European Union | confederation of 27 member countries

Already after the First World War, there were various efforts to form a union of European states, such as the Paneuropa Union founded in 1922. However, these efforts were ultimately unsuccessful. The decisive starting point for European integration did not come until the end of the Second World War: By networking the militarily relevant economic sectors, a new war between the former adversaries was to be made impossible and, as a consequence, political rapprochement and lasting reconciliation between the states involved was to be achieved. In addition, security policy considerations were also important: In the incipient Cold War, the Western European states were to be brought closer together and the Federal Republic of Germany was to be integrated into the Western bloc.

Timetable

Coal and Steel Union (1951)

Jean Monnet, then head of the French Planning Office, voiced the proposal to place all Franco-German coal and steel production under a joint authority. French Foreign Minister Robert Schuman took up this idea and presented it to Parliament on May 9, 1950, which is why it went down in history as the Schuman Plan. This Schuman Plan led to the founding of the European Coal and Steel Community (ECSC, colloquially also "Coal and Steel Community") on April 18, 1951 by Belgium, the Federal Republic of Germany, France, Italy, Luxembourg and the Netherlands. The institutions of this ECSC formed the core of what later became the EU: a High Authority with supranational powers (which later became the European Commission), a Council of Ministers as the legislative branch (now the Council of the EU), and a Consultative Assembly (later the European Parliament). However, the competences of the various bodies changed in the course of integration - for example, the Consultative Assembly still had hardly any say, whereas today the European Parliament has equal rights with the Council in areas where the ordinary legislative procedure applies.

Treaties of Rome (1957)

On March 25, 1957, the so-called Treaties of Rome constituted the next step in integration. With these treaties, the same six states founded the European Economic Community (EEC) as well as the European Atomic Energy Community (EAEC and Euratom). The goal of the EEC was to create a common market in which goods, services, capital and labor could move freely. Through Euratom, there was to be a common development for the peaceful use of atomic energy.

The ECSC, EEC and Euratom each initially had their own Commission and Council. However, with the so-called Merger Treaty in 1967, these institutions were merged and now called the institutions of the European Communities (EC).

Alongside the stages of progressive integration, however, there were also setbacks and phases of stagnation. For example, the plan for a European Defense Community (EDC) failed in the French National Assembly in 1954. In the 1960s, Charles de Gaulle, as President of France, put the brakes on the Community's progress with the so-called empty chair policy and with his repeated veto of British accession to the EEC. Then, in the first half of the 1980s, it was British Prime Minister Margaret Thatcher who prevented further progress in integration by calling for a reduction in British contributions. This phase of stagnant integration was also referred to as Eurosclerosis. Nevertheless, isolated declarations continued to promote the idea of European integration during this period, such as the document on European identity adopted on December 14, 1973, in which the nine member states of the European Communities declared their commitment to the "dynamism of European integration" and affirmed the "envisaged transformation of the totality of their relations into a European Union" as a common goal.

It was not until the end of the 1980s that integration regained momentum. With the Single European Act (SEA) in 1987, the EEC under Commission President Jacques Delors developed the plan for a single European market in which all national barriers to Europe-wide trade were to be overcome by January 1, 1993, through an approximation of economic law.

Maastricht Treaty (1992)

The fall of the Iron Curtain, the associated loss of power of the communists in the Eastern Bloc together with the change of government system in the GDR, Poland, Hungary, the ČSSR as well as Bulgaria and Romania led to the end of the East-West confrontation and thus to the enabling of the reunification of Germany and to further integration steps: On February 7, 1992, the Maastricht Treaty establishing the European Union (EU) was signed. It entered into force on November 1, 1993. On the one hand, the treaty decided to establish an economic and monetary union, which later led to the introduction of the euro; on the other hand, the member states decided on closer coordination in foreign and security policy and in the area of home affairs and justice. At the same time, the EEC was renamed the European Community (EC), as it was now given responsibilities in policy areas other than the economy (such as environmental policy).

With the Treaty of Amsterdam (signed in 1997) and the Treaty of Nice (in force since February 2003), the EU's treaty structure was again revised to bring about better functioning of the institutions. Until the Lisbon Treaty, only the European Communities had legal personality, not the European Union itself. This meant that the EC could take generally binding decisions within the scope of its competences, while the EU merely acted as an "umbrella organization." In the Common Foreign and Security Policy (CFSP) in particular, the EU could not act as an independent institution, but always only in the form of its individual member states.

The end of the Cold War also brought the overcoming of the political division of Europe into focus for the EU. It had already grown from six to fifteen members through several rounds of enlargement (1973, 1981, 1986, 1995); now the Central and Eastern European countries that had previously belonged to the Eastern bloc were also to become part of the Union. To this end, the EU member states established the so-called Copenhagen accession criteria in 1993, defining freedom, democracy, the rule of law, human rights and fundamental civil liberties as the Union's core values. In 2004 and 2007, the two eastward enlargements finally took place, in which twelve new members were admitted to the EU.

New objectives for the internal development of the European Union were set in 2000 with the Lisbon Strategy, which was intended to take appropriate account of the challenges of globalization and a new, "knowledge-based" economy. The strategic goal for the coming decade was determined to be "to make the Union the most competitive and dynamic knowledge-based economy in the world - capable of sustainable economic growth with more and better jobs and greater social cohesion." In its 2005 "mid-term review," the European Parliament also expressed confidence that the EU's Lisbon Strategy could serve as a model for economic, social and environmental progress in the world, within the framework of the global goal of sustainable development. The successor program to the Lisbon Strategy, Europe 2020, launched ten years later, formulated essentially similar goals.

Lisbon Treaty (2007)

However, the enlargement rounds threatened to increasingly restrict the EU's ability to act politically: The first adjustment reforms took place - with the usual difficulties and compromises - in the agricultural sector, in regional structural support and in the modification of the British rebate. With regard to the institutional structure, however, they were only partially successful: The veto possibilities for individual member states could have blocked a large number of decisions. With the introduction of the enhanced cooperation procedure by the Treaties of Amsterdam and Nice, a way was developed to counteract such a blockade of European decision-making processes. Member states willing to integrate could now take deeper steps toward agreement in individual areas, even if the other EU states did not participate: The Schengen Agreement and monetary union served as models for this. However, this concept of a "multi-speed Europe" also met with criticism, as it threatened to divide the EU. Another problem was the efficiency of the European Commission's work: Until 2004, individual member states still had two commissioners, but after the eastward enlargement the number was reduced to one commissioner per country - yet the Commission grew from nine members in 1952 to 27 members in 2007.

At the Laeken Summit in 2001, the EU heads of state and government therefore decided to convene a European Convention to draw up a new basic treaty that would make the EU's decision-making procedures more efficient and at the same time more democratic. In October 2004, this constitutional treaty was signed in Rome. Among other things, it provided for the dissolution of the EC and the transfer of its legal personality to the EU, an expansion of majority decision-making, a reduction in the size of the Commission, and better coordination of the Common Foreign Policy. Ratification of the Constitutional Treaty failed, however, because the French and Dutch rejected it in a referendum. Instead, an intergovernmental conference in 2007 drew up the Treaty of Lisbon, which adopted the main content of the Constitutional Treaty. Ratification was planned by the 2009 European elections, and the Treaty of Lisbon entered into force on December 1, 2009.

In 2012, the European Union was awarded the Nobel Peace Prize "for over six decades of contribution to the promotion of peace and reconciliation, democracy and human rights in Europe."

Phase of the challenges of the Union

Since the financial crisis from 2007 onward, which resulted in high levels of sovereign debt in some cases, and the ensuing euro crisis, the European Union has experienced economic and social turmoil among some of its members, which has in some cases strained the relationship between member states in need of financial assistance and those eligible for support measures. After 2010, a number of measures were initiated to address the euro crisis, including the European Stability Mechanism (ESM), established in 2012 as part of the euro bailout fund, and the European Fiscal Compact, which imposes fiscal discipline and debt limits on participating member states. The European Banking Union has transferred national competencies to central institutions as of 2014, creating uniform, common guidelines and regulations in the area of financial market supervision and the recovery or resolution of credit institutions within the European Union. Also, with the strengthening and sustained economic growth now of all member states after 2016, the European Union has begun to slowly overcome this crisis. Further institutional reforms such as a coordinated economic and social policy or the further development of the ESM into a European Monetary Fund are on the agenda of the EU in order to better and more quickly manage future crises or to prevent them from arising in the first place.

Disunity and further crisis-ridden developments in the European Union resulted in the refugee crisis from 2015 onward. In this overall context, anti-European political currents received further impetus. The refugee crisis is also seen as partly responsible for the United Kingdom's exit from the European Union. The willingness of the various governments of the member states to accept refugees varied greatly and stood in the way of joint action by the members of the Union to overcome the crisis, which was easily manageable for the Union as a whole. In some cases, border controls were reintroduced in the Schengen area; on the other hand, various arrangements were made to protect the EU's external borders, including the expansion of Frontex. A plan for the distribution of refugees among the member states was only rudimentarily implemented and was boycotted by national conservative governments, in part openly, contrary to majority decisions confirmed by the European Court of Justice. It is not only in this context that the European Union will soon have to decide what means it should use in the future to respond to open breaches of treaty by these governments, because the Treaty on European Union obliges the Member States of the European Union to show solidarity and uphold the rule of law (cf. Art. 2 TEU, Art. 3 TEU).

Global warming and bringing about effective climate protection are seen as a priority challenge for political action by the EU's newly elected institutions in 2019. On the occasion of the confirmation of the newly composed EU Commission by the European Parliament, President-elect Ursula von der Leyen issued the goal of reducing greenhouse gas emissions in the EU by 50 percent by 2030, rather than 40 percent as previously planned, as part of a "European green deal." Europe was to become the first climate-neutral continent. On the following day, November 28, 2019, the European Parliament declared a climate emergency for Europe. As a consequence, the European Commission is to align all its policies with the global goal of limiting global warming to 1.5 degrees compared to pre-industrial times.

The political system of the European Union clearly differs from national political systems. As a supranational association of sovereign states, the EU has its own sovereign rights, unlike a confederation of states; on the other hand, the EU institutions do not have competence competence - so unlike a federal state, the EU cannot shape the distribution of competences within its system itself. In accordance with the principle of conferral, the EU institutions may only act in those areas that are explicitly mentioned in the founding treaties. In its 1993 Maastricht ruling, the German Constitutional Court therefore coined the new term "association of states" to characterize the EU in terms of constitutional law.

The two most important treaties on which the EU is currently based are the Treaty on European Union and the Treaty on the Functioning of the European Union (TFEU; formerly the EC Treaty). They are therefore referred to as European primary law. All secondary law, which the EU itself enacts according to its own legislative procedures, is derived from these treaties and the competences mentioned therein. However, as a result of the legal personality that the EU has had since December 1, 2009, it can sign international treaties and agreements in its own name as a subject of international law (albeit in principle only by unanimous decision of the Foreign Affairs Council). Through the newly created European External Action Service, it can establish diplomatic relations with other states and apply for membership in international organizations - such as the Council of Europe or the United Nations.

In addition to the EU, there is also the European Atomic Energy Community (Euratom), which is based on its own founding treaty concluded in 1958 (the Euratom Treaty). Following the dissolution of the ECSC and EC, Euratom is the last of the remaining European Communities. In its structures, however, it is fully affiliated with the EU and also shares its institutions with it.

Law

Depending on the policy area, the EU has different competences and voting procedures. In principle, legal acts adopted by the European institutions - Commission, Council and Parliament - in accordance with the EU's legislative procedures are binding. Since the governments of individual states can also be outvoted here, this is referred to as the supranational (supranational) community method. In some policy areas, such as trade policy, the vote is unanimous, but the decisions are binding and cannot be revoked by the individual states.

Other areas in which the EU has no legislative competence are characterized by purely intergovernmental (intergovernmental) decision-making mechanisms. This applies above all to the Common Foreign and Security Policy (CFSP): Here, it is a matter of mere cooperation between the governments of the member states, whereby all decisions must be taken unanimously and also do not have immediate legal force.

Finally, the third method alongside the Community and intergovernmental methods is the open method of coordination, which is used in some areas for which the EU has no legislative competence of its own. Here, no formal decisions are taken, but only informal coordination of the member states in the Council; the Commission only acts in a supporting role.

The EU's supranational policy areas include, among others, the customs union, the European Single Market, the European Economic and Monetary Union, research and environmental policy, health care, consumer protection, areas of social policy, and the area of freedom, security and justice. The latter covers aspects of home affairs and justice policy, including immigration policy, judicial cooperation in civil matters, and police and judicial cooperation in criminal matters.

The supranational competences of the EU in this core area are evident in several ways:

• The Council of the European Union usually decides on the basis of the majority principle. The veto options of the individual member states are severely limited; in most policy areas, they can be outvoted by a qualified majority.
• The supranational European Parliament has full legislative rights in most policy areas. The governments of the member states cannot therefore legislate against the will of the Parliament.
• Certain executive activities in the EU are left entirely to the European Commission. This makes its independence vis-à-vis national governments particularly clear.
• EU law has a high binding effect: EU regulations are directly applicable law in all member states; in the case of EU directives, the member states are obliged to transpose them into the respective national law (even if the exact form is left to the individual states). The jurisdiction of the courts of the European Union with the European Court of Justice (ECJ) at its head is mandatory.

The European Commission (sole right of initiative), the Council of the European Union and the European Parliament are involved in the creation of EU legal acts in accordance with the ordinary legislative procedure. A distinction is made between EU regulations (directly valid in the member states without a national act of transposition), EU directives (binding only after transposition into national law) and EU decisions (in each case a legal act in the individual case, similar to an administrative act).

Institutions

The institutional structure of the EU has remained essentially constant since its beginnings in 1952, although the competences of the individual institutions have changed several times. The legal basis for the institutions is Title III of the EU Treaty and Part Six of the TFEU.

In many respects, the EU displays typical features of a federal system, with the Commission as the executive and a two-part legislature consisting of the European Parliament as the chamber of citizens and the Council as the chamber of states. The important role of the Council is based on the concept of executive federalism, which also characterizes the Federal Republic of Germany. Compared with the practices in federal nation states, however, the influence of the lower level (in this case, the governments of the member states) is greater in the EU: For example, the members of the Commission are proposed by the national governments and the national parliaments are closely involved in EU policy through their EU committees. Another special feature is the European Council, the summit of heads of state and government that takes place every three months. According to the EU Treaty, this institution is to set the general political guidelines of the Union. It thus has a very great influence on the development of the Union, although it is not formally involved in its legislative process.

The central EU institutions:

All competences not conferred on the European Union in the Treaties remain with the Member States in accordance with Article 5 TEU. According to the principle of conferral, the Union shall act only within the limits of the competences conferred upon it by the Member States in the Treaties to attain the objectives set out therein. In accordance with the principle of subsidiarity, the Union shall take action in areas which do not fall within its exclusive competence only if and insofar as the objectives pursued can be better achieved at Union level than by the Member States. At the same time, EU action may not go further than is necessary to achieve the objectives set out in the EU Treaty (principle of proportionality). Despite these restrictive principles, EU legislation also determines a large part of national legislation: In the Federal Republic of Germany, for example, two-thirds of all laws passed in the area of domestic policy can be traced back to initiatives or legal acts at the EU level.

The Treaties confer on the Union either exclusive competence in a given area, or competence shared with the Member States. In certain areas, the Union also has competence only to implement measures to support and coordinate the actions of the Member States (supporting competence). According to Art. 3 TFEU, the Union has exclusive competence in the areas of the European Customs Union, the definition of competition rules for the European Single Market, the monetary policy of the states participating in the European Monetary Union, the conservation of marine biological resources under the Common Fisheries Policy, and the Common Commercial Policy. The shared competences according to Art. 4 TFEU include the European internal market, certain areas of social policy, economic, social and territorial cohesion, agriculture and fisheries with the exception of the conservation of marine biological resources, environmental policy, consumer protection, transport policy, trans-European networks, energy policy, the area of freedom, security and justice, certain areas of health protection, research, technology and space policy, and development policy.

Economic policy

The history of European unification is characterized by the overriding importance of economic integration steps. Initiated by the communitarization of the coal and steel sector in 1952 and continued with the creation of the EEC and EURATOM in 1957 and the completion of the single market in 1993, they led up to the introduction of the euro as cash in 2002.

Today, the institutions of the EU play an important role in European economic policy in several areas: While the agricultural sector is characterized by an EU-wide market organization with high subsidies, the influence of the Union in industry and trade is particularly evident in the specification of standards and competition rules, compliance with which is monitored by the Commission. The main competence for ensuring fair competition on the internal market lies with the Competition Commissioner of the European Commission, who complements the respective antitrust authorities of the individual states as a supranational body. In addition to controlling the economy, he is also responsible for approving subsidies in the member states. This is intended to prevent individual states from supporting national companies to the detriment of competitors from the rest of the EU.

To strengthen European industry, the EU promotes new technologies. For example, numerous coordination bodies have been set up to develop uniform standards so that the internal market is not hampered in its development by differing technical standards.

In addition, the EU promotes, among other things, the cooperation of small and medium-sized enterprises in particular in the research and development of innovative products for growth markets. Externally, too, the EU countries act as a unified economic bloc and are represented by the Trade Commissioner in the World Trade Organization, for example.

Customs union and internal market

The 1957 EEC Treaty aimed to remove barriers to trade between the Member States and provided for the gradual introduction of the so-called four fundamental freedoms, namely the free movement of goods, capital, services and labor within the territory of the Community. Of particular importance is the free movement of goods (Art. 28 et seq. TFEU), which prohibits import and export duties as well as quantitative import and export restrictions (quotas) within the internal market. Since the 1980s, the fundamental freedoms have been extended - inter alia by the case law of the ECJ and by the Single European Act - so that all other national standards that impede interstate trade within the Community are also prohibited. The economic community was thus expanded into a single internal market.

Since 1968, a customs union has been in force within the European Union, which means that trade between different member states may not be hindered by customs duties or levies having the same effect. In addition, the member states have a common customs tariff vis-à-vis third countries. Turkey has also been a member of the customs union since 1996, as have Andorra and San Marino. The EEA member states Iceland, Liechtenstein and Norway form a free trade area with the customs union, but do not apply the common customs tariff vis-à-vis third countries.

Furthermore, Art. 34 et seq. TFEU generally prohibit quantitative restrictions on imports and exports between EU member states. Such restrictions are only permissible if such national legislation is necessary to protect public safety and order, for reasons of morality and public health, for reasons of the protection of human, animal and plant life or for the preservation of national treasures of artistic, historical or archaeological value or for the protection of industrial property. A general prohibition of discrimination also applies throughout the EU, according to which no EU citizen may be discriminated against on the basis of his or her citizenship. With regard to this so-called equal treatment of nationals, for example, merchants who sell goods in another EU member state may not be subject to any regulations other than those applicable to nationals of the state in question.

The case law of the European Court of Justice on the free movement of goods has made this fundamental freedom the driving force behind further market integration. The free movement of goods has been significantly expanded by the fact that goods-related regulations of the member states that treat EU foreigners in the same way as nationals and do not provide for quotas are also considered impermissible if they actually make trade in goods between the member states more difficult. According to the ECJ, such provisions have the same effect as quotas and are therefore equally contrary to the Treaty. This also applies to provisions that apply equally to nationals and foreigners: For example, the regulation has fallen according to which only beer brewed according to the German Purity Law could be sold in Germany. Since the purity law applied to both German and foreign producers, it was not disadvantageous, but it was practically tantamount to a ban on imports into Germany for beers produced outside Germany. However, national regulations that inhibit trade are permitted in cases where quantitative import and export restrictions would also be allowed. Furthermore, such regulations are permissible if they are not product-related but distribution-related.

With the Single European Act in 1986, the goal of a common internal market was also enshrined in the treaty. To prevent the principle whereby products that can be manufactured and sold in one EU member state cannot be banned throughout the rest of the Union from leading to a race to undercut production standards, the member states harmonized many of their legal and administrative regulations and created a large number of EU-wide standards in the Council of the European Union - despite criticism of the centralization this would entail.

Competition policy

In order to prevent economic cartels and monopolies in the EU and to ensure fair competition on the internal market, the antitrust authorities of the individual states are supported by the Competition Commissioner of the European Commission. In addition to controlling the economy, he is also responsible for approving subsidies in the member states. This is to prevent individual states from supporting certain companies in an anti-competitive manner. Subsidies are only permitted for economically weak regions (such as eastern Germany).

EU competition policy (Articles 101 et seq. TFEU) has played a major role in forcing many monopoly-like companies, for example in the telecommunications sector, in gas, water and electricity supply and in rail transport, to give up their special position and face competition from other providers on the market. The pressure of competition often led to spurts of innovation and to falling consumer prices, but also to changes in wage and working conditions and, in many cases, to job cuts at the companies concerned. Liberalization was and is therefore viewed critically in parts of the public.

Free movement of services

While the reduction of barriers to trade in goods progressed quite rapidly after the establishment of the common internal market, barriers to interstate trade remained in the services sector (Art. 56 et seq. TFEU) for some time. This problem area was addressed by the European Services Directive of December 12, 2006, which is considered by the European Commission to be an important component of the Lisbon Strategy for promoting the European economy. As a directive, it requires transposition into national law by the individual member states.

The aim of the directive is to promote cross-border trade in services. To this end, it provides for certain facilitations for established service providers, including the creation of single points of contact and electronic processing. Its scope covers not only traditional service providers such as hairdressers, IT specialists, service providers in the construction industry and craftsmen, but also in part services of general interest such as care for the elderly, childcare, facilities for the disabled, home education, waste collection, transport systems, etc., insofar as these are already provided under market conditions in the Member State concerned.

European Economic and Monetary Union

The introduction of a common European currency (Art. 127 et seq. TFEU) was a topic of discussion in the European Economic Community at an early stage. After initial attempts in this direction, such as the Werner Plan of 1970, failed, the euro was finally introduced as a common currency on the basis of the Maastricht Treaty: in 1999 for central and commercial banks, and in 2002 as a means of cash payment in all participating member states.

However, not all EU member states are members of the monetary union. During the negotiations, Great Britain and Denmark reserved the option of non-participation, which they have made use of to date. All other states are in principle obliged to participate, but this is subject to the achievement of certain conditions that are regarded as crucial for monetary stability. These so-called convergence criteria are laid down in the Stability and Growth Pact and relate to government debt, interest rate levels and inflation rates. Sweden is currently avoiding participation in monetary union by deliberately failing to meet these convergence criteria, as a referendum in 2003 decided against the euro. Of the new countries that joined in 2004, 2007 and 2013, Slovenia, Malta, the Republic of Cyprus, Slovakia, Estonia, Latvia and Lithuania have so far participated in the monetary union. As a result, the euro zone has comprised 19 member states since 2015.

Even before the introduction of the euro, the convergence criteria led to a degree of harmonization in the financial and economic policies of the member states that was hardly expected. The governing body of the monetary union is the European Central Bank, which was set up independently on the model of the German Bundesbank. The coordination of the economic and financial policies of the member states is the responsibility of the so-called Eurogroup, in which the finance ministers of the euro zone meet.

Trade Policy

In the course of the Common Commercial Policy, the EU regulates imports and exports from and to third countries (Art. 206 f. TFEU). The Customs Union introduced a single customs tariff (TARIC, Combined Nomenclature), which is adopted by the Council of the European Union by qualified majority on a proposal from the Commission. It represents an important feature and bargaining chip of EU economic policy.

In principle, the EU's common trade policy is committed to the idea of global free trade, but it can draw on a comprehensive range of protective instruments of both a tariff and non-tariff nature to avert economic threats. In addition to autonomous measures, international trade agreements to which the EU is a party are also of great importance, especially those within the framework of the World Trade Organization (WTO). Although all member states are also independent members of the WTO, the spokesperson for them here is the European Union, represented by the European Commission's Trade Commissioner.

Agricultural and fisheries policy

Despite its comparatively small contribution to the EU's gross domestic product, agricultural policy (Art. 38 et seq. TFEU) acquired a prominent role in European integration at an early stage. Initiated by the European Commission in 1960, the first common agricultural market organization was introduced by the Council of Ministers in January 1962. The aim was to increase agricultural productivity and avoid price fluctuations, which would ensure a decent standard of living for producers and a stable supply at reasonable prices for consumers.

However, a system of guaranteed prices set up for this purpose had a large number of undesirable side effects. On the one hand, it led to production surpluses that were not in line with the market, and on the other hand, it resulted in food prices that were significantly higher than the world market level, thus burdening consumers. Moreover, since the European Economic Community guaranteed the purchase of production surpluses, its budget was also heavily burdened for decades: For a long time, agricultural policy accounted for well over half of total spending. In addition, the guaranteed price system also had negative consequences in terms of environmental and development policy, as it made imports more difficult. Under certain conditions, agricultural products can be produced more efficiently in emerging and developing countries. In addition to economic conditions such as wage levels and transport costs, climatic conditions and resource availability - particularly with regard to water and arable land - are also key factors here. Until the 1990s, all attempts at reform to reduce price subsidies failed due to drastic forms of protest by farmers and the unanimity principle retained here in the Council of the European Union.

Only when it became clear that the planned eastward enlargement would bust the EU budget without a reform of agricultural policy, since the economies of many of the accession candidates were still heavily agricultural, was a reduction in producer prices (with compensatory payments) and an approximation to world market prices for agricultural products initiated in the course of Agenda 2000, following various quota regulations. However, this reform process of the Common Agricultural Policy has not been completed to date.

While forestry has hardly played a role at the EU level so far, the Common Fisheries Policy (Art. 38 et seq. TFEU) has been an important bone of contention in negotiations and in the balancing of political compromises in the Council of the European Union since the early 1970s, although it accounts for only a small part in the EU budget. In 2004, the budget of the fisheries policy was 931 million euros, or about 0.75% of the total EU budget. The task of the Common Fisheries Policy is to promote the fishing industry in accordance with the principle of sustainability. To counter overfishing and the decline in fish stocks, the EU sets fishing quotas for the various member states and certain fish species. As part of its structural policy, the EU has on the one hand enforced a reduction in national fishing fleets, while on the other hand providing compensatory measures in particularly affected regions and promoting the use of environmentally sound technology. Nevertheless, fishing quotas are considered a major reason why countries such as Norway and Iceland, whose economies are heavily dependent on fishing, have not joined the EU.

Regional Policy

Within the EU, there are a number of regions whose economic performance is far below the EU average, mostly as a result of disadvantageous economic geographic location factors. A classic example of this is the Mezzogiorno in Italy. Such regions - which have grown strongly since 2004 due to the accession of Central and Eastern European countries - are granted special support, whereby differences in the level of development of the areas are to be equalized and regional disparities are to be reduced (Art. 174 et seq. TFEU). To this end, three so-called structural funds have been set up to ensure that the poorer regions catch up economically. The use of these funds is roughly planned in the EU's seven-year financial perspective (currently for the period 2007-2013).

The first of the three structural funds is the European Regional Development Fund (ERDF). Among other things, it supports medium-sized companies so that permanent jobs are created. In order to be able to provide more targeted assistance, the funding is usually allocated to individual economic sectors. In addition, infrastructure projects are initiated and technical assistance measures are applied.

The ERDF can operate within the framework of three objectives: The first objective, convergence, applies to regions whose gross domestic product per inhabitant is below 75% of the EU average. The main aim is to modernize the economic structure and create jobs. The second objective, regional competitiveness and employment, concerns the regions that are not eligible under the Convergence objective; the funds earmarked for this are correspondingly lower than those for Objective 1. The priorities of the regional competitiveness and employment objective are to strengthen research, development and finance, as well as environmental protection and risk prevention. To prevent a shock in the loss of subsidies due to a region's transition from Objective 1 to Objective 2, there are two bridging mechanisms: regions that were previously eligible under Objective 1, but whose GDP has increased so that it is now above 75% of the EU average for pre-2004 member states, receive decreasing transitional aid called phasing-in. Other regions that fell into the Objective 1 category until the EU enlargements since 2004, but now no longer fall below the 75% criterion due to the accession of poorer countries for statistical reasons, are awarded decreasing transitional aid called phasing-out. Finally, the third ERDF objective, European territorial cooperation, focuses on transnational cooperation and economic and social development in border regions.

The second fund is the European Social Fund, which, like the ERDF, is applied in all member states. It aims to improve education systems and access to the labor market.

Finally, the Cohesion Fund, established in 1993, is designed to reduce economic and social disparities among member states. Eligible for support under this fund are projects relating to environmental and transport infrastructure in EU member states whose per capita gross domestic product is below 90% of the EU average. Since May 1, 2004, these have been Greece, Portugal, Spain, the Republic of Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia and Slovenia.

For regional development in the member states, the EU plans to spend around 360 billion euros in funding between 2007 and 2013. Often, EU grants are not disbursed directly from Brussels, but indirectly through national and regional authorities in the member states. Directly, the European Commission pays money to governmental or private organizations, such as universities, companies, interest groups and non-governmental organizations.

In addition to projects within the EU, the EU also supports projects in countries that wish to join the EU. These external grants serve, among other things, to support neighborly relations and stabilize the recipient countries.

Foreign and security policy

Common foreign policy

The aim of the Common Foreign and Security Policy (CFSP, Art. 21 et seq. TEU and Art. 205 et seq. TFEU) is to safeguard the common values and interests of the Union, to strengthen security and peace, to promote international cooperation and to strengthen democracy, the rule of law and human rights. Unlike most other EU policies, the CFSP is largely intergovernmental: The governments of the member states unanimously define common strategies, in the formulation of which the European Parliament in particular has almost no say. European foreign policy complements the foreign policy of the nation states, but does not replace it.

However, most of the practical negotiation and coordination work in the CFSP is in the hands of the High Representative for Foreign Affairs and Security Policy. He is also Vice-President of the European Commission and (non-voting) Chairman of the Foreign Affairs Council. He is responsible for some 130 delegations of the European Union to international organizations and third countries. The Lisbon Treaty also provides for the establishment of a European External Action Service, which is to be composed of these delegations as well as of staff from the Council Secretariat and the national diplomatic services and which is also to be fully subordinate to the High Representative (Art. 27 para. 3 TEU). It thus has operational independence and can also set its own priorities within the framework of the Council's guidelines.

While the CFSP has repeatedly been successful in day-to-day diplomacy and joint action by the EU states is now the rule, for example, in votes at the United Nations General Assembly, national governments still frequently pursue their own strategies in international crises. This led, for example, to a fierce diplomatic conflict between EU member states before the 2003 Iraq war (see Iraq Crisis 2003).

The EU's international relations are often governed by bilateral and multilateral agreements that are geared to the economic, but also political interests of both partners. In addition to agreements with the Organization of African, Caribbean and Pacific States (see Development Policy), there are also agreements with other regional free trade organizations, for example with the Southeast Asian ASEAN states, the South American Mercosur, the North American NAFTA, etc. A special relationship exists between the EU and the U.S. as the world's two largest economic blocs and most important Western democratic powers. The EU has also had a special Partnership and Cooperation Agreement (PCA) with Russia since 1994. However, the further development of Russian-European relations is controversial among EU member states.

Security and defense policy

Finally, the Common Security and Defense Policy (CSDP, Art. 42 ff. TEU) plays a special role as part of the CFSP. After the failure of the European Defense Community in 1954, military cooperation among Western European states initially took place primarily within the framework of NATO. It was not until the 1990s that the EU began to develop independent security policy structures. To this end, it initially relied on the Western European Union and eventually developed the CSDP. This is intended both to respect the neutrality of certain member states and to be compatible with the NATO affiliation of other member states. The EU has the character of a defensive alliance; that is, in the event of an armed attack on one of the member states, the others must provide it with support (Article 42 (7) TEU).

·         Products of joint EU armaments cooperation

CSDP also has some specific institutions: the Political and Security Committee, the Military Committee, the Military Staff, the Committee for Civilian Aspects of Crisis Management, and the EU Civilian and Military Planning Cell. There is also a European Defense Agency with the task of "contributing to the identification of measures to strengthen the industrial and technological base of the defense sector." In principle, decisions can only be taken unanimously in the Council of the EU. The so-called passerelle rule, by which otherwise topics requiring unanimity can be transferred to the area of majority decisions, is also not applicable to CSDP. However, if a group of member states wishes to move forward more quickly in CSDP than others, they have the option of Permanent Structured Cooperation (Art. 46 TEU), which essentially corresponds to enhanced cooperation in other policy areas.

The aim of CSDP is to fulfill the so-called Petersberg tasks, namely humanitarian and rescue missions, peacekeeping tasks and combat missions in crisis management, including peace-building measures. For this purpose, EU states can undertake joint military missions, which was first done in 2003 in Operation Artemis in eastern Congo. According to the text of the treaty, CSDP could also lead to a common European defense, i.e. a European army. However, this would require a unanimous decision by the European Council, which seems unlikely at present - especially because several EU states are also active in NATO, while others are neutral. The member states provide troops for missions within the framework of CSDP, such as the EU peacekeeping mission EUFOR, in each case on a voluntary basis and according to national legal requirements (Germany, for example, only after approval by the Bundestag). The EU Battlegroups, which were set up in 2005 and consist of two multinational combat units of 1,500 soldiers each, are aimed at intensifying practical cooperation within the framework of CSDP and are intended to be ready for deployment at short notice in the event of a crisis. They are provided by a group of member states for six months at a time and then disbanded. However, these supranational units have not actually been deployed since their introduction because of disputes over funding.

At the end of 2017, 25 of the then 28 member states signed an agreement on Permanent Structured Cooperation (PESCO) in defense and security policy, which provides for joint operations and armaments projects as well as a regular increase in defense spending by the participating states. Apart from the United Kingdom, which is dealing with Brexit, the EU members Denmark and Malta have not joined the agreement.

European Neighborhood Policy

An important component of European foreign policy is its relations with its immediate neighbors to the south and east of the EU, with whom it has concluded a dense network of agreements since 2004 as part of the European Neighborhood Policy (ENP). The ENP aims to promote economic cooperation on the one hand and to strengthen democracy and the rule of law in the EU's immediate vicinity on the other. In parallel with this neighborhood policy, the Union for the Mediterranean was established in 2008 with the states in North Africa and the Middle East (including Turkey and Israel), following on from the Euro-Mediterranean Partnership of 1995. In 2009, the Eastern Partnership was initiated, the aim of which is the political association and economic integration of former Soviet Union republics.

The ENP is aimed primarily at those states that seek close relations with the EU but cannot join it in the foreseeable future for political or geographical reasons. The ENP therefore does not include the states in the Western Balkans, which are considered potential candidates for accession. These are being prepared for membership in so-called Stabilization and Association Agreements (SAAs). This binds the applicant states more closely to the EU both economically and politically, which should make accession talks easier.

Both the ENP and the negotiations with the accession candidates are not the responsibility of the High Representative for Foreign Affairs and Security Policy, but of the Commissioner for Enlargement of the European Commission. However, he must coordinate closely with the High Representative in order to ensure the coherence of European foreign policy.

Development policy

The European Union is also active in development policy (Art. 208 ff. TFEU). European states thus bear responsibility, especially in Africa and parts of South America, for the damage caused under their rule during colonization. Unlike foreign and security policy, decisions on development policy measures are taken in accordance with the ordinary legislative procedure, i.e. with the equal participation of the European Parliament.

Among the individual measures, the trade concessions for developing countries through the Generalized System of Preferences, the raw materials regime and, in particular, humanitarian aid through the responsible European office ECHO are worth mentioning. In addition, a number of states are granted additional trade privileges through bilateral or multilateral treaties. The most important of these is the Cotonou Agreement, which was concluded in 2000 with 77 states in the African, Caribbean and Pacific regions (so-called ACP states) and replaced the previous Lomé Conventions. In most cases, these agreements oblige the partner countries to comply with certain democratic and rule-of-law standards in return.

The European Investment Bank also contributes to development policy and, together with the European Development Fund, also provides the bulk of the financial resources.

In the Union for the Mediterranean, the EU promotes the development of the Arab Mediterranean states as well as Turkey and Israel. At the heart of this are bilateral agreements with the individual states which, in addition to extensive exemption from customs duties, provide for further trade concessions and cooperation in the technical and economic spheres.

Justice and home affairs policy

Since the Treaty of Maastricht in 1992, the European Union has had competences in justice and home affairs policy. The third pillar, which was created at that time, contains regulations for cooperation in the areas of justice and home affairs. Matters of common interest are thus asylum policy, rules on crossing the external borders of the Member States, immigration policy, combating illegal immigration, drug addiction and fraud on an international scale, as well as judicial cooperation in civil and criminal matters, police cooperation to combat terrorism, illegal drug trafficking and other serious forms of international crime.

The 1997 Treaty of Amsterdam introduced the broader objective of a Europe-wide area of freedom, security and justice and incorporated the Schengen Agreement on the abolition of checks on persons at internal borders into EU law. This covers border control, asylum and immigration policies (Art. 77 et seq. TFEU, formerly known as flanking measures to the free movement of persons), also judicial cooperation in civil matters (JZZ, Art. 81 TFEU) and police and judicial cooperation in criminal matters (PJZS, Art. 82 ff. TFEU). Through the PJZS, the EU can, among other things, set minimum standards in criminal procedural law, such as the rights of defendants (Art. 82 TFEU). For certain cross-border crimes, such as terrorism, trafficking in human beings, drug trafficking, arms trafficking, money laundering, corruption, and computer crime, it can also regulate minimum rules on criminal offenses and penalties (Art. 83 TFEU).

After the Council initially decided unanimously for all these areas and the European Parliament had no powers, the ordinary legislative procedure was gradually introduced. Since the Treaty of Lisbon in 2007, it has applied to all justice and home affairs policies. However, some Member States, namely the United Kingdom, Ireland and Denmark, have derogations; they participate in the common measures only in a limited way. On the other hand, some non-EU states, namely Iceland, Norway, and Switzerland, have also joined the Schengen Agreement and are therefore required to implement certain decisions taken by the EU within this framework.

To implement the common justice and home affairs policy, the European authorities Europol and Eurojust were established to coordinate the cooperation of national police and judicial authorities. In addition, the Schengen Information System has been established, through which Member States exchange information on persons and objects wanted. For joint border management, there is the European Agency for the Management of Operational Cooperation at the External Borders of the Member States of the European Union (Frontex for short). Measures taken under the PJZS also include the European Arrest Warrant, which facilitated the extradition of criminals between member states.

The establishment of a European Public Prosecutor's Office to fight crimes under Article 86, among others, those detrimental to the financial interests of the Union, has been underway for several years, but despite the approval of the European Parliament, it was not implemented by the European Council until 2016, when it was decided in 2017 to implement it in the initially smaller framework of structured cooperation.

Education policy and research funding

The transformation of European countries from classic industrial societies to potential information and knowledge societies, triggered by technological innovation thrusts and global networking opportunities, has led to significant activities in this area by the EU institutions, which for decades paid little attention to education policy (Art. 165 f. TFEU). For example, the Lisbon Strategy adopted in 2000, as well as its successor program Europe 2020, sees education policy as the most important instrument for promoting the European economy. It aims to create a European education and employment area based on lifelong learning.

The Bologna Process, which was launched in 1999 at a conference of 29 European education ministers and now encompasses 45 countries, is designed to create a European Higher Education Area. It is not limited to the EU, but is oriented toward its educational policy goals. Its core component is a two-tier system of degrees, which in Germany have been called bachelor's and master's degrees, following the Anglo-Saxon model. While the bachelor's degree usually lasts three to four (in Germany three) years and is intended to provide the first degree that qualifies students for a profession, the master's degree lasts one to two (in Germany two) years and is intended for specialization. This can be followed by a doctorate to achieve a doctorate, which is already the highest academic degree in Europe.

In order to promote the free movement and mobility of learners in Europe, the European Qualifications Framework (EQF) was also introduced, a scheme for standardizing qualification requirements within which defined competencies are assigned to specific levels. This system is intended to make educational qualifications more comparable internationally. Specifically for higher education, a Europe-wide credit transfer system (ECTS) was created to facilitate the recognition, transfer and accumulation of credits across Europe, also to facilitate the recognition of study periods abroad and to promote the mobility of students across Europe.

In analogy to higher education, a credit point system is also being developed for vocational training. This is intended to enable individual learners throughout Europe to document their learning success or the skills they have acquired. The points should also be able to be credited anywhere in Europe. The aim is to increase the permeability of the different education systems in Europe, but this requires a restructuring of the education and training programs in the member states.

In addition to these measures to create a common European higher education area, there have already been a large number of EU programs since the 1980s that are intended to promote Europe-wide exchange in education. In July 2004, the European Commission presented a legislative proposal to merge these programs into a single Lifelong Learning Program, structured according to four different educational sectors: general (school) education, vocational education and training, higher education, and adult education. Among the currently existing cooperation measures of a general education nature, the Erasmus higher education program is particularly well known, promoting transnational cooperation and exchanges of students and lecturers. There is also the Comenius program, which supports school partnerships, Lingua, which promotes foreign language teaching at the EU level, and Leonardo, which stimulates corresponding activities in vocational education, as well as the Grundtvig program, which is responsible for adult education. Since 2014, these European education programs have been continued together in a coordinated manner under the umbrella of the Erasmus+ program.

In addition to teaching, the EU is also active in research funding (Art. 179 ff. TFEU). The European Research Council, which was founded by the European Commission and began its work at the beginning of 2007, is intended to support basic scientific research. A total of 22 scientists appointed to the Research Council allocate project funds of initially one billion euros annually, independently of political influence, according to excellence criteria and without regard to regional distribution. In addition to the previously funded thematic programs, there is now also general funding for research without immediate application (so-called frontier research). The program is intended, among other things, to make the EU more attractive as a research location for highly qualified people, to better identify outstanding scientific talent, and to fill personnel gaps in top-level research, initially primarily by supporting young scientists.

Social and employment policy

Although the harmonization of social standards was one of the goals of the European Economic Community at an early stage, the national reservations of sovereignty and the demand for the principle of subsidiarity are generally more pronounced here than in economic policy. For this reason, the principle of unanimity applies in the Council of the EU in certain issues in this policy field, such as social security; the European Parliament need only be consulted and has no co-determination rights. The importance of national policy-making in these fields is therefore correspondingly more important: The important social security systems, such as unemployment and social assistance, are still located at the level of the nation states. Since they account for a large share of the national budget in all EU member states - and thus also of the scope for policy-making - governments also have little interest in transferring competencies to the EU in this area. In other areas, however, such as occupational safety or gender equality, the ordinary legislative procedure applies.

The EU's social policy (Art. 151 et seq. TFEU) is therefore based in material terms mainly on the European Social Fund, which was established in 1960 and whose resources are used for measures in vocational training, retraining, combating youth unemployment (75% of funding) and reintegrating the unemployed. In addition, the anchoring of fundamental social rights in the EU Treaty is linked to the concern to have a standardizing effect on the social policy of the member states. This is reflected, among other things, in the accentuated EU equality policy in the sense of implementing the gender mainstreaming concept, in anti-discrimination requirements and in requirements for reconciling work and family life.

With the Treaty of Amsterdam, the EU also made an active employment policy its program (Art. 145 ff. TFEU). The funds available for this purpose were initially very small, but have been gradually expanded. The aim is a strategy coordinated between the EU and the member states, which is primarily aimed at improving the qualifications of job seekers and at labor market flexibility. The EU also promotes labor market policy coordination among the member states.

Consumer protection

In 1992, the Maastricht Treaty introduced consumer protection interests into the European treaties for the first time (Art. 12, Art. 169 TFEU). The primary objectives are not only uniform quality standards in production and trade, but also health protection and consumer education and information. This is evident, for example, in the mandatory labeling of genetically modifiedproducts.

Following the deficiencies in consumer protection that became apparent during the cattle epidemic BSE, the Directorate-General for Health and Consumer Protection was set up at the European Commission in 1999, with responsibility for plant protection, veterinary and food controls, among other things. Thus, the free movement of goods in the internal market can be partially suspended by export bans if there is a health risk to consumers from certain products. The Product Liability Directive, introduced as early as 1985, places the burden of proof for a defect-free product on the manufacturer's side in the event of damage, for example in the case of children's toys, textiles and cosmetics. EU consumer policy also covers, for example, refund claims for package tours, misleading advertising and unfair contract terms, especially in cross-border transactions.

Environmental policy

An active environmental protection policy (Art. 191 ff. TFEU) has been pursued by the European Economic Community since the early 1970s, for example in the areas of water protection, air pollution control and waste disposal. While the initial focus was on aftercare environmental protection in the sense of remedying damage that has occurred, the principle of prevention has since been increasingly emphasized. Since the Treaty of Amsterdam, environmental protection has been a cross-cutting principle that must be taken into account in all EU measures. For example, in the planning of economic and infrastructure projects, an environmental impact assessment must be undertaken as a matter of principle, which precedes the approval of construction measures as a uniform administrative procedure.

Legal acts in environmental policy are generally adopted in accordance with the ordinary legislative procedure. Individual states have the option of applying stricter environmental standards than those applicable to the EU as a whole, provided that this does not create barriers to trade.

The Fauna-Flora-Habitat Directive is intended to preserve natural habitats of wild animals and plants and thus biological diversity. Designated protected areas in the EU member states are to develop into a European ecological network (Natura 2000). This network serves to preserve, (re-)establish and develop ecological interrelationships and to promote natural dispersal and recolonization processes. It is thus the central legal instrument of the European Union for implementing the commitments made by the member states, also in 1992, to protect biological diversity (Convention on Biological Diversity, CBD, Rio 1992).

The EU provides financial support to Member States for the designation of Sites of Community Importance (SCI) and Special Protected Areas (SPA). At the end of 2013, there were 27,308 SCI and SPA sites designated, covering 1,039,332 km², 787,767 km² land area, 251,565 km² marine area.

Climate and energy policy

In addition to traditional environmental policy, climate protection is also a contractual objective of the EU. Among the major international players, the EU plays a pioneering role in this area, although the commitment and success of individual member states varies. The reduction of carbon dioxide emissions is to be achieved through various measures, above all through EU emissions trading. In addition, the EU is promoting the replacement of fossil fuels with renewable energies through the ALTENER program.

In recent years, climate policy has developed into one of the EU's most dynamic policy areas. In organizational terms, climate policy was for a long time part of the Directorate-General for the Environment. In the Barroso II Commission, the office of a Commissioner for Climate Protection was created for the first time, which now exists independently of the Environment Commission.

The European Union's energy policy has only been institutionalized in the Treaty of Lisbon (Art. 194 TFEU). Isolated energy policy initiatives (to promote energy efficiency or to unbundle energy supply companies) had already been taken beforehand via the detour of environmental or competition policy. The goals of energy policy are a functioning energy market, the guarantee of energy supply, the promotion of energy efficiency and renewable energies, and the interconnection of energy networks between the member states. Measures concerning the choice between different energy sources, i.e. the energy mix of the Member States, can only be taken unanimously according to Art. 192 (Energy Law).

On March 9, 2007, the European Union made a binding commitment to reduce greenhouse gas emissions by one-fifth by 2020 compared with 1990 levels and to increase the share of renewable energies on average to 20% by 2020. In January 2008, the European Commission adopted binding targets for the individual member states. Directive 2009/28/EC obliges the member states to set national indicative targets for the share of renewable energies in electricity consumption, while expressly giving the individual states free rein with regard to the support systems in detail.

In the political guidelines of the new Commission President Jean Claude Juncker, it is planned to reform and restructure Europe's energy policy and to create a European Energy Union with an increased share of renewable energy in the energy mix. The aim is for Europe's energy union to become the world's number one in renewable energies.

Transport and space policy

The EU's transport policy (Art. 90 et seq. TFEU) is primarily aimed at improving the cross-border mobility of people and goods in the internal market. An essential component of this is the establishment and expansion of Trans-European Networks (TENs, Art. 170 TFEU), which are to connect the various European regions by 2020. This TEN project includes roads, railroads, inland waterways, combined transport (linking different modes of transport), ports, airports and transhipment facilities for long-distance freight transport, but also information, navigation and traffic management systems.

In addition, the goal of environmental compatibility also plays an important role in EU transport policy. The European Commission is taking account of the increasing burden on the residential population and the environment resulting from road traffic and aviation with proposals that provide for higher technical environmental standards for vehicles and increasingly charge road and environmental costs to users.

In addition, the Commission is focusing above all on promoting rail transport: As early as 1996, it presented a White Paper on "Revitalizing Europe's Railways," which envisages the formation of so-called trans-European freeways for freight rail transport. In one segment of the TEN development, there are major projects such as the Paris-Brussels-Cologne-Amsterdam-London high-speed line.

Beyond its domestic market-oriented transport policy, the EU also pursues its own space policy in close cooperation with the European Space Agency (ESA), with which the EU has concluded a contract, the EU-ESA Framework Agreement. The European Space Council, formed for this purpose, is responsible for the EU's space policy and coordination with ESA and other partners.

With a nominal gross domestic product of 14.82 trillion euros (as of 2016), the European Union is the largest single market in the world, generating around a quarter of global GDP. However, per capita income is subject to strong fluctuations depending on the country and is usually significantly higher in northern and western Europe than in the southern and eastern member states. In 2016, it was highest in Luxembourg at 92,900 euros and lowest in Bulgaria at $6,600.

The most important economic sectors are industry and services, while agriculture accounts for only a small part of the European economy. Economic growth in the EU averaged 2.2% between 2000 and 2008. Due to the global financial and economic crisis, the EU experienced a 4.4% recession in 2009. The impact on economic growth and unemployment rates in the EU as a whole is clearly reflected in the relevant statistics, as are the differences among EU member states in this regard. In the two following years, GDP rose again (by 2.1% in 2010, by 1.7% in 2011), and in 2012 it fell again slightly by 0.5%. From 2013, a recovery set in and the economy grew by 0.2%. From 2014, economic output grew by just under 2% a year, returning to the pre-crisis level.

The average annual inflation rate between 2003 and 2013 was 2.25%. The unemployment rate was 7.4% in March 2017, and the energy intensity of the European economy (energy consumption in kilograms of oil equivalents per €1000 of GDP) was 151.6 in 2008 (for comparison: USA 180.7; Japan 90.1).

In terms of foreign trade, the EU achieved a current account surplus of USD 387,100 million in 2016, which was the highest surplus of all economic areas.

Gross Domestic Product

The development of the gross domestic product (purchasing power parity) of the European Union compared with countries outside the EU (IMF data, October 2020).

Economic development

Employment

According to Eurostat's statistical survey, the following picture emerges of the development of unemployment in the European Union compared to the United States and Japan between 2005 and 2018. The effects of the financial crisis from 2007 onwards are clearly visible:

Domestic trade

In terms of exports and imports, the EU handled almost two-thirds of its total trade in goods within its own borders in 2015. For individual member states, the importance of the single market is even greater.

Foreign Trade