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| Economy of the European Union | |
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| Currency | 1 Euro (€) = 100 cents |
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Other currencies in member states |
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| Statistics | |
| GDP ranking | 1st (2006) |
| GDP (PPP) | US $13.06 trillion (2006) |
| GDP growth rate | 3.1% (2006) |
| GDP per capita | US $29,900 (2006) |
| GDP by sector (2006) | 70.5% services 27.3% industry 2.1% agriculture |
| Inflation | 1.9% (2007) |
| Population below poverty threshold | 17% |
| Labour force | 221.5 million |
| Labour force by occupation (2006) | 67.0% services 27.3% industry 4.4% agriculture |
| Unemployment | 7.0% (May 2007) |
| Sources: [1] [2] [3] [4] | |
| Trading partners | |
| Imports | US $1.466 trillion (2006) |
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Main import partners (2005) |
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| Exports | US $1.33 trillion (ranking: 1st) (2006) |
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Main export partners (2005) |
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| Public finances | |
| Public debt | € 7,240.8 billion (58.7% of GDP) (2007) |
| Public deficit | € 109.5 billion (-0.9% of GDP) (2007) |
| Expenditure | € 5,648.6 billion (2007) |
| Revenue | € 5,537.6 billion (2007) |
| Note: The data in this section is derived from the combined public finance figures of each of the 27 EU member states Sources: Eurostat Data 2008 |
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The economy of the European Union combines the economies of 27 member states and is generating an estimated nominal GDP of €12,581 billion ($18,493.009 in 2008) according to the IMF. It accounts for about 31% of the world's total economic output. Fifteen member states adopted a single currency, the euro, managed by the European Central Bank. The EU economy consists of a single market and is represented as a unified entity in the WTO.
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Currency
The official currency of the European Union is the euro, used in all its documents and policies. The Stability and Growth Pact sets out the fiscal criteria to maintain for stability and (economic) convergence. The euro is also the most widely used currency in the EU, which is in use in 15 member states known as the Eurozone. All other member states, apart from Denmark and the United Kingdom which have special opt-outs, have committed to changing over to the euro once they have fulfilled the requirements needed to do so - although Sweden also has an effective opt-out by choosing when or whether to join the European Exchange Rate Mechanism which is the preliminary step towards joining. The remaining states are committed to join the Euro through their Treaties of Accession.
Budget
- Further information: Budget of the European Union
The operation of the EU has an agreed budget of €116 billion for the year 2007, and €862 billion for the period 2007-2013,[1] this represent around 1% of the EU's GDP. By comparison, the UK expenditure for 2004 alone was estimated at about €759 billion and France was estimated at about €801 billion. In 1960, the then "EU" (EEC) budget was 0.03% of GDP. [5]
Economic variation
Below is a table showing, respectively, the GDP (PPP) and the GDP (PPP) per capita for the European Union and for each of its 27 member states, sorted by GDP (PPP) per capita. This can be used as a rough gauge to the relative standards of living among member states, with Luxembourg the highest and Bulgaria the lowest. The income of the Bulgarian citizens is not simply the lowest in the European Union, but lower than those of residents of countries outside the EU, such as Croatia.[2] Eurostat, based in Luxembourg, is the Official Statistical Office of the European Communities releasing yearly GDP figures for the member states as well as the EU as a whole, which are regularly updated, supporting this way a measure of wealth and a base for the European Union's budgetary and economic policies. Figures are stated in euro. All data for 2007 are projections.
These are the official Eurostat figures, as of 21 April 2007.
>€30,000 >€25,000 >€20,000 >€15,000 >€10,000
| Member States | GDP (PPP) 2007 millions of euro |
GDP (PPP) per capita 2007 euro |
Percentage of EU27 average GDP (PPP) per capita 2007 |
|---|---|---|---|
 European Union |
12,172,536 | 24,800 | 100% |
1  Germany € |
2,309,810 | 28,100 | 113% |
2  United Kingdom |
1,847,105 | 28,800 | 116% |
3  France € |
1,744,444 | 27,600 | 111% |
4  Italy € |
1,500,475 | 25,200 | 101% |
5  Spain € |
1,189,174 | 26,500 | 107% |
6  Netherlands € |
530,564 | 32,500 | 131% |
7  Poland |
515,608 | 13,300 | 54% |
8 .svg){kind=small} Belgium € |
319,867 | 29,300 | 118% |
9  Sweden |
274,499 | 30,300 | 126% |
10  Austria € |
264,472 | 31,800 | 128% |
11  Greece € |
271,206 | 24,300 | 98% |
12  Romania |
217,012 | 10,100 | 41% |
13  Czech Republic |
209,773 | 20,300 | 82% |
14  Portugal € |
194,502 | 18,500 | 75% |
15  Denmark |
171,298 | 30,500 | 123% |
16  Hungary |
158,304 | 15,700 | 63% |
17  Ireland € |
157,070 | 36,300 | 146% |
18  Finland € |
155,640 | 28,800 | 116% |
19  Slovakia |
91,772 | 17,000 | 69% |
20  Bulgaria |
76,400 | 10,000 | 38% |
21  Lithuania |
50,515 | 15,000 | 60% |
22  Slovenia € |
44,429 | 22,000 | 89% |
23  Latvia |
32,802 | 14,400 | 58% |
24  Luxembourg € |
31,376 | 68,500 | 276% |
25  Estonia |
24,005 | 17,900 | 72% |
26  Cyprus € |
18,109 | 23,000 | 93% |
27  Malta € |
7,824 | 19,100 | 77% |
Source:GDP(PPP): EUROSTAT [6]
PERCENTAGES: EUROSTAT([7]).
Economies of member states
Economic performance varies from state to state. The Growth and Stability Pact governs fiscal policy with the European Union. It applies to all member states, with specific rules which apply to the eurozone members that stipulate that each state's deficit must not exceed 3% of GDP and its public debt must not exceed 60% of GDP. However, many larger members have consistently run deficits substantially in excess of 3%, and the eurozone as a whole has a debt percentage exceeding 60% (see below).
With the exception of Portugal, all countries with below average GNI per capita are those which joined the EU in May 2004 and all countries with above average GNI per capita come from the existing (pre-2004) member states.citation needed
The following table shows information relating to the member states of the European Union, ordered according to the 'Size' of their economies. (NB: Were the table ordered according to 'GDP per capita' this would perhaps better reflect the strength of an individual economy. But this is not how such tables are commonly structured).
The colours denote how a member state is performing relative to the rest of the European Union, above average (green) or below average (red). The smallest and greatest values in each column are emphasised. The data for GDP, Annual change of GDP, GDP per capita and inflation are IMF estimates made in May 2008. [8]& [9]
| Member State sorted by GDP |
GDP in billions of US $ (2008) |
GDP % of EU (2008) |
Annual change % of GDP |
GDP per capita in PPP US$ (2008) |
Public Debt[3] % of GDP (2007) |
Deficit (-)/ Surplus (+)[3] % of GDP (2007) |
Inflation % Annual (2007) |
Unemp.[4] % (May 2008) |
|---|---|---|---|---|---|---|---|---|
| European Union [10] |
18,493.0 | 100.0% | 2.8 | 29 342 | 58.7 | -0.9 | 2.2 | 6.8 |
| Germany |
3,653.3 | 19.8% | 1.8 | 35,392 | 65.0 | 0.0 | 2.0 | 7.4 |
| France |
2,843.1 | 15.4% | 2.0 | 34,140 | 64.2 | -2.7 | 1.7 | 7.4 |
| United Kingdom |
2,833.2 | 15.3% | 2.9 | 36,315 | 43.8 | -2.9 | 2.3 | 5.2 |
| Italy |
2,330.0 | 12.6% | 1.8 | 31,022 | 104.0 | -1.9 | 2.1 | 6.5 |
| Spain |
1,622.5 | 8.8% | 3.8 | 30,765 | 36.2 | 2.2 | 2.6 | 9.9 |
| Netherlands |
862.9 | 4.7% | 2.9 | 39,892 | 45.4 | 0.4 | 1.8 | 2.9 |
| Belgium |
507.1 | 2.7% | 2.2 | 36,215 | 84.9 | -0.2 | 1.9 | 6.7 |
| Sweden |
502.5 | 2.7% | 3.3 | 37,762 | 40.6 | 3.5 | 1.8 | 5.2 |
| Poland |
450.6 | 2.4% | 6.5 | 17,493 | 45.2 | -2.0 | 2.2 | 7.5 |
| Austria |
418.7 | 2.3% | 2.8 | 39,847 | 59.1 | -0.5 | 1.6 | 4.1 |
| Greece |
361.6 | 2.0% | 3.8 | 30,745 | 94.5 | -2.8 | 3.2 | 7.8 |
| Denmark |
349.2 | 1.9% | 2.5 | 38,864 | 26.0 | 4.4 | 2.0 | 2.7 |
| Ireland |
290.7 | 1.6% | 5.0 | 44,415 | 25.4 | 0.3 | 2.4 | 6.0 |
| Finland |
273.1 | 1.5% | 3.1 | 36,777 | 35.4 | 5.3 | 1.5 | 6.1 |
| Portugal |
248.9 | 1.3% | 1.8 | 22,357 | 63.6 | -2.6 | 2.5 | 7.5 |
| Czech Republic |
211.7 | 1.1% | 4.8 | 25,765 | 28.7 | -1.6 | 2.9 | 4.4 |
| Romania |
187.9 | 1.0% | 6.5 | 12,285 | 13.0 | -2.5 | 4.5 | 6.0 |
| Hungary |
155.2 | 0.8% | 2.8 | 20,700 | 66.0 | -5.5 | 6.4 | 7.6 |
| Slovakia |
88.9 | 0.5% | 8.2 | 22,024 | 29.4 | -2.2 | 2.4 | 10.5 |
| Luxembourg |
57.0 | 0.3% | 4.6 | 83,456 | 6.8 | 2.9 | 2.1 | 4.2 |
| Slovenia |
53.3 | 0.3% | 4.5 | 28,848 | 24.1 | -0.1 | 2.7 | 4.3 |
| Bulgaria |
49.3 | 0.3% | 6.0 | 12,252 | 18.2 | 3.4 | 5.3 | 5.7 |
| Lithuania |
48.1 | 0.3% | 7.0 | 19,216 | 17.3 | -1.2 | 3.5 | 4.3 |
| Latvia |
35.8 | 0.2% | 10.5 | 18,496 | 9.7 | 0.0 | 7.3 | 5.6 |
| Estonia |
25.4 | 0.1% | 9.9 | 22,205 | 3.4 | 2.8 | 4.8 | 4.1 |
| Cyprus |
24.5 | 0.1% | 3.9 | 28,673 | 59.8 | 3.3 | 2.1 | 3.5 |
| Malta |
8.4 | 0.1% | 2.3 | 23,663 | 62.6 | -1.8 | 2.4 | 5.8 |
A special mention should be made on official figures from the French government ministry of finance("Bercy" and "Agence France Tresor". According to respected public individuals (ex: M Pebereau, head of BNP and MP Charles de Courson, expert on finance),citation needed the real French public debt is grossly underreported by French officials. The official figures of 1,200 Billion in public debt (state and others) should be closer to 2.000 Billions. This figure would make France the world most indebted country in relation with its private GDP (as opposed to total GDP which includes private & public GDP). M de Courson going as far as saying that public figures are "cooked" by the ministry through "deconsolidation" of deficit budget chapters.citation needed These suspicions are enhanced by the January 08 announcements from Agence France Tresor that, through 2008, they would call on the market for a surprising € 150 Billion ($ 230 billion) in new borrowings due to unfunded final payments on previous loans. Additionally, French official figures do not add up with previous budget deficits as well as deficit figures reported by the British government showing figures close to French figures while France suffers from much larger public expenses. French figures should be significantly worse than British figures considered as reliable.citation needed
Economic growth
The EU's share of Gross world product (GWP) is stable at around one fifth [11]. GDP growth, though strong in the new member states, is being affected by sluggish growth in France, Italy and Portugal.
Estonia and Latvia, also referred[5] to as the Baltic Tigers, have the highest GDP growth rates in the union and one of the highest in the world.
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The ten new member states of Eastern and North Europe have enjoyed a higher average percentage growth rate than their Western European counterparts. Notably the Baltic states have achieved massive GDP growth, with Latvia topping 11%, close to China, the world leader at 9% on average for the past 25 years. Reasons for this massive growth include government commitments to stable monetary policy, export-oriented trade policies, low flat-tax rates and the utilisation of relatively cheap labour.
The current map of EU growth is one of huge regional variation, with the larger economies suffering from stagnant growth and the new nations enjoying sustained, robust economic growth.
Although EU27 GDP is on the increase, the percentage of Gross world product is decreasing due to the emergence of economic powers such as China, India and Brazil. In the medium to long term, the EU will be looking to increase GDP growth in the central European economies such as France, Germany and Italy and stabilise growth in the new Eastern European states to ensure sustained economic prosperity.
Energy resources
The European Union has large coal, oil, and natural gas reserves. There are six oil producers in the European Union, primarily in North Sea oilfields. The United Kingdom by far is the largest producer, however Denmark, Germany, Italy, Romania and the Netherlands all produce oil. If it is treated as a single unit, which is not conventional in the oil markets, the European Union is the 7th largest producer of oil in the world, producing 3,424,000 (2001) barrels a day. However, it is also the world's 2nd largest consumer of oil, consuming much more than it can produce, at 14,590,000 (2001) barrels a day.
All countries in the EU have committed to the Kyoto Protocol, and the European Union is one of its biggest proponents. The European Commission published proposals for the first comprehensive EU energy policy on January 10, 2007.
Trade
The European Union is the largest exporter in the world ([15]) and the second largest importer. 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. 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, and acts on behalf of member states in any disputes.
Unemployment
The seasonally adjusted unemployment rate in the European Union (EU27) in March 2008 was 6.7% compared to 7.5% in March 2007.[4] The unemployment rate (EU25) had already declined in prior years from 8.9% in March 2005 to 8.4% in March 2006.[6] The rate varies widely by member state. By comparison in March 2008 the United States had an unemployment rate of 5.1% (2007: 4.4; 2006: 4.7; 2005: 5.1) and Japan a rate of 3.9% (2007: 4.0; 2006: 4.1; 2005: 4.5) measured by Eurostat.[4][6]
The following tables show the current unemployment rate of all Member States for March 2008 with comparisons to March 2007, 2006 and 2005 and comparisons to the United States and Japan:
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Industries
The services sector is by far the most important sector in the European Union, making up 69.4% of GDP, compared to the manufacturing industry with 28.4% of GDP and agriculture with only 2.3% of GDP.
Agriculture
The agricultural sector is supported by subsidies from the European Union in the form of the Common Agricultural Policy (CAP). This currently represents 40-50% of the EU's total spending. It guarantees a minimum price for farmers in the EU. This is criticised as a form of protectionism, inhibiting trade, and damaging developing countries; one of the most vocal opponents is the UK, the second largest economy within the bloc, which has repeatedly refused to give up the annual UK Rebate unless the CAP undergoes significant reform; France, the biggest benefactor of the CAP and the bloc's third largest economy, is its most vocal proponent.
Tourism
The European Union is a major tourist destination, attracting visitors from outside of the Union and citizens travelling inside it. Internal tourism is made more convenient for the citizens of some EU member states by the Schengen treaty and the Euro. All citizens of the European Union are entitled to travel to any member state without the need of a visa. If the EU component states are considered separate entities, France is the world's number one tourist destination for international visitors, followed by Spain, Italy and the United Kingdom at 2nd, 5th and 6th spots respectively. If the EU is considered a single entity, the number of international visitors is less, as most visitors to EU nations are from other EU member states.
Companies
The European Union's member states are the birthplace of many of the world's largest leading multinational companies, and home to its global headquarters. Among these are distinguished companies ranked first in the world within their industry/sector, like Allianz, which is the largest financial service provider in the world by revenue; Airbus, which produces around half of the world's jet airliners; Air France-KLM, which is the largest airline company in the world in terms of total operating revenues; Amorim, which is the world's largest cork-processing and cork producer company; ArcelorMittal, which is the largest steel company in the world; Groupe Danone, which has the world leadership in the dairy products market; InBev, which is the largest beer company in the world; L'Oréal Group, which is the world's largest cosmetics and beauty company; LVMH, which is the world's largest luxury goods conglomerate; Nokia Corporation, which is the world's largest manufacturer of mobile telephones; Royal Dutch Shell, which is one of the largest energy corporation in the world; and Stora Enso, which is the world's largest pulp and paper manufacturer in terms of production capacity, in terms of banking and finance the EU has some of the worlds largest notably HSBC- the worlds largest company- and RBS. Many other European companies rank among the world's largest companies in terms of turnover, profit, market share, number of employees or other major indicators. A considerable number of EU-based companies are ranked among the worlds' top-ten within their sector of activity.
Regional variation
Comparing the richest areas of the EU can be a difficult task. This is because the NUTS 1 & 2 regions are not homogenous, some of them being very large regions, such as NUTS-1 Hesse (21,100 km²) or NUTS-1 Île-de-France (12,011 km²), whilst other NUTS regions are much smaller, for example NUTS-1 Hamburg (755 km²) or NUTS-1 Greater London (1,580 km²). An extreme example is Finland, which is divided for historical reasons into mainland Finland with 5.3 million inhabitants and Åland, an island with a population of 26,700, or about the population of a small Finnish city.
One problem with this data is that in some areas, including Greater London, are subject to a large number of commuters coming into the area, thereby artificially inflating the figures. It has the effect of raising GDP but not altering the number of people living in the area, inflating the GDP per capita figure. Similar problems can be produced by a large number of tourists visiting the area.
The data is used to define regions that are supported with financial aid in programs such as the European Regional Development Fund.
The decision to delineate a Nomenclature of Territorial Units for Statistics (NUTS) region is to a large extent arbitrary (i.e. not based on objective and uniform criteria across Europe), and is decided at European level (See also: Regions of the European Union).
Top 10: economically strongest NUTS-1 and NUTS-2 regions
The 10 NUTS-1 and NUTS-2 regions with the highest GDP per capita are all in the first fifteen member states: none are in the 12 new member states that joined in May 2004 and January 2007. The NUTS Regulation lays down a minimum population size of 3 million and a maximum size of 7 million for the average NUTS-1 region, whereas a minimum of 800.000 and a maximum of 3 million for NUTS-2 regions ¹ [16]. This definition, however, is not respected by Eurostat. E.g.: the région of Île-de-France, with 11.6 million inhabitants, is treated as a NUTS-2 region, while the state of Bremen, with only 664,000 inhabitants, is treated as a NUTS-1 region.
See also: List of NUTS-1, NUTS-2 and NUTS-3 regions
| Rank | NUTS-1 region | 2005 GDP (PPP) per capita[7] in euros |
|---|---|---|
| 1 |
Luxembourg | 59,202 |
| 2 |
Brussels-Capital, Belgium | 53,876 |
| 3 |
Hamburg, Germany | 45,271 |
| 4 |
Greater London, United Kingdom | 41,475 |
| 5 |