European Union

European Union

Европейски съюз (Bulgarian)
Evropská unie (Czech)
Den Europæiske Union (Danish)
Europese Unie (Dutch)
Euroopa Liit (Estonian)
Euroopan unioni (Finnish)
Union européenne (French)
Europäische Union (German)
Ευρωπαϊκή Ένωση (Greek)
Európai Unió (Hungarian)
An tAontas Eorpach (Irish)
Unione Europea (Italian)
Eiropas Savienība (Latvian)
Europos Sąjunga (Lithuanian)
L-Unjoni Ewropea (Maltese)
Unia Europejska (Polish)
União Europeia (Portuguese)
Uniunea Europeană (Romanian)
Európska únia (Slovak)
Evropska unija (Slovene)
Unión Europea (Spanish)
Europeiska unionen (Swedish)

Flag

The European Union (EU) is an economic and political union of 27 member countries,^[9] located primarily in Europe. Committed to regional integration, the EU was established by the Treaty of Maastricht on 1 November 1993 upon the foundations of the European Communities.^[10] With over 500 million citizens,^[11] the EU combined generates an estimated 28% share (US$ 16.45 trillion in 2009) of the nominal gross world product and about 21.3% (US$14.8 trillion in 2009) of the PPP gross world product.^[12]

The EU has developed a single market through a standardised system of laws which apply in all member states, ensuring the free movement of people, goods, services, and capital.^[13] It maintains common policies on trade,^[14] agriculture, fisheries^[15] and regional development.^[16] Sixteen member states have adopted a common currency, the euro, constituting the Eurozone. The EU has developed a limited role in foreign policy, having representation at the World Trade Organization, G8, G-20 major economies and at the United Nations. It enacts legislation in justice and home affairs, including the abolition of passport controls by the Schengen Agreement between 22 EU and 3 non-EU states.^[17]

As an international organisation, the EU operates through a hybrid system of supranationalism and intergovernmentalism.^[18][19][20] In certain areas, decisions are made through negotiation between member states, while in others, independent supranational institutions are responsible without a requirement for unanimity between member states. Important institutions of the EU include the European Commission, the Council of the European Union, the European Council, the Court of Justice of the European Union, and the European Central Bank. The European Parliament is elected every five years by member states' citizens, to whom the citizenship of the European Union is guaranteed.

The EU traces its origins from the European Coal and Steel Community formed among six countries in 1951 and the Treaty of Rome formed in 1957 by the same states. Since then, the EU has grown in size through enlargement, and in power through the addition of policy areas to its remit

History

Main article: History of the European Union

Robert Schuman proposing the Coal and Steel Community in 1950

The 1957 Rome Treaty created the European Economic Community.

After World War II, moves towards European integration were seen by many as an escape from the extreme forms of nationalism which had devastated the continent.^[21] 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 its member states, was declared to be "a first step in the federation of Europe".^[22] The originators and supporters of the Community include Jean Monnet, Robert Schuman, Paul Henri Spaak, and Alcide de Gasperi. The founding members of the Community were Belgium, France, Italy, Luxembourg, the Netherlands, and West Germany.^[23]

In 1957, these six countries signed the Treaties of Rome which extended the earlier cooperation within the European Coal and Steel Community and created the European Economic Community, (EEC) establishing a customs union and the European Atomic Energy Community (Euratom) for cooperation in developing nuclear energy.^[23] In 1967 the Merger Treaty created a single set of institutions for the three communities, which were collectively referred to as the European Communities (EC), although commonly just as the European Community.^[24]

In 1973, the Communities enlarged to include Denmark, Ireland, and the United Kingdom.^[25] Norway had negotiated to join at the same time but Norwegian voters rejected membership in a referendum and so Norway remained outside. In 1979, the first direct, democratic elections to the European Parliament were held.^[26]

Greece joined in 1981, and Spain and Portugal in 1986.^[27] In 1985, the Schengen Agreement led the way toward the creation of open borders without passport controls between most member states and some non-member states.^[28] In 1986, the European flag began to be used by the Community^[29] and the Single European Act was signed.

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.^[30] With enlargement towards Eastern and Central 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,^[10] 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 encompass sixteen countries. In 2004, the EU saw its biggest enlargement to date when Malta, Cyprus, Slovenia, Estonia, Latvia, Lithuania, Poland, the Czech Republic, Slovak Republic, and Hungary joined the Union.^[31]

On 1 January 2007, Romania and Bulgaria became the EU's newest members. In the same year Slovenia adopted the euro^[31], followed in 2008 by Cyprus and Malta, and by Slovakia in 2009. In June 2009, the 2009 Parliament elections were held leading to a renewal of Barroso's Commission Presidency, and in July 2009 Iceland formally applied for EU membership. On 1 December 2009, the Lisbon Treaty came into force after a protracted and controversial birth. This reformed many aspects of the EU but in particular created a permanent President of the European Council, the first of which is Herman van Rompuy, and a strengthened High Representative, Catherine Ashton.

Treaties timeline

Signed In force Treaty

1948 1948 Brussels

1951 1952 Paris

1954 1955 Paris Agr.

1957 1958 Rome

1965 1967 Merger

1986 1987 Single Act

1992 1993 Maastricht

1997 1999 Amsterdam

2001 2003 Nice

2007 2009 Lisbon

European Communities

Three pillars of the European Union

European Atomic Energy Community (EURATOM)

→

←

European Coal and Steel Community (ECSC)

Treaty expired in 2002

European Union (EU)

European Economic Community (EEC)

European Community (EC)

→

Justice and Home Affairs (JHA)

Police and Judicial Co-operation in Criminal Matters (PJCC)

←

European Political Cooperation (EPC)

→

Common Foreign and Security Policy (CFSP)

←

Unconsolidated bodies

Western European Union (WEU)

Treaty terminated in 2010

Member states

The continental territories of the member states of the European Union (European Communities pre-1993), animated in order of accession. Albania Austria Belarus Belgium Bos. & Herz. Bulgaria Croatia Cyprus Czech Rep. Denmark Estonia Finland France Germany Greece Hungary Iceland Ireland Italy Latvia Lithuania Luxembourg Mac. Malta→ Moldova Mont. Netherlands Norway Poland Portugal Romania Russia Serbia Slovakia Slovenia Spain Sweden Switz- erland Turkey Ukraine United Kingdom

Main article: Member State of the European Union

See also: Special Member State territories and the European Union, Enlargement of the European Union, Future enlargement of the European Union, and Withdrawal from the European Union

The European Union is composed of 27 sovereign 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, Slovak Republic, Slovenia, Spain, Sweden, and the United Kingdom.^[32]

The Union's membership has grown from the original six founding states–Belgium, France, (then-West) Germany, Italy, Luxembourg and the Netherlands–to the present day 27 by successive enlargements as countries acceded to the treaties and by doing so, pooled their sovereignty in exchange for representation in the institutions.^[33]

To join the EU a country must meet the Copenhagen criteria, defined at the 1993 Copenhagen European Council. These require a stable democracy that 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 fulfilment of the criteria is the responsibility of the European Council.^[34]

No member state has ever left the Union, although Greenland (an autonomous province of Denmark) withdrew in 1985. The Lisbon Treaty now provides a clause dealing with how a member leaves the EU.

There are three official candidate countries, Croatia, Macedonia and Turkey. Albania, Bosnia and Herzegovina, Montenegro, Serbia and Iceland are officially recognised as potential candidates.^[35] Kosovo is also listed as a potential candidate but the European Commission does not list it as an independent country because not all member states recognise it as an independent country separate from Serbia.^[36]

Four Western European countries that have chosen not to join the EU have partly committed to the EU's economy and regulations: Iceland, which has now applied for membership, Liechtenstein and Norway, which are a part of the single market through the European Economic Area, and Switzerland, which has similar ties through bilateral treaties.^[37][38] The relationships of the European microstates, Andorra, Monaco, San Marino and the Vatican include the use of the euro and other areas of co-operation.^[39]

Geography

Main article: Geography of the European Union

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 Switzerland, Norway, European Russia, and Iceland. Some parts of member states are not part of the EU, despite forming part of the European continent (for example the Isle of Man and Channel Islands (two Crown Dependencies), and the Faroe Islands (a territory of Denmark)). The island country of Cyprus, a member of the EU, is closer to Turkey than to continental Europe and is often considered part of Asia.^[40][41]

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 British overseas territories). Some overseas territories are part of the EU even though geographically not part of Europe, such as the Azores, the Canary Islands, Madeira, Lampedusa, French Guiana, Guadeloupe, Saint Barthélemy, Martinique and Réunion, Ceuta and Melilla. As well, although being technically part of the EU,^[42] EU law is suspended in Northern Cyprus as it is under the de facto control of the Turkish Republic of North Cyprus, a self-proclaimed state that is recognised only by Turkey.

The EU's climate is influenced by its 65,993 km (41,006 mi) coastline. (Crete)

The EU's member states cover an area of 4,422,773 square kilometres (1,707,642 sq mi).^[43] The EU is larger in area than all but six countries, and its highest peak is Mont Blanc in the Graian Alps, 4,807 metres (15,771 ft) above sea level. The landscape, climate, and economy of the EU are influenced by its coastline, which is 65,993 kilometres (41,006 mi) long. The EU has the world's second-longest coastline, after Canada. The combined member states share land borders with 19 non-member states for a total of 12,441 kilometres (7,730 mi), the fifth-longest border in the world.^[19][44][45]

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. The majority of the population lives in areas with a Mediterranean climate (Southern Europe), a temperate maritime climate (Western Europe), or a warm summer continental or hemiboreal climate (Eastern Europe).^[46]

The EU's population is also highly urbanized, with some 75% of people (and growing, projected to be 90% in 7 states by 2020) living in urban areas. Cities are largely spread out across the EU, although with a large grouping in and around the Benelux and a large amount of urbanization in Spain since it joined the EU^{[citation needed]}. An increasing percentage of this is due to low density urban sprawl which is extending into natural areas. In some cases this urban growth has been due to the influx of EU funds into a region

Governance

European Union

This article is part of the series: Politics and government of the European Union

Parliament[show] President Jerzy Buzek Largest groups; Joseph Daul: EPP Martin Schulz: S&D 7th session MEPs (736) 2009-14 term Bureau Vice Presidents Quaestor Conference Legislative procedure

Council of Ministers[show] Presidency Spain Configurations: General Foreign Economic Euro Legislative procedure Voting Secretariat Secretary-General Pierre de Boissieu COREPER

European Council[show] President Herman Van Rompuy Parties List of meetings

Commission[show] Barroso Comm. President José M. Barroso Vice Presidents Catherine Ashton Viviane Reding Joaquín Almunia Siim Kallas Neelie Kroes Antonio Tajani Maroš Šefčovič Commissioners Civil Service Secretary-General Catherine Day

Court of Justice[show] Court of Justice General Court Civil Service Tribunal Members Rulings

Other institutions[show] Central Bank President ESCB Euro EMU Eurozone Court of Auditors Budget OLAF Investment Bank CoR EESC Ombudsman Other bodies Agencies National parliaments

Policies and issues[show] Budget Four Freedoms Economic area Single market Area of FS&J Schengen Policies Agricultural Energy Fisheries Regional Citizenship Identity Pro-Europeanism Euroscepticism Integration Supranationalism Federalism U.S.E. Multi-speed Opt-outs Enhanced co-op Withdrawal

Foreign relations[show] High Representative Catherine Ashton Ext. Action Service Foreign Policy Defence Policy Enlargement

Elections[show] 1979, 1984, 1989 1994, 1999, 2004 2009 (last election) 2014 (next election) Political parties EPP PES ELDR Free Alliance Greens AEN Left Democratic EUDemocrats Parl. groups EPP S&D ALDE G-EFA ECR EUL-NGL EFD Constituencies Referenda

Law[show] Acquis comm. Primacy Subsidiarity Treaties; Rome 1957 Merger 1965 SEA 1986 Maastricht 1992 Amsterdam 1997 Nice 2001 Lisbon 2007 Fundamental Rights Membership v • d • e

The institutions of the EU operate solely within those competencies conferred on it upon the treaties and according to the principle of subsidiarity (which dictates that action by the EU should only be taken where an objective cannot be sufficiently achieved by the member states alone). Law made by the EU institutions is passed in a variety of forms, primarily that which comes into direct force and that which must be passed in a refined form by national parliaments.

Legislative competencies are divided equally, with some exceptions, between the European Parliament and the Council of the European Union while executive tasks are carried out by the European Commission and in a limited capacity by the European Council (not to be confused with the aforementioned Council of the European Union). The interpretation and the application of EU law and the treaties are ensured by the Court of Justice of the European Union. There are also a number of ancillary bodies which advise the EU or operate in a specific area.

European Council

The President of the European Council, Herman Van Rompuy

The EU receives its political leadership from the European Council, which usually meets four times a year. It comprises one representative per member state—either its head of state or head of government—plus its President as well as the President of the Commission. The member states' representatives are assisted by their Foreign Ministers. The European Council uses its leadership role to sort out disputes between member states and the institutions, and to resolve political crises and disagreements over controversial issues and policies. The European Council should not be mistaken for the Council of Europe, an international organisation independent from the EU.

On 19 November 2009, Herman Van Rompuy was chosen as the first President of the European Council and Catherine Ashton was chosen as the High Representative of the Union for Foreign Affairs and Security Policy. They both assumed office on 1 December 2009.

Council

The Council (also called "Council of the European Union"^[48] and sometimes referred to as the "Council of Ministers"^[49]) forms one half of the EU's legislature. It consists of a government minister from each member state and meets in different compositions depending on the policy area being addressed. Notwithstanding its different compositions, it is considered to be one single body.^[50] In addition to its legislative functions, the Council also exercises executive functions in relations to the Common Foreign and Security Policy.

[edit] Commission

Commission President José Manuel Barroso

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.^[51]

Parliament

The seat of the European Parliament in Strasbourg.

The European Parliament forms the other half of the EU's legislature. The 736 (soon to be 750) 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 and in some cases is divided into sub-national constituencies. The Parliament and the Council of Ministers pass legislation jointly in nearly all areas under the ordinary legislative procedure. This also applies to the EU budget. Finally, the Commission is accountable to Parliament, requiring its approval to take office, having to report back to it and subject to motions of censure from it. 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.^[52]

Courts

The judicial branch of the EU—formally called the Court of Justice of the European Union—consists of three courts: the Court of Justice, the General Court, and the European Union Civil Service Tribunal. Together they interpret and apply the treaties and the law of the EU.^[53]

The Court of Justice primarily deals with cases taken by member states, the institutions, and cases referred to it by the courts of member states.^[54] The General Court mainly deals with cases taken by individuals and companies directly before the EU's courts,^[55] and the European Union Civil Service Tribunal adjudicates in disputes between the European Union and its civil service.^[56] Decisions from the General Court can be appealed to the Court of Justice but only on a point of law.^[57]

Legal system

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

The Court of Justice in Luxembourg can judge member states over EU law.

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.^[58] 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^[59] which can directly affect all member states and their inhabitants.^[60] Under the principle of supremacy, 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.^[61]

The main legal acts of the EU come in three forms: regulations, directives, and decisions. Regulations become law in all member states the moment they come into force, without the requirement for any implementing measures,^[62] and automatically override conflicting domestic provisions.^[59] 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.^[63]

EU member states have a standardised passport design, burgundy coloured with the name of the member state, Coat of Arms and with the words "European Union" given in their official language(s) at the top; in this case those of Ireland.

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, companies or a particular member state. 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.^[64] 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.^[65] 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.^[66]

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 Court of Justice. The right to declare EU legislation invalid however is reserved to the EU courts.

Fundamental rights

As a product of efforts to establish a written fundamental rights code, the EU drew up the Charter of Fundamental Rights in 2000. The Charter is legally binding since the Lisbon Treaty has come into force.^[67] Also, the Court of Justice gives judgements on fundamental rights derived from the "constitutional traditions common to the member states,"^[68] and may even invalidate EU legislation based on its failure to adhere to these fundamental rights.^[69]

Although signing the European Convention on Human Rights (ECHR) is a condition for EU membership,^[70] the EU itself is not covered by the convention as it is neither a state^[71] nor, prior to the entry into force of the Lisbon treaty, had the competence to accede.^[72] Lisbon Treaty and Protocol 14 to the ECHR have changed this: the first binding the EU to accede to the Convention and the second formally allowing this. Nonetheless the Court of Justice and European Court of Human Rights co-operate to ensure their case-law does not conflict.^[73] The EU opposes the death penalty and promotes its world wide abolition.^[74] Abolition of the death penalty is a condition for EU membership.

Foreign relations

Main articles: Foreign relations of the European Union and Common Foreign and Security Policy

Catherine Ashton 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 bloc in international trade negotiations under the Common Commercial Policy.^[76] 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 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.^[77]

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.^[78]

The Amsterdam Treaty created the office of the High Representative for the Common Foreign and Security Policy (currently held by Catherine Ashton) to co-ordinate the EU's foreign policy.^[79] 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 issue. The unanimity and difficult issues treated under the CFSP makes disagreements, such as those which occurred over the war in Iraq,^[80] not uncommon.

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 an important factor contributing to the reform of former Communist countries in Central and Eastern Europe.^[81] This influence on the internal affairs of other countries is generally referred to as "soft power", as opposed to military "hard power".^[82]

In the UN, as an observer and working together, the EU has gained influence in areas such as aid due to its large contributions in that field (see below).^[83] 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.^[84] In the World Trade Organisation (WTO), where all 27 member states are represented, the EU as a body is represented by Trade Commissioner Karel De Gucht.^[85]

Military and defence

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

The Eurofighter is built by a consortium of four EU countries.

The predecessors of the European Union were not devised as a strong military alliance because NATO was largely seen as appropriate and sufficient for defence purposes.^[86] Twenty-one EU members are members of NATO^[87] while the remaining member states follow policies of neutrality.^[88] 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 and now form part of the Common Foreign and Security Policy and the Common Security and Defence Policy. Elements of the WEU are currently being merged into the Common Foreign and Security Policy, and the President of the WEU is currently the EU's foreign policy chief.^[89][90]

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

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 personnel.^[91]

EU forces have been deployed on peacekeeping missions from Africa to the former Yugoslavia and the Middle East.^[92] EU military operations are supported by a number of bodies, including the European Defence Agency, satellite centre and the military staff.^[93] In an EU consisting of 27 members, substantial security and defence cooperation is increasingly relying on great power cooperation.^[94]

Humanitarian aid

Further information: ECHO (European Commission)

Collectively, the EU is the largest contributor of foreign aid in the world.

The European Commissions Humanitarian Aid Office, or "ECHO", provides humanitarian aid from the EU to developing countries. In 2006 its budget amounted to €671 million, 48% of which went to the African, Caribbean and Pacific countries.^[95] Counting the EU's own contributions and those of its member states together, the EU is the largest aid donor in the world.^[96]

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.^[97] 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 as a whole did not reach its internal aid target in 2006^[98] and is expected not to reach the international target of 0.7% of gross national income until 2015.^[99]

However, four countries have reached that target, most notably Sweden, Luxembourg, the Netherlands and Denmark.^[96] In 2005 EU aid was 0.34% of the GNP which was higher than that of either the United States or Japan.^[100] The previous commissioner for aid, Louis Michel, has called for aid to be delivered more rapidly, to greater effect, and on humanitarian principles.^[101]

Justice and home affairs

Further information: Area of freedom, security and justice

The Schengen Area comprises most member states ensuring open borders.

Since the creating of the EU in 1993, it has developed its competencies in the area of justice and home affairs, initially at an intergovernmental level and later by supranationalism. To this end, agencies have been established that co-ordinate associated actions: Europol for co-operation of police forces,^[102] Eurojust for co-operation between prosecutors,^[103] and Frontex for co-operation between border control authorities.^[104] The EU also operates the Schengen Information System^[17] which provides a common database for police and immigration authorities. This cooperation had to particularly be developed with the advent of open borders through the Schengen Agreement and the associated cross border crime.

Furthermore, the Union has legislated in areas such as extradition,^[105] family law,^[106] asylum law,^[107] and criminal justice.^[108] Prohibitions against sexual and nationality discrimination have a long standing in the treaties.^[109] In more recent years, these have been supplemented by powers to legislate against discrimination based on race, religion, disability, age, and sexual orientation.^[110] By virtue of these powers, the EU has enacted legislation on sexual discrimination in the work-place, age discrimination, and racial discrimination.^[111] By virtue of the Treaty of Lisbon, the EU is now bound by its Charter of Fundamental Rights which consolidates a large array of citizens rights.

Economy

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 16 members of the eurozone.^[114][115] If considered as a single economy, the EU generated an estimated nominal gross domestic product (GDP) of US$16.45 trillion (14.794 trillion international dollars based on purchasing power parity) in 2009, amounting to over 21% of the world's total economic output in terms of purchasing power parity,^[12] 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 ,^[116] and largest importer^[117] of goods and services, and the biggest trading partner to several large countries such as China and India.^{[118][119][120]}

178 of the top 500 largest corporations measured by revenue (Fortune Global 500) have their headquarters in the EU.^[121]

In May 2007 unemployment in the EU stood at 7%^[122] while investment was at 21.4% of GDP, inflation at 2.2% and public deficit at −0.9% of GDP.^[123] There is a great deal of variance for annual per capita income within individual EU states, these range from US$7,000 to US$69,000.^[124]

Single market

Further information: Four Freedoms (European Union)

The European Central Bank in Frankfurt governs the eurozone's monetary policy.

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,^[115] 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.^[37] Half the trade in the EU is covered by legislation harmonised by the EU.^[125]

Free movement of capital is intended to permit movement of investments such as property purchases and buying of shares between countries.^[126] 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 judgements regarding this initially neglected freedom. The free movement of capital is unique insofar as that it is granted equally to non-member states.

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.^[127]

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. While services account for between sixty and seventy percent of GDP, legislation in the area is not as developed as in other areas. This lacuna has been addressed by the recently passed Directive on services in the internal market which aims to liberalise the cross border provision of services.^[128] According to the Treaty the provision of services is a residual freedom that only applies if no other freedom is being exercised.

Monetary union

See also: Euro, Eurozone, and Economic and Monetary Union of the European Union

16 EU countries have introduced the euro as their sole currency.

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 sixteen countries, the most recent being Slovakia which joined on 1 January 2009.

All other EU member states, except Denmark and the United Kingdom, are legally bound to join the euro^[129] when the convergence criteria are met, however only a few countries have set target dates for accession. Sweden has circumvented the requirement to join the euro by not meeting the membership criteria.^[130]

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.^[114] Since its launch the euro has become the second reserve currency in the world with a quarter of foreign exchanges reserves being in euro.^[131]

The euro, and the monetary policies of those who have adopted it in agreement with the EU, are under the control of the European Central Bank (ECB).^[132] There are eleven other currencies used in the EU^[114] with all but two legally obliged to be switched to the euro. A number of other countries outside the EU, such as Montenegro, use the euro without formal agreement with the ECB.^[39]

Budget

Main article: Budget of the European Union

The total expenditure of the European Union in 2006[133]

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,^[134] representing 1.10% and 1.05% of the EU-27's GNI forecast for the respective periods. By comparison, the United Kingdom's expenditure for 2004 was estimated to be €759 billion, and France was estimated to have spent €801 billion. In 1960, the budget of the then European Economic Community was 0.03% of GDP.^[135]

In the 2006 budget, the largest single expenditure item was agriculture with around 46.7% of the total budget.^[136] Next came structural and cohesion funds with approximately 30.4% of the total.^[136] 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.^[136]

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.^[137] 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.^[138]

The Competition Commissioner, currently Joaquín Almunia, is one of the most powerful positions in the Commission, notable for the ability to affect the commercial interests of trans-national corporations.^[139] For example, in 2001 the Commission for the first time prevented a merger between two companies based in the United States (GE and Honeywell) which had already been approved by their national authority.^[140] Another high profile case against Microsoft, resulted in the Commission fining Microsoft over €777 million following nine years of legal action.^[141]

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.