With the motto “United in Diversity”, the EU works on its Europe 2020 growth strategy for the EU to become a smart, sustainable and inclusive economy.
The EU is a unique economic and political partnership between 28 European countries that together cover much of the continent. It was created in the aftermath of the Second World War. The first steps were to foster economic cooperation: the idea being that countries that trade with one another become economically interdependent and so more likely to avoid conflict. The result was the European Economic Community (EEC), created in 1958, and initially increasing economic cooperation between six countries: Belgium, Germany, France, Italy, Luxembourg, and The Netherlands. Since then, a huge single market has been created and continues to develop towards its full potential.
What began as a purely economic union has evolved into an organization spanning all policy areas, from development aid to the environment. A name change from the EEC to the European Union (EU) in 1993 reflected this. The EU is based on the rule of law; everything that it does is founded on treaties, voluntarily and democratically agreed on by all member countries. These binding agreements set out the EU’s goals in its main areas of activity.
“United in diversity”, the motto of the European Union, first came into use in 2000. It signifies how Europeans have come together, in the form of the EU, to work for peace and prosperity, while at the same time being enriched by the continent’s many different cultures, traditions and languages.
The EU has delivered more than half a century of peace, stability and prosperity, helped raise living standards, and launched a single European currency: the euro. More than 340 million EU citizens in 19 countries now use it as their currency and enjoy its benefits. Thanks to the abolition of border controls between EU countries, people can travel freely throughout most of the continent. It has become much easier to live, work, and travel abroad in Europe. All EU citizens have the right and freedom to choose which EU country they want to study, work, or retire in. Every EU country must treat EU citizens in exactly the same way as its own citizens for employment, social security, and tax purposes.
The EU is governed by the principle of representative democracy, with citizens directly represented at Union level in the European Parliament and Member States represented in the European Council and Council of the EU. European citizens are encouraged to contribute to the democratic life of the Union by giving their views on EU policies during development or suggest improvements to existing laws and policies. The European citizens’ initiative empowers citizens to have a greater say on EU policies that affect their lives. Citizens can also submit complaints and inquiries concerning the application of EU law.
One of its main goals is to promote human rights both internally and around the world. Human dignity, freedom, democracy, equality, the rule of law and respect for human rights: these are the core values of the EU. Since the 2009 signing of the Treaty of Lisbon, the EU’s Charter of Fundamental Rights brings all these rights together in a single document. The EU’s institutions are legally bound to uphold them, as are EU governments whenever they apply EU law. As it continues to grow, the EU remains focused on making its governing institutions more transparent and democratic. More powers are being given to the directly elected European Parliament, while national parliaments are being given a greater role, working alongside the European institutions. In turn, European citizens have an ever-increasing number of channels for taking part in the political process.
Europe 2020 is the EU’s ten year growth strategy. It is about more than just overcoming the crisis which continues to afflict many of our economies. It is about addressing the shortcomings of our growth model and creating the conditions for a different type of growth that is smarter, more sustainable and more inclusive.
To render this more tangible, five key targets have been set for the EU to achieve by the end of the decade. These cover employment, education, research and innovation, social inclusion and poverty reduction, and climate / energy. The strategy also includes seven ‘flagship initiatives’ providing a framework through which the EU and national authorities mutually reinforce their efforts in areas supporting the Europe 2020 priorities such as innovation, the digital economy, employment, youth, industrial policy, poverty and resource efficiency.
The EU’s main economic engine is the single market. It enables most goods, services, money, and people to travel freely. The EU aims to develop this huge resource to other areas like energy, knowledge, and capital markets to ensure that Europeans can draw maximum benefits from it.
It is the largest trade block in the world. It is also the world’s biggest exporter of manufactured goods and services, and the biggest import market for over 100 countries. Free trade among its members was one of the EU’s founding principles. This is possible thanks to the single market. Beyond its borders, the EU is also committed to liberalizing world trade.
Operating as a single market, the EU is a major world trading power. EU economic policy focuses on creating jobs and boosting growth by making smarter use of financial resources, removing obstacles to investment, and providing visibility and technical assistance to investment projects. The EU’s economy – measured in terms of the goods and services it produces (GDP) – is now bigger than the US’s. EU GDP in 2017: €15.3 trillion
The 28 member states that make up the EU have adopted an internal single market with free movement of goods, services, capital, and labor. The EU, which is also a customs union, aims to bolster Europe’s trade position and its political and economic weight in international affairs.
Despite great differences in per capita income among member states (from $28,000 to $109,000) and in national attitudes towards issues like inflation, debt, and foreign trade, the EU has achieved a high degree of coordination of monetary and fiscal policies. A common currency – the euro – circulates among 19 of the member states, under the auspices of the European Economic and Monetary Union (EMU). Eleven member states introduced the euro as their common currency on 1 January 1999 (Greece did so two years later).
Since 2004, 13 states acceded to the EU. Of the 13, Slovenia (2007), Cyprus and Malta (2008), Slovakia (2009), Estonia (2011), Latvia (2014), and Lithuania (2015) have adopted the euro; 7 other member states – not including the UK and Denmark, which have formal opt – outs – are required by EU treaties to adopt the common currency upon meeting fiscal and monetary convergence criteria.
The EU economy posted moderate GDP growth for 2014 through 2017, capping five years of sustained growth since the 2008 – 09 global economic crisis and ensuing sovereign debt crisis in the eurozone in 2011. The bloc’s recovery has been uneven. Some EU member states (Czech Republic, Ireland, Malta, Romania, Sweden, and Spain) have recorded strong growth while others (Italy and the UK) are experiencing modest expansion, and some (Greece) have only recently shaken off recession. Only Greece remains under an EU rescue program (due to end August 2018), while Cyprus, Ireland, Portugal, and Spain have successfully concluded their agreements.
Overall, the EU’s recovery has been buoyed by lower commodities prices and accommodative monetary policy, which has lowered interest rates and stimulated demand. The eurozone, which makes up about 70% of the total EU economy, is performing well, achieving a growth rate not seen in a decade.
Continued uncertainty about the implications of the UK’s exit from the EU could hurt consumer and investor confidence and dampen EU growth, particularly if trade and cross – border investment significantly declines. Externally, the EU has continued to pursue comprehensive free trade agreements to expand EU external market share, particularly with Asian countries; EU and Japanese leaders reached a political – level agreement on a free trade agreement in July 2017, and an agreement with Mexico in April 2018 on updates to an existing free trade agreement.
Among the world’s largest and most technologically advanced regions, the EU industrial base includes: ferrous and non – ferrous metal production and processing, metal products, petroleum, coal, cement, chemicals, pharmaceuticals, aerospace, rail transportation equipment, passenger and commercial vehicles, construction equipment, industrial equipment, shipbuilding, electrical power equipment, machine tools and automated manufacturing systems, electronics and telecommunications equipment, fishing, food and beverages, furniture, paper, and textiles.