European Union

(Abbr. EU)
An economic and political union established in 1993 after the ratification of the Maastricht Treaty by members of the European Community and since expanded to include numerous Central and Eastern European nations. The establishment of the European Union expanded the political scope of the European Economic Community, especially in the area of foreign and security policy, and provided for the creation of a central European bank and the adoption of a common currency, the euro.

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group established in 1992 by the European Union Treaty (also known as the Maastricht Treaty) and amended by various treaties thereafter. Initially, the EU consisted of six countries: Belgium, Germany, France, Italy, Luxembourg, and the Netherlands.
Denmark, Ireland, and the United Kingdom joined in 1973, Greece in 1981, Spain and Portugal in 1986, Austria, Finland, and Sweden in 1995. The largest expansion occurred in 2004 with 10 new countries joining. They are Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia, and Slovenia. In 2007, two more countries from Eastern Europe, Bulgaria and Romania, joined, bringing the total number to 27. Others are expected to join as well. At its core, the EU is a group of democratic countries working together on economic, judicial, and security issues. It has taken several steps toward a more unified Europe. For example, in 1992, the EU made the decision to move toward a single European currency, known as the Euro. The EU is governed by a five-part institutional system, including the European Commission, the EU Council of Ministers, the European Parliament, the European Court of Justice, and the Court of Auditors, which monitors EU budget spending.
europa. eu.int/index_en.htm.

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The European Union (EU), formerly known as the European Community (EC), was formed in the 1950s to encourage and oversee political and economic cooperation between numerous European nations. In the nearly half-century since it was formed, the EU has gradually succeeded in becoming the dominant governing economic body in Europe, and it now affects every aspect of business in its member states.

History

After World War II, European leaders realized that drastic changes needed to be made to ensure that the armed conflicts that had plagued the continent for more than half a century would become a thing of the past. Leaders of the democratic European nations decided that some form of governing body was needed that would encourage cooperation on all levels and have the power to set economic policy for the entire region.

The first signs of cooperation came in 1948, when the United Kingdom, France, and three other countries formed the West European Union, which was primarily concerned with defense issues. Also in 1948, the Organization for European Economic Cooperation (OEEC) was formed by 16 nations that were not under the influence of the Soviet Union. The OEEC oversaw the implementation of the Marshall Plan, which was the plan created by the United States to get Europe back on its feet after World War II. The OEEC later became the Organization for Economic Cooperation and Development (OECD), which now also includes the United States and Japan.

In the 1950s, three important treaties were signed that signaled the actual birth of a European union. In 1951, the European Coal and Steel Community (ECSC) was created to oversee those industries. The treaty creating that organization is an important one, because it marked the first time that any European nations had allowed a supranational organization to control an important policy area. The ECSC sprang from the Schulman Plan, a 1950 proposal that coordinated steel and coal production between France and Germany. This plan signaled the re-entry of Germany into peacetime Europe and is considered to be the most important date in the history of European unification.

In 1957, a second treaty created the European Atomic Energy Community (Euratom), and in 1958, the European Economic Community (EEC) was brought into being by yet another treaty. These two treaties together are known as the Treaties of Rome, and the creation of the EEC was seen as the first step in creating a common economic market in Europe that would allow for free trade between members and the free movement of people, services, and capital. Official governing bodies were put into place for the first time, as an assembly was convened to oversee the ECSC and the first European Parliament was established. The parliament first met in March 1958 and initially included 142 members from all member states. It was intended that direct elections would be held in each nation to fill parliament seats, but various conflicts over how the system would work led to a 20-year delay in the election process, which was finally launched in January 1979. Prior to that time, members of the European Parliament were nominated by their national parliaments.

In 1967, the name European Community (EC) was used to describe the new, independent institution that was created to oversee the ECSC, EEC, and Euratom. The EC came into being as a result of the Merger Treaty, which was ratified in 1965. The term European Community was used as the main name for the organization for more than 25 years, before the current European Union was adopted in 1993.

The 1970s and 1980s were a period of growth for the EU. In 1973, Denmark, Ireland, and the United Kingdom joined for the first time, and the parliament expanded to 198 members. In 1981 Greece joined the union, and in 1986, Spain and Portugal did the same. The parliament—which had greatly expanded in 1979 to 410 members—grew again, this time to 518 members.

After the growth period ended in 1986, the union sought to strengthen its powers in the late 1980s and early 1990s. In 1986, the Single European Act (SEA) was passed, which targeted the end of 1992 as the date for the formation of a common market and also emphasized political cooperation in foreign policy. To aid unification, the parliament saw its powers increased, as participants had the power to vote on new members for the first time and also had an increased role in setting budgets.

The year 1992 would prove to be a watershed in the growth of the union. That year, the Maastricht Treaty was ratified, representing the most comprehensive treaty since the Treaties of Rome. The treaty also marked a distinct shift toward an emphasis on using economic policy as the main tool to increase European unification. The treaty, which went into effect in 1993, officially changed the name of the European Community to the European Union. In addition, it outlined a three-stage plan for conversion to a common market that included the establishment of a central bank and the creation of a common European currency.

In 1994, the EU combined with the seven-member European Free Trade Association (EFTA) to form the European Economic Area, a zone of 19 countries that formed a single market with no trade restrictions. As a result of that cooperative effort, EFTA members Austria, Finland, and Sweden joined the EU for the first time on January 1, 1995. This triggered a concurrent growth in the European Parliament, which expanded to 626 members. In 1997, the Treaty of Amsterdam was ratified, which cleared the way for the third stage of the plan proposed under the Maastricht Treaty.

Structure

The European Union is comprised of several governing bodies that oversee different aspects of the union's operations. In addition, each country in the union takes turn acting as chairman, with the position changing hands every six months. The European Commission (EC) is perhaps the most important of the governing bodies, as it proposes policies and is the only body that is allowed to propose legislation (besides the national governments of each state). It also oversees the day-to-day operations of the union and ensures that treaties are being carried out as intended. The commission is comprised of 20 commissioners, including a president, who are appointed by member states and approved by the parliament.

Once legislation is passed, it is administered by the European Council, which enforces legislation throughout the union and seeks to improve cooperation between governments. The council is comprised of ministers who represent the national governments of the 15 members of the union. Power in the council is based on the size of the member nations. Germany, France, Italy, and the UK have 10 votes each on the council; Spain has 8 votes; Belgium, Greece, the Netherlands, and Portugal have 5 each; Austria and Sweden have 4 each; Ireland, Denmark, and Finland have 2 each; and Luxembourg has 1 vote. Some issues, such as environmental items, require what is known as a qualified majority (62 votes) to pass. However, any items affecting nuclear policy must be passed unanimously.

Members of the European Parliament are directly elected by the people of each nation, and members serve five-year terms. While the parliament did gain some legislative power from the Maastricht Treaty, it mainly serves as the public forum of the EU, holding open debates on important issues and overseeing the activities of the council and the commission. Finally, the Court of Justice oversees EU laws and regulations and issues rulings when conflicts arise. All decisions issued by the court, which includes 15 judges and 9 advocates, are binding on member states.

How the Union Affects Businesses

Because one of the main roles of the union is to oversee economic cooperation between members, it plays a very large role in how business is conducted throughout Europe. It has established a single market trading system with low, or no, taxes and tariffs, and it encourages economic development.

The most important economic changes in the union have occurred in the last few decades. In 1979, the European Monetary System (EMS) was established to create greater price stability between the currencies of all union members. The core of the EMS was the Exchange Rate Mechanism (ERM), a voluntary system that fixed the price of currencies against each other; rates could be adjusted within a narrow range of prices. Every nation except England participated in the ERM when it was launched. England did eventually participate, beginning in 1990, but it joined Italy in pulling out of the ERM in 1992 on a day that is now remembered as "Black Wednesday."

The ratification of the Maastricht Treaty in 1992 launched the union's current economic policy by creating a timetable to enact a three-stage plan for implementing a single market economy across Europe. Stage 1 of the plan took effect when the treaty was ratified. It officially recognized that the goal of the European Union was to create an Economic and Monetary Union (EMU) of all member states in which members would strive to cooperate more closely than in the past in managing their economies.

Stage 2 of the Maastricht plan was launched in 1994 with the creation of the European Monetary Institute in Frankfurt, Germany. This was a central banking institution that was the forerunner of the European Central Bank (ECB), which now oversees the control of currencies throughout the union. The Central Bank is the hub of the centralized banking system that also includes 15 national Central Banks that serve as the main bank in each of the member states.

One year after stage 2 was completed, union members agreed that stage 3 would begin on January 1, 1999. On that day, the union officially began the move towards a single European currency unit, which is called the euro. Currency conversion rates in participating member states were fixed, and a single monetary policy and foreign exchange rate were implemented. A "euro zone" was created that included the following participating countries: Belgium, Germany, Spain, France, Ireland, Italy, Luxembourg, the Netherlands, Austria, Portugal, and Finland; Greece agreed to participate, but did not become an active member until 2001. Noticeably absent were the United Kingdom, Denmark, and Sweden. As of 2001, those countries still had not joined the euro zone.

Between January 1, 1999 and 2001, countries in the euro zone began the conversion to the single currency. The euro was still a non-cash currency during that transition period, but it was used for almost all non-cash transactions, such as bank transfers, credit card payments, and check or money order payments. Dual pricing systems were set up, establishing prices in national currencies and in euro dollars. Changes were made in software, automatic teller machines, vending machines, and other components to prepare for the euro, and consumers were allowed to open euro bank accounts.

On January 1, 2002, the transition will be completed and the euro will become the official currency of the participating nations. For a two-month period, national currencies and the newly launched euro coins and paper bills will remain in circulation at the same time. At the end of that period, only the euro will be accepted for all financial transactions. Plans call for 12 billion euro banknotes and 50 billion euro coins to go into circulation initially. The full changeover to the new currency is expected to be completed no later than July 1, 2002. At that point, the European Union will have completed its greatest achievement. By converting to a single currency, union leaders hope to achieve benefits that include price stability, greater confidence among investors, a simpler single market economy, a reduction in transaction costs due to the absence of currency exchanges, and an integrated banking system. It is expected that international business and currency transactions will also become simpler and more efficient under the euro. The ultimate goal is a strong and stable Europe that features open markets.

Further Reading:

"A Brief History of the European Union." http://www.salford.ac.uk/economics/euro2/history.htm.

"Economic and Monetary Union. From Rome to Maastricht: A Brief History of EMU." http://europa.eu.int/scadplus/leg/en/lvb/125007.htm.

"The Euro in the Internal Market." http://europa.eu.int/business/en/advice/theeuro/index.html.

The European Union in the United States Web site: http://www.eurunion.org/states/home.htm.

Weidenfeld, Werner. Europe from A to Z: A Guide to European Integration. Office for Official Publications of the European Communities, 1997.

A free trade area comprising Austria, Belgium, Cyprus, the Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Poland, Portugal, Slovakia, Slovenia, Spain, Sweden, and the UK. Designed initially as an economic unit, the European Union is now attempting uniformity in social as well as economic policies. see common agricultural policy.

In November 1993 the official title of the European Community (EC) was changed to European Union (EU) as a result of ratification of the Maastricht treaty by member states' parliaments. The EC was properly known as the European Communities, in the plural. It began as three legally distinct but related organizations: the European Coal and Steel Community (ECSC), the European Atomic Energy Community (Euratom), and the European Economic Community (EEC, sometimes referred to as the ‘Common Market’). In practice the institutions and politics of the three have become increasingly indistinct, a trend formalized at Maastricht.

The EU is the most thoroughgoing example of regional economic and political integration. As an international organization it goes beyond traditional intergovernmentalism and has substantial elements of supranationality, with policy processes often referred to as multi-level governance. The various Union/Community treaties contain fairly open-ended if imprecise commitments to ‘ever closer union’ among the (currently) twenty-five member states.

At the end of the Second World War, European economic and political unity was seen as an important element of post-war reconstruction, and was therefore supported by the United States. As a wholesale abrogation of national sovereignty seemed a distant reality, efforts focused on the functionalist approach to integration as expressed in Jean Monnet's Schumann Plan. Monnet's guiding idea was that war between France and Germany must never again disrupt the politics and prosperity of the continent. Italy and the three Benelux states joined the ensuing negotiations.

The result was the ECSC (Treaty of Paris, signed 18 April 1951, implemented July 1952) among the six, which sought to integrate the coal and steel sectors in such a way that the parties could no longer maintain an independent capacity to make war on each other. Its economic success provided impetus for further and broader integration, despite the failure of the European Defence Community in 1954. Plans for integration across all economic sectors culminated in the Treaty of Rome establishing the EEC and Euratom, signed on 25 March 1957 by the six ECSC members with effect from 1 January 1958. The treaty established a common assembly and Court for all three, and a Commission and Council of Ministers for the two new communities. The United Kingdom had declined involvement, opting to establish a rival organization, the European Free Trade Area (EFTA).

The EEC quickly became the focal point of efforts at European integration. Where the six states could agree, a concrete timetable for policy integration was specified. This led to the fairly rapid establishment of a customs union, a common external tariff, and a nascent common trade policy. Where agreement had been difficult, the Treaty was vague about further steps towards integration. In this way the Treaty has ensured that the integration process has never progressed unless it was in line with member states' national interests.

The Treaty also put forward a long series of policy questions for negotiation among the members. It was hoped that the tangible economic benefits of common policies would provide ongoing impetus for the integration process. It was the responsibility of the Commission to develop legislative proposals aimed at common EC policies, integrating or replacing the policies of individual member states. Agriculture had been of great concern to the French government, being specifically mentioned in the Treaty as a priority, and 1962 Regulation 25 was adopted establishing a Common Agricultural Policy (CAP). The EU also developed its role in external relations through its assistance agreements with former French colonies, the Yaoundé Accords of 1963, succeeded 1975 by the first Lomé Convention.

The Commission proposed legislation and sought approval from the Council of Ministers which represented the member states. The European Court had ruled that EU laws would take precedence over national laws. From this provision stems many of the Union's supranational characteristics. Policy decisions therefore may pose great difficulties for the negotiating states as fundamental national interests are frequently at stake.

The three Communities came to be increasingly indistinguishable over time. The Merger Treaty of 1965 gave all three a common Commission and Council. The EU has also undergone a considerable expansion of membership from six to twenty five, with the accession of the United Kingdom, Ireland, and Denmark in 1973, Greece in 1981, Spain and Portugal in 1986, Sweden, Austria, and Finland in 1995, and Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia and Slovenia in 2004.

If membership has widened, the policy jurisdiction of the EU has ‘deepened’ dramatically. The monumental Single Market Programme was contained in the Single European Act (SEA) and has led to the rapid transborder integration of markets and corporate structures in member economies. Regional and social policy dimensions have been developed (if hesitantly, largely due to UK resistance), and important elements of foreign and defence policy cooperation are enshrined in the Common Foreign and Security Policy (CFSP) process. The most radical step so far, the successful adoption of the Euro as single EU currency (process completed 1 January 2002, though initially excluding Denmark, Sweden, and the UK), and a single monetary policy run by a European Central Bank, has removed core elements of macroeconomic policy-making from national jurisdiction (see Economic and Monetary Union). The introduction of the Euro has also accelerated the process of market integration, building on the single market programme. This process of policy deepening has been aided by institutional reforms contained in amendments to the Treaties as with the SEA of 1986 and the Treaty of Maastricht. The more recent treaties of Amsterdam (1997) and Nice (2000) modestly extended this process of institutional reform, and currently there is a ‘Constitutional Convention’ beginning work on institutional innovations perceived as necessary in the face of both deepening and especially the imminent widening of the membership.

By keeping the end goal indeterminate, ‘Euroenthusiasts’ and ardent supporters of national autonomy alike have usually been able to strike compromises which are understood to be in the common interest of all. This propels the process of integration, despite frequent turmoil and disagreement, and has seen the EU emerge as an increasingly ‘state-like’ entity in the international system. As such the EU is poised to alter traditional conceptions of sovereignty and international organizations. However, the EU finds itself post-Euro at a crucial juncture. It has taken on many state-like attributes in a context of institutional underdevelopment. This fuels dilemmas for EU authorities and member states alike. A single currency, CFSP, and continued enlargement have serious implications for traditional notions of national policy-making and sovereignty, while the EU clearly lacks a strong sense of collective identity at the level of civil society, often portrayed as democratic deficit. Economic adjustment processes resulting from integration are often difficult and the costs are unequally distributed across members and regions. These challenges come in the context of challenges to state capacity in the form of new security dilemmas and global economic integration, which EU-level policy is at least partially meant to address. Institutional underdevelopment awards EU authorities few of the policy mechanisms which have been eroded at the national level. The EU will need collectively to lend more substance to the notion of ‘ever closer union’.

— Geoffrey R. D. Underhill

European Union (European Community). On 1 November 1993 the European Community (EC), a political and economic confederation of European countries, officially became the European Union (EU). The EU consists of three institutions: the European Coal and Steel Community (ECSC), the European Atomic Energy Community (EURATOM), and the European Economic Community (EEC). Its fifteen members are France, Germany, Italy, Belgium, the Netherlands, and Luxembourg (the original "Six" from the 1950s); Great Britain, Denmark, and Ireland (joined 1973); Greece (1981); Portugal and Spain (1986); and Austria, Finland, and Sweden (1995).

The EU's total area is about one-third the size of the United States, but its population in 2000 was 377.6 million, compared to 284.2 million for the United States. Their economies are of roughly comparable size. In 2000 the EU accounted for 18.2 percent of world imports and 17.2 percent of world exports, while its GDP totaled $7.8 trillion. The American figures were 23.9 percent and 15.7 percent with a GDP of $9.9 trillion. Both are also important economic partners. In 2000 the EU's trade with the United States was valued at $394.8 billion and made up 19.2 percent of its total imports and 24.7 percent of its total exports, while American trade with the EU was worth $385.2 billion and accounted for 18.1 and 21.1 percent, respectively. During the same year the EU also made $802.7 billion in direct investments in the United States and received $573.4 billion in return.

Institutions

The EU has four major governing organs. The European Commission, located in Brussels, proposes policies and legislation, is responsible for administration, and enforces both decisions made by European institutions and the provisions of European treaties. Including the commission president, twenty commissioners with individual portfolios serve five-year terms. They are appointed by the national governments but act independently of them. The Council of the European Union, consisting of ministers from each member state, coordinates intergovernmental policies and enacts binding legislation. Depending on the agenda, different types of national minister will attend each council meeting. Most decisions within it take place as a result of a majority vote (normally weighted to reflect the size and importance of the member state), although some issues, such as foreign policy, taxation, and the environment, still require unanimity. The council has a rotating presidency with a six-month term that ends with a meeting of all fifteen heads of state or government. It holds most of its meetings in the country that has the EU presidency. The European Parliament, which meets in Strasbourg, currently consists of 626 members elected for five-year terms. Members are seated by party group (such as Socialist, Christian Democrat, and Green) and since 1979 have been chosen in direct elections. The Parliament's key powers include approving or amending the EU budget submitted by the commission and publicly debating the work of the other governing organs. It may also censure the commission. The Court of Justice, which is located in Luxembourg and has fifteen judges, determines whether treaties in the European Union are being implemented and are in accordance with Union law. Both its judgments and EU law as a whole are binding on all member states.

European and American Perspectives on Integration

Although proposals for European integration go back as far as the Middle Ages, the origins of the present EU date from World War II. Many Europeans believed that for their continent to experience a political and economic revival, the national rivalries that characterized the past had to give way to greater international cooperation. However, ever since the 1940s there has been disagreement on what methods to utilize. "Federalists" like the Italian politician Altiero Spinelli advocated creating a unified European state as soon as possible. The Frenchman Jean Monnet and other "(neo)functionalists" believed that the consolidation of important industrial sectors across national lines would promote integration in all fields. Still another perspective, traditionally strong in Great Britain and Scandinavia but universally evident, advocated greater intergovernmental cooperation but remained wary about supranational organizations that would limit sovereignty. These divergent opinions have ensured that a mélange of approaches has characterized the road to the EU.

Since 1945 American policymakers have consistently supported European integration both publicly and privately, even if their active interest in promoting it waned dramatically starting in the 1960s. According to Geir Lundestad, several considerations informed their thinking. These include the belief that the new European institutions represented a healthy attempt to emulate the "American model" based around federalism, democracy, and free markets and also the idea that integration would promote a modernized Europe that was more efficient economically and less troubled by nationalist rivalries. More concretely, integration would reduce the burden of American military and economic commitments to Europe. Above all, a unified (Western) Europe could play an important role in containing both the Soviet Union and Germany. The United States also has promoted European integration for so long now that to some extent this policy has become traditional, irrespective of other considerations. Furthermore, the desire of Europeans themselves to work toward unity has been a tremendous influence on American policy as well.

American Support for European Integration During the 1940s and 1950s

During World War II, the Roosevelt administration feared that any moves toward European integration would contribute to a division of the world into political and economic blocs. However, the onset of the Cold War dramatically changed the official American attitude. Fear that communists might come to power in Western European countries due to postwar economic hardship led the Truman administration to propose the Marshall Plan in 1947. This initiative led to some modest steps toward European integration, especially the establishment of the Organization for European Economic Cooperation (OEEC) to administer Marshall aid and work for the reduction of tariffs. The Marshall Plan also helped to determine the geographic limits of integration until the 1990s since the negative Soviet reaction cemented the division of the continent. To the Truman administration's frustration, little further progress came until 1950, despite the intensification of the Cold War. The major reason was that Great Britain, at the time the most important state in Western Europe politically and economically, opposed all plans for supranational organizations.

The creation of the Federal Republic of Germany in 1949 made integration seem more urgent than ever. Under pressure from Washington but also motivated by its own interests, the French government and its unofficial advisor Monnet now assumed a leading role. The "Schuman Plan" for a European Coal and Steel Community (ECSC), developed by Monnet and announced by Foreign Minister Robert Schuman on 9 May 1950, ensured that German heavy industry would be used only for peaceful purposes, significantly upgraded the international status of the Federal Republic, and marked the start of postwar Franco-German cooperation. The Truman administration greeted it with enthusiasm. The ECSC, which came into existence in 1952, also set the pattern for further initiatives. It brought together for the first time the "Six" and created the four basic governing organs that characterized later integration. After initial hesitations, the Truman administration also gave its support to Monnet's plan for a "European Defense Community" (EDC) that would prevent the creation of an independent West German army. Although in December 1953 Secretary of State John Foster Dulles even threatened an "agonizing reappraisal" of the American security commitment to Western Europe if the EDC Treaty were not ratified, the French National Assembly rejected it on 30 August 1954, largely because of misgivings about surrendering the national army. The Eisenhower administration later gave its support to the creation of the European Economic Community (EEC) and the European Atomic Energy Community (EURATOM) in 1958. These two institutions and the ECSC, at first collectively called the "European Economic Community," were officially fused into the EC in 1967. They went a long way toward fulfilling Washington's desire for integrated Western European structures that would help contain the Soviet Union and safely incorporate the Federal Republic.

Troubled Relations Between the United States and the European Economic Community

Nonetheless, doubts soon arose about whether European integration was compatible with American leadership in Western Europe. Starting in 1958 French President Charles de Gaulle challenged United States political predominance by demanding a coequal role for France with it and Britain within the North Atlantic Treaty Organization (NATO). He also pursued an increasingly independent policy on issues like Berlin, the Vietnam War, relations with communist states, nuclear weapons, and British membership in the European Economic Community (which to the chagrin of American policymakers he vetoed in 1963). American leaders tried to accommodate de Gaulle while rejecting his aspirations to leadership, but already during the Kennedy administration they began to stress the Atlantic character of European-American relations. Moreover, starting in the late 1950s negative American payment balances (at first due to high levels of American foreign investment and military aid but by the late 1960s also involving trade deficits) led to increasing worries about economic competition from the "Six." Washington responded by intensifying the process of reducing tariffs between industrialized states within the General Agreement on Tariffs and Trade and in 1961 helped create an Organization for Economic Cooperation and Development with American and Canadian membership to replace the OEEC. Since the mid-1960s, the United States and the EU have been involved periodically in trade disputes involving a variety of agricultural and industrial products.

Even though National Security Advisor Henry Kissinger proclaimed 1973 the "Year of Europe," the Nixon administration reevaluated the traditional policy of American support for European integration in light of these political and economic challenges. Henceforth the United States would no longer actively promote new initiatives for supranational integration, although it would not oppose further efforts by the Europeans themselves. Although Jimmy Carter criticized the Nixon and Ford administrations' neglect of the European allies and in January 1978 became the first president to visit the European Commission in Brussels, in practice the United States' main priority had become protecting its own national interests. This became quite clear during the 1980s, when the process of European integration revived after the relative stagnation of the previous decade. The negotiations on the "Single European Act" in 1985–1986, which aimed at the creation of a fully integrated European market by 1992, led to worried speculation in the United States about a "Fortress Europe." In addition, the Reagan administration became involved in a series of disputes over commercial policy with the EC, with which the United States had run a trade deficit starting in 1984.

Relations Since 1989

By 1989 an improvement in relations was in sight, however. The end of the Cold War and the reunification of Germany made expanded European structures seem the best way of providing stability for the entire continent. In addition, by 1990 the United States had a positive trade balance with the EC again but was becoming worried about economic relations with both Japan and China. President George H. W. Bush gave increased attention to the American relationship with the EC. The 1990 Transatlantic Declaration set up a mechanism for regular consultations and reaffirmed the desire of both sides to strengthen their partnership. The Bush administration reached compromises on many of the economic disputes that had arisen as a result of the Single European Act. Moreover, it strongly supported the 1992 Maastricht Treaty that created the EU in 1993 with both an Economic and Monetary Union (EMU) and a Common Foreign and Security Policy (CFSP) among its future goals. In 1995 the United States and the EU agreed on a "New Transatlantic Agenda" that committed them to active cooperation in roughly a hundred policy areas. The EMU was realized with the introduction of a common currency, the euro, on 1 January 1999, at first on an accounting basis only. Although Denmark, Great Britain, and Sweden chose not to participate for the time being, the other twelve EU states replaced their national currencies with euro bank-notes and coins on 1 January 2002. The euro has the potential to rival the dollar as an international reserve currency. The United States remains sensitive to any developments toward a CFSP that might call NATO's preeminence into question, but the EU for some time will not have any capacity to conduct significant military operations outside of that alliance and also has signaled its continued desire to work within it. Moreover, the EU's attention during the first part of the twenty-first century will be devoted to its expansion into eastern Europe. In 1998 it began negotiations with six new candidates for admission (the Czech Republic, Cyprus, Estonia, Hungary, Poland, and Slovenia), with enlargement from this group not expected before the end of 2002. On 15 January 2000 it also initiated talks with six further applicants (Bulgaria, Latvia, Lithuania, Malta, Romania, and Slovakia). Ten of the twelve candidates should join around mid-decade, with Bulgarian and Romanian accession by 2009.

Bibliography

Lundestad, Geir. "Empire" by Integration: The United States and European Integration, 1945–1997. Oxford: Oxford University Press, 1998. The standard work; also provocative with its thesis of an American "empire."

Nugent, Neill. The Government and Politics of the European Union. 4th ed. Durham, N.C.: Duke University Press, 1999. The standard work on how the EU functions and its policies.

Pond, Elizabeth. The Rebirth of Europe. Rev. ed. Washington, D.C.: Brookings Institution Press, 1999. An excellent overview of European integration and its prospects and problems since 1989.

Stirk, Peter M. R. A History of European Integration since 1914. London: Continuum, 1996.

Urwin, Derek W. The Community of Europe: A History of European Integration since 1945. 2d ed. London: Longman, 1995. Both Stirk and Urwin are good general histories, with the former paying more attention to both the Atlantic framework and the Cold War as influences on the integration process.

—Thomas Maulucci

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The European Union (EU) is a long-standing political and economic federation of autonomous European nations. With the consent of member states, the EU legislates a variety of issues by treaty, including trade, customs, travel, currency, and defense. Members choose to participate in various EU institutions, delegating sovereignty in order to achieve common goals.

The organization embraces democracy and the rule of law, requiring member states to possess some form of representative government, elected by universal adult suffrage of the adult citizenry. The mission of the EU is to promote economic growth in Europe, create a strong international market, lobby for European interests in the international community, raise standards of living, and promote peace.

History. European integration, the process that eventually yielded the EU, began on May 9, 1950, when France proposed to create a European trade organization. Two years later, France and Germany established the European Coal and Steel Community. Both nations sought to solve disputes over coal mining territories and industry competition unresolved since the end of the Second World War. Belgium later joined France and Germany, uniting most of Western Europe's continental coal and steel industry.

Continued success of the European Coal and Steel Community prompted its president to lobby European governments for the establishment of a large-scale economic and trade union. In 1957, six nations (France, Germany, Belgium, the Netherlands, Luxembourg, and Italy) signed the Treaty of Rome, establishing the European Economic Community (EEC). The EEC standardized some tariffs, opened borders to free trade, promoted industry cooperation, regulated industry standards, and synchronized export practices.

In 1967, the member nations brought the European Coal and Steel Community and the European Atomic Energy Community (Euratom) into the fold of the EEC. The new unified organization was officially named the European Community (EC), though many continued to use to older designation, EEC, to refer to the new union.

Several nations in Europe chose not to join the original EEC, the most prominent of which was Great Britain. In January 1960, Britain formed a more loosely regulated economic union to rival the EC. The European Free Trade Association (EFTA), known colloquially as the "Seven," included Britain, Austria, Denmark, Norway, Portugal, Sweden, and Switzerland. A year later, Britain applied for membership in the EC, but France rejected their proposal to join the organization. The French government subsequently vetoed Britain's second application for membership in 1964.

Britain, along with Ireland, Denmark, and Norway, became members of the EC in 1973. In a series of accessions, six more nations joined the EC before 1995. The organization adopted a more ambitious mandate in the 1990s, establishing government and judiciary organizations in an attempt to closely unite European interests. Adoption of the new mandate by member states established the European Union.

Organization. Today's EU mission encompasses more than economic goals. The principal objectives of the EU are to establish European citizenship, ensure civil rights of European citizens, promote social progress, protect European security, and ensure justice. To these ends, the European Union maintains its own government and supporting agencies. These institutions are granted sovereignty by the member states to legislate European affairs and create international law. Final adoption of EU policy, however, is left to the individual member states.

Five primary institutions comprise the government of the EU. Its overall structure embraces the three-branch democratic model of government, with executive, legislative, and judicial bodies. The European Commission is the primary institution of the executive branch. Members are elected or appointed by the European Parliament. The Council of the Union is composed of representatives from the governments of the member states. The Council governs the EU as a collective, requiring majority support to set or endorse policy.

The European Parliament, the legislative body, is elected by the people of the member states. Committees within the European Parliament address specific concerns, such as health care, preservation of the environment, and trade regulation. The Court of Auditors, the committee responsible for overseeing and managing the EU budget, remains separate from every branch of the EU government, but works closely with the Parliament to appropriately allocate funds and resources.

The EU judiciary is the Court of Justice. The jurisdiction of the European court is somewhat dubious, and member states recognize its authority to varying degrees. The court is similar in structure and function to those of the United Nations, but is permitted to pursue only cases that affect member states.

A myriad of committees and support institutions comprise the rest of the EU government. The EU maintains its own central finance system, including the European Central Bank and the European Investment Bank. These contain funds used by the EU or granted to individual member states for various joint projects. In 1999, nine nations adopted a standard European currency, the Euro.

Membership. Fifteen member states currently comprise the European Union: Austria, Belgium, Denmark, Germany, Greece, Finland, France, Ireland, Italy, Luxembourg, the Netherlands, Portugal, Spain, Sweden, and the United Kingdom of Great Britain and Northern Ireland. These member nations participate in the EU to varying degrees. For example, Britain participates in EU economic and trade associations, but uses its national currency, the pound, instead of the euro.

In 1998, the EU began negotiations with several eastern and southern European nations regarding EU expansion. Still recovering from decades of Soviet Communist domination, many of these nations possess fledgling free market economies. Introduction of former Eastern Block nations into the EU holds the potential for economic growth and expanded investment opportunities for European industry. However, expansion also poses liabilities to more economically robust EU nations.

The EU granted admission to the following candidate nations in 2002: Czech Republic, Cyprus, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovenia, and Slovakia. These nations officially join the EU on May 1, 2004, assuming that they ratify membership in a national, public referendum. Bulgaria and Romania are scheduled join the EU in 2007. Some negotiations on expansion proved contentious. The EU denied Turkey's application to join the organization, despite the nation's numerous economic and trade associations with Europe. The EU will review Turkey's application again in 2004, if the nation furnishes evidence that it has met EU demands to improve human rights and maintain a stable democratic government. The nation of Cyprus, divided between Grecian southern Cyprus and nationalist Turkish Cypriots, failed to reunify before the EU accepted the national proposal to join the EU. Therefore, only the independent half of the nation will join the EU in 2004.

Some nations in Western Europe have chosen to remain outside of the European Union. Switzerland, and EFTA members, did not join the union on the grounds that membership in the EU threatened its national policy of declared neutrality. Norway also chose to exclude itself from EU membership.

Common defense and security: the future of the EU. A series of treaties in the 1980s and 1990s expanded the political, defense, and military role of the European Union. Formerly an instrument of economic and social policy, the EU adopted the Common Foreign and Security Policy (CFSP) in response to global instability and the rise or terrorism. The creation of the European Security and Defense Policy (ESDP) followed, outlining the EU's international responsibilities to defend European territory and interests while cooperating with organizations such as the North Atlantic Treaty Organization (NATO) and the United Nations.

Defense and security strategy remains one of the most contentious aspects of European Union policy. Some member states prefer to rely on their connections to NATO, or their own defenses, for protection. Others are wary of creating an EU military force under international command.

The EU established several crisis management tasks, known as the Petersberg Tasks, a foreign policy priority. For the purpose of humanitarian aid and rescue, peacekeeping, and crisis management, the EU created a military task force of 60,000 reserve troops. Member states can choose to contribute and deploy national military troops to EU operations on a case-by-case basis.

The EDSP launched its first operation, a police mission in Bosnia and Herzegovina, in January 2003. The first EU military operation commenced in Macedonia two months later.

With the aid of ESDP liaisons in 2002, the EU candidate nations signed a declaration warning Iraqi leader Saddam Hussein that military action was justified if United Nations weapons inspections were not permitted to freely proceed. The statement angered several EU members, causing a rift in EU foreign policy. Although the EU did not formally support the subsequent United States led action in Iraq, several member and candidate nations supported the Coalition military action. Some of the most influential EU nations, such as France and Germany, voiced strong opposition to the 2003 war in Iraq.

Further Reading

Electronic

European Union. <http://www.europa.eu.int> (May 9, 2003).

Euro

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Preliminary statement:

The evolution of the European Union (EU) from a regional economic agreement among six neighboring states in 1951 to today's supranational organization of 27 countries across the European continent stands as an unprecedented phenomenon in the annals of history. Dynastic unions for territorial consolidation were long the norm in Europe. On a few occasions even country-level unions were arranged - the Polish-Lithuanian Commonwealth and the Austro-Hungarian Empire were examples - but for such a large number of nation-states to cede some of their sovereignty to an overarching entity is truly unique. Although the EU is not a federation in the strict sense, it is far more than a free-trade association such as ASEAN, NAFTA, or Mercosur, and it has many of the attributes associated with independent nations: its own flag, anthem, founding date, and currency, as well as an incipient common foreign and security policy in its dealings with other nations. In the future, many of these nation-like characteristics are likely to be expanded. Thus, inclusion of basic intelligence on the EU has been deemed appropriate as a new, separate entity in The World Factbook. However, because of the EU's special status, this description is placed after the regular country entries.

Background:

Following the two devastating World Wars in the first half of the 20th century, a number of European leaders in the late 1940s became convinced that the only way to establish a lasting peace was to unite the two chief belligerent nations - France and Germany - both economically and politically. In 1950, the French Foreign Minister Robert SCHUMAN proposed an eventual union of all Europe, the first step of which would be the integration of the coal and steel industries of Western Europe. The following year the European Coal and Steel Community (ECSC) was set up when six members, Belgium, France, West Germany, Italy, Luxembourg, and the Netherlands, signed the Treaty of Paris. The ECSC was so successful that within a few years the decision was made to integrate other parts of the countries' economies. In 1957, the Treaties of Rome created the European Economic Community (EEC) and the European Atomic Energy Community (Euratom), and the six member states undertook to eliminate trade barriers among themselves by forming a common market. In 1967, the institutions of all three communities were formally merged into the European Community (EC), creating a single Commission, a single Council of Ministers, and the European Parliament. Members of the European Parliament were initially selected by national parliaments, but in 1979 the first direct elections were undertaken and they have been held every five years since. In 1973, the first enlargement of the EC took place with the addition of Denmark, Ireland, and the United Kingdom. The 1980s saw further membership expansion with Greece joining in 1981 and Spain and Portugal in 1986. The 1992 Treaty of Maastricht laid the basis for further forms of cooperation in foreign and defense policy, in judicial and internal affairs, and in the creation of an economic and monetary union - including a common currency. This further integration created the European Union (EU). In 1995, Austria, Finland, and Sweden joined the EU, raising the membership total to 15. A new currency, the euro, was launched in world money markets on 1 January 1999; it became the unit of exchange for all of the EU states except the United Kingdom, Sweden, and Denmark. In 2002, citizens of the 12 euro-area countries began using the euro banknotes and coins. Ten new countries joined the EU in 2004 - Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia, and Slovenia - and in 2007 Bulgaria and Romania joined, bringing the current membership to 27. In order to ensure that the EU can continue to function efficiently with an expanded membership, the Treaty of Nice (in force as of 1 February 2003) set forth rules streamlining the size and procedures of EU institutions. An effort to establish an EU constitution, begun in October 2004, failed to attain unanimous ratification. A new effort, undertaken in June 2007, calls for the creation of an Intergovernmental Conference to form a political agreement, known as the Reform Treaty, which is to serve as a constitution. Unlike the constitution, however, the Reform Treaty would amend existing treaties rather than replace them. In June 2008, the Irish rejected the Reform Treaty in a referendum.

Location:	Europe between the North Atlantic Ocean in the west and Russia, Belarus, and Ukraine to the east
Map references:	Europe
Area:	total: 4,324,782 sq km
Area - comparative:	less than one-half the size of the US
Land boundaries:	total: 12,440.8 km border countries: Albania 282 km, Andorra 120.3 km, Belarus 1,050 km, Croatia 999 km, Holy See 3.2 km, Liechtenstein 34.9 km, Macedonia 394 km, Moldova 450 km, Monaco 4.4 km, Norway 2,348 km, Russia 2,257 km, San Marino 39 km, Serbia 945 km, Switzerland 1,811 km, Turkey 446 km, Ukraine 1,257 km note: data for European Continent only
Coastline:	65,992.9 km
Maritime claims:	NA
Climate:	cold temperate; potentially subarctic in the north to temperate; mild wet winters; hot dry summers in the south
Terrain:	fairly flat along the Baltic and Atlantic coast; mountainous in the central and southern areas
Elevation extremes:	lowest point: Lammefjord, Denmark -7 m; Zuidplaspolder, Netherlands -7 m highest point: Mont Blanc 4,807 m; note - situated on the border between France and Italy
Natural resources:	iron ore, natural gas, petroleum, coal, copper, lead, zinc, bauxite, uranium, potash, salt, hydropower, arable land, timber, fish
Land use:	arable land: NA permanent crops: NA other: NA
Irrigated land:	168,050 sq km (2003 est.)
Natural hazards:	flooding along coasts; avalanches in mountainous area; earthquakes in the south; volcanic eruptions in Italy; periodic droughts in Spain; ice floes in the Baltic
Environment - current issues:	NA
Environment - international agreements:	party to: Air Pollution, Air Pollution-Nitrogen Oxides, Air Pollution-Persistent Organic Pollutants, Air Pollution-Sulphur 94, Antarctic-Marine Living Resources, Biodiversity, Climate Change, Climate Change-Kyoto Protocol, Desertification, Hazardous Wastes, Law of the Sea, Ozone Layer Protection, Tropical Timber 83, Tropical Timber 94 signed but not ratified: Air Pollution-Volatile Organic Compounds

Population:	491,582,852 (July 2009 est.)
Age structure:	0-14 years: 15.44% (male 38,975,981/female 36,925,704) 15-64 years: 67.22% (male 166,277,341/female 164,183,829) 65 years and over: 17.34% (male 35,372,684/female 49,847,313) (2009 est.)
Median age:	note - see individual country entries of member states (2009 est.)
Population growth rate:	0.108% (2009 est.)
Birth rate:	9.9 births/1,000 population (2009 est.)
Death rate:	10.28 deaths/1,000 population (2009 est.)
Net migration rate:	1.46 migrant(s)/1,000 population (2009 est.)
Sex ratio:	at birth: 1.06 male(s)/female under 15 years: 1.06 male(s)/female 15-64 years: 1 male(s)/female 65 years and over: 0.68 male(s)/female total population: 0.92 male(s)/female (2009 est.)
Infant mortality rate:	total: 5.72 deaths/1,000 live births male: 6.38 deaths/1,000 live births female: 5.02 deaths/1,000 live births (2009 est.)
Life expectancy at birth:	total population: 78.67 years male: 75.54 years female: 81.97 years (2009 est.)
Total fertility rate:	1.51 children born/woman (2009 est.)
HIV/AIDS - adult prevalence rate:	note - see individual country entries of member states
HIV/AIDS - people living with HIV/AIDS:	note - see individual country entries of member states
HIV/AIDS - deaths:	note - see individual country entries of member states
Religions:	Roman Catholic, Protestant, Orthodox, Muslim, Jewish
Languages:	Bulgarian, Czech, Danish, Dutch, English, Estonian, Finnish, French, Gaelic, German, Greek, Hungarian, Italian, Latvian, Lithuanian, Maltese, Polish, Portuguese, Romanian, Slovak, Slovene, Spanish, Swedish note: only official languages are listed; German, the major language of Germany, Austria, and Switzerland, is the most widely spoken mother tongue - over 19% of the EU population; English is the most widely spoken language - about 49% of the EU population is conversant with it (2007)

Union name:	conventional long form: European Union abbreviation: EU
Political structure:	a hybrid intergovernmental and supranational organization
Capital:	name: Brussels (Belgium), Strasbourg (France), Luxembourg geographic coordinates: 50 50 N, 4 20 E time difference: UTC+1 (6 hours ahead of Washington, DC during Standard Time) daylight saving time: +1hr, begins last Sunday in March; ends last Sunday in October note: the Council of the European Union meets in Brussels, Belgium; the European Parliament meets in Brussels and Strasbourg, France; the Court of Justice of the European Communities meets in Luxembourg
Member states:	27 countries: Austria, Belgium, Bulgaria, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, UK; note - Canary Islands (Spain), Azores and Madeira (Portugal), French Guiana, Guadeloupe, Martinique, and Reunion (France) are sometimes listed separately even though they are legally a part of Spain, Portugal, and France; candidate countries: Croatia, Macedonia, Turkey
Independence:	7 February 1992 (Maastricht Treaty signed establishing the EU); 1 November 1993 (Maastricht Treaty entered into force)
National holiday:	Europe Day 9 May (1950); note - a Union-wide holiday, the day that Robert SCHUMAN proposed the creation of the European Coal and Steel Community to achieve an organized Europe
Constitution:	none note: based on a series of treaties: the Treaty of Paris, which set up the European Coal and Steel Community (ECSC) in 1951; the Treaties of Rome, which set up the European Economic Community (EEC) and the European Atomic Energy Community (Euratom) in 1957; the Single European Act in 1986; the Treaty on European Union (Maastricht) in 1992; the Treaty of Amsterdam in 1997; and the Treaty of Nice in 2003; note - a new draft Constitutional Treaty, signed on 29 October 2004 in Rome, gave member states two years for ratification either by parliamentary vote or national referendum before it was scheduled to take effect on 1 November 2006; defeat in French and Dutch referenda in May-June 2005 dealt a severe setback to the ratification process; in June 2007, the European Council agreed on a clear and concise mandate for an Intergovernmental Conference to form a political agreement and put it into legal form; this agreement, known as the Reform Treaty, would have served as a constitution and was presented to the European Council in October 2007 for individual country ratification; it was rejected by Irish voters in June 2008, again stalling the ratification process
Legal system:	comparable to the legal systems of member states; first supranational law system
Suffrage:	18 years of age; universal
Executive branch:	chief of union: President of the European Commission Jose Manuel DURAO BARROSO (since 22 November 2004) cabinet: European Commission (composed of 27 members, one from each member country; each commissioner responsible for one or more policy areas) elections: the president of the European Commission is designated by member governments and is confirmed by the European Parliament; working from member state recommendations, the Commission president then assembles a "college" of Commission members; the European Parliament confirms the entire Commission for a five-year term; the last confirmation process was held 18 November 2004 (next to be held in 2009) election results: European Parliament approved the European Commission by a vote of 449 to 149 with 82 abstentions note: the European Council brings together heads of state and government and the president of the European Commission and meets at least four times a year; its aim is to provide the impetus for the major political issues relating to European integration and to issue general policy guidelines
Legislative branch:	two legislative bodies consisting of the Council of the European Union (27 member-state ministers having 345 votes; the number of votes is roughly proportional to member-states' population; note - the Council is the main decision-making body of the EU) and the European Parliament (785 seats, as of 1 January 2007; seats allocated among member states in proportion to population; members elected by direct universal suffrage for a five-year term) elections: last held 10-13 June 2004 (next to be held in June 2009) election results: percent of vote - NA; seats by party - EPP-ED 268, PES 202, ALDE 88, Greens/EFA 42, EUL/NGL 41, IND/DEM 36, UEN 27, independents 28; note - seats by party as of 1 December 2007 - EPP-ED 275, PES 217, ALDE 104, UEN 44, Greens/EFA 42, EUL/NGL 41, IND/DEM 24, independents 34, unaccounted for 4
Judicial branch:	Court of Justice of the European Communities (ensures that the treaties are interpreted and applied uniformly throughout the EU; resolve constitutional issues among the EU institutions) - 27 justices (one from each member state) appointed for a six-year term; note - for the sake of efficiency, the court can sit with 13 justices known as the "Grand Chamber"; Court of First Instance - 27 justices appointed for a six-year term
Political parties and leaders:	Confederal Group of the European United Left-Nordic Green Left or EUL/NGL [Francis WURTZ]; European People's Party-European Democrats or EPP-ED [Joseph DAUL]; Group of the Alliance of Liberals and Democrats for Europe or ALDE [Graham R. WATSON]; Group of Greens/European Free Alliance or Greens/EFA [Monica FRASSONI and Daniel Marc COHN-BENDIT]; Identity, Tradition, Sovereignty Group or ITS [Bruno GOLLNISCH]; Independence/Democracy Group or IND/DEM [Jens-Peter BONDE and Nigel FARAGE]; Socialist Group in the European Parliament or PES [Martin SCHULZ]; Union for Europe of the Nations Group or UEN [Brian CROWLEY and Cristiana MUSCARDINI]
International organization participation:	European Union: ARF (dialogue member), ASEAN (dialogue member), IDA, OAS (observer), PIF (partner), SAARC (observer), UN (observer) European Community: Australian Group, CBSS, CERN, FAO, EBRD, G-10, LAIA, NSG (observer), OECD, UNRWA, WCO, WTO, ZC (observer) European Central Bank: BIS European Investment Bank: EBRD, WADB (nonregional member)
Diplomatic representation in the US:	chief of mission: Ambassador John BRUTON chancery: 2300 M Street, NW, Washington, DC 20037 telephone: [1] (202) 862-9500 FAX: [1] (202) 429-1766
Diplomatic representation from the US:	chief of mission: Ambassador (vacant); Charge d'Affaires Christopher MURRAY embassy: 13 Zinnerstraat/Rue Zinner, B-1000 Brussels mailing address: same as above telephone: [32] (2) 508-2111 FAX: [32] (2) 508-2063
Flag description:	blue field with 12 five-pointed gold stars arranged in a circle in the center, representing the union of the peoples of Europe; the number of stars is fixed

Economy - overview:	Internally, the EU is attempting to lower trade barriers, adopt a common currency, and move toward convergence of living standards. Internationally, the EU aims to bolster Europe's trade position and its political and economic power. Because of the great differences in per capita income among member states (from $7,000 to $69,000) and historic national animosities, the EU faces difficulties in devising and enforcing common policies. For example, since 2003 Germany and France have flouted the member states' treaty obligation to prevent their national budgets from running more than a 3% deficit. In 2004 and 2007, the EU admitted 10 and two countries, respectively, that are, in general, less advanced technologically and economically than the other 15. Eleven established EU member states introduced the euro as their common currency on 1 January 1999 (Greece did so two years later), but the UK, Sweden, and Denmark chose not to participate. Of the 12 most recent member states, only Slovenia (1 January 2007) and Cyprus and Malta (1 January 2008) have adopted the euro; the remaining nine are legally required to adopt the currency upon meeting EU's fiscal and monetary convergence criteria.
GDP (purchasing power parity):	$14.82 trillion (2008 est.) $14.66 trillion (2007) $14.34 trillion (2006) note: data are in 2008 US dollars
GDP (official exchange rate):	$18.85 trillion (2008 est.)
GDP - real growth rate:	1% (2008 est.) 3% (2007 est.) 3.3% (2006 est.)
GDP - per capita (PPP):	$33,400 (2008 est.) $33,400 (2007 est.) $32,600 (2006 est.) note: data are in 2008 US dollars
GDP - composition by sector:	agriculture: 2% industry: 26.8% services: 71.1% (2008 est.)
Labor force:	224.8 million (2008 est.)
Labor force - by occupation:	agriculture: 5.6% industry: 27.7% services: 66.7% note: the remainder is in miscellaneous public and private sector industries and services (2007 est.)
Unemployment rate:	7.5% (2008 est.)
Population below poverty line:	note - see individual country entries of member states
Household income or consumption by percentage share:	lowest 10%: 2.8% highest 10%: 25.2% (2001 est.)
Distribution of family income - Gini index:	31 (2005 est.)
Investment (gross fixed):	21% of GDP (2008 est.)
Fiscal year:	NA
Inflation rate (consumer prices):	3% (2008 est.)
Central bank discount rate:	4% note: this is the European Central Bank's rate on the marginal lending facility, which offers overnight credit to banks from the eurosystem (31 December 2008)
Commercial bank prime lending rate:	8.03% (31 December 2007)
Stock of money:	$5.679 trillion note: this is the quantity of money, M1, for the euro area, converted into US dollars at the exchange rate for the date indicated; it excludes the stock of money carried by non-eurozone members of the European Union (31 December 2008)
Stock of quasi money:	$11.38 trillion note: this is the quantity of quasi money, M2, for the euro area, converted into US dollars at the exchange rate for the date indicated; it excludes the stock of quasi money carried by non-eurozone members of the European Union (31 December 2008)
Stock of domestic credit:	$20.94 trillion note: this figure refers to the euro area only; it excludes credit data for members of the EU outside the eurozone (31 December 2007)
Market value of publicly traded shares:	$14.37 trillion (2008 est.)
Agriculture - products:	wheat, barley, oilseeds, sugar beets, wine, grapes; dairy products, cattle, sheep, pigs, poultry; fish
Industries:	among the world's largest and most technologically advanced, the European Union industrial base includes: ferrous and non-ferrous metal production and processing, metal products, petroleum, coal, cement, chemicals, pharmaceuticals, aerospace, rail transportation equipment, passenger and commercial vehicles, construction equipment, industrial equipment, shipbuilding, electrical power equipment, machine tools and automated manufacturing systems, electronics and telecommunications equipment, fishing, food and beverage processing, furniture, paper, textiles, tourism
Industrial production growth rate:	-0.4% (2008 est.)
Electricity - production:	3.103 trillion kWh (2007 est.)
Electricity - consumption:	2.926 trillion kWh (2007 est.)
Electricity - exports:	NA kWh
Electricity - imports:	NA kWh
Oil - production:	2.676 million bbl/day (2007 est.)
Oil - consumption:	14.38 million bbl/day (2007 est.)
Oil - exports:	2.196 million bbl/day (2007 est.)
Oil - imports:	8.613 million bbl/day (2007 est.)
Oil - proved reserves:	6.146 billion bbl (1 January 2008)
Natural gas - production:	197.8 billion cu m (2007 est.)
Natural gas - consumption:	497.3 billion cu m (2007 est.)
Natural gas - exports:	NA cu m
Natural gas - imports:	NA cu m
Natural gas - proved reserves:	2.476 trillion cu m (1 January 2008 est.)
Current account balance:	$51.4 billion (2008 est.)
Exports:	$1.952 trillion; note - external exports, excluding intra-EU trade (2007)
Exports - commodities:	machinery, motor vehicles, aircraft, plastics, pharmaceuticals and other chemicals, fuels, iron and steel, nonferrous metals, wood pulp and paper products, textiles, meat, dairy products, fish, alcoholic beverages.
Imports:	$1.69 trillion f.o.b.; note - external imports, excluding intra-EU trade (2007)
Imports - commodities:	machinery, vehicles, aircraft, plastics, crude oil, chemicals, textiles, metals, foodstuffs, clothing
Reserves of foreign exchange and gold:	$NA
Currency (code):	euro, British pound, Bulgarian lev, Czech koruna, Danish krone, Estonian kroon, Hungarian forint, Latvian lat, Lithuanian litas, Polish zloty, Romanian leu, Slovak koruna, Swedish krona
Currency code:	EUR
Exchange rates:	euros per US dollar - 0.6827 (2008 est.), 0.7345 (2007), 0.7964 (2006), 0.8041 (2005), 0.8054 (2004)

Telephones - main lines in use:	238 million (2005)
Telephones - mobile cellular:	466 million (2005)
Telephone system:	note - see individual country entries of member states
Radio broadcast stations:	AM 930, FM 13,655, shortwave 71 (1998); note - sum of individual country radio broadcast stations; there is also a European-wide station (Euroradio)
Television broadcast stations:	2,700 (1995); note - sum of individual country television broadcast stations excluding repeaters; there is also a European-wide station (Eurovision)
Internet country code:	.eu; note - see country entries of member states for individual country codes
Internet hosts:	31,693 (2008); note - this sum reflects the number of internet hosts assigned the .eu internet country code
Internet users:	247 million (2006)

Airports:	3,127 3,393 (2008)
Airports - with paved runways:	total: 1,842 over 3,047 m: 107 2,438 to 3,047 m: 316 1,524 to 2,437 m: 518 914 to 1,523 m: 424 under 914 m: 277 (2008)
Airports - with unpaved runways:	total: 1,285 over 3,047 m: 3 2,438 to 3,047 m: 3 1,524 to 2,437 m: 27 914 to 1,523 m: 243 under 914 m: 1,009 (2008)
Heliports:	100 (2007)
Railways:	total: 236,436 km broad gauge: 28,250 km standard gauge: 200,401 km narrow gauge: 7,771 km other: 23 km (2007)
Roadways:	total: 5,454,446 km (2008)
Waterways:	52,332 km (2006)
Ports and terminals:	Antwerp (Belgium), Barcelona (Spain), Braila (Romania), Bremen (Germany), Burgas (Bulgaria), Constanta (Romania), Copenhagen (Denmark), Galati (Romania), Gdansk (Poland), Hamburg (Germany), Helsinki (Finland), Las Palmas (Canary Islands, Spain), Le Havre (France), Lisbon (Portugal), London (UK), Marseille (France), Naples (Italy), Peiraiefs or Piraeus (Greece), Riga (Latvia), Rotterdam (Netherlands), Stockholm (Sweden), Talinn (Estonia), Tulcea (Romania), Varna (Bulgaria)

Military - note:

the five-nation Eurocorps - created in 1992 by France, Germany, Belgium, Spain, and Luxembourg - has deployed troops and police on peacekeeping missions to Bosnia-Herzegovina, Macedonia, and the Democratic Republic of the Congo and assumed command of the ISAF in Afghanistan in August 2004; Eurocorps directly commands the 5,000-man Franco-German Brigade, the Multinational Command Support Brigade, and EUFOR in Bosnia and Herzegovina; in November 2004, the EU Council of Ministers formally committed to creating 13 1,500-man battle groups by the end of 2007, to respond to international crises on a rotating basis; 22 of the EU's 27 nations have agreed to supply troops; France, Italy, and the UK formed the first of three battle groups in 2005; Norway, Sweden, Estonia, and Finland established the Nordic Battle Group effective 1 January 2008; nine other groups are to be formed; a rapid-reaction naval EU Maritime Task Group was stood up in March 2007 (2007)

Disputes - international:

as a political union, the EU has no border disputes with neighboring countries, but Estonia has no land boundary agreements with Russia, Slovenia disputes its land and maritime boundaries with Croatia, and Spain has territorial and maritime disputes with Morocco and with the UK over Gibraltar; the EU has set up a Schengen area - consisting of 22 EU member states that have signed the convention implementing the Schengen agreements or "acquis" (1985 and 1990) on the free movement of persons and the harmonization of border controls in Europe; these agreements became incorporated into EU law with the implementation of the 1997 Treaty of Amsterdam on 1 May 1999; in addition, non-EU states Iceland and Norway (as part of the Nordic Union) have been included in the Schengen area since 1996 (full members in 2001), and Switzerland since 2008 bringing the total current membership to 25; the UK (since 2000) and Ireland (since 2002) take part in only some aspects of the Schengen area, especially with respect to police and criminal matters; nine of the 12 new member states that joined the EU since 2004 joined Schengen on 21 December 2007; of the three remaining EU states, Cyprus is expected to join by 2009, while Romania and Bulgaria continue to enhance their border security systems

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A federation of European nations set up after the World War II. The original European Union members were Belgium, Germany, France, Italy, Luxembourg, and the Netherlands. These countries were later joined by Austria, Denmark, Finland, Greece, Ireland, Portugal, Spain, Sweden, and the United Kingdom. Other countries preparing to join the current group of fifteen are Bulgaria, Czech Republic, Estonia, Cyprus, Latvia, Lithuania, Hungary, Malta, Poland, Romania, Slovenia, Slovakia, and Turkey. As it relates to the world of wine, the EU has established a standard set of regulations for wines entering EU countries from the United States; some member countries might also have additional individual requirements. Essentially, U.S. Exporters must follow the tax and trade bureau (previously batf) production regulations described in Circular 86-2-Certification and Analysis of U.S. Wine for Export to the European Economic Community (EEC). In addition to a host of required information that must appear on the labels, it's interesting to note what is not allowed. Items that cannot appear on labels include European appellation names, such as "Champagne" and "Beaujolais." In fact, the label can't show the use of generic or semigeneric wine class or type designations having European significance. For instance, "méthode champenoise" cannot be used and must be replaced by any of the following: "bottle-fermented by the traditional method," "traditional method," "classical method," or "classical traditional method." Labels are not allowed to have quality terms that have no tax and trade bureau (previously batf) standard, such as "reserve" and "select." Furthermore, a geographic indication of "American" is too broad-the label must indicate a smaller area, such as "California" or "New York," or one of the american viticultural areas. Interestingly, items required on U.S. Labels, like the government warning statement and the sulfites declaration, are not allowed either.

A group of European countries that participates in the world economy as one economic unit and operates under one official currency, the euro. The EU's goal is to create a barrier-free trade zone and to enhance economic wealth by creating more efficiency within its marketplace.

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The current formalized incarnation of the European Union was created in 1993 with 12 initial members. Since then, many additional countries have since joined. The EU has become one of the largest producers in the world, in terms of GDP, and the euro has maintained a competitive value against the U.S. dollar.

EU and non-EU members must agree to many legal requirements in order to trade with the EU member states.

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A political union, often called the EU, to which the member states of the EEC are evolving. Based on the Maastrict Treaty, it envisions the eventual establishment of common economic, foreign, security, and justice policies. The extent to which this goal will be achieved is still in doubt and occasions deep divisions in some member states, especially Great Britain. The members of the EU are Austria, Belgium, Denmark, Finland, France, Germany, Great Britain, Greece, Ireland, Italy, Luxembourg, The Netherlands, Portugal, Spain, and Sweden. Several nations, including the Czech Republic, Hungary, Poland, and Turkey, are seeking membership.

The European Union (EU) is an alliance of 15 European countries. Comprised of Belgium, Germany, France, Italy, Luxembourg, the Netherlands, Denmark, Ireland, the United Kingdom, Greece, Spain, Portugal, Austria, Finland, and Sweden, the EU’s mission is to organize and promote relations between these countries. Specifically, it focuses on advancing economic and social goals, through the establishment of the EU single monetary market in 1993 and the launching of a single currency in 1999; building and establishing EU law, including legislation and treaties; and providing a united “international” front with respect to foreign policy, common humanitarian aid to non-EU countries, united action in international crises, and common positions within international organizations. When the United States called upon the EU to support the war on terrorism, for example, the EU responded as one like entity, contributing to emergency preparedness, air transport security, and humanitarian aid.
The United States and the European Union share many like-minded foreign-policy goals, including promoting peace and democracy around the world and contributing to the expansion of world trade and closer economic relations. Like the United States, the EU has promised to promote the Middle East peace process, support United Nations human rights activities, and fight against worldwide organized crime, terrorism, and drug trafficking. Recognizing the importance of American support for European integration, in 1971 the EU Commission opened a U.S. delegation (which in essence functions like an embassy), with full diplomatic privileges and immunities. The Head of Delegation was accorded full ambassadorial status by the United States in 1990, representing the commission in its dealings with the U.S. government for all matters within EU jurisdiction.

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The organization made up of governing interests of all of the participating European countries. See Nature Identical.

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