Page last updated at 15:01 GMT, Wednesday, 27 June 2012 16:01 UK

Profile: The European Union

The European Union, or EU, describes itself as a family of democratic European countries, committed to working together for peace and prosperity.

The organisation oversees co-operation among its members in diverse areas, including trade, the environment, transport and employment.

EU flag
The EU promotes economic, political integration of Europe through:
A common currency
Freedom of movement between member states
Trading market without frontiers
Development of common foreign, security policy

On 1 May 2004 the EU took in 10 new members, most of them former communist countries, in a huge step along the road towards dismantling the post-World War II division of Europe.

The new joiners were the Czech Republic, Cyprus, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia and Slovenia.

However, plans to introduce a constitution - intended to ensure the smooth running of the enlarged EU - faltered repeatedly at various national referendums until the revised "Lisbon" reform treaty was adopted. It came into force in December 2009.


Over half a century earlier, it was the devastation caused in Europe by World War II which underlay the imperative to build international relationships to guard against any such catastrophe recurring.

French statesmen Jean Monnet and Robert Schuman are regarded as the architects of the principle that the best way to start the European bonding process was by developing economic ties.

Main EU decision making body
Also known as Council of Ministers
Represents interests of individual member states
Each member state represented by its own ministers
Appoints president for a 30-month term, renewable once
Appoints foreign policy High Representative for five-year term

This philosophy was the foundation for the Treaty of Paris which was signed in 1951. It established the European Coal and Steel Community (ECSC) which was joined by France, Germany, Italy, the Netherlands, Belgium and Luxembourg.

Under the Treaty of Rome which came into force in 1958, these six countries founded the European Economic Community and European Atomic Energy Community to work alongside the ECSC.

In 1967 the three communities merged to become collectively known as the European Communities (EC) whose main focus was on cooperation in economic and agricultural affairs.

Denmark, Ireland and the UK became full EC members in 1973, Greece joined in 1981, Portugal and Spain in 1986, Austria, Finland and Sweden in 1995.

Maastricht and beyond

The Treaty on European Union, signed at Maastricht in 1991, formally established the European Union as the successor to the EC.

At the same time, Maastricht expanded the concept of European union into new areas. It introduced a Common Foreign and Security Policy and moved towards an EU coordinating policy on asylum, immigration, drugs and terrorism.

Euro ntoes
2002: Euro becomes legal tender
2009: Major crisis erupts in eurozone after Greece posts record public deficit

EU citizenship was brought into being for the first time, allowing people from member countries to move freely between member states. The treaty included a Social Chapter, from which the UK opted out, laying down EU policies on workers' rights and other social issues.

Crucially, Maastricht established the timetable for economic and monetary union and specified the economic and budgetary criteria which would determine when countries were ready to join.

The subsequent Stability and Growth Pact tightened up the approach to these criteria, stressing that strict fiscal discipline and coordination would be vital to the success of economic and monetary union. It also laid down penalties for members failing to control budget deficits.

Monetary travails

The single European currency, the euro, was officially adopted by 11 member states in 1999. Greece, which took longer to meet convergence criteria, joined two years later. Denmark, Sweden and the UK chose not to join.

The failure of many eurozone countries to stick to the self-imposed rules on government debt triggered a major financial crisis in 2009. By the end of that year, Greece was burdened with debt amounting to 113% of GDP - nearly double the eurozone limit of 60%.

Following a 110bn-euro bail-out package for Greece agreed in May 2010 by other eurozone members and the IMF, other heavily-indebted EU member states - notably Ireland, Portugal and Spain - started to come under close scrutiny.

In November 2010, an EU/IMF bail-out package totalling 85bn euros was agreed on for Ireland, and in May 2011 a 78bn-euro bail-out was approved for Portugal. By the end of the summer the indebtedness of Spain, Italy and Cyprus was also becoming a cause for concern.

Signs that the debt contagion was spreading beyond the periphery of the eurozone gave rise to a clamour of calls for urgent action, and at an emergency summit in October 2011, Europe's leaders agreed on a package of measures that included boosting the eurozone's main bailout fund to 1tn euros.

This, however, failed both to address a continuing crisis of confidence in the currency and to heal rifts among the major European Union economies on how to deal with it. France and Germany sought eurozone tax harmonisation, while Britain demanded safeguards for its own financial sector.

The year 2012 saw the debt crisis worsen in Greece and Spain, while the election of a Socialist government in France left Germany isolated as the chief advocate of austerity within the eurozone.

Sensing a need for leadership, in June 2012 the European Union authorities unveiled their own vision for a future that gave them much greater power, including a European treasury with control over national budgets. European Commission President Jose Manuel Barroso said this "defining moment for European integration" was designed to strengthen the eurozone and prevent future crises over a ten-year period, but critics saw little in it to address pressing debt problems.

Other key issues

Supporters of the 2004 influx of new member states saw enlargement as the best way of building economic and political bonds between the peoples of Europe in order to end the divisions of the past.

Proposes legislation to Council and Parliament
Manages implementation of EU legislation
Commissioners appointed on five-yearly basis by Council in agreement with member states
Appointments confirmed by parliament to which commission is answerable

They looked forward to sharing the world's largest single market and so to expanding and consolidating stability and prosperity.

Critics highlighted the fact that average GDP per head for the new member states was 40% of the average for existing EU countries, making them an economic burden.

Some also argued that the EU decision-making process would become bogged down as the number of countries round the table increased.

Fears were expressed in some quarters that established EU members would see a huge influx of immigrants from former communist states seeking better job and benefit prospects.

Reform treaty

Expansion is almost certain to continue. Bulgaria and Romania joined in January 2007, Croatia is expected to become the EU's 28th member state in mid-2013, and in 2009 Serbia submitted a formal application to join. Talks over Turkey's possible accession began in October 2005.

European Parliament meeting in Brussels
Members - MEPs - elected every five years by EU citizens
Votes on and oversees implementation of EU budget
Considers Commission proposals on legislation
Works with Council on legislative decisions
Holds sessions in Brussels and Strasbourg

With the first big wave of enlargement approaching, a convention was established in 2002 to draft a constitution for the EU intended to streamline and replace the complex array of treaties and agreements which then governed it, and to define the powers of the body.

After intensive negotiation, the final text of the constitution was approved at a meeting of the 25 EU heads of state in Brussels in June 2004.

However, every EU country had to ratify the constitution - through national parliament or public referendum - before it could take effect. The charter was dealt a severe blow in May and June 2005 when it was spurned by French and Dutch voters.

The constitution was put on hold, but with Germany's assumption of the EU presidency in January 2007 it was placed firmly back on the agenda.

Negotiations on a new Reform Treaty took place throughout 2007, and what has become known as the Lisbon Treaty was signed in the Portuguese capital on 13 December.

Most European leaders acknowledged that the main substance of the constitution would be preserved, but they argued that Lisbon simply amended previous European treaties, rather than marking any fundamental new shift in powers.

Herman Van Rompuy
Mr Van Rompuy became the EU's first permanent president in January 2010

All 27 EU countries were expected to ratify the Treaty in 2008 with a view to it coming into force in 2009. However, it was thrown into turmoil in June 2008 after voters in Ireland - the only country to hold a referendum on it - delivered a resounding "no" vote.

European Commission President Jose Manuel Barroso urged other countries to continue ratifying the Treaty, and Ireland approved it in a second referendum in October 2009.

The ratification process was completed the following month when the eurosceptic Czech President Vaclav Klaus finally signed it.

New presidency

In November the Council of Ministers approved Belgian Prime Minister Herman Van Rompuy as the first president of the European Council after rejecting several other higher-profile candidacies, including that of former British prime minister Tony Blair. Mr Van Rompuy took office in January 2010.

The European Union Trade Commissioner, Britain's Baroness Ashton, was appointed High Representative for foreign affairs at the same time. She took office when the Lisbon Treaty came into force in December 2009.

Under Baroness Ashton's chairmanship, EU foreign ministers have taken a more concerted line on issues in the Middle East, in particular sanctions against Iran's nuclear programme. In January 2012 they banned imports of Iranian oil in a major step against the Tehran authorities.

Mr Van Rompuy was elected for a two-and-a-half-year term, to replace a six-monthly rotating presidency and usher in a redistribution of power among the Commission, Parliament and Council.

The number of Commissioners will be reduced in 2014, so that not every member-state will have its own Commissioner.

Parliament will be put on an equal footing with the Council for most issues, including the crucial areas of the budget and agriculture, under a system dubbed the "co-decision".

The Commission and Court of Justice will have enhanced powers in justice and home affairs.

National vetoes will be removed in some areas, although they will remain on tax, foreign policy, defence and social security.

In addition there will be a redistribution of voting weights among member-states, to be phased in between 2014 and 2017, with 55% of member-states being entitled to pass certain measures as they account for 65% of the EU population.

Print Sponsor


The BBC is not responsible for the content of external internet sites

Has China's housing bubble burst?
How the world's oldest clove tree defied an empire
Why Royal Ballet principal Sergei Polunin quit


Americas Africa Europe Middle East South Asia Asia Pacific