c


›
 


   


The c
  (c) is an economic and political union of 27 member states which are located
primarily in Europe.[8] The EU traces its origins from the European Coal and Steel Community (ECSC)
and the European Economic Community (EEC) formed by six countries in the 1950s. In the
intervening years the EU has grown, in size, by the accession of new member states and, in power,
by the addition of policy areas to its remit. TheMaastricht Treaty established the European Union
under its current name in 1993.[9] The last amendment to the constitutional basis of the EU, theTreaty
of Lisbon, came into force in 2009.

The EU operates through a hybrid system of supranational independent institutions

and intergovernmentally made decisions negotiated by the member
[10][11][12]
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 EU citizens.

The EU has developed a single market through a standardised system of laws which apply in all
member states including the abolition of passport controls within the Schengen area.[13] It ensures
[14]
the free movement of people, goods, services, and capital, enacts legislation in justice and home
[15]
affairs, and maintains common policies on trade, agriculture,[16] fisheries and regional
[17]
development. A monetary union, the eurozone, was established in 1999 and is currently composed
of seventeen member states. Through the Common Foreign and Security Policy the EU has
developed a limited role in external relations and defence. Permanent diplomatic missions have been
established around the world and the EU is represented at theUnited Nations, the WTO, the G8 and
the G-20.
[18]
With a combined population of 500 million inhabitants, the EU generated an estimated 21% (US$
14.8 trillion) share of the global economy (GDP PPP) in 2009.[19] As a trading bloc the EU accounts for
20% of global imports and exports.

Eurosystem
?

The c


 is the monetary authority of the Eurozone, the collective of European Union member
states that have adopted the euro as their sole official currency. The Eurosystem consists of the European
Central Bank (it decides the monetary policy) and the central banks of the member states that belong to the
Eurozone (their function is to apply the monetary policy decided by the ECB).[1] The primary objective of the
Eurosystem is price stability.[2] Secondary objectives are financial stability and financial integration.[3] The
mission statement of the Eurosystem says that the ECB and the national central banks jointly contribute to
achieving the objectives.[4]

With a number of the member states outside the Eurozone, the European System of Central Banks is the
system of central banks consisting of the ECB and the central banks of all member states, inside and

 
Ê t i  t E
ÊÊ.  ESB' Êjti  i 
i tilit t
Ê Ê t t E
Ê 

iÊ. SÊ

il ,

t ESB' Ê
l i tÊ i
Ê Êt


 fi
i
l ÊÊ 

tiÊ t  t E
Ê t
 t

t
t Ê ti t E
ÊÊ.[ ]

[it]

t 
S

 fÊ
E R Z E

† E
Ê 
 t

l B


† A t
i
 Öt

ii 
tiÊ
l


† Bli  
tiÊ
l B
 
 Blië/B
  
tiÊ
l  Bli 

† 
 KİȞIJȡȚțȘ ȉȡĮʌİȗĮ IJȘȢ ȀȣʌȡȠȣ Kt
i


ti K
Ê 

† EtÊi
 Eti P


† il
 S Ê P
i/il
 B


† 

 B
   



† 

   t B 


† 
 ȉȡȐʌİȗĮ IJȘȢ ǼȜȜȐįȠȢ 


ti Ell
Ê

† I
l
 B
 

i 
i

 / t

l B
 Êf I
l


† It
l  B

'It
li

†  Ê
 B
  t

l   Ê


† 
lt
 B
 Ċt

li t
 
lt

† t
l
  
l
 B


† PÊ
t 
l B
Ê  PÊ
t 
l

† SlÊ
i
 á
Êá 

SlÊ

† SlÊi
 B

SlÊij

† S
i B
Ê  E


E
ÊÊ
?


 |
| 
Ê i
tiÊ l ifÊ , Êffii
ll t |

|,[] i
 ÊÊi
 Êt


iÊ E Êf  E
Ê 
 iÊ E 
t
t t
t 

Ê t t 
Ê 


 ti

Êl l
l t
. It 

tl Êit
Êf A t
i
, Bli , 
, EtÊi
, il
, 

, 

 ,
, t R li Êf
I
l
, It
l ,  Ê
, 
lt
, t t
l
, PÊ
t 
l, SlÊ
i
, SlÊi
,
 S
i. S Êt
 
il i S , i 

u
 Ê t Ê t Êt
t
t

 Êli tÊ jÊi t Ê Ê t f lfil t
t
it t

it
i
.
Monetary policy of the zone is the responsibility of the European Central Bank, though there is no common
representation, governance or fiscal policy for the currency union. Some co-operation does however take
place through the euro group, which makes political decisions regarding the eurozone and the euro.

The eurozone can also be taken informally to include third countries that have adopted the euro, for
example Montenegro (see details on these countriesbelow). Three European microstates²Monaco, San
Marino and the Vatican City²have concluded agreements with the European Union permitting them to use
the euro as their official currency and mint coins,[8] but they are neither formally part of the
eurozone[9][10] nor represented on the board of the European Central Bank.

Members

In 1998 eleven European Union member-states had met the convergence criteria, and the eurozone
came into existence with the official launch of the euro on 1 January 1999. Greece qualified in 2000
and was admitted on 1 January 2001. Physical coins and banknotes were introduced on 1 January
2002. Slovenia qualified in 2006 and was admitted on 1 January 2007. Cyprus and Malta qualified in
2007 and were admitted on 1 January 2008. Slovakia qualified in 2008 and joined on 1 January
2009. Estonia qualified in 2010 and joined on 1 January 2011. That makes 17 member states with
329 million people in the eurozone.

Economy

a 




a
  
  
  

 

 

            
  


  
  ??
? ? ?  ?? ??

 !" ?? ? ?  ? ?? ??


#
 ?? ? ? ? 
?? ??

$ 
?? ? ? ? 
?? ??

???  ?? !?!?"#?#$! ? %&'? !?

c c
economy of the European Union


   !" ##$% 
   %&'
(  )*+ ,  

  -
(c
 



 
,(



(
   (   ./

Currency
^






  

The official currency of the European Union is the euro, used in all its documents and policies.
The Stability and Growth Pact sets out the fiscal criteria to maintain for stability and
(economic) convergence. The euro is also the most widely used currency in the EU, which is in use in
17 member states known as the Eurozone. All other member states, apart from Denmark and the
United Kingdom, which have special opt-outs, have committed to changing over to the euro once they
have fulfilled the requirements needed to do so. Also, Sweden can effectively opt out by choosing
when or whether to join theEuropean Exchange ate Mechanism, which is the preliminary step
towards joining. The remaining states are committed to join the Euro through their Treaties of
Accession.

[edit]Budget




  






  



The operation of the EU has an agreed budget of ¼116 billion for the year 2007, and ¼862 billion for
!
the period 2007-2013,[1] this represents around 1% of the EU s GDP. By comparison, the UK
!
expenditure for 2004 alone was estimated at about ¼759 billion and France s was estimated at about
¼801 billion. In 1960, the then "EU" (EEC) budget was 0.03% of GDP. [14]

Economies of member states

Economic performance varies from state to state. The Growth and Stability Pact governs fiscal
policy with the European Union. It applies to all member states, with specific rules which apply to
!
theeurozone members that stipulate that each state s deficit must not exceed 3% of GDP and its
public debt must not exceed 60% of GDP. However, many larger members have consistently run
deficits substantially in excess of 3%, and the eurozone as a whole has a debt percentage exceeding
60% (see below). The following table shows information relating to the member states of the
! !
European Union, ordered according to the Size of their economies. (NB Were the table ordered
! !
according to GDP per capita this would perhaps better reflect the strength of an individual economy.
But this is not how such tables are commonly structured). The colours denote how a member state is
performing relative to the rest of the European Union, above average (green) or below average (red).
The smallest and greatest values in each column are emphasised. The data for GDP, Annual change
 '
Êf "#P, "#P 

it


 
 Ê t I$% & Ê
l EÊÊi ( tlÊÊ ti
t
l
 i A
il
)* +*. [ +,]

- 1
1 1 0      

0  0  -&    
4 
     
^
 -   
  
   





 


  ./   % 2  ./
  
% 2 
  % 
% 2   % 3  
' 2  % 


  
56? 67? %6
?  5
? 67? % 6? ? 6?
 (

 
 56? 6
7? %6?  5?  6? % 6? 6? 6?

  56? 67? %6 ?  5? 

6 ? % 6? 6 ? 6
?

6
? 8?
 &
 5
6? 67? %6?  5? 
6? % 6? 6?
 (?

 5
6? 67? %6?  5 ?  6? % 6? 6
?
6?

 56?
6
7? %6?  5
?  6? % 6 ? %6? 4?

  
6? 67? %6
?  5?  6
? % 6? ? ?

 &
 6? 67? %6?  5?  6 ? % 6? 6?

6?

  6? 67? '!?

5
?  6? % 6? 6? 6
?

   6? 67? %6?  5?  6? % 6? 6? 6

?

 
6? 67? %6 ?  5?  6? % 6? 6? 6 ?

6? 8?
  6
? 67? % 6? 
5
? '? %  6? 6?
 (?

6? 8?
 
 6? 67? %6?  5?  6? % 6? 6 ?
 (?

 
6 ? 67? %6?  5 ?  6
? % 6? 6? 6?

 & 6? 67? %6

?  5 ?  6 ? % 6? %6? 6
?

  6

? 67? %6 ? 
5
?  6? '? '!? 6?
 a9    :
? : ;? %:?  <
?  :? % :
? :? :?

:? >?

  :? :;? %: ? ''=!?  :? %
:? )?
 (?

!& :? :
;? %:?
<
? 
:? % :? :? :?

 *

:? :;? %:?  <?  :? % :? :? :?

"
 &  :? :;? %:? =+?  :? !? :? :

?

 *  :? :;? %:?  <

?  :? % :
? :? :?

& : ? :;? %:?  <?  :? % :? :? :?

:? >?
" :? :;? % :?  <?  :? % :? :?
 (?

:?
?
"* :? :;? ''?  <?  :? %  :? :?
 (?

a :? : ;? % :? 
<? 
:? % :? :? :?

:? >?
  : ? : ;? % :
?
<? !? % :? :?
 (?

^ :? : ;? % :?  <

? 
:? % :
? :
? :?

E

Ê


? @
^

 
 
 




 A  
B


C
 E
Ê 
 iÊ 
 l

 Ê
l, Êil,
 
t

l 


. 


 i Êil
Ê 
 i t
C C
E
Ê 
 iÊ,
i

il i DÊ
t S
Êilfil.  it KiÊ  f

i t l

t
Ê 
,
Ê
E

, F

 , It
l , RÊ
i

 t Dt
l

ll
Ê  Êil. If it i t

t


C G
il it, i i Êt ÊtiÊ
l i t Êil 

t, t E
Ê 
 iÊ i t t l

t
H IJI KKK

Ê 
Êf Êil i t Ê
l,
Ê i , ,  


l

. LÊ
, it i
lÊ t Ê
l'
 l

t Ê 
Êf Êil, Ê i   Ê
 t
 it 

Ê ,
t  ,MN,  


l
O C


.  Êf t iff
 Ê f
Ê R i

 t P
 i
 S

i. All Ê t
i i t E
C

 Êitt tÊ t K ÊtÊ P
ÊtÊÊl,
 t E
Ê 
 iÊ i Ê Êf it it
Ê Êt. 
C
E
Ê 
 PÊiiÊ li
Ê Ê
l fÊ
t fi
t Ê
i E 
 Êli Ê 
Q


!.




The European Union is the largest exporter in the world ([24]) and as of 2008 the largest importer of
[6]
goods and services. Internal trade between the member states is aided by the removal of barriers to
trade such as tariffs and border controls. In the eurozone, trade is helped by not having any currency
differences to deal with amongst most members. The European Union Association Agreement does
something similar for a much larger range of countries, partly as a so-called soft approach (Ra carrot
instead of a stickR) to influence the politics in those countries. The European Union represents all its
members at the World Trade Organization (WTO), and acts on behalf of member states in any
disputes. However, when the EU negotiates trade related agreement outside the WTO framework, the
[7]
subsequent agreement must be approved by each individual EU member.

Industries

The services sector is by far the most important sector in the European Union, making up 69.4% of
GDP, compared to the manufacturing industry with 28.4% of GDP and agriculture with only 2.3% of
GDP.

[edit]-
 

The agricultural sector is supported by subsidies from the European Union in the form of the Common
Agricultural Policy (CAP). This currently represents 40-50% of the EURs total spending. It guarantees
a minimum price for farmers in the EU. This is criticised as a form of protectionism, inhibiting trade,
and damaging developing countries; one of the most vocal opponents is the UK, the third largest
economy within the bloc, which has repeatedly refused to give up the annual UK Sebate unless the
CAP undergoes significant reform; France, the biggest benefactor of the CAP and the blocRs third
largest economy, is its most vocal proponent.

[edit]


The European Union is a major tourist destination, attracting visitors from outside of the Union and
citizens travelling inside it. Internal tourism is made more convenient for the citizens of some EU
member states by the Schengen treaty and the Euro. All citizens of the European Union are entitled to
travel to any member state without the need of a visa. France is the worldRs number one tourist
destination for international visitors, followed by Spain, Italy and the United Kingdom at 2nd, 5th and
6th spots respectively. It is worth noting however a significant proportion of international visitors to EU
countries are from other member states

Gini index



  




 



To date, one of the most commonly used measures of income inequality is the Gini index. The Gini
coefficient measures income inequality on a scale from 0 to 1. On this scale 0 represents perfect
equality with everyone having exactly the same income and 1 represents perfect inequality with one
person having all income. According to the United Nations (UN), gini index ratings for countries range
from 0.247 in Denmark to 0.743 in Namibia. Most post-industrial nations had a gini coefficient in the
 [12]
range 0.25 to 0.40. In 2005 the gini index for the EU was estimated at 0.31, as a comparison the
[13]
USA has 0.463, a surprising result since the EU has virtually no interstate income redistribution
power and poorer new member states joined in 2004.

Companies

The European UnionTs member states are the birthplace of many of the worldTs largest
leading multinational companies, and home to its global headquarters. Among these are distinguished
companies ranked first in the world within their industry/sector, like Allianz, which is the largest
financial service provider in the world by revenue; Airbus, which produces around half of the
worldTs jet airliners; Air France-KLM, which is the largest airline company in the world in terms of total
operating revenues; Amorim, which is the worldTs largest cork-processing and cork producer
company; ArcelorMittal, which is the largest steel company in the world; Groupe Danone, which has
the world leadership in the dairy products market; Anheuser-Busch InBev, which is the
largest beer company in the world;LTOréal Group, which is the worldTs
largest cosmetics and beauty company; LVMH, which is the worldTs largest luxury
goods conglomerate; Nokia Corporation, which is the worldTs largest manufacturer of mobile
U
telephones; oyal Dutch Shell, which is one of the largest energy corporations in the world; and Stora
Enso, which is the worldTs largest pulp and paper manufacturer in terms of production capacity, in
terms of banking and finance the EU has some of the worlds largest notably HSBC and Grupo
Santander, the largest bank in Europe in terms of Market Capitalisation. Many other European
companies rank among the worldTs largest companies in terms of turnover, profit, market share,
number of employees or other major indicators. A considerable number of EU-based companies are
ranked among the worldsT top-ten within their sector of activity.

Schengen Agreement

A monument to the Agreement in Schengen, Luxembourg

A simple sign marks the entrance to Spain fromPortugal by the municipalities of Tui (Pontevedra) and Valença do

Minho (Viana do Castelo).

The x-
  is a treaty signed on 14 June 1985 near the town of Schengen in Luxembourg,
between five of the ten member states of theEuropean Economic Community. It was supplemented by
the a    x-
  5 years later. Together these treaties created
EuropeVs borderless Schengen Area.

The Schengen Agreements and the rules adopted under them were entirely separate from the EU
structures until the 1997 Amsterdam Treaty that incorporated them into the mainstream of European Union
law. The borderless zone created by the Schengen Agreements, the Schengen Area, currently consists of
25 European countries, covering a population of over 400 million people and an area of 4,312,099 square
kilometers (1,664,911 sq mi)

History

The Schengen Agreement was signed on 14 June 1985 on the river-boat Ñ

^ 


in the
middle of the river Mosel where France, Germany and Luxembourg meet. The original signatories
were Belgium, France, Luxembourg, the Netherlands and West Germany.[3] It was created
independently of the European Union, in part owing to the lack of consensus amongst EU members
over whether the EU had the competence to abolish border controls,[4] and in part because those
ready to implement the idea did not wish to wait for others (back then there was no Enhanced co-
operationmechanism). The Agreement initially only provided for the replacement of passport checks
with visual surveillance of private vehicles which would be able to cross borders without stopping
albeit at reduced speed.

In 1990 before the Schengen Agreement had been implemented, the same five states signed
a  







 
 . It was this Convention which created the
Schengen Area through the complete abolition of border controls between Schengen states, common
rules on visas, and police and judicial cooperation.

The Schengen Agreement along with its implementing Convention was implemented in 1995 only for
some signatories, but just over two years later during the Amsterdam Intergovernmental Conference,
all European Union member states except the United Kingdom and Ireland, and two non-member
states Norway and Iceland (part of theNordic Passport Union along with EU
members Denmark, Finland and Sweden) had signed the Schengen Agreement. It was during those
negotiations, which led toAmsterdam Treaty, that the incorporation of the so-called Schengen-
[5]
Acquis into the main body of European Union law was agreed along with opt-outs for Ireland and
theUnited Kingdom that were to remain outside of the Schengen Area.
Now that the Schengen Agreement is part of the 

  
, the Agreement has lost the
status of a treaty which could only be amended according to its terms; instead, its amendments are
made according to that legislative procedure of the EU that covers the rules to be amended as
[6]
defined in the EU treaties. Watification by the former agreement signatory states is not required for
[7]
altering or repealing some or all of the former Schengen-Acquis. Legal acts setting out the
conditions for entry into the Schengen Area are now be enacted by majority vote in the legislative
bodies of the European Union. New EU member states do not sign the Schengen Agreement as
such; instead, they are bound to implement the Schengen rules as part of the pre-existing body of EU
law which every new entrant is required to accept.

This led to the result that the Schengen States which are not EU members have few formally binding
options to influence the shaping and evolution of the Schengen rules; their options are effectively
reduced to agreeing with whatever is presented before them, or withdrawing from the agreement. Of
course, similarly to the European Economic Area practice, consultations with the affected countries
are conducted informally, prior to the adoption of particular new legislation