Economy of the European Union

Template:Infobox Economy of the European Union The European Union is the world's largest economy. The EU accounts for 30.3% of the world's total GDP in 2005 (World Bank figure).

Currency

Main articles: Euro and Eurozone

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 13 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.

Economic variation

File:655px-European Union GDP per capita w text.png

GDP (PPP) per capita 2006
  >$30,000   >$25,000   >$20,000   >$15,000   >$10,000

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 and Ireland the highest; Romania and Bulgaria the lowest. 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 euros. All data for 2007 are projections.

These are the official Eurostat figures, as of 21 April, 2007.

Member States	GDP (PPP) 2006 millions of euros	GDP (PPP) per capita 2006 euros	Percentage of EU27 average GDP (PPP) per capita	GDP (PPP) 2007 millions of euros	GDP (PPP) per capita 2007 euros	Percentage of EU27 average GDP (PPP) per capita
European Union	11,557,853	23,400	100%	12,172,536	24,600	100%
Luxembourg	30,183	65,300	279%	31,376	67,200	273%
Ireland	143,475	33,700	144%	157,070	36,100	147%
Netherlands	500,762	30,600	131%	530,564	32,400	132%
Austria	250,247	30,200	129%	264,472	31,800	129%
Denmark	161,613	29,700	127%	171,298	31,400	128%
Belgium	302,570	28,700	123%	319,867	30,300	123%
Sweden	256,327	28,200	121%	274,499	30,100	122%
United Kingdom	1,688,660	27,900	119%	1,847,105	30,400	124%
Finland	143,818	27,300	117%	153,595	29,100	118%
Germany	2,184,612	26,500	113%	2,340,372	28,400	115%
France	1,673,128	26,500	113%	1,744,444	27,500	112%
Italy	1,432,261	24,300	104%	1,500,475	25,400	103%
Spain	1,053,600	23,900	102%	1,121,961	25,200	102%
Cyprus	16,849	21,900	94%	17,773	22,600	92%
Greece	230,659	20,800	89%	246,671	22,100	90%
Slovenia	40,867	20,400	87%	44,040	21,900	89%
Czech Republic	191,080	18,600	79%	207,174	20,200	82%
Malta	7,289	18,000	77%	7,824	19,100	78%
Portugal	185,083	17,500	75%	190,882	18,000	73%
Estonia	21,170	15,700	67%	23,919	17,800	72%
Hungary	154,358	15,300	65%	166,031	16,500	67%
Slovakia	79,339	14,700	63%	88,602	16,400	67%
Lithuania	46,015	13,600	58%	50,241	14,800	60%
Latvia	29,971	13,100	56%	33,630	14,800	60%
Poland	473,774	12,400	53%	525,277	13,800	56%
Romania	190,657	8,800	38%	208,220	9,700	39%
Bulgaria	66,799	8,700	37%	71,714	9,400	38%
Candidate countries: (not included from EU total above)
Croatia	52,082	11,700	50%	57,948	13,000	53%
Turkey	503,856	6,900	29%	541,418	7,300	30%
Republic of Macedonia	13,080	6,400	27%	13,897	6,800	28%

Source:GDP(PPP): EUROSTAT [1]
PERCENTAGES: EUROSTAT([2]). Recalculated manually to EU27.

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).

All countries, except Greece and Portugal 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.

The following table shows information relating to the member states of the European Union, ordered according to the size of their economies. 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.

Member State sorted by GDP	GDP in billions of US $ (2006)	GDP % of EU (2006)	GDP per capita in PPP US $ (2006 est.)	Public Debt % of GDP	Deficit % of GDP	Inflation % Annual	Unemp. %
European Union	13 840.8	100.0%	27 849	63.8	-2.6	2.0	7.5
Germany	2 698.7	19.5%	32 684	66.0	-3.7	1.8	7.7
United Kingdom	2 229.4	16.5%	32 949	41.6	-3.2	2.0	5.4
France	1 998.2	14.4%	31 377	65.6	-3.7	1.8	8.4
Italy	1 791.0	12.9%	30 383	105.8	-3.0	2.2	6.7
Spain	1 203.4	8.7%	28 810	48.9	-0.3	2.7	8.6
Poland	556.9	4.0%	14 609	43.6	-3.7	2.3	10.5
Netherlands	549.7	4.0%	33 079	55.7	-2.5	1.5	3.6
Belgium	353.3	2.6%	33 908	95.6	-0.1	2.7	7.8
Austria	298.7	2.2%	36 189	65.2	-1.3	2.0	4.5
Sweden	296.7	2.1%	32 548	51.2	-1.4	0.8	6.3
Greece	274.5	2.0%	24 733	106.5	-2.8	3.2	8.7
Portugal	217.9	1.6%	20 673	61.9	-2.9	3.0	7.2
Czech Republic	210.4	1.5%	20 539	37.4	-3.0	1.3	6.6
Denmark	203.5	1.5%	37 399	42.7	-2.8	1.7	3.2
Romania	202.2	1.5%	9 100	21.2	-4.0	3.7	4.5
Ireland	191.7	1.3%	45 135	29.9	-1.3	1.9	4.4
Hungary	190.3	1.4%	18 922	57.6	-4.5	3.7	7.9
Finland	179.1	1.5%	34 162	43.6	-2.1	1.0	7.0
Slovakia	101.2	0.7%	18 705	36.9	-2.9	2.5	10.8
Bulgaria	82.5	0.6%	10 844	24.8	-4.0	6.5	7.8
Lithuania	57.0	0.3%	16 756	19.7	-2.5	2.0	6.1
Slovenia	49.1	0.4%	24 459	29.4	-1.9	1.7	5.0
Luxembourg	35.2	0.2%	76 025	7.5	-1.1	3.2	5.0
Latvia	34.4	0.2%	15 061	14.4	-0.8	6.6	6.3
Estonia	25.8	0.2%	19 243	4.9	-1.8	4.6	4.2
Cyprus	19.7	0.1%	23 419	62.3	-3.5	1.5	4.7
Malta	8.5	0.1%	21 081	75.0	-5.2	2.1	6.8

Economic growth

The EU's share of Gross world product (GWP) is stable at around one fifth [3]. GDP growth, though strong in the new member states, is being affected by sluggish growth in France and especially Germany, Italy and Portugal. Belgium and the Netherlands also have a relatively low growth rate. Estonia and Latvia, also referred to as the Baltic tigers, have the highest GDP growth rates in the union and one of the highest in the world.

Population and GDP per capita of EU member states and some candidates.

GDP (PPP) per capita 2007 showing countries above and below EU-27 average

IMF EU15 GDP growth rates

[4] New member GDP growth rates

Member State % GDP Growth [5] 2004 2005 2006 2007 Austria 2.4 2.0 2.8 2.9 Belgium 2.4 1.5 2.7 2.3 Denmark 1.9 3.2 2.7 2.3 Finland 3.5 2.9 3.5 3.1 France 2.0 1.2 2.4 2.4 Germany 1.2 0.9 2.0 2.5 Greece 4.7 3.7 3.7 3.7 Ireland 4.3 5.5 5.8 5.0 Italy 1.1 0.0 1.5 1.9 Luxembourg 4.2 4.0 4.0 5.0 Netherlands 2.0 1.5 2.9 2.8 Portugal 1.2 0.4 1.2 1.8 Spain 3.1 3.4 3.4 3.7 Sweden 3.7 2.7 4.0 3.8 United Kingdom 3.3 1.9 2.7 2.8

Member State % GDP Growth 2004 2005 2006 2007 Bulgaria 5.7 5.5 5.6 6.1 Cyprus 3.9 3.7 3.5 3.8 Czech Republic 4.2 6.1 6.0 4.9 Estonia 7.8 9.8 9.5 8.7 Hungary 5.2 4.1 4.5 2.4 Latvia 8.6 10.2 11.0 9.6 Lithuania 7.0 7.5 6.8 7.3 Malta -1.5 2.5 1.6 3.0 Poland 5.3 3.4 6.1 6.5 Romania 4.1 8.5 7.7 6.7 Slovakia 5.4 6.1 6.5 8.5 Slovenia 4.2 4.0 5.2 4.3 European Union 2.5 1.8 3.0 2.9 Eurozone 2.0 1.5 2.7 2.6

Current forecasts see the Union's economy achieving growth of 2.3% during 2006 [6]. 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 EU25 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, 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 exponents. The European Commission published proposals for the first comprehensive EU energy policy on January 10, 2007.

see also: Renewable energy in the European Union and category:Energy in the European Union

Trade

The European Union is the largest exporter in the world ([7]) 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

Unemployment rate by country in the EU at February 2007

Changes in the unemployment rate from February 2006 until February 2007 in the EU (Red - increasing and Blue - decreasing)

The seasonally adjusted unemployment rate in the European Union in June 2007 was 6.9% compared to 7.9% in all current 27 memberstates in June 2006. The rate varies widely by member state. In comparison the United States had an unemployment rate of 4.5% and Japan a rate of 3.8% measured by Eurostat.

The following table states the current unemployment rate of all Member States for June 2007 with comparisons to June 2006:

Member State % Unemployment Jun 2006 Jun 2007 Austria 4.8 4.3 Belgium 8.4 7.2 Denmark 4.2 3.5 Finland 7.8 6.7 France 9.5 8.6 Germany 8.3 6.4 Greece 9.0 8.6 Ireland 4.5 4.0 Italy 6.8 6.1 Luxembourg 4.6 4.9 Netherlands 3.9 3.3 Portugal 7.6 7.9 Spain 8.5 8.0 Sweden 7.2 5.3 United Kingdom 5.4 5.4

Member State % Unemployment Rate Jun 2006 Jun 2007 Bulgaria 9.0 7.0 Cyprus 4.8 3.9 Czech Republic 7.1 5.7 Estonia 5.7 5.1 Hungary 7.3 7.7 Latvia 7.0 5.7 Lithuania 5.6 4.7 Malta 7.4 6.4 Poland 13.9 10.2 Romania 7.3 7.3 Slovakia 13.4 10.7 Slovenia 6.1 5.1 European Union 7.9 6.9

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.

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).

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.

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 seventeen member states: none are in the 10 new member states that joined in May 2004. 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 [8]. This definition, however, is not respected by Eurostat. E.g.: the région of Île-de-France, with 11.3 million inhabitants, is treated as a NUTS-2 region, while the state of Bremen, with only 662,000 inhabitants, is treated as a NUTS-1 region.

See also: List of NUTS-1, NUTS-2 and NUTS-3 regions

Rank	NUTS-1 region	2004 GDP (PPP) per capita in Euros
1	Luxembourg	53,978
2	Brussels-Capital, Belgium	53,381
3	Hamburg, Germany	41,972
4	Greater London, United Kingdom	40,542
5	Île-de-France, France	37,526
6	Bremen, Germany	33,508
7	Åland, Finland	31,909
8	Randstad, Netherlands	30,762
9	Ireland	30,414
10	Bavaria, Germany	29,646

Rank	NUTS-2 region	2004 GDP (PPP) per capita in Euros
Note that Frankfurt (68,751 euros per capita) and Paris (67,980 euros per capita) are treated as NUTS-3 by Eurostat and are thus not listed here.
1	Inner London, United Kingdom	65,138
2	Luxembourg	53,978
3	Brussels-Capital, Belgium	53,381
4	Hamburg, Germany	41,972
5	Vienna, Austria	38,632
6	Île-de-France, France	37,526
7	Berkshire, Buckinghamshire & Oxfordshire, United Kingdom	37,379
8	Oberbayern (Upper Bavaria), Germany	36,408
9	Stockholm, Sweden	35,621
10	Utrecht, Netherlands	33,905

Economically weakest NUTS-2 regions

The fifteen lowest regions in the ranking in 2004 were all in Bulgaria, Poland and Romania, with the lowest figures recorded in Nord-Est in Romania (24% of the average), followed by Severozapaden, Yuzhen tsentralen and Severen tsentralen in Bulgaria (all 26%). Among the 70 regions below the 75% level, fifteen were in Poland, eight each in Greece and Romania, seven in the Czech Republic, six each in Bulgaria and Hungary, four each in France (all overseas departments), Italy and Portugal, three in Slovakia, one region in Spain, and Estonia, Latvia, Lithuania and Malta.

Rank	NUTS-2 region	2004 GDP (PPP) per capita in Euros	% of the average GDP of EU27 in 2004
1	Nord-Est, Romania	5,070	24
2	Severozapaden, Bulgaria	5,502	26
3	Yuzhen tsentralen, Bulgaria	5,509	26
4	Severen tsentralen, Bulgaria	5,681	26
5	Sud, Romania	6,111	28
6	Sud-Vest, Romania	6,183	29
7	Severoiztochen, Bulgaria	6,299	29
8	Yugoiztochen, Bulgaria	6,420	30
9	Sud-Est, Romania	6,612	31
10	Nord-Vest, Romania	7,093	33
11	Lubelskie, Poland	7 568	35
12	Podkarpackie, Poland	7 617	35
13	Centru, Romania	7 629	35
14	Podlaskie, Poland	8 148	38
15	Vest, Romania	8 395	39

Richest & Poorest NUTS-2 Regions (GDP PPP 2004)

See also: List of all NUTS-2 regions with GDP 2004 data

Member State	Region	GDP per capita
		in Euros	As % of EU-27 average
European Union		21,503	100.0%
Austria		27,666	128.7%
Richest	Vienna	38,632	179.7%
Poorest	Burgenland	19,305	89.8%
Belgium		26,759	124.4%
Richest	Brussels-Capital	53,381	248.3%
Poorest	Hainaut	17,546	81.6%
Bulgaria		7,134	33.2%
Richest	Yugozapaden	10,550	49.1%
Poorest	Severozapaden	5,502	25.6%
Cyprus		19,648	91.4%
Czech Republic		16,171	75,2%
Richest	Prague	33,784	157.1%
Poorest	Central Moravia	12,856	59.8%
Denmark		26,772	124.5%
France		24,146	112.3%
Richest	Ile-de-France	37,526	174.5%
Poorest	French Guiana	11,690	54.4%
Germany		24,903	115.8%
Richest	Hamburg	41,972	195.2%
Poorest	Dessau	16,295	75.8%
Estonia		11,978	55.7%
Finland		24,834	115.5%
Richest	Åland	31,461	146.3%
Poorest	East Finland	18,336	85.3%
Greece		18,245	84.8%
Richest	Athens	24,230	112.7%
Poorest	West Greece	11,714	54.5%
Hungary		13,751	64.0%
Richest	Central Hungary	21,837	101.6%
Poorest	Northern Hungary	9,003	41.9%
Ireland		30,414	141.4%
Richest	Southern and Eastern	33,653	156.5%
Poorest	Border, Midland and Western	21,518	100.1%
Italy		23,095	107.4%
Richest	Lombardy	30,426	141.5%
Poorest	Sicily	14,447	67.3%
Latvia		9,775	45.5%
Lithuania		10,981	51.1%
Luxembourg		53,978	251.0%
Malta		15,988	74.4%
Netherlands		27,946	130.0%
Richest	Utrecht	33,905	157.7%
Poorest	Flevoland	20,736	96.4%
Poland		10,908	50.7%
Richest	Mazowieckie	16,523	76.8%
Poorest	Lubelskie	7,568	35.2%
Portugal		16,086	74.8%
Richest	Lisbon	22,745	105.8%
Poorest	Norte	12,648	58.8%
Romania		7,301	34.0%
Richest	Bucharest-Ilfov	13,862	64.5%
Poorest	North East Romania	5,070	23.6%
Slovakia		12,196	56.7%
Richest	Bratislava region	27,802	129.3%
Poorest	Prešovský kraj & Košický kraj	9,102	42.3%
Slovenia		17,920	83.3%
Spain		21,658	100.7%
Richest	Madrid	28,416	132.1%
Poorest	Extremadura	14,419	67.1%
Sweden		25,865	120.3%
Richest	Stockholm	35,621	165.7%
Poorest	East Middle Sweden	21,862	101.7%
United Kingdom		26,455	123.0%
Richest	Inner London	65,138	302.9%
Poorest	Cornwall & Isles of Scilly	17,025	79.2%

References

• Template:Fnb One region may be classified by Eurostat as a NUTS-1, NUTS-2 as well as a NUTS-3 region. Several NUTS-1 regions are also classified as NUTS-2 regions such as Brussels-Capital or Ile-de-France. Many countries are only classified as a single NUTS-1 and a single NUTS-2 region such as Latvia, Lithuania, Luxemburg and (although over 3 million inhabitants) Denmark.
• The NUTS definition depends largely on political district definition, rather than on transnational consistent economic units. For example is Munich larger than Stockholm and much larger than Bremen (and has a higher GDP than both), nevertheless as Munich is no state on its own in Germany it's no NUTS-2 region.
• "Euro-indicators News release" (PDF). June 2005 inflation data. Retrieved July 18. {{cite web}}: Check date values in: |accessdate= (help); Unknown parameter |accessyear= ignored (|access-date= suggested) (help)
• "Euro-indicators News release" (PDF). May 2005 unemployment data. Retrieved July 18. {{cite web}}: Check date values in: |accessdate= (help); Unknown parameter |accessyear= ignored (|access-date= suggested) (help)
• "World Bank". GNI data (July 2005). Retrieved August 4. {{cite web}}: Check date values in: |accessdate= (help); Unknown parameter |accessyear= ignored (|access-date= suggested) (help)

The following links are used for the GDP growth and GDP totals (IMF):

• Link to Growth Rates for the Eurozone
• Link to non-Eurozone EU15 countries Growth Rates
• Link to 10 new memberstates Growth Rates
• Link to the 500 largest European Companies

See also

• Sapir Report