European Union

By: EconomyWatch   Date: 30 June 2010

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As an exceptional economic and political community in recent times, the very existence of European Union (EU) is characterized the inter-governmental and international attributes. The European Union comprises 27 member-states, having locations mostly in different parts of the European mainland.

Historical evolution of the European Union:

The concept of European Union emerged in the post Second World War period, when there was an utmost need for political unification of the European continent. The Treaty of Rome in 1957 led to the formation of 6 European countries, collectively known as the European Economic Community (EEC). This more or less marked the beginning or origin of the European Union, after which it increased in size with passing time, following the addition of fresh member-states. The powers of this organization strengthened simultaneously, with inclusion of fresh policy regions to its remit. It was recently in 1993 that the European Union gained the current legitimate structure, with the Maastricht Treaty.

Geographical location:

As far as the total land area of the European Union is concerned, it is the world's 7th biggest territory. The total geographic region covered jointly by the EU member states is around 4,422,773 square kilometers. It is the 65,993 kilometers long coastline (second longest in the world) of the European Union, which exerts direct impact on the topography, climatic and economic conditions of the country.

EU economic conditions:

Agriculture: The agricultural sector thrives mainly on the EU subsidies, in various forms like the Common Agricultural Policy (CAP). In recent times, it is these agricultural subsidies which constitute 40-50% of the total EU expenditures. The CAP intends to encourage productions in agriculture sector, ensure supply of food grains, stabilize the market, ascertain fair prices to the consumers and assure quality lifestyles to farmers. Around 2.3% of the EU GDP comes from this sector.

Industry: The manufacturing industries contribute about 28.4% to the EU GDP. Tourism industry is a flourishing sector in the country both on national and international levels, bringing in sufficient foreign earnings. Moreover, some of the foremost multinational companies of the world (Nokia Corporation, L'Oréal Group, ArcelorMittal, Air France-KLM, Allianz, etc.) have their headquarters in different EU member-states. These companies upgrade the overall economic conditions of the EU, through their diverse industrial activities.

Services: The service sector, considered as the most significant area of the European Union, accounts for 69.4% contribution to the GDP.

Foreign Trade: The European Union is the second largest importer and the largest exporter, on the global basis. On the national level, removal of tariffs and restrictions in the borders has facilitated inter-state commercial activities to flourish well.

Unemployment: The EU's seasonally-adjusted unemployment rate was 6.9%, as per the available data of 2007 June. However, this rate varies extensively, when the EU member-states are considered together.


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