Economy of the European Union
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The European Union has the largest economy in the world. It has the largest economy in the agricultural, industrial and service sectors. The EU has set an objective under the Lisbon Strategy to make the European Union "the world's most dynamic and competitive economy" by the year 2010.
| Contents |
Economic Growth
| Economy of the European Union | |
|---|---|
| Currency | 1 Euro (€) = 100 cents |
| Other Currencies in Member States | 1 Cyprus Pound = 100 cents 1 Czech koruna = 100 haleru 1 Danish krone = 100 řre 1 Kroon = 100 sent 1 Forint = 100 fillér 1 Lat = 100 santims 1 Litas = 100 cents 1 Maltese Lira = 100 cents 1 Zloty = 100 groszy 1 Krona = 100 öre 1 tolar = 100 stotins 1 Pound = 100 pence (Not all currencies are legal tender in all of the EU) |
| Statistics | |
| GDP Ranking (2003) | 1st |
| GDP (2004) | $11.324 trillion |
| GDP growth rate (2004) | 1% |
| GDP per Capita (2004) | $25 700 |
| GDP by sector (2004) | agriculture (2.3%), industry (28.3%), services (69.4%) |
| Inflation rate (2004) | 2% |
| Pop below poverty line | 17% |
| Labour force | 211.1 million |
| Labour force by occupation (2000) | agriculture (4.3%), industry (29%), services )66.8%) |
| Unemployment rate (2004) | 9.1% |
| Main Industries | Among the world's largest and most technologically advanced industries, including iron and steel, aluminum, petroleum, coal, cement, chemicals, pharmaceuticals, automobiles, aircraft, railroad equipment, shipbuilding, electrical power equipment, machine tools, electronics, telecommunications equipment, fishing, food processing, furniture, paper, textiles and clothing, tourism |
| Sources: [1] (http://www.cia.gov/cia/publications/factbook/rankorder/2001rank.html) [2] (http://www.imf.org/external/pubs/ft/weo/2004/02/data/) [3] (http://www.odci.gov/cia/publications/factbook/geos/ee.html) | |
| Trading Partners | |
| Imports (2005) | €1 035 Billion |
| Main Partners (2001) | Japan, Switzerland, United States |
| Exports (2005) | €970.6 Billion - #1 in world |
| Main Partners (2001) | Japan, Switzerland, United States |
| Public Finances | |
| Public Debt (2004) | €6 509.8 Billion - 63.8% of GDP |
| Public Deficit (2004) | €270.2 Billion |
| External Debt (2001) | |
| Revenues (2003) | |
| Expenses (2004) | €2 134.7 Billion |
| Economic Aid | |
The table below shows growth in Gross Domestic Product (GDP) over the past 5 years. The European Union has achieved steady growth. However, the EU's share of Gross world product (GWP) has fallen over the same period. GDP growth is being affected by sluggish growth in France and especially Germany and Italy.
| Year | GDP in trillions | % Change | % of GWP |
|---|---|---|---|
| 2001 | 10.445 | NA | 22.6% |
| 2002 | 10.693 | 2.4% | 22.2% |
| 2003 | 10.953 | 2.4% | 21.7% |
| 2004 | 11.323 | 3.4% | 21.3% |
| 2005 | 11.848 | 4.6% | 21.1% |
Currency
The most widely used currency in the European Union is the Euro, which is in use in 12 member states. 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. The Stability and Growth Pact sets out the fiscal criteria to maintain for stability and convergence.
The current government of the United Kingdom has committed to joining the Euro upon a successful referendum of the issue, and when the five economic tests have been passed. The last assessment of five economic tests concluded that only one passed, and a referendum is not likely until at least 2006.
The official currency, in use in all documents produced by the European Union is the Euro.
Energy resources
The European Union has large coal, oil, and natural gas reserves. There are six oil producers in the European Union, although most oil production happens in the North Sea oilfields. The United Kingdom by far is the largest producer, however Denmark, Germany, Ireland, Italy, and the Netherlands all produce oil. The European Union is the 8th largest producer of oil, producing 3 244 000 (2001) barrels a day. However, it is also the world's 2nd largest consumer of oil, consuming much more than it can produce, at 14 480 000 (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.
Trade
The European Union is the largest exporter in the world ([4] (http://www.odci.gov/cia/publications/factbook/rankorder/2078rank.html)) and the second largest importer. Internal trade between the member states is aided by the removal of barriers to trade such as tarrifs and border controls. In the eurozone, trade is helped by not having any currency differences to deal with.
The European Union represents all its members at the World Trade Organisation, and acts on the behalf of member states in any disputes.
Unemployment
On average, the unemployment rate of the European Union is at 8.9%. In comparison to both the United States and Japan this is high. Unemployment varies by member state, the lowest rate is in Ireland with 4.3% whilst the highest is in Poland with 18.1%. The average for the 12 eurozone members is also 8.9%.
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. This currently represent's 40-50% of the EU's total spending. It guarantees a minimum price for farmers in the EU. This is criticized as a form of protectionism, inhibiting trade, and damaging developing countries.
Tourism
The European Union is a major tourist destination, both from outside of the Union and inside of it. Internal tourism is greatly aided 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. France is the world's number one tourist destination, by number of tourists. Spain, Italy, the United Kingdom, Germany and Austria are all also within the top 10.
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.
All countries, except Greece, Portugal, and Spain with below average GDP per capita are those which joined the EU in May 2004 and all countries with above average GDP 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 country 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 emphasized.
| Member State | GDP in billions of $ (USD) | GDP % of EU | GDP per capita in $ (USD) | Public Debt % of GDP | Deficit % of GDP | Inflation % Annual | Unemp. % |
|---|---|---|---|---|---|---|---|
| European Union | 12 329.1 | 100.0% | 26 875 | 63.8 | 2.6 | 2.1 | 8.9 |
| Germany | 2 498.5 | 20.3% | 30 150 | 66.0 | 3.7 | 1.8 | 9.7 |
 United Kingdom
| 1 825.8 | 14.8% | 30 309 | 41.6 | 3.2 | 1.6 | 4.6 |
 France
| 1 811.2 | 14.7% | 29 203 | 65.6 | 3.7 | 1.9 | 9.8 |
| Italy | 1 694.7 | 13.7% | 29 414 | 105.8 | 3.0 | 2.0 | 8.0 |
 Spain
| 1 026.3 | 8.3% | 24 803 | 48.9 | 0.3 | 3.3 | 10.3 |
 Poland
| 512.9 | 4.2% | 13 275 | 43.6 | 4.8 | 3.5 | 18.1 |
 Netherlands
| 498.7 | 4.0% | 30 363 | 55.7 | 2.5 | 1.5 | 4.7 |
 Belgium
| 324.3 | 2.6% | 31 549 | 95.6 | -0.1 | 2.3 | 8.0 |
 Sweden
| 267.4 | 2.2% | 29 537 | 51.2 | -1.4 | 1.2 | 6.5 |
 Austria
| 267.1 | 2.2% | 32 962 | 65.2 | 1.3 | 2.3 | 4.6 |
 Greece
| 236.3 | 1.9% | 21 529 | 110.5 | 6.1 | 3.2 | 10.5 |
 Portugal
| 203.9 | 1.7% | 19 949 | 61.9 | 2.9 | 2.1 | 6.9 |
 Czech Republic
| 199.0 | 1.6% | 19 475 | 37.4 | 3.0 | 1.4 | 8.3 |
 Denmark
| 187.7 | 1.5% | 34 781 | 42.7 | -2.8 | 1.0 | 5.0 |
 Ireland
| 164.2 | 1.3% | 40 003 | 29.9 | -1.3 | 2.0 | 4.3 |
 Hungary
| 162.3 | 1.3% | 16 627 | 57.6 | 4.5 | 3.4 | 6.3 |
 Finland
| 161.1 | 1.3% | 30 818 | 43.6 | -2.1 | 0.0 | 9.0 |
 Slovakia
| 87.1 | 0.7% | 16 110 | 43.6 | 3.3 | 2.6 | 16.2 |
 Lithuania
| 49.1 | 0.4% | 14 198 | 19.7 | 2.5 | 3.2 | 8.9 |
 Slovenia
| 43.3 | 0.4% | 21 695 | 29.4 | 1.9 | 2.8 | 5.8 |
 Luxembourg
| 30.7 | 0.2% | 66 821 | 7.5 | -1.1 | 3.2 | 4.4 |
 Latvia
| 30.2 | 0.2% | 12 886 | 14.4 | 0.8 | 7.0 | 9.6 |
| Estonia | 22.2 | 0.2% | 16 461 | 4.9 | -1.8 | 4.6 | 8.0 |
 Cyprus
| 16.7 | 0.1% | 20 669 | 62.3 | 3.5 | 2.4 | 5.6 |
| Malta | 7.9 | 0.1% | 20 015 | 75.0 | 5.2 | 2.5 | 6.8 |
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 km˛) or NUTS-1 Île-de-France (12,011 km˛), whilst other NUTS regions are much smaller, for example NUTS-1 Hamburg (755 km˛) or NUTS-1 Greater London (1,580 km˛).
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, meaning that GDP per capita is higher than it should be.
The decision to delimitate a 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.
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 existing member states, before the 10 new member states 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 [5] (http://europa.eu.int/comm/eurostat/ramon/nuts/basicnuts_regions_en.html).
See also: List of NUTS-1, NUTS-2 and NUTS-3 regions (http://europa.eu.int/comm/eurostat/ramon/nuts/codelist_en.cfm?list=nuts)
| Rank | NUTS-1 region | 2002 GDP (PPP) per capita in Euros |
|---|---|---|
1 
| Brussels-Capital, Belgium | 49,645 |
| 2
| Luxembourg | 45,026 |
3 
| Greater London, United Kingdom | 40,068 |
4 
| Hamburg, Germany | 39,766 |
5 
| Île-de-France (Paris), France | 37,267 |
6 
| Ĺland, Finland | 32,795 |
| 7
| Bremen, Germany | 31,672 |
8 
| West-Nederland (Randstad), Netherlands | 28,705 |
9 
| Nord-Ovest (Milan, Turin, Genoa), Italy | 28,488 |
| 10
| Hesse (Frankfurt), Germany | 28,382 |
| Rank | NUTS-2 region | 2002 GDP (PPP) per capita in Euros |
|---|---|---|
| 1
| Inner London, United Kingdom | 66 761 |
| 2
| Brussels-Capital, Belgium | 49 645 |
| 3
| Luxembourg | 45 026 |
| 4
| Hamburg, Germany | 39 766 |
| 5
| Île-de-France, France | 37 267 |
6 
| Vienna, Austria | 36 603 |
| 7
| Berkshire, Buckinghamshire & Oxfordshire, United Kingdom | 34 251 |
| 8
| Bolzano-Bozen, Italy | 33 783 |
9 
| Stockholm, Sweden | 33 488 |
| 10
| Oberbayern, Germany | 33 454 |
Bottom 10: economically weakest NUTS-2 regions
Poland, although not having the lowest GDP per capita of all the states in the European Union, contains 6 of the 10 poorest regions in the EU. All 10 regions are part of the new member states which joined in 2004.
| Rank | NUTS-2 region | GDP per Capita in Euros |
|---|---|---|
1 
| Lubelskie, Poland | 6 764 |
| 2
| Podkarpackie, Poland | 6 891 |
| 3
| Warminsko-Mazurskie, Poland | 7 217 |
| 4
| Podlaskie, Poland | 7 435 |
| 5
| Swietokrzyskie, Poland | 7 557 |
6 
| Heves, Nógrád & Borsod-Abaúj-Zemplén, Hungary | 7 902 |
| 7
| Opolskie, Poland | 7 917 |
| 8
| Hajdú-Bihar, Jász-Nagykun-Szolnok & Szabolcs-Szatmár-Bereg, Hungary | 7 990 |
9 
| Preovský kraj & Koický kraj, Slovakia | 8 200 |
10 
| Latvia | 8 249 |
Richest & Poorest NUTS-2 Regions (GDP 2002 PPP)
See also: List of all NUTS-2 regions with GDP 2002 data (http://europa.eu.int/rapid/pressReleasesAction.do?reference=STAT/05/13&format=HTML&aged=0&language=en&guiLanguage=en)
| Country | Region | GDP per capita in Euros | As % of EU average |
|---|---|---|---|
| European Union | 21 170 | 100.0% | |
| Austria
| 25 568 | 120.8% | |
| Richest | Vienna | 36 603 | 172.9% |
| Poorest | Burgenland | 17 244 | 81.5% |
| Belgium
| 24 717 | 116.8% | |
| Richest | Brussels-Capital | 49 645 | 234.5% |
| Poorest | Hainaut | 15 862 | 74.9% |
| Cyprus
| 17 558 | 82.9% | |
| Czech Republic
| 14 318 | 67.6% | |
| Richest | Prague | 32 357 | 152.8% |
| Poorest | Moravian-Silesian Region | 11 098 | 52.4% |
| Denmark
| 25 936 | 122.5% | |
| France
| 23 915 | 113.0% | |
| Richest | Île de France | 37 267 | 176.0% |
| Poorest | French Guiana | 12 136 | 57.3% |
| Germany | 23 012 | 108.7% | |
| Richest | Hamburg | 39 766 | 187.8% |
| Poorest | Dessau | 14 085 | 66.5% |
| Estonia | 9 871 | 46.6% | |
| Finland
| 24 090 | 113.8% | |
| Richest | Ĺland | 32 795 | 154.9% |
| Poorest | East Finland | 17 329 | 81.9% |
| Greece
| 16 425 | 77.6% | |
| Richest | Central Greece | 23 045 | 108.9% |
| Poorest | West Greece | 12 339 | 58.3% |
| Hungary
| 12 402 | 58.6% | |
| Richest | Budapest & Pest | 20 329 | 96.0% |
| Poorest | Heves, Nógrád & Borsod-Abaúj-Zemplén | 7 902 | 37.3% |
| Ireland
| 28 089 | 132.7% | |
| Richest | Southern and Eastern | 31 232 | 147.5% |
| Poorest | Border, Midland and Western | 19 374 | 91.5% |
| Italy | 23 083 | 109.0% | |
| Richest | Bolzano-Bozen | 33 783 | 159.6% |
| Poorest | Calabria | 14 336 | 67.7% |
| Latvia
| 8 249 | 39.0% | |
| Lithuania
| 8 977 | 42.4% | |
| Luxembourg
| 45 026 | 212.7% | |
| Malta | 15 499 | 73.2% | |
| Netherlands
| 25 847 | 122.1% | |
| Richest | Utrecht | 32 710 | 154.4% |
| Poorest | Flevoland | 19 133 | 90.4% |
| Poland
| 9 664 | 45.6% | |
| Richest | Mazowieckie | 14 718 | 69.5% |
| Poorest | Lubelskie | 6 764 | 32.0% |
| Portugal
| 16 248 | 76.7% | |
| Richest | Lisbon | 23 665 | 111.8% |
| Poorest | Norte | 13 017 | 61.5% |
| Slovakia
| 10 857 | 51.3% | |
| Richest | Bratislava region | 25 351 | 119.7% |
| Poorest | Preovský kraj & Koický kraj | 8 200 | 38.7% |
| Slovenia
| 15 941 | 75.3% | |
| Spain
| 20 025 | 94.6% | |
| Richest | Madrid | 26 822 | 126.7% |
| Poorest | Andalucía | 15 055 | 71.1% |
| Sweden
| 24 304 | 114.8% | |
| Richest | Stockholm | 33 488 | 158.2% |
| Poorest | Gävleborg, Dalarna, & Värmland Counties | 20 735 | 97.9% |
| United Kingdom
| 24 945 | 117.8% | |
| Richest | Inner London | 66 761 | 315.4% |
| Poorest | Highlands and Islands | 16 226 | 76.6% |
Footnotes
- Note 1: 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.
See also
- European Union
- Economy of Europe
- Economic and Monetary Union
- List of European countries by GDP
- UK rebate
- Economy of:
- Austria, Belgium, Cyrpus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Slovakia, Slovenia, Spain, Sweden, United Kingdom
