German is the most widely spoken mother tongue (about 88.7 million people as of 2006), followed by English, French, and Italian. English is by far the most spoken foreign language at over half (51%) of the population, with German and French following. 56% of European citizens are able to engage in a conversation in a language other than their mother tongue. Most official languages of the EU belong to the Indo-European language family, except Estonian, Finnish, and Hungarian, which belong to the Uralic language family, and Maltese, which is a Semitic language. Most EU official languages are written in the Latin alphabet except Bulgarian, written in Cyrillic, and Greek, written in the Greek alphabet.

Besides the 23 official languages, there are about 150 regional and minority languages, spoken by up to 50 million people. Of these, only the Spanish regional languages (Catalan, Basque and Galician) can be used by citizens in communication with the main European institutions. Although EU programmes can support regional and minority languages, the protection of linguistic rights is a matter for the individual member states.

Besides the many regional languages, a broad variety of languages from other parts of the world are spoken by immigrant communities in the member states: Turkish, Maghrebi Arabic, Russian, Urdu, Bengali, Hindi, Tamil, Ukrainian, and Balkan languages are spoken in many parts of the EU. Many older immigrant communities are bilingual, being fluent in both the local (EU) language and in that of their ancestral community. Migrant languages have no formal status or recognition in the EU or in the EU countries, although from 2007 they are eligible for support from the language teaching section of the EU's Lifelong Learning Programme 2007–2013.

Religion

Main article: Religion in the European Union

The EU is a secular body, with no formal connections to any religion and no mention of religion in any current or proposed treaty. Discussion over the draft texts of the European Constitution and later the Treaty of Lisbon included proposals to mention Christianity and/or God in the preamble of the text, but the idea faced opposition and was dropped.

Percentage of Europeans in each Member State who believe in some deity
Percentage of Europeans in each Member State who believe in some deity

Emphasis on Christianity stems from this being the dominant religion in Europe, and thus of the EU. It divides between Roman Catholicism, a wide range of Protestant churches (especially in northern Europe) and Eastern Orthodox (in south eastern Europe). Other religions such as Judaism and Islam are also represented in the EU population; in 2002 the EU had an estimated Jewish population of over a million and a Muslim population in 2006 of 16 million people.

Eurobarometer opinion polls organised by Eurostat show that the majority of EU citizens have some form of belief system but that only 21% see it as important. There is increasing atheism or agnosticism among the general population in Europe, with falling church attendance and membership in many countries. The 2005 Eurobarometer showed that of the European citizens (of the 25 members at that time), 52% believed in a god, 27% in some sort of spirit or life force and 18% had no form of belief. The countries where the fewest people reported a religious belief were the Czech Republic (19%) and Estonia (16%), The most religious societies are those in Malta (95%; predominantly Roman Catholic), and Cyprus and Romania both with about 90% of citizens believing in a god. Across the EU, belief was higher among women, increased with age, those with religious upbringing, those with the lowest levels of formal education, those leaning towards right-wing politics, and those reflecting more upon philosophical and ethical issues.

Other significant religions present in the EU territories are Buddhism, Hinduism (with a strong presence in the United Kingdom) and Neopaganism. Neopaganism is a fast-growing movement that revives and reinvents (in its reconstructionistic approach) the ancient pagan spiritualities of the European peoples. Neopagan religions are legally recognised by the governments of the United Kingdom, Denmark, Sweden, and Spain.

Culture

Further information: Culture of Europe and Cultural policies of the European Union

Liverpool is one of the two European Capitals of Culture for 2008.
Liverpool is one of the two European Capitals of Culture for 2008.

EU culture is intertwined with the culture of Europe and its specific national heritages; policies affecting cultural matters are mainly set by individual member states. Cultural co-operation between member states has been a concern of the EU since its inclusion as a community competency in the Maastricht Treaty. Actions taken in the cultural area by the EU include the Culture 2000 7-year programme, the European Cultural Month event, the Media Plus programme, orchestras such as the European Union Youth Orchestra and the European Capital of Culture programme – where one or more cities in the EU are selected for one year to assist the cultural development of that city. In addition, the EU gives grants to cultural projects (totalling 233 in 2004) and has launched a Web portal dedicated to Europe and culture, responding to the European Council's expressed desire to see the Commission and the member states "promote the networking of cultural information to enable all citizens to access European cultural content by the most advanced technological means".

Within the EU, supporters of European integration often appeal to a shared European historical/cultural heritage, typically including Ancient Greece and Ancient Rome, the feudalism of the Middle Ages, the Renaissance, the Age of Enlightenment, 19th century Liberalism and negative elements such as the World wars. European values are assumed to be grounded in this shared heritage.

Sport

Further information: Sport in Europe and Sport policies of the European Union

Spectator sports are popular in many EU member states (Camp Nou, Barcelona)
Spectator sports are popular in many EU member states (Camp Nou, Barcelona)

Sport is mainly the responsibility of individual member states or other international organisations rather than that of the EU. However, some EU policies have had an impact on sport, such as the free movement of workers which was at the core of the Bosman ruling, which prohibited national football leagues from imposing quotas on foreign players with European citizenship.

Under the proposed Treaty of Lisbon sports would be given a special status which would exempt this sector from much of the EU's economic rules. This followed lobbying by governing organisations such as the International Olympic Committee and FIFA, due to objections over the applications of free market principles to sport which led to an increasing gap between rich and poor clubs.

Several European sports associations are consulted in the formulation of the EU's sports policy, including FIBA, UEFA, EHF, IIHF, FIRA and CEV. All EU member states and their respective national sport associations participate in European sport organisations such as UEFA.

 

 




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