European Union

Following the two devastating World Wars in the first half of the 20th century, a number of European leaders in the late 1940s became convinced that the only way to establish a lasting peace was to reconcile the two chief belligerent nations - France and Germany - both economically and politically. In 1950, the French Foreign Minister Robert SCHUMAN proposed an eventual union of all Europe, the first step of which would be the integration of the coal and steel industries of Western Europe. The following year, the European Coal and Steel Community (ECSC) was set up when six members, Belgium, France, West Germany, Italy, Luxembourg, and the Netherlands, signed the Treaty of Paris.

The ECSC was so successful that within a few years the decision was made to integrate other elements of the countries' economies. In 1957, envisioning an "ever closer union," the Treaties of Rome created the European Economic Community (EEC) and the European Atomic Energy Community (Euratom), and the six member states undertook to eliminate trade barriers among themselves by forming a common market. In 1967, the institutions of all three communities were formally merged into the European Community (EC), creating a single Commission, a single Council of Ministers, and the body known today as the European Parliament. Members of the European Parliament were initially selected by national parliaments, but in 1979 the first direct elections were undertaken and have been held every five years since.

In 1973, the first enlargement of the EC took place with the addition of Denmark, Ireland, and the United Kingdom. The 1980s saw further membership expansion with Greece joining in 1981 and Spain and Portugal in 1986. The 1992 Treaty of Maastricht laid the basis for further forms of cooperation in foreign and defense policy, in judicial and internal affairs, and in the creation of an economic and monetary union - including a common currency.

This further integration created the European Union (EU), at the time standing alongside the European Community. In 1995, Austria, Finland, and Sweden joined the EU/EC, raising the membership total to 15.

A new currency, the euro, was launched in world money markets on 1 January 1999; it became the unit of exchange for all EU member states except Denmark, Sweden, and the United Kingdom. In 2002, citizens of those 12 countries began using euro banknotes and coins. Ten new countries joined the EU in 2004 - Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia, and Slovenia. Bulgaria and Romania joined in 2007 and Croatia in 2013, bringing the current membership to 28.

In an effort to ensure that the EU could function efficiently with an expanded membership, the Treaty of Nice (signed in 2000) set forth rules aimed at streamlining the size and procedures of EU institutions. An effort to establish a "Constitution for Europe," growing out of a Convention held in 2002-2003, foundered when it was rejected in referenda in France and the Netherlands in 2005. A subsequent effort in 2007 incorporated many of the features of the rejected Constitution while also making a number of substantive and symbolic changes.

The new treaty, initially known as the Reform Treaty but subsequently referred to as the Treaty of Lisbon, sought to amend existing treaties rather than replace them. The treaty was approved at the EU intergovernmental conference of the 27 member states held in Lisbon in December 2007, after which the process of national ratifications began. In October 2009, an Irish referendum approved the Lisbon Treaty (overturning a previous rejection) and cleared the way for an ultimate unanimous endorsement.

Poland and the Czech Republic signed on soon after. The Lisbon Treaty, again invoking the idea of an "ever closer union," came into force on 1 December 2009 and the European Union officially replaced and succeeded the European Community.

The evolution of what is today the European Union (EU) from a regional economic agreement among six neighboring states in 1951 to today's hybrid intergovernmental and supranational organization of 28 countries across the European continent stands as an unprecedented phenomenon in the annals of history.

Dynastic unions for territorial consolidation were long the norm in Europe; on a few occasions even country-level unions were arranged - the Polish-Lithuanian Commonwealth and the Austro-Hungarian Empire were examples. But for such a large number of nation-states to cede some of their sovereignty to an overarching entity is unique.

Although the EU is not a federation in the strict sense, it is far more than a free-trade association such as ASEAN, NAFTA, or Mercosur, and it has certain attributes associated with independent nations: its own flag, currency (for some members), and law-making abilities, as well as diplomatic representation and a common foreign and security policy in its dealings with external partners.

Thus, inclusion of basic intelligence on the EU has been deemed appropriate as a new, separate entity in The World Factbook. However, because of the EU's special status, this description is placed after the regular country entries.

party to:

Air Pollution, Air Pollution-Nitrogen Oxides, Air Pollution-Persistent Organic Pollutants, Air Pollution-Sulphur 94, Antarctic-Marine Living Resources, Biodiversity, Climate Change, Climate Change-Kyoto Protocol, Desertification, Hazardous Wastes, Law of the Sea, Ozone Layer Protection, Tropical Timber 83, Tropical Timber 94

signed but not ratified:

Air Pollution-Volatile Organic Compounds

• 28 countries:
  • Austria,
  • Belgium,
  • Bulgaria,
  • Croatia,
  • Cyprus,
  • Czech Republic,
  • Denmark,
  • Estonia,
  • Finland,
  • France,
  • Germany,
  • Greece,
  • Hungary,
  • Ireland,
  • Italy,
  • Latvia,
  • Lithuania,
  • Luxembourg,
  • Malta,
  • Netherlands,
  • Poland,
  • Portugal,
  • Romania,
  • Slovakia,
  • Slovenia,
  • Spain,
  • Sweden,
  • UK
  ;
• note - candidate countries:
  • Iceland,
  • Macedonia,
  • Montenegro,
  • Serbia,
  • Turkey

note: there are 9 Outermost Regions (OMR) that are considered part of the EU: Azores, Madeira, Canary Islands, French Guiana, Guadeloup, Martinique, Mayotte, Reunion, and Saint Martin;

and 7 special cases that are considered part of the EU: Aland, Busingen and Hochrhein, Campione d'Italia and Livigno, Ceuta and Melilla, Gibraltar, Helgoland, and Mount Athos; most citizens of Outermost countries and territories have EU citizenship

Internally, the EU has adopted the framework of a single market with free movement of goods, services and capital and a common currency amongst 18 member states. Internationally, the EU aims to bolster Europe's trade position and its political and economic weight. Despite great differences in per capita income among member states (from $13,000 to $82,000) and in national attitudes toward issues like inflation, debt, and foreign trade, the EU has achieved a high degree of coordination of economic and fiscal policies.

Eleven established EU member states, under the auspices of the European Economic and Monetary Union (EMU), introduced the euro as their common currency on 1 January 1999 (Greece did so two years later). Between 2004 and 2007, 12 states acceded to the EU that are, in general, less advanced economically than the other 15 member states.

On 1 July 2013 Croatia became the most recent member of the EU, following a decade long application process. Of the 13 most recent entrants, Slovenia (1 January 2007), Cyprus and Malta (1 January 2008), Slovakia (1 January 2009), Estonia (1 January 2011) and Latvia (2014) have adopted the euro;

11 other member states - other than 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. Following the 2008-09 global economic crisis, the EU economy saw moderate GDP growth in 2010 and 2011, but a sovereign debt crisis in the eurozone intensified in 2011, making it impossible for several member states to gain market financing for new sovereign debt to sustain fiscal deficits.

As a result, the eurozone crisis became the bloc's top economic and political priority. Despite EU/IMF rescue programs in Greece, Ireland, Portugal, Spain and Cyprus, and fiscal consolidation measures in many other EU member states, significant risks to growth remain, including high public and private debt loads, crimped lending as banks raise capital, aging populations, onerous regulations, and high unemployment.

In response, eurozone leaders in 2011 boosted funding levels for the temporary European Financial Stability Facility (EFSF) to almost $600 billion and made loan terms more favorable for crisis-hit countries, followed in July 2012 by the permanent European Stabilization Mechanism (ESM). In addition, 26 of 28 EU member states (all except the UK and Czech Republic) enacted a "fiscal compact" treaty to boost long-term budgetary discipline and coordination.

In September 2012 the European Central Bank indicated its willingness to purchase bonds from troubled eurozone member states that agree to a formal program of fiscal and structural reforms, aiming to reduce their borrowing costs and restore confidence in the eurozone. The eurozone has since made great strides towards a banking union to increase financial stability and improve lending conditions.

In an effort to restore economic growth and create jobs, in 2013 the EU and the United States started negotiations on an ambitious and comprehensive free trade agreement with the goal of expanding already massive trade and investment flows.