Thumb — GDP (PPP) per capita in 2021 (including non-EU countries)

The gross domestic product (GDP), a measure of economic activity, of EU member states was US$16.64 trillion in 2022, around 16.6 percent of the world GDP.^[174] There is a significant variation in GDP per capita between and within individual EU states. The difference between the richest and poorest regions (281 NUTS-2 regions of the Nomenclature of Territorial Units for Statistics) ranged, in 2017, from 31 per cent (Severozapaden, Bulgaria) of the EU28 average (€30,000) to 253 per cent (Luxembourg), or from €4,600 to €92,600.^[175]

EU member states own the estimated third largest after the United States (US$140 trillion) and China (US$84 trillion) net wealth in the world, equal to around one sixth (US$76 trillion) of the US$454 trillion global wealth.^[176] Of the top 500 largest corporations in the world measured by revenue in 2010, 161 had their headquarters in the EU.^[177] In 2016, unemployment in the EU stood at 8.9 per cent^[178] while inflation was at 2.2 per cent, and the account balance at −0.9 per cent of GDP. The average annual net earnings in the European Union was around €25,000^[179] in 2021.

Economic and monetary union

The Euro is the official currency in 20 member states of the EU. The creation of a European single currency became an official objective of the European Economic Community in 1969. In 1992, having negotiated the structure and procedures of a currency union, the member states signed the Maastricht Treaty and were legally bound to fulfil the agreed-on rules including the convergence criteria if they wanted to join the monetary union. The states wanting to participate had first to join the European Exchange Rate Mechanism. To prevent the joining states from getting into financial trouble or crisis after entering the monetary union, they were obliged in the Maastricht treaty to fulfil important financial obligations and procedures, especially to show budgetary discipline and a high degree of sustainable economic convergence, as well as to avoid excessive government deficits and limit the government debt to a sustainable level, as agreed in the European Fiscal Pact.

Capital Markets Union and financial institutions

Free movement of capital is intended to permit movement of investments such as property purchases and buying of shares between countries.^[180] 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 European System of Financial Supervision 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 central bank. The aim of this financial control system is to ensure the economic stability of the EU.^[181]

Eurozone and banking union

In 1999, the currency union started to materialise through introducing a common accounting (virtual) currency in eleven of the member states. In 2002, it was turned into a fully-fledged conventible currency, when euro notes and coins were issued, while the phaseout of national currencies in the eurozone (consisting by then of 12 member states) was initiated. The eurozone (constituted by the EU member states which have adopted the euro) has since grown to 20 countries.^[182]^[183]

The 20 EU member states known collectively as the eurozone have fully implemented the currency union by superseding their national currencies with the euro. The currency union represents 345 million EU citizens.^[184] The euro is the second largest reserve currency as well as the second most traded currency in the world after the United States dollar.^[185]^[186]^[187]

The euro, and the monetary policies of those who have adopted it in agreement with the EU, are under the control of the ECB.^[188] 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 Eurosystem, which comprehends all the Eurozone national central banks.^[189] The ECB is also the central institution of the Banking Union established within the eurozone, as the hub of European Banking Supervision. There is also a Single Resolution Mechanism in case of a bank default.

Trade

As a political entity, the European Union is represented in the World Trade Organization (WTO). Two of the original core objectives of the European Economic Community were the development of a common market, subsequently becoming a single market, and a customs union between its member states.

Single market

The single market involves the free circulation of goods, capital, people, and services within the EU,^[184] 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 per cent to 70 per cent of GDP, legislation in the area is not as developed as in other areas. This lacuna has been addressed by the Services in the Internal Market Directive 2006 which aims to liberalise the cross border provision of services.^[190] According to the treaty the provision of services is a residual freedom that only applies if no other freedom is being exercised.

Customs union

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.^[146] Half the trade in the EU is covered by legislation harmonised by the EU.^[191]

The European Union Association Agreement does something similar for a much larger range of countries, partly as a so-called soft approach ('a carrot instead of a stick') to influence the politics in those countries. The European Union represents all its members at the World Trade Organization (WTO), and acts on behalf of member states in any disputes. When the EU negotiates trade related agreement outside the WTO framework, the subsequent agreement must be approved by each individual EU member state government.^[192]

External trade

The European Union has concluded free trade agreements (FTAs)^[193] and other agreements with a trade component with many countries worldwide and is negotiating with many others.^[194] The European Union's services trade surplus rose from $16 billion in 2000 to more than $250 billion in 2018.^[195] In 2020, in part due to the COVID-19 pandemic, China became the EU's largest trading partner, displacing the United States.^[196] The European Union is the largest exporter in the world^[197] and in 2008 was the largest importer of goods and services.^[198]^[199] Internal trade between the member states is aided by the removal of barriers to trade such as tariffs and border controls. In the eurozone, trade is helped by not having any currency differences to deal with amongst most members.^[192] Externally, the EU's free-trade agreement with Japan is perhaps its most notable one. The EU-Japan Economic Partnership Agreement was officially signed on July 17, 2018, becoming the world's largest bilateral free trade deal when it went into effect on February 1, 2019, creating an open trade zone covering nearly one-third of global GDP.^[200]^[201]

Competition and consumer protection

The EU operates a competition policy intended to ensure undistorted competition within the single market.^{[lower-alpha 13]} In 2001 the commission for the first time prevented a merger between two companies based in the United States (General Electric and Honeywell) which had already been approved by their national authority.^[202] Another high-profile case, against Microsoft, resulted in the commission fining Microsoft over €777 million following nine years of legal action.^[203]

Energy

Total energy supply (2019)^[204]

Oil (31.7%)

Natural gas (24.7%)

Coal (10.9%)

Nuclear (13.2%)

Biofuels, waste, electricity, heat (19.4%)

The total energy supply of the EU was 59 billion GJ in 2019, about 10.2 per cent of the world total. Approximately three fifths of the energy available in the EU came from imports (mostly of fossil fuels). Renewable energy contributed 18.1 per cent of the EU's total energy supply in 2019, and 11.1 per cent of the final energy consumption.^[205]

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.^[206]

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^[207] and North Africa; use existing energy supplies more efficiently while increasing renewable energy commercialisation; and finally increase funding for new energy technologies.^[206]

In 2007, EU countries as a whole imported 82 per cent of their oil, 57 per cent of their natural gas^[208] and 97.48 per cent of their uranium^[209] demands. The three largest suppliers of natural gas to the European Union are Russia, Norway and Algeria, that amounted for about three quarters of the imports in 2019.^[210] There is a strong dependence on Russian energy that the EU has been attempting to reduce.^[211] However, in May 2022, it was reported that the European Union is preparing another sanction against Russia over its invasion of Ukraine. It is expected to target Russian oil, Russian and Belarusian banks, as well as individuals and companies. According to an article by Reuters, two diplomats stated that the European Union may impose a ban on imports of Russian oil by the end of 2022.^[212] In May 2022, the European Commission published the 'RePowerEU' initiative, a €300 billion plan outlining the path towards the end of EU dependence on Russian fossil fuels by 2030 and the acceleration on the clean energy transition.^[213]

Transport

The European Union manages cross-border road, railway, airport and water infrastructure through the Trans-European Transport Network (TEN-T), created in 1990,^[214] and the Trans-European Combined Transport network. TEN-T comprises two network layers: the Core Network, which is to be completed by 2030; and the Comprehensive Network, which is to be completed by 2050. The network is currently made up of 9 core corridors: the Baltic–Adriatic Corridor, the North Sea–Baltic Corridor, the Mediterranean Corridor, the Orient/East–Med Corridor, the Scandinavian–Mediterranean Corridor, the Rhine–Alpine Corridor, the Atlantic Corridor, the North Sea–Mediterranean Corridor, and the Rhine–Danube Corridor. Road transportation was organised under the TEN-T by the Trans-European road network. Bundesautobahn 7 is the longest national motorway in the EU at 963 km (598 mi).

Maritime transportation is organised under the TEN-T by the Trans-European Inland Waterway network, and the Trans-European Seaport network. European seaports are categorized as international, community, or regional. The Port of Rotterdam is the busiest in the EU, and the world's largest seaport outside of East Asia, located in and near the city of Rotterdam, in the province of South Holland in the Netherlands.^[215]^[216] The European Maritime Safety Agency (EMSA), founded in 2002 in Lisbon, Portugal, is charged with reducing the risk of maritime accidents, marine pollution from ships and the loss of human lives at sea by helping to enforce the pertinent EU legislation.

Air transportation is organised under the TEN-T by the Trans-European Airport network. European airports are categorized as international, community, or regional. The Charles de Gaulle Airport is the busiest in the EU, located in and near the city of Paris, in France.^[217] The European Common Aviation Area (ECAA) is a single market in aviation. ECAA agreements were signed on 5 May 2006 in Salzburg, Austria between the EU and some third countries. The ECAA liberalises the air transport industry by allowing any company from any ECAA member state to fly between any ECAA member states airports, thereby allowing a "foreign" airline to provide domestic flights. The Single European Sky (SES) is an initiative that seeks to reform the European air traffic management system through a series of actions carried out in four different levels (institutional, operational, technological and control and supervision) with the aim of satisfying the needs of the European airspace in terms of capacity, safety, efficiency and environmental impact. Civil aviation safety is under the responsibility of the European Union Aviation Safety Agency (EASA). It carries out certification, regulation and standardisation and also performs investigation and monitoring. The idea of a European-level aviation safety authority goes back to 1996, but the agency was only legally established in 2002, and began operating in 2003.

Rail transportation is organised under the TEN-T by the Trans-European Rail network, made up of the high-speed rail network and the conventional rail network. The Gare du Nord railway station is the busiest in the EU, located in and near the city of Paris, in France.^[218]^[219] Rail transport in Europe is being synchronised with the European Rail Traffic Management System (ERTMS) with the goal of greatly enhancing safety, increase efficiency of train transports and enhance cross-border interoperability. This is done by replacing former national signalling equipment and operational procedures with a single new Europe-wide standard for train control and command systems. This system is conducted by the European Union Agency for Railways (ERA).

Transport documents used in the European Union

European driving licence
(Croatian version pictured)
European vehicle registration plate
(Slovak version pictured)
European vehicle registration certificate
(Austrian version pictured)
European disabled parking permit
(Polish version pictured)

Telecommunications and space

Mobile communication roaming charges are abolished throughout the EU, Iceland, Liechtenstein and Norway.

The European Union Agency for the Space Programme (EUSPA), headquartered in Prague, Czech Republic, was established in 2021 to manage the European Union Space Programme in order to implement the pre-existing European Space Policy, established on 22 May 2007 between the EU and the European Space Agency (ESA), known collectively as the European Space Council. This was the first common political framework for space activities established by the EU. Each member state has pursued to some extent their own national space policy, though often co-ordinating through the ESA. Günter Verheugen, the European Commissioner for Enterprise and Industry, has stated that even though the EU is "a world leader in the technology, it is being put on the defensive by the United States and Russia and that it only has about a 10-year technological advantage on China and India, which are racing to catch up."

Galileo is a global navigation satellite system (GNSS) that went live in 2016, created by the EU through the ESA, operated by the EUSPA, with two ground operations centres in Fucino, Italy, and Oberpfaffenhofen, Germany. The €10 billion project is named after the Italian astronomer Galileo Galilei. One of the aims of Galileo is to provide an independent high-precision positioning system so European political and military authorities do not have to rely on the US GPS, or the Russian GLONASS systems, which could be disabled or degraded by their operators at any time. The European Geostationary Navigation Overlay Service (EGNOS) is a satellite-based augmentation system (SBAS) developed by the ESA and EUROCONTROL. Currently, it supplements the GPS by reporting on the reliability and accuracy of their positioning data and sending out corrections. The system will supplement Galileo in a future version. The Copernicus Programme is the EU's Earth observation programme coordinated and managed by EUSPA in partnership with ESA. It aims at achieving a global, continuous, autonomous, high quality, wide range Earth observation capacity, providing accurate, timely and easily accessible information to, among other things, improve the management of the environment, understand and mitigate the effects of climate change, and ensure civil security.

Agriculture and fisheries

The Common Agricultural Policy (CAP) is the agricultural policy of the European Union. It implements a system of agricultural subsidies and other programmes. It was introduced in 1962 and has since then undergone several changes to reduce the EEC budget cost (from 73% in 1985 to 37% in 2017) and consider rural development in its aims. It has, however, been criticised on the grounds of its cost and its environmental and humanitarian effects.

Likewise, the Common Fisheries Policy (CFP) is the fisheries policy of the European Union. It sets quotas for which member states are allowed to catch each type of fish, as well as encouraging the fishing industry by various market interventions and fishing subsidies. It was introduced in 2009 with the Treaty of Lisbon, which formally enshrined fisheries conservation policy as one of the handful of "exclusive competences" reserved for the European Union.

Regional development

The five European Structural and Investment Funds are supporting the development of the EU regions, primarily the underdeveloped ones, located mostly in the states of central and southern Europe.^[221]^[222] Another fund (the Instrument for Pre-Accession Assistance) provides support for candidate members to transform their country to conform to the EU's standard. Demographic transition to a society of ageing population, low fertility-rates and depopulation of non-metropolitan regions is tackled within this policies.

Labour

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.^[223] The EU seasonally adjusted unemployment rate was 6.7 per cent in September 2018.^[224] The euro area unemployment rate was 8.1 per cent.^[224] Among the member states, the lowest unemployment rates were recorded in the Czech Republic (2.3 per cent), Germany and Poland (both 3.4 per cent), and the highest in Spain (11.27 per cent in 2024) and Greece (19.0 in July 2018).

The European Union has long sought to mitigate the effects of free markets by protecting workers' rights and preventing social and environmental dumping.^{[citation needed]} To this end it has adopted laws establishing minimum employment and environmental standards. These included the Working Time Directive and the Environmental Impact Assessment Directive. The European Directive about Minimum Wage, which looks to lift minimum wages and strengthen collective bargaining was approved by the European Parliament in September 2022.^[225]

Social rights and equality

The EU has also sought to coordinate the social security and health systems of member states to facilitate individuals exercising free movement rights and to ensure they maintain their ability to access social security and health services in other member states. Since 2019 there has been a European commissioner for equality and the European Institute for Gender Equality has existed since 2007. A Directive on countering gender-based violence has been proposed.^[226]^[227] In September 2022, a European Care strategy was approved in order to provide "quality, affordable and accessible care services".^[228] The European Social Charter is the main body that recognises the social rights of European citizens.

In 2020, the first ever European Union Strategy on LGBTIQ equality was approved under Helena Dalli mandate.^[229] In December 2021, the commission announced the intention of codifying a union-wide law against LGBT hate crimes.^[230]

Freedom, security and justice

Thumb — The Charter of Fundamental Rights of the European Union contains a wide range of political, social, and economic rights for EU citizens.

Since the creation of the European Union in 1993, it has developed its competencies in the area of justice and home affairs; initially at an intergovernmental level and later by supranationalism. Accordingly, the union has legislated in areas such as extradition,^[231] family law,^[232] asylum law,^[233] and criminal justice.^[234]

The EU has also established agencies to co-ordinate police, prosecution and civil litigations across the member states: Europol for police co-operation, CEPOL for training of police forces^[235] and the Eurojust for co-operation between prosecutors and courts.^[236] It also operates the EUCARIS database of vehicles and drivers, the Eurodac, the European Criminal Records Information System, the European Cybercrime Centre, FADO, PRADO and others.

Prohibitions against 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.^{[lower-alpha 14]} The treaties declare that the European Union 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."^[237] By virtue of these powers, the EU has enacted legislation on sexism in the work-place, age discrimination, and racial discrimination.^{[lower-alpha 15]}

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".^[238] 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.^[239]

Signing the European Convention on Human Rights (ECHR) is a condition for EU membership.^{[lower-alpha 16]} Previously, the EU itself could not accede to the convention as it is neither a state^{[lower-alpha 17]} nor had the competence to accede.^{[lower-alpha 18]} 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.

The EU is independent from the Council of Europe, although they share purpose and ideas, especially on the rule of law, human rights and democracy. Furthermore, the European Convention on Human Rights and European Social Charter, as well as the source of law for the Charter of Fundamental Rights are created by the Council of Europe. The EU has 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.^[240] On 19 October 2020, the European Union revealed new plans to create a legal structure to act against human rights violations worldwide. The new plan was expected to provide the European Union with greater flexibility to target and sanction those responsible for serious human rights violations and abuses around the world.^[241]

Examples of identity, travel and health documents used in the EU

EU national identity card
(German version pictured)
Schengen visa
(German version)
A passport, displaying the name of the member state, the national coat of arms and the words "European Union" given in their official language(s)
(Irish version pictured)
European Health Insurance Card
(Slovenian version pictured)