European Union

The Iron Curtain's fall in 1989 enabled eastward enlargement. (Berlin Wall)

The introduction of the euro in 2002 replaced several national currencies.

Treaties

Signed In force Document

1948 1948 Brussels Treaty

1951 1952 Paris Treaty

1954 1955 Modified Brussels Treaty

1957 1958 Rome treaties

1965 1967 Merger Treaty

1975 N/A European Council conclusion

1985 1985 Schengen Treaty

1986 1987 Single European Act

1992 1993 Maastricht Treaty

1997 1999 Amsterdam Treaty

2001 2003 Nice Treaty

2007 2009 Lisbon Treaty

Three pillars of the European Union:

European Communities:

European Atomic Energy Community (EURATOM)

European Coal and Steel Community (ECSC)

Treaty expired in 2002

European Union (EU)

European Economic Community (EEC)

Schengen Rules

European Community (EC)

TREVI

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 2011

Geography

The EU's member states cover an area of 4,423,147 square kilometres (1,707,787 sq mi). The EU's highest peak is Mont Blanc in the Graian Alps, 4,810.45 metres (15,782 ft) above sea level. The lowest point in the EU is Zuidplaspolder in the Netherlands, at 7 m (23 ft) below 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 combined member states share land borders with 19 non-member states for a total of 12,441 kilometres (7,730 mi).

Including the overseas territories of France which are located outside of the continent of Europe, but which are members of the union, the EU experiences most types of climate from Arctic (North-East Europe) to tropical (French Guyana), rendering meteorological averages for the EU as a whole meaningless. The majority of the population lives in areas with a temperate maritime climate (North-Western Europe and Central Europe), a Mediterranean climate (Southern Europe), or a warm summer continental or hemiboreal climate (Northern Balkans and Central Europe).

The EU's population is highly urbanised, with some 75% of inhabitants (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. 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.

Member states

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, Slovakia, Slovenia, Spain, Sweden, and the United Kingdom. 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.

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.

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.

Croatia will become the 28th member state of the EU on 1 July 2013 after a referendum on EU membership was approved by Croatian voters on 22 January 2012. The Croatian accession treaty still has to be ratified by all current EU member states.

There are five candidate countries: Iceland, Macedonia, Montenegro, Serbia and Turkey. Albania and Bosnia and Herzegovina are officially recognised as potential candidates. 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.

Four countries forming the EFTA (that are not EU members) have partly committed to the EU's economy and regulations: Iceland (a candidate country for EU 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. The relationships of the European microstates, Andorra, Monaco, San Marino and the Vatican include the use of the euro and other areas of cooperation.

Politics

The EU operates 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). Laws made by the EU institutions are passed in a variety of forms. Generally speaking they can be classified into two groups: those which come into force without the necessity for national implementation measures, and those which specifically require national implementation measures.

Constitutional nature of the European Union

The classification of the European Union in terms of international or constitutional law has been much debated, often in the light of the degree of integration that is perceived, desired, or expected. Historically, at least, the EU is an international organisation, and by some criteria, it could be classified as a confederation; but it also has many attributes of a federation, so some would classify it as a ( de facto) federation of states. For this reason, the organisation has, in the past, been termed sui generis (incomparable, one of a kind), though it is also argued that this designation is no longer true.

The organisation itself has traditionally used the terms "community", and later "union". The difficulties of classification involve the difference between national law (where the subjects of the law include natural persons and corporations) and international law (where the subjects include sovereign states and international organisations); they can also be seen in the light of differing European and American constitutional traditions. Especially in terms of the European constitutional tradition, the term federation is equated with a sovereign federal state in international law; so the EU cannot be called a federal state or federation—at least, not without qualification. Though not, strictly, a federation, it is more than a free-trade association. It is, however, described as being based on a federal model or federal in nature. Walter Hallstein, in the original German edition of Europe in the Making called it "an unfinished federal state". The German Constitutional Court refers to the European Union as an association of sovereign states and affirms that making the EU a federation would require replacement of the German constitution. Others claim that it will not develop into a federal state but has reached maturity as an international organisation.

Governance

The European Union has seven institutions: the European Parliament, the Council of the European Union, the European Commission, the European Council, the European Central Bank, the Court of Justice of the European Union and the European Court of Auditors. Competencies in scrutinising and amending legislation are divided 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 monetary policy of the eurozone is governed by the European Central Bank. The interpretation and the application of EU law and the treaties are ensured by the Court of Justice of the European Union. The EU budget is scrutinised by the European Court of Auditors. There are also a number of ancillary bodies which advise the EU or operate in a specific area.

European Council

The European Council gives direction to the EU, and convenes at least four times a year. It comprises the President of the European Council, the President of the European Commission and one representative per member state; either its head of state or head of government. The European Council has been described by some as the Union's "supreme political authority". It is actively involved in the negotiation of the treaty changes and defines the EU's policy agenda and strategies.

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. It acts externally as a "collective head of state" and ratifies important documents (for example, international agreements and treaties).

On 19 November 2009, Herman Van Rompuy was chosen as the first permanent President of the European Council. On 1 December 2009, the Treaty of Lisbon entered into force and he assumed office. Ensuring the external representation of the EU, driving consensus and settling divergences among members are tasks for the President both during the convocations of the European Council and in the time periods between them. The European Council should not be mistaken for the Council of Europe, an international organisation independent from the EU.

Commission

The European Commission acts as the EU's executive arm and is responsible for initiating legislation and the day-to-day running of the EU. The Commission is also seen as the motor of European integration. It operates as a cabinet government, with 27 Commissioners for different areas of policy, one from each member state, though Commissioners are bound to represent the interests of the EU as a whole rather than their home state.

One of the 27 is the Commission President (currently José Manuel Durão Barroso) appointed by the European Council. After the President, the most prominent Commissioner is the High Representative of the Union for Foreign Affairs and Security Policy who is ex-officio Vice President of the Commission and is chosen by the European Council too. The other 25 Commissioners are subsequently appointed by the Council of the European Union in agreement with the nominated President. The 27 Commissioners as a single body are subject to a vote of approval by the European Parliament.

Parliament

The European Parliament (EP) forms one half of the EU's legislature (the other half is the Council of the European Union, see below). The 736 (soon to be 751) Members of the European Parliament (MEPs) are directly elected by EU citizens every five years on the basis of proportional representation. 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 is divided into sub-national constituencies where this does not affect the proportional nature of the voting system.

The Parliament and the Council of the European Union 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 EP President and Vice Presidents are elected by MEPs every two and a half years.

Council

The Council of the European Union (also called the "Council" and sometimes referred to as the "Council of Ministers") forms the other 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 configurations, it is considered to be one single body. In addition to its legislative functions, the Council also exercises executive functions in relations to the Common Foreign and Security Policy.

Budget

The EU had an agreed budget of €120.7 billion for the year 2007 and €864.3 billion for the period 2007–2013, representing 1.10% and 1.05% of the EU-27's GNI forecast for the respective periods. By comparison, the 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.

In the 2010 budget of €141.5 billion, the largest single expenditure item is " cohesion & competitiveness" with around 45% of the total budget. Next comes " agriculture" with approximately 31% of the total. "Rural development, environment and fisheries" takes up around 11%. "Administration" accounts for around 6%. The "EU as a global partner" and "citizenship, freedom, security and justice" bring up the rear with approximately 6% and 1% respectively.

The Court of Auditors aims to ensure that the budget of the European Union has been properly accounted for. The court provides an audit report for each financial year to the Council and the European Parliament. The Parliament uses this to decide whether to approve the Commission's handling of the budget. The Court also gives opinions and proposals on financial legislation and anti-fraud actions.

The Court of Auditors is legally obliged to provide the Parliament and the Council with "a statement of assurance as to the reliability of the accounts and the legality and regularity of the underlying transactions". The Court has refused to do so every year since 1993, qualifying their report of the Union's accounts every year since then. In their report on 2009 the auditors found that five areas of Union expenditure, agriculture and the cohesion fund, were materially affected by error. The European Commission estimated that the financial impact of irregularities was €1,863 million.

Competences

EU member states retain all powers not explicitly handed to the European Union. In some areas the EU enjoys exclusive competence. These are areas in which member states have renounced any capacity to enact legislation. In other areas the EU and its member states share the competence to legislate. While both can legislate, member states can only legislate to the extent to which the EU has not. In other policy areas the EU can only co-ordinate, support and supplement member state action but cannot enact legislation with the aim of harmonising national laws.

That a particular policy area falls into a certain category of competence is not necessarily indicative of what legislative procedure is used for enacting legislation within that policy area. Different legislative procedures are used within the same category of competence, and even with the same policy area.

The distribution of competences in various policy areas between Member States and the Union is divided in the following three categories:

As outlined in Part I, Title I of the consolidated Treaty on the Functioning of the European Union:
Exclusive competence: "The Union has exclusive competence to make directives and conclude international agreements when provided for in a Union legislative act." the customs union the establishing of the competition rules necessary for the functioning of the internal market monetary policy for the Member States whose currency is the euro the conservation of marine biological resources under the common fisheries policy common commercial policy conclusion of certain international agreements	Shared competence: "Member States cannot exercise competence in areas where the Union has done so." "Union exercise of competence shall not result in Member States being prevented from exercising theirs in:" the internal market social policy, for the aspects defined in this Treaty economic, social and territorial cohesion agriculture and fisheries, excluding the conservation of marine biological resources environment consumer protection transport trans-European networks energy the area of freedom, security and justice common safety concerns in public health matters, for the aspects defined in this Treaty research, technological development and  space development cooperation, humanitarian aid "The Union coordinates Member States policies or implements supplemental to theirs common policies, not covered elsewhere" coordination of economic, employment and social policies common foreign, security and defence policies		Supporting competence: "The Union can carry out actions to support, coordinate or supplement Member States' actions in:" the protection and improvement of human health industry culture tourism education, youth, sport and vocational training civil protection (disaster prevention) administrative cooperation

Proposed transfer union

One of the outgrowths of the European sovereign debt crisis of 2008 on and strains on the Euro have been, first, increased reliance on the European Central Bank (ECB) and the IMF for managing intra-Union financial imbalances; second, a move toward European common banking regulation; and third, proposals for greater common political and budgetary policy for the Union. One form for common budgetary policy would involve a transfer union wherein direct payments within the Union would help equalise between economies. At the beginning of 2013, the debate played out in Germany, the largest and strongest single economy in the Union. While Jens Weidmann, president of the German Bundesbank expressed reservations about the so-called outright monetary transactions program (OMT) in mid-year 2012, "some predict that Chancellor Angela Merkel is simply waiting for victory in the September election [in 2013] to declare support for a full-scale European transfer union", per commentator David Marsh.

Legal system

The EU is based on a series of treaties. These first established the European Community and the EU, and then made amendments to those founding treaties. These are power-giving treaties which set broad policy goals and establish institutions with the necessary legal powers to implement those goals. These legal powers include the ability to enact legislation which can directly affect all member states and their inhabitants. The EU has legal personality, with the right to sign agreements and international treaties.

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.

Courts of Justice

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.

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. The General Court mainly deals with cases taken by individuals and companies directly before the EU's courts, and the European Union Civil Service Tribunal adjudicates in disputes between the European Union and its civil service. Decisions from the General Court can be appealed to the Court of Justice but only on a point of law.

Fundamental rights

The treaties declare that the EU itself is "founded on the values of respect for human dignity, freedom, democracy, equality, the rule of law and respect for human rights, including the rights of persons belonging to minorities... in a society in which pluralism, non-discrimination, tolerance, justice, solidarity and equality between women and men prevail."

In 2009 the Lisbon Treaty gave legal effect to the Charter of Fundamental Rights of the European Union. The charter is a codified catalogue of fundamental rights against which the EU's legal acts can be judged. It consolidates many rights which were previously recognised by the Court of Justice and derived from the "constitutional traditions common to the member states." The Court of Justice has long recognised fundamental rights and has, on occasion, invalidated EU legislation based on its failure to adhere to those fundamental rights. The Charter of Fundamental Rights was drawn up in 2000. Although originally not legally binding the Charter was frequently cited by the EU's courts as encapsulating rights which the courts had long recognised as the fundamental principles of EU law. Although signing the European Convention on Human Rights (ECHR) is a condition for EU membership, previously, the EU itself could not accede to the Convention as it is neither a state nor had the competence to accede. The Lisbon Treaty and Protocol 14 to the ECHR have changed this: the former binds the EU to accede to the Convention while the latter formally permits it.

Although, the EU is independent from Council of Europe, they share purpose and ideas especially on rule of law, human rights and democracy. Further European Convention on Human Rights and European Social Charter, the source of law of Charter of Fundamental Rights are created by Council of Europe. The EU also promoted human rights issues in the wider world. The EU opposes the death penalty and has proposed its worldwide abolition. Abolition of the death penalty is a condition for EU membership.

Acts

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, and automatically override conflicting domestic provisions. Directives require member states to achieve a certain result while leaving them discretion as to how to achieve the result. The details of how they are to be implemented are left to member states. When the time limit for implementing directives passes, they may, under certain conditions, have direct effect in national law against member states.

Decisions offer an alternative to the two above modes of legislation. They are legal acts which only apply to specified individuals, 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.

Justice and home affairs

Since the creation 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, Eurojust for co-operation between prosecutors, and Frontex for co-operation between border control authorities. The EU also operates the Schengen Information System which provides a common database for police and immigration authorities. 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, family law, asylum law, and criminal justice. Prohibitions against sexual and nationality discrimination have a long standing in the treaties. In more recent years, these have been supplemented by powers to legislate against discrimination based on race, religion, disability, age, and sexual orientation. By virtue of these powers, the EU has enacted legislation on sexual discrimination in the work-place, age discrimination, and racial discrimination.

Foreign relations

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. 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.

The aims of the CFSP are to promote both the EU's own interests and those of the international community as a whole, including the furtherance of international co-operation, respect for human rights, democracy, and the rule of law. The CFSP requires unanimity among the 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, not uncommon.

The coordinator and representative of the CFSP within the EU is the High Representative of the Union for Foreign Affairs and Security Policy (currently Catherine Ashton) who speaks on behalf of the EU in foreign policy and defence matters, and has the task of articulating the positions expressed by the member states on these fields of policy into a common alignment. The High Representative heads up the European External Action Service (EEAS), a unique EU department that has been officially implemented and operational since 1 December 2010 on the occasion of the first anniversary of the entry into force of the Treaty of Lisbon. The EEAS will serve as a foreign ministry and diplomatic corps for the European Union.

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 European formerly Communist countries. This influence on the internal affairs of other countries is generally referred to as " soft power", as opposed to military "hard power".

Military

The European Union does not have one unified military. 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. 21 EU members are members of NATO while the remaining member states follow policies of neutrality. The Western European Union, a military alliance with a mutual defence clause, was disbanded in 2010 as its role had been transferred to the EU.

According to the Stockholm International Peace Research Institute (SIPRI), France spent more than €44 billion ($59bn) on defence in 2010, placing it third in the world after the US and China, while the United Kingdom spent almost £38 billion ($58bn), the fourth largest. Together, France and the United Kingdom account for 45 per cent of Europe's defence budget, 50 per cent of its military capacity and 70 per cent of all spending in military research and development. In 2000, the United Kingdom, France, Spain, and Germany accounted for 97% of the total military research budget of the then 15 EU member states.

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.

EU forces have been deployed on peacekeeping missions from Africa to the former Yugoslavia and the Middle East. EU military operations are supported by a number of bodies, including the European Defence Agency, European Union Satellite Centre and the European Union Military Staff. In an EU consisting of 27 members, substantial security and defence cooperation is increasingly relying on great power cooperation.

Humanitarian aid

The European Commission 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.

Humanitarian aid is financed directly by the budget (70%) as part of the financial instruments for external action and also by the European Development Fund (30%). The EU's external action financing is divided into 'geographic' instruments and 'thematic' instruments. The 'geographic' instruments provide aid through the Development Cooperation Instrument (DCI, €16.9 billion, 2007–2013), which must spend 95% of its budget on overseas development assistance (ODA), and from the European Neighbourhood and Partnership Instrument (ENPI), which contains some relevant programmes. The European Development Fund (EDF, €22.7 bn, 2008–2013) is made up of voluntary contributions by member states, but there is pressure to merge the EDF into the budget-financed instruments to encourage increased contributions to match the 0.7% target and allow the European Parliament greater oversight.

The EU's aid has previously been criticised by the think-tank Open Europe for being inefficient, mis-targeted and linked to economic objectives. Furthermore, some charities such as ActionAid 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 and is expected not to reach the international target of 0.7% of gross national income until 2015.

However, four countries have reached the 0.7% target: Sweden, Luxembourg, the Netherlands and Denmark. In 2005 EU aid was 0.34% of the GNP which was higher than that of either the United States or Japan. The previous Commissioner for Aid, Louis Michel, has called for aid to be delivered more rapidly, to greater effect, and on humanitarian principles.

Economy

The EU has established a single market across the territory of all its members. A monetary union, the eurozone, using a single currency comprises 17 member states. In 2012 the EU had a combined GDP of 16.41 trillion international dollars, a 20% share of the global gross domestic product (in terms of purchasing power parity).

Of the top 500 largest corporations measured by revenue ( Fortune Global 500 in 2010), 161 have their headquarters in the EU. In 2007, unemployment in the EU stood at 7% while investment was at 21.4% of GDP, inflation at 2.2%, and current account balance at −0.9% of GDP (i.e., slightly more import than export). Now, in 2012, unemployment in the EU stand, per August 2012, at 11.4%

There is a significant variance for GDP (PPP) per capita within individual EU states, these range from €11,300 to €69,800 (about US$15,700 to US$97,000). The difference between the richest and poorest regions (271 NUTS-2 regions of the Nomenclature of Territorial Units for Statistics) ranged, in 2009, from 27% of the EU27 average in the region of Severozapaden in Bulgaria, to 332% of the average in Inner London in the United Kingdom. On the high end, Inner London has €78,000 PPP per capita, Luxembourg €62,500, and Bruxelles-Cap €52,500, while the poorest regions, are Severozapaden with €6,400 PPP per capita, Nord-Est with €6,900 PPP per capita, Severen tsentralen with €6,900 and Yuzhen tsentralen with €7,200.

Structural Funds and Cohesion Funds are supporting the development of underdeveloped regions of the EU. Such regions are primarily located in the states of central and southern Europe. Several funds provide emergency aid, support for candidate members to transform their country to conform to the EU's standard ( Phare, ISPA, and SAPARD), and support to the former USSR Commonwealth of Independent States ( TACIS). TACIS has now become part of the worldwide EuropeAid programme. EU research and technological framework programmes sponsor research conducted by consortia from all EU members to work towards a single European Research Area.

Internal market

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

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

The free movement of persons means that EU 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.

The free movement of services and of establishment allows self-employed persons to move between member states to provide services on a temporary or permanent basis. While services account for 60–70% 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. According to the Treaty the provision of services is a residual freedom that only applies if no other freedom is being exercised.

Competition

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

The Competition Commissioner, currently 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. 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. Another high-profile case against Microsoft, resulted in the Commission fining Microsoft over €777 million following nine years of legal action.

Monetary union

The creation of a European single currency became an official objective of the European Economic Community 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 15 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 12 member states. The eurozone (constituted by the EU member states which have adopted the euro) has since grown to 17 countries, the most recent being Estonia which joined on 1 January 2011.

All other EU member states, except Denmark and the United Kingdom, are legally bound to join the euro 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.

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. Since its launch the euro has become the second reserve currency in the world with a quarter of foreign exchanges reserves being in euro. 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).

The ECB is the central bank for the eurozone, and thus controls monetary policy in that area with an agenda to maintain price stability. It is at the centre of the European System of Central Banks, which comprehends all EU national central banks and is controlled by its General Council, consisting of the President of the ECB, who is appointed by the European Council, the Vice-President of the ECB, and the governors of the national central banks of all 27 EU member states.

The monetary union has been shaken by the European sovereign-debt crisis since 2009.

Financial supervision

The European System of Financial Supervisors is an institutional architecture of the EU's framework of financial supervision composed by three authorities: the European Banking Authority, the European Insurance and Occupational Pensions Authority and the European Securities and Markets Authority. To complement this framework, there is also a European Systemic Risk Board under the responsibility of the ECB. The aim of this financial control system is to ensure the economic stability of the EU.

Energy

EU energy production
46% of total EU primary energy use
Nuclear energy	29.3%
Coal & lignite	21.9%
Gas	19.4%
Renewable energy	14.6%
Oil	13.4%
Other	1.4%
Net imports of energy
54% of total primary EU energy use
Oil & petroleum products	60.2%
Gas	26.4%
Other	13.4%

In 2006, the 27 member states of the EU had a gross inland energy consumption of 1,825 million tonnes of oil equivalent (toe). Around 46% of the energy consumed was produced within the member states while 54% was imported. In these statistics, nuclear energy is treated as primary energy produced in the EU, regardless of the source of the uranium, of which less than 3% is produced in the EU.

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

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

The EU currently imports 82% of its oil, 57% of its natural gas and 97.48% of its uranium demands. There are concerns that Europe's dependence on Russian energy is endangering the Union and its member countries. The EU is attempting to diversify its energy supply.

Infrastructure

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

The developing European transport policies will increase the pressure on the environment in many regions by the increased transport network. In the pre-2004 EU members, the major problem in transport deals with congestion and pollution. After the recent enlargement, the new states that joined since 2004 added the problem of solving accessibility to the transport agenda. The Polish road network in particular was in poor condition: at Poland's accession to the EU, a number of roads needed to be upgraded, particularly the A4 autostrada, requiring approximately €13 billion.

The Galileo positioning system is another EU infrastructure project. Galileo is a proposed Satellite navigation system, to be built by the EU and launched by the European Space Agency (ESA), and is to be operational by 2012. The Galileo project was launched partly to reduce the EU's dependency on the US-operated Global Positioning System, but also to give more complete global coverage and allow for far greater accuracy, given the aged nature of the GPS system. It has been criticised by some due to costs, delays, and their perception of redundancy given the existence of the GPS system.

Agriculture

The Common Agricultural Policy (CAP) is one of the oldest policies of the European Community, and was one of its core aims. The policy has the objectives of increasing agricultural production, providing certainty in food supplies, ensuring a high quality of life for farmers, stabilising markets, and ensuring reasonable prices for consumers. It was, until recently, operated by a system of subsidies and market intervention. Until the 1990s, the policy accounted for over 60% of the then European Community's annual budget, and still accounts for around 34%.

The policy's price controls and market interventions led to considerable overproduction, resulting in so-called butter mountains and wine lakes. These were intervention stores of produce bought up by the Community to maintain minimum price levels. In order to dispose of surplus stores, they were often sold on the world market at prices considerably below Community guaranteed prices, or farmers were offered subsidies (amounting to the difference between the Community and world prices) to export their produce outside the Community. This system has been criticised for under-cutting farmers outside of Europe, especially those in the developing world.

The overproduction has also been criticised for encouraging environmentally unfriendly intensive farming methods. Supporters of CAP say that the economic support which it gives to farmers provides them with a reasonable standard of living, in what would otherwise be an economically unviable way of life. However, the EU's small farmers receive only 8% of CAP's available subsidies.

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

Environment

In 1957 when the EU was founded, it had no environmental policy, no environmental bureaucracy, and no environmental laws. Today, the EU has some of the most progressive environmental policies of any state in the world. The environmental policy of the EU has therefore developed in remarkable fashion in the past four decades. An increasingly dense network of legislation has emerged, which now extends to all areas of environmental protection, including: air pollution control; water protection; waste management; nature conservation; and the control of chemicals, biotechnology and other industrial risks. The Institute for European Environmental Policy estimates the body of EU environmental law amounts to well over 500 Directives, Regulations and Decisions. Environmental policy has thus become a core area of European politics.

Such dynamic developments are surprising in light of the legal and institutional conditions which existed in the late 1950s and 60s. Acting without any legislative authority, European policy-makers initially increased the EU's capacity to act by defining environmental policy as a trade problem. The most important reason for the introduction of a common environmental policy was the fear that trade barriers and competitive distortions in the Common Market could emerge due to the different environmental standards. However, in the course of time, EU environmental policy emerged as a formal policy area, with its own policy actors, policy principles and procedures. The legal basis of EU environmental policy was not more explicitly established until the introduction of the Single European Act in 1987.

Initially, EU environmental policy was rather inward looking. More recently, however, the Union has demonstrated a growing leadership in global environmental governance. The role of the EU in securing the ratification and entry into force of the Kyoto Protocol in the face of US opposition is an example in this regard. This international dimension is reflected in the EU's Sixth Environmental Action Programme, which recognises that its strategic objectives can only be achieved if a series of key international environmental agreements are actively supported and properly implemented both at an EU level and worldwide. The entry into force of the Lisbon Treaty further strengthens the EU's global environmental leadership ambitions. The vast body of EU environmental law which now exists has played a vital role in improving habitat and species protection in Europe as well as contributed to improvements in air and water quality and waste management. However, significant challenges remain, both to meet existing EU targets and aspirations and to agree new targets and actions that will further improve the environment and the quality of life in Europe and beyond.

One of the top priorities of EU environmental policy is combatting climate change. In 2007, member states agreed that the EU is to use 20% renewable energy in the future and that it has to reduce carbon dioxide emissions in 2020 by at least 20% compared to 1990 levels. This includes measures that in 2020, 10% of the overall fuel quantity used by cars and trucks in EU 27 should be running on renewable energy such as biofuels. This is considered to be one of the most ambitious moves of an important industrialised region to fight global warming.

Education and science

Education and science are areas where the EU's role is limited to supporting national governments. In education, the policy was mainly developed in the 1980s in programmes supporting exchanges and mobility. The most visible of these has been the Erasmus Programme, a university exchange programme which began in 1987. In its first 20 years it has supported international exchange opportunities for well over 1.5 million university and college students and has become a symbol of European student life.

There are now similar programmes for school pupils and teachers, for trainees in vocational education and training, and for adult learners in the Lifelong Learning Programme 2007–2013. These programmes are designed to encourage a wider knowledge of other countries and to spread good practices in the education and training fields across the EU. Through its support of the Bologna process the EU is supporting comparable standards and compatible degrees across Europe.

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

Health care

Although the EU has no major competences in the field of health care, Article 35 of the Charter of Fundamental Rights of the European Union affirms that "A high level of human health protection shall be ensured in the definition and implementation of all Union policies and activities". All the member states have either publicly sponsored and regulated universal health care or publicly provided universal health care. The European Commission's Directorate-General for Health and Consumers seeks to align national laws on the protection of people's health, on the consumers' rights, on the safety of food and other products.

Health care in the EU is provided through a wide range of different systems run at the national level. The systems are primarily publicly funded through taxation (universal health care). Private funding for health care may represent personal contributions towards meeting the non-taxpayer refunded portion of health care or may reflect totally private (non-subsidised) health care either paid out of pocket or met by some form of personal or employer funded insurance.

All EU and many other European countries offer their citizens a free European Health Insurance Card which, on a reciprocal basis, provides insurance for emergency medical treatment insurance when visiting other participating European countries. A directive on cross-border healthcare aims at promoting cooperation on health care between member states and facilitating access to safe and high-quality cross-border healthcare for European patients.

Demographics

The combined population of all 27 member states was forecast at 503,679,730 as of 1 January 2012.

Largest population centres of European Union Larger Urban Zones, according to Eurostat
	Rank	City name	State	Pop.
London Paris	1	London	United Kingdom	11,905,500	Madrid Berlin
	2	Paris	France	11,532,409
	3	Madrid	Spain	5,804,829
	4	Berlin	Germany	4,971,331
	5	Barcelona	Spain	4,440,629
	6	Athens	Greece	4,013,368
	7	Rome	Italy	3,457,690
	8	Hamburg	Germany	3,134,620
	9	Milan	Italy	3,076,643
	10	Katowice	Poland	2,710,397

The EU contains 16 cities with populations of over one million, the largest being London.

Besides many large cities, the EU also includes several densely populated regions that have no single core but have emerged from the connection of several cites and now encompass large metropolitan areas. The largest are Rhine-Ruhr having approximately 11.5 million inhabitants (Cologne, Dortmund, Düsseldorf et al.), Randstad approx. 7 million (Amsterdam, Rotterdam, The Hague, Utrecht et al.), Frankfurt Rhine-Main Metropolitan Region approx. 5.8 million (Frankfurt, Wiesbaden et al.), the Flemish diamond approx. 5.5 million (urban area in between Antwerp, Brussels, Leuven and Ghent), Katowice and its Upper Silesian metropolitan area approx. 5.3 million and the Øresund Region approx. 3.7 million (Copenhagen, Denmark and Malmö, Sweden).

In 2010, 47.3 million people lived in the EU, who were born outside their resident country. This corresponds to 9.4% of the total EU population. Of these, 31.4 million (6.3%) were born outside the EU and 16.0 million (3.2%) were born in another EU member state. The largest absolute numbers of people born outside the EU were in Germany (6.4 million), France (5.1 million), the United Kingdom (4.7 million), Spain (4.1 million), Italy (3.2 million), and the Netherlands (1.4 million).

Languages

European official languages report (EU-27)

Language	Native Speakers	Total
English	13%	51%
German	16%	27%
French	12%	24%
Italian	13%	16%
Spanish	8%	15%
Polish	8%	9%
Romanian	5%	5%
Dutch	4%	5%
Hungarian	3%	3%
Portuguese	2%	3%
Czech	2%	3%
Swedish	2%	3%
Greek	2%	2%
Bulgarian	2%	2%
Slovak	1%	2%
Danish	1%	1%
Finnish	1%	1%
Lithuanian	1%	1%
Slovenian	<1%	<1%
Estonian	<1%	<1%
Irish	<1%	<1%
Latvian	<1%	<1%
Maltese	<1%	<1%
Published in June 2012. Survey conducted in February - March 2012. Native: Native language Total: EU citizens able to hold a conversation in this language

Among the many languages and dialects used in the EU, it has 23 official and working languages: Bulgarian, Czech, Danish, Dutch, English, Estonian, Finnish, French, German, Greek, Hungarian, Italian, Irish, Latvian, Lithuanian, Maltese, Polish, Portuguese, Romanian, Slovak, Slovene, Spanish, and Swedish. Important documents, such as legislation, are translated into every official language. The European Parliament provides translation into all languages for documents and its plenary sessions. Some institutions use only a handful of languages as internal working languages. Catalan, Galician, Basque, Scottish Gaelic and Welsh are not official languages of the EU but have semi-official status in that official translations of the treaties are made into them and citizens of the EU have the right to correspond with the institutions using them.

Language policy is the responsibility of member states, but EU institutions promote the learning of other languages. English is the most spoken language in the EU, it is spoken by 51% of the EU population when counting both native and non-native speakers. German is the most widely spoken mother tongue (about 88.7 million people as of 2006). 56% of EU citizens are able to engage in a conversation in a language other than their mother tongue. Most official languages of the EU belong to the Indo-European language family, except Estonian, Finnish, and Hungarian, which belong to the Uralic language family, and Maltese, which is an Afroasiatic language. Most EU official languages are written in the Latin alphabet except Bulgarian, written in Cyrillic, and Greek, written in the Greek alphabet.

Besides the 23 official languages, there are about 150 regional and minority languages, spoken by up to 50 million people. Of these, only the Spanish regional languages (that is, Catalan, Galician, and Basque), Scottish Gaelic, and Welsh can be used by citizens in communication with the main European institutions. Although EU programmes can support regional and minority languages, the protection of linguistic rights is a matter for the individual member states. The European Charter for Regional or Minority Languages ratified by most EU states provides general guidelines that states can follow to protect their linguistic heritage.

Religion

The EU is a secular body with no formal connection to any religion. The Article 17 of the Treaty on the Functioning of the European Union recognises the "status under national law of churches and religious associations" as well as that of "philosophical and non-confessional organisations".

The preamble to the Treaty on European Union mentions the "cultural, religious and humanist inheritance of Europe". Discussion over the draft texts of the European Constitution and later the Treaty of Lisbon included proposals to mention Christianity or God or both, in the preamble of the text, but the idea faced opposition and was dropped.

Christians in the EU are divided among followers of Roman Catholicism, numerous Protestant denominations, and the Eastern Orthodox Church. Other world religions are also represented in the EU population. As of 2009, the EU had an estimated Muslim population of 13 million, and an estimated Jewish population of over a million.

Eurostat's Eurobarometer opinion polls showed in 2005 that 52% of EU citizens believed in a God, 27% in "some sort of spirit or life force", and 18% had no form of belief. Many countries have experienced falling church attendance and membership in recent years. The countries where the fewest people reported a religious belief were Estonia (16%) and the Czech Republic (19%). The most religious countries are Malta (95%; predominantly Roman Catholic), and Cyprus and Romania both with about 90% of the citizens believing in God (both predominantly Orthodox). Across the EU, belief was higher among women, increased with age, those with religious upbringing, those who left school at 15 with a basic education, and those "positioning themselves on the right of the political scale (57%)."

Culture and sport

Cultural co-operation between member states has been a concern of the EU since its inclusion as a community competency in the Maastricht Treaty. Actions taken in the cultural area by the EU include the Culture 2000 7-year programme, the European Cultural Month event, the Media Plus programme, orchestras such as the European Union Youth Orchestra and the European Capital of Culture programme – where one or more cities in the EU are selected for one year to assist the cultural development of that city.

Sport is mainly the responsibility of an individual member states or other international organisations rather than that of the EU. However, there are some EU policies that have had an impact on sport, such as the free movement of workers which was at the core of the Bosman ruling, which prohibited national football leagues from imposing quotas on foreign players with European citizenship. The Treaty of Lisbon requires any application of economic rules to take into account the specific nature of sport and its structures based on voluntary activity. This followed lobbying by governing organisations such as the International Olympic Committee and FIFA, due to objections over the applications of free market principles to sport which led to an increasing gap between rich and poor clubs. The EU does fund a program for Israeli, Jordanian, Irish and British football coaches, as part of the Football 4 Peace project.