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The European Union (EU) comprises 28 member states. Each member state is party to the founding treaties of the union and thereby subject to the privileges and obligations of membership. Unlike members of most international organisations, the member states of the EU are subjected to binding laws in exchange for representation within the common legislative and judicial institutions. Member states must agree unanimously for the EU to adopt policies concerning defence and foreign affairs.[4]Subsidiarity is a founding principle of the EU.

In 1957 six core states founded the EU's predecessor, the European Economic Community (Belgium, France, Italy, Luxembourg, the Netherlands and West Germany). The remaining states have acceded in subsequent enlargements. On 1 July 2013 Croatia became the newest member state of the EU. In order to accede, a state must fulfill the economic and political requirements known as the Copenhagen criteria, which require a candidate to have a democratic, free market government together with the corresponding freedoms and institutions, and respect for the rule of law. Enlargement of the Union is also contingent upon the consent of all existing members and the candidate's adoption of the existing body of EU law, known as the acquis communautaire.

There is disparity in the size, wealth and political system of member states, but all have equal rights. While in some areas majority voting takes place where larger states have more votes than smaller ones, smaller states have disproportional representation compared to their population. No member state has withdrawn or been suspended from the EU, though some dependent territories or semi-autonomous areas have left. In June 2016 the UK voted to leave the EU and in July 2016 the UK government confirmed it will conduct the UK exit, colloquially known as Brexit.

Enlargement is, and has been, a principal feature of the Union's political landscape.[11] The EU's predecessors were founded by the "Inner Six", those countries willing to forge ahead with the Community while others remained skeptical. It was only a decade before the first countries changed their policy and attempted to join the Union, which led to the first skepticism of enlargement. French President Charles de Gaulle feared British membership would be an American Trojan horse and vetoed its application. It was only after de Gaulle left office and a 12-hour talk by British Prime Minister Edward Heath and French President Georges Pompidou took place that the United Kingdom's third application succeeded in 1970.[12][13][14]

Applying in 1969 were the United Kingdom, Ireland, Denmark, and Norway. Norway, however, declined to accept the invitation to become a member when the electorate voted against it,[15][16] leaving just the UK, Ireland and Denmark to join.[17] But despite the setbacks, and the withdrawal of Greenland from Denmark's membership in 1985,[18] three more countries joined the Communities before the end of the Cold War.[17] In 1987, the geographical extent of the project was tested when Morocco applied, and was rejected as it was not considered a European country.[19]

The year 1990 saw the Cold War drawing to a close, and East Germany was welcomed into the Community as part of a reunited Germany. Shortly after, the previously neutral countries of Austria, Finland and Sweden acceded to the new European Union,[17] though Switzerland, which applied in 1992, froze its application due to opposition from voters[20] while Norway, which had applied once more, had its voters reject membership again.[21] Meanwhile, the members of the former Eastern Bloc and Yugoslavia were all starting to move towards EU membership. Ten of these joined in a major enlargement on 1 May 2004 symbolising the unification of East and Western Europe in the EU.[22] Bulgaria and Romania joined in 2007.

The year 2013 saw the latest member, Croatia, accede to the Union, and the EU has prioritised membership for the rest of the Balkans namely Western Balkans. Albania, Macedonia, Montenegro, Serbia, and Turkey are all formal, acknowledged candidates. Turkish membership, pending since the 1980s, is a more contentious issue but it entered negotiations in 2005.[23]

According to the Copenhagen criteria, membership of the European Union is open to any European country that is a stable, free market liberal democracy that respects the rule of law and human rights. Furthermore, it has to be willing to accept all the obligations of membership, such as adopting all previously agreed law (the 170,000 pages of acquis communautaire) and switching to the euro.[24] In addition to enlargement by adding new countries, the EU can also expand by having territories of member states, which are outside the EU, integrate more closely (for example in respect to the dissolution of the Netherlands Antilles) or by a territory of a member state which had previously seceded and then rejoined (see withdrawal below).

In order to join the European Union, it is required for all member states to agree; if a single member state disagrees, the applying country is declined acceptance to the European Union.

Each state has representation in the institutions of the European Union. Full membership gives the government of a member state a seat in the Council of the European Union and European Council. When decisions are not being taken by consensus, votes are weighted so that a country with a greater population has more votes within the Council than a smaller country (although not exact, smaller countries have more votes than their population would allow relative to the largest countries). The Presidency of the Council of the European Union rotates between each of the member states, allowing each state six months to help direct the agenda of the EU.[25][26]

Similarly, each state is assigned seats in Parliament according to their population (again, with the smaller countries receiving more seats per inhabitant than the larger ones). The members of the European Parliament have been elected by universal suffrage since 1979 (before that, they were seconded from national parliaments).[27][28]

The national governments appoint one member each to the European Commission (in accord with its president), the European Court of Justice (in accord with other members) and the European Court of Auditors. Historically, larger member states were granted an extra Commissioner. However, as the body grew, this right has been removed and each state is represented equally. The six largest states are also granted an Advocates General in the Court of Justice. Finally, the Governing Council of the European Central Bank includes the governors of the national central banks (who may or may not be government appointed) of each euro area country.[29]

The larger states traditionally carry more weight in negotiations, however smaller states can be effective impartial mediators and citizens of smaller states are often appointed to sensitive top posts to avoid competition between the larger states. This, together with the disproportionate representation of the smaller states in terms of votes and seats in parliament, gives the smaller EU states a greater clout than normally attributed to a state of their size. However most negotiations are still dominated by the larger states. This has traditionally been largely through the "Franco-German motor" but Franco-German influence has diminished slightly following the influx of new members in 2004 (see G6).[30]

Article 4

While the member states are sovereign, the union partially follows a supranational system that is comparable to federalism. Previously limited to European Community matters, the practice, known as the "community method", is currently used in most areas of policy. Combined sovereignty is delegated by each member to the institutions in return for representation within those institutions. This practice is often referred to as "pooling of sovereignty".[31] Those institutions are then empowered to make laws and execute them at a European level.

If a state fails to comply with the law of the European Union, it may be fined or have funds withdrawn.

In contrast to other organisations, the EU's style of integration has "become a highly developed system for mutual interference in each other's domestic affairs".[32] However, on defence and foreign policy issues (and, pre-Lisbon Treaty, police and judicial matters) less sovereignty is transferred, with issues being dealt with by unanimity and cooperation. Very early on in the history of the EU, the unique state of its establishment and pooling of sovereignty was emphasised by the Court of Justice:[33]

By creating a Community of unlimited duration, having its own institutions, its own personality, its own legal capacity and capacity of representation on the international plane and, more particularly, real powers stemming from a limitation of sovereignty or a transfer of powers from the States to Community, the Member States have limited their sovereign rights and have thus created a body of law which binds both their nationals and themselves...The transfer by the States from their domestic legal system to the Community legal system of the rights and obligations arising under the Treaty carries with it a permanent limitation of their sovereign rights.

Yet, as sovereignty still originates from the national level, it may be withdrawn by a member state who wishes to leave. Hence, if a law is agreed that is not to the liking of a state, it may withdraw from the EU to avoid it. This however has not happened as the benefits of membership are often seen to outweigh the potentially negative impact of a specific law.

The question of whether EU law is superior to national law is subject to some debate. The treaties do not give a judgement on the matter but court judgements have established EU's law superiority over national law and it is affirmed in a declaration attached to the Treaty of Lisbon (the European Constitution would have fully enshrined this). Some national legal systems also explicitly accept the Court of Justice's interpretation, such as France and Italy, however in Poland it does not override the national constitution, which it does in Germany. The exact areas where the member states have given legislative competence to the EU are as follows. Every area not mentioned remains with member states.[citation needed]

As a result of the European sovereign debt crisis, some eurozone states required a bailout from the EU via the European Financial Stability Facility and European Financial Stability Mechanism (to be replaced by the European Stability Mechanism from 2013). In exchange for their bailout, Greece was required to accept a large austerity plan including privatisations and a sell off of state assets. In order to ensure that Greece complies with the EU's demands, a "large-scale technical assistance" from the European Commission and other member states has been deployed to Greek government ministries. Some, including the President of the Euro Group Jean-Claude Juncker, state that "the sovereignty of Greece will be massively limited."[34][35][36] The situation of the bailed out countries (Greece, Portugal and Ireland) has been described as being a ward[37][38][39] or protectorate[36][40][41] of the EU with some such as the Netherlands calling for a formalisation of the situation.[42]

A number of states are less integrated into the EU than others. In most cases this is because those states have gained an opt-out from a certain policy area. The most notable is the opt-out from the Economic and Monetary Union, the adoption of the euro as sole legal currency. Most states outside the Eurozone are obliged to adopt the euro when they are ready, but Denmark and the United Kingdom have obtained the right to retain their own independent currencies.

Ireland and the United Kingdom also do not participate in the Schengen Agreement, which eliminates internal EU border checks. Denmark has an opt out from the Common Security and Defence Policy; Denmark, Ireland and the UK have an opt-out on police and justice matters and Poland and the UK have an opt out from the Charter of Fundamental Rights.

There are a number of overseas member state territories which are legally part of the EU, but have certain exemptions based on their remoteness. These "outermost regions" have partial application of EU law and in some cases are outside of Schengen or the EU VAT areahowever they are legally within the EU.[43] They all use the euro as their currency.

Entry to the EU is limited to liberal democracies and Freedom House ranks all EU states as being totally free electoral democracies. All but 4 are ranked at the top 1.0 rating.[45] However, the exact political system of a state is not limited, with each state having its own system based on its historical evolution.

The majority of member states17 out of 28are parliamentary republics, while seven states are constitutional monarchies, meaning they have a monarch although political powers are exercised by elected politicians. Most republics and all the monarchies operate a parliamentary system whereby the head of state (president or monarch) has a largely ceremonial role with reserve powers. That means most power is in the hands of what is called in most of those countries the prime minister, who is accountable to the national parliament. Of the remaining republics, three operate a semi-presidential system, where competencies are shared between the president and prime minister, while one republic operates a presidential system, where the president is head of state and government.[citation needed]

The EU is divided between unicameral (single chamber) and bicameral (dual chamber) parliaments, with 15 unicameral national parliaments and 13 bicameral parliaments. The prime minister and government are usually directly accountable to the directly-elected lower house and require its support to stay in officethe exception being Cyprus with its presidential system. Upper houses are composed differently in different member states: it can be directly elected like the Polish senate, indirectly elected, for example, by regional legislatures like the Federal Council of Austria, unelected, but representing certain interest groups like the National Council of Slovenia, unelected (though by and large appointed by elected officials) as a remnant of a non-democratic political system in earlier times (as in the House of Lords in the United Kingdom). Most (though not all) elections in the EU use some form of proportional representation. The most common type of proportional representation is the party-list system.[citation needed]

There are also differences in the level of self-governance for the sub-regions of a member state. Most states, especially the smaller ones, are unitary states; meaning all major political power is concentrated at the national level. 10 states allocate power to more local levels of government. Austria, Belgium and Germany are full federations, meaning their regions have constitutional autonomies. Denmark, Finland, France, the Netherlands, and Portugal are federacies, meaning some regions have autonomy but most do not. Spain and Italy have system of devolution where regions have autonomy, but the national government retains the right to revoke it. The United Kingdom has a mixture of federacy and devolution as only some of its regions enjoy a system of devolution while others are ruled directly from the national government.[citation needed]

States such as France have a number of overseas territories, retained from their former empires. Some of these territories such as French Guiana are part of the EU (see outermost regions, above) while others are related to the EU or outside it, such as the Falkland Islands.[citation needed]

The Lisbon Treaty made the first provision of a member state to leave. The procedure for a state to leave is outlined in TEU Article 50 which also makes clear that "Any Member State may decide to withdraw from the Union in accordance with its own constitutional requirements". Although it calls for a negotiated withdrawal between the seceding state and the rest of the EU, if no agreement is reached two years after the seceding state notifying of its intention to leave, it would cease to be subject to the treaties anyway (thus ensuring a right to unilateral withdrawal).[46] There is no formal limit to how much time a member state can take between adopting a policy of withdrawal, and actually triggering Article 50.

In a non-binding referendum in June 2016 the United Kingdom voted to withdraw the EU. Termed "Brexit", this has become government policy under Prime Minister Theresa May. However, as of October 2016, the UK has not triggered Article 50. Theresa May has indicated that she intends to trigger it by the end of March 2017.[47] Once triggered, formal talks could begin but there is no certainty of a deal and some EU officials are preparing to deal with a situation where no deal is reached after the two years.[48]

Prior to 2016, no member state had ever voted to withdraw. However Greenland, as a territory, did leave the EU in 1985 when gaining home rule from a member state (Denmark). The situation of Greenland being outside the EU while still subject to an EU member state had been discussed as a template for the pro-EU regions of the UK remaining within the EU or its single market.[49]

Beyond the formal withdrawal of a member state, there are a number of independence movements such as Catalonia or Flanders which could result in a similar situation to Greenland. Were a territory of a member state to secede but wish to remain in the EU, some scholars claim it would need to reapply to join as if it were a new country applying from scratch.[50] However, other studies claim internal enlargement is legally viable if, in case of a member state dissolution or secession, the resulting states are all considered successor states.[51] There is also an European Citizens' Initiative that aims at guaranteeing the continuity of rights and obligations of the European citizens belonging to a new state arising from the democratic secession of a European Union member state.[52]

TEU Article 7 provides for the suspension of certain rights of a member state. Introduced in the Treaty of Amsterdam, Article 7 outlines that if a member persistently breaches the EU's founding principles (liberty, democracy, human rights and so forth, outlined in TEU Article 2) then the European Council can vote to suspend any rights of membership, such as voting and representation as outlined above. Identifying the breach requires unanimity (excluding the state concerned), but sanctions require only a qualified majority.[53]

The state in question would still be bound by the obligations treaties and the Council acting by majority may alter or lift such sanctions. The Treaty of Nice included a preventative mechanism whereby the Council, acting by majority, may identify a potential breach and make recommendations to the state to rectify it before action is taken against it as outlined above.[53] However the treaties do not provide any mechanism to expel a member state outright.[46]

There are a number of countries with strong links with the EU, similar to elements of membership. Following Norway's decision not to join the EU, it remained one of the members of the European Economic Area which also includes Iceland and Liechtenstein (all former members have joined the EU, and Switzerland rejected membership). The EEA links these countries into the EU's market, extending the four freedoms to these states. In return, they pay a membership fee and have to adopt most areas of EU law (which they do not have direct impact in shaping). The democratic repercussions of this have been described as "fax democracy" (waiting for new laws to be faxed in from Brussels rather than being involved in drafting them).[54]

A different example is Bosnia and Herzegovina, which has been under international supervision. The High Representative for Bosnia and Herzegovina is an international administrator who has wide-ranging powers over Bosnia and Herzegovina to ensure the peace agreement is respected. The High Representative is also the EU's representative, and is in practice appointed by the EU. In this role, and since a major ambition of Bosnia and Herzegovina is to join the EU, the country has become a de facto protectorate of the EU. The EU appointed representative has the power to impose legislation and dismiss elected officials and civil servants, meaning the EU has greater direct control over Bosnia and Herzegovina than its own states. Indeed, the state's flag was inspired by the EU's flag.[55]

In the same manner as Bosnia and Herzegovina, Kosovo is under heavy EU influence, particularly after the de facto transfer from UN to EU authority. In theory Kosovo is supervised by EU missions, with justice and policing personal training and helping to build up the state institutions. However the EU mission does enjoy certain executive powers over the state and has a responsibility to maintain stability and order.[56] Like Bosnia, Kosovo has been termed an "EU protectorate".[57][58][59]

However, there is also the largely defunct term of associate member. It has occasionally been applied to states which have signed an association agreement with the EU. Associate membership is not a formal classification and does not entitle the state to any of the representation of free movement rights that full membership allows. The term is almost unheard of in the modern context and was primarily used in the earlier days of the EU with countries such as Greece and Turkey. Turkey's association agreement was the 1963 Ankara Agreement, implying that Turkey became an associate member that year.[60][61] Present association agreements include the Stabilisation and Association Agreements with the western Balkans; these states are no longer termed "associate members".

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Member state of the European Union - Wikipedia

Italian Prime Minister Matteo Renzi announced his resignation shortly after midnight on Dec. 5 after his government was defeated in a referendum on constitutional reforms.

A total of 59% of Italians voted against the reforms, which were designed to reduce the size and attributions of the Senate and concentrate powers in the lower chamber. The goal of the constitutional reforms was to sever the link between political instability and financial fragility in Italy, but the referendum result instead will open a new phase of uncertainty in the country.

Renzis resignation does not mean that Italy will automatically hold early elections. Italian President Sergio Mattarella plans to meet with the main forces in Parliament to determine whether a new prime minister and a new government can be appointed.

This could result in the appointment of a caretaker government tasked with passing several political and economic reforms. In particular, this government would be in charge of adopting a new electoral law. The current law, approved in 2015, has never been used and is currently being challenged in court, giving the Italian Parliament a pretext to delay a new vote.

Should Italian lawmakers fail to appoint a new government in the coming days, elections would be held in early 2017. Renzis center-left Democratic Party and the anti-establishment Five Star Movement are polling neck and neck. The potential victory of the Five Star Movement, a party that wants to renegotiate Italys debt and hold a referendum on the countrys membership in the eurozone, will create uncertainty about Italys future.

The European Central Bank (ECB) could act to mitigate a rise in Italys borrowing costs, which should be able to keep Italys interest rates under control. But the ECB is less effective when it comes to assisting Italys troubled banking sector, as some banks are struggling to recapitalize and reduce their burden of nonperforming loans.

In addition to these financial issues, the referendum result raises questions about Italys ability to introduce structural reforms. Since 1946, Italy has had more than 40 governments, and economic and political reforms have proved difficult to achieve.

The constitutional changes promoted by Renzi sought to build more stable governments and reduce market uncertainty about the countrys governability.

But Renzis decision to link the reforms to his personal political future is now putting Italy in a fragile situation. Even if the Italian Parliament manages to avoid elections for a few more months, anti-establishment sentiments in the country will not go away. With the exception of the Democratic Party, the rest of the countrys main political forces are critical of the European Union and the eurozone, which means that elections no matter when they are held will raise questions about the countrys membership in the currency union.

Read: Italian vote against the elites could shatter Europe

Italy could therefore join France and Germany in holding general elections next year. It will make 2017 a crucial year for the future of the European Union.

The French vote is particularly important because the Euroskeptic National Front party is polling strongly and will probably make it to the second round of the presidential election in May. The possibility of a eurozone breakup is still distant because the Five Star Movement and the National Front would first have to win an election, and then hold a referendum on eurozone membership and win it.

But the mere announcement of a referendum on eurozone membership in France and Italy (Europes second- and third-largest economies, respectively) could be enough to precipitate the collapse of the entire currency area.

And even if Euroskeptic parties fail to access power in 2017, popular discontent with the status quo will continue to influence European politics and challenge the continuity of the European Union in its current form.

This article was published with the permission of Stratfor, the Austin, Texas-based geopolitical-intelligence firm.

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In Italy, voters are being asked for a single yes-or-no vote on a series of complicated constitutional changes proposed by Prime Minister Matteo Renzi, but the plebiscite has taken on far more meaning than just the streamlining of the political and electoral systems.

The vote has, for many, become a referendum on Renzi himself, who has said he will resign if the measure fails. The chopping-block aspect of the vote is heightened by the near-incomprehensibility of the many measures contained in the single document, many of which are intricate and obtuse.

The risk of political instability has triggered market reaction before the vote, with bank stocks sinking and the borrowing costs on sovereign debt rising.

Should Mr. Renzi be forced to stand down by failing to carry his referendum, a snap general election could see prominent no campaign backer Beppe Grillo and his Eurosceptic Five Star Movement form a government. Recent polls have shown him to be leading in the country, and his victory would likely see Italy voting in another referendum this time to leave the European Union.

Meanwhile in Austria, whichever way the vote goes the nationhas no chance of their new president coming from a mainstream party. The two traditional centre left and right parties which have controlled Austrian politics for decades were knocked out in the first round of voting in April, leaving Norbert Hofer of the anti-mass migration, Eurosceptic Freedom Party and former green party leader Alexander Van Der Bellen in the running.

While Mr. Van Der Bellen took the second round in May by a few thousand votes a fraction of a percent of those cast revelations over vote tampering and poorly handled postal ballots led to the nations high court ordering a re-run. It found the number of potentially contaminated votes in that contest was higher than the margin of victory.

Mr. Hofer is campaigning to secure Austrias borders and has mooted the country joining the conservative Visegrad group of nations. Present members Poland, Hungary, Slovakia, and Czechia have formed the vanguard of nations in Europe opposing Brussels directives on mass migration and resettlement.

He has said he would support a referendum on Austrian membership of the European Union if the bloc continued the process to admit Turkey.

As reported byBreitbart London, a planned protest against Mr. Hofer in Vienna yesterday fell flat, with the number of press who turned up to cover the march outnumbering those actually protesting. While pollsters have said the contest is too close to call, bookmakers have slashed odds on Mr. Hofer, making him the clear favourite.

First results from the Austrian election are expected around 1800 GMT, with a preliminary result in the evening. A certified result will follow on Monday. Results for the Italian referendum are not expected until Monday.

AFP contributed to this report

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Polls Open In Austria and Italy For Anti-Establishment Votes ...

National Front leader Marine le Pen has called for a referendum on EU membership to be held in France. Photograph: Matthieu Alexandre/AFP/Getty Images

In Italy and Austria this weekend a shaken EU faces the first of a series of pivotal electoral tests that could profoundly change the political landscape of the bloc, and conceivably herald the end of the European project in its current form.

Shortly before last Mays G7 meeting in Tokyo, Martin Selmayr, the senior Brussels official who runs the cabinet of the European commission president, Jean-Claude Juncker, tweeted what he described as his populist horror scenario.

Imagine, he said, if instead of Barack Obama, Franois Hollande, David Cameron and Matteo Renzi, next years summit were to feature Donald Trump, Marine Le Pen, Boris Johnson and Beppe Grillo.

Selmayr was right about Trump, now the US president-elect. He was half-right about Johnson, who missed out on the job of prime minister after Cameron resigned following Britains Brexit vote, but did become foreign secretary.

If he proves right on the rest, Europe will be in serious trouble.

The angry, anti-establishment, nation-first tide that voted to sweep the UK out of the EU and Trump into the White House in what the billionaire property developer himself called a Brexit plus, plus, plus is rising steadily across the continent.

It is still far from certain to carry all before it. But over the next 12 months, EU member states face a dozen referendums and parliamentary and presidential elections, many contested by populist, Eurosceptic parties whose members believe that what happened in the UK and the US can now happen in Europe.

The French prime minister, Manuel Valls, has said Europe could die in the face of attacks from the populists. Germans doughty finance minister, Wolfgang Schuble, has warned of the scourge of demagogic populism, while the EUs economic affairs commissioner, Pierre Moscovici, suggested Europes voters might be poised to destroy it.

The first two tests will be on Sunday. In Austria, voters elect a new president after their first attempt was annulled. In a race currently too close to call, Norbert Hofer, of the anti-immigration Freedom party, could become the first freely elected far-right head of state in western Europe since the second world war.

On the same day, Italians vote in a referendum on constitutional reforms on which Renzi has staked his political future. Polls have suggested the prime minister will lose potentially bringing Grillos fiercely anti-establishment Five Star Movement a step closer to power.

The Netherlands goes to the polls on 15 March. There, Geert Wilders and his Eurosceptic, anti-Islam Freedom party is tied in the polls with the prime minister, Mark Ruttes liberal VVD.

In France, the first round of presidential elections is on 23 April. The leader of the far-right, anti-European Front National, Marine Le Pen, is expected to advance from this to the runoff stage the following month.

Germany votes later, in federal elections that could well see the far-right Alternative fr Deutschland (AfD) enter parliament as the third-largest party, on the back of strong opposition to Angela Merkels open-door refugee policy.

And in the Czech Republic in October, the populists of ANO 2011, the Action of Dissatisfied Citizens, are forecast to win in the general elections.

Simon Tilford, of the Centre for European Reform thinktank, said the two big flashpoints for the union would be Italys constitutional referendum and Frances presidential election.

In Italy, if Renzi loses the referendum, cant survive, and elections then return a government committed to a referendum on taking [the country] out of the euro that could produce a real standoff, Tilford said.

And in France, if Le Pen should win ... We dont know what would happen, but shes talked of a referendum on the euro, and on Frances EU membership. A strongly Eurosceptic government in France would mean a full-blown crisis in Europe.

All this is by no means certain, of course. The populists confidence could be misplaced. All were quick to welcome the Brexit vote and Trumps victory as events that, in Le Pens words, made possible what was considered impossible.

But in such uncertain times, voters could opt for continuity and stability: polls show support for the EU has surged since Britain voted to leave, and polling since the US election suggests no immediate Trump bounce for the Eurosceptics.

A victory in Austria by Hofer, the candidate from a party founded by a former SS officer, would be a huge symbolic blow for Europe and could presage worse in parliamentary elections to follow in 2018. Some, however, argue that its actual consequences may be limited: the presidential role is largely ceremonial.

In Italy, Renzi could cling on, or be replaced by a technocratic government committed to continuing steady, incremental reform. And if snap elections do follow, Italys electoral system does not necessarily make it easy for a single party to gain a majority in both houses of parliament.

In France, every poll so far has predicted Le Pen will lose heavily in the second round to a more centrist rival, who, on current form, is likely to be the conservative Franois Fillon. In the Netherlands, even if his toxic party emerges as the largest, Wilders is unlikely to be able to form a majority.

But regardless of the electoral outcomes, Europes upstarts will still shape the debate. Analysts point to the enormous influence exercised by the former Ukip leader, Nigel Farage, even though he was never elected to Westminster, and how mainstream, centrist parties, particularly on the right, have been pulled inexorably to the more radical edge in the Netherlands and France.

Mainstream leaders such as Merkel or Fillon would find themselves weakened, heading countries arguably more deeply divided than at any time in the postwar era, and struggling to push through their programmes.

For the European project itself, its confidence knocked by Brexit, the upcoming Trump presidency, a continuing migrant crisis, the terrorism threat, an agonisingly slow return to strong economic growth and the gathering Eurosceptic backlash, the consequences could be serious.

Faced with a more pressing need than ever to get our act together, bring back a sense of direction, confidence, order as the European council president, Donald Tusk, put it the bloc may find itself less able than ever to actually do so.

Its instinct, certainly, will be to pull together and maintain unity at all costs not, from the UKs perspective, a good sign for productive Brexit negotiations and move forward forcefully where it can.

The head of the European Central Bank, Mario Draghi, said the blocs challenge must be to provide outcomes that are both more efficient, and more directly aimed at the people, their needs and their fears not towards institution-building.

Trumps apparent fondness for the Russian president, Vladimir Putin, along with his suggestion that US support for Nato the security umbrella that for 60 years has made European stability and prosperity possible may not be unconditional, has already prompted progress in one area.

A Franco-German defence and security initiative launched in September has gained fresh impetus, with foreign and defence ministers agreeing concrete steps to bolster the blocs capacity to respond to conflicts and crises on its borders. The influential German MEP Manfred Weber said Trump will force Europe to grow up.

Beyond security, analysts say, the unions most pressing priority must be economic recovery, wage growth, the return of some sense of wellbeing. Not that the whole anti-European backlash is solely attributable to that, said Tilford. But the poor performance of the EU economy is a very big factor.

In fact, said Gianni Pittella, the leader of the European parliaments Socialist group, Brexit and Trump had created a huge opportunity for strong, pragmatic EU initiatives.

Will they happen? Will Europe advance, or crumble? The coming months and years will be critical. If anti-Europeans win national elections and the EU fails to rise to the nation-first challenge, it will struggle to survive in its present form.

Few think it will break up entirely. But its ambitions may shrink; it could become more of commercial association than a 60-year-old, overarching political project. A hard eurozone core may ultimately emerge, with satellite associate members.

Some, including in Britain, would regard that as a good thing. But according to Mark Leonard, of the European Council on Foreign Relations, in a less open world of trade barriers and anti-migrant walls, where solidarity among old allies must pass a cost-benefit analysis, they should be careful what they wish for.

Ultimately, Leonard said in an article for Social Europe, even Europes most Trump-like leaders will find it harder to defend their national interest if they try to go it alone. To survive in Trumps world, they should try to make Europe great again.

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Year of electoral tests may end European Union as we know it ...

Economy of the European Union Currency (EUR) - Euro//

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The European Union is the second largest economy in the world (if treated as a single country) in nominal terms and according to purchasing power parity (PPP). The European Union's GDP was estimated to be 16.5trillion (nominal) in 2016 according to the International Monetary Fund, representing 22,8% of nominal global GDP.[18]

The euro, used by 19 of its 28 members, is the second largest reserve currency as well as the second most traded currency in the world after the United States dollar.[19][20][21] The euro is the official currency in the eurozone and in six other European countries, officially or de facto. All the members of the European Union are obliged to join the eurozone, except the United Kingdom and Denmark who have negotiated opt-outs.

The European Union (EU) economy consists of an internal market of mixed economies based on free market and advanced social models. The GDP per capita (PPP) was $37,800 in 2015,[1] compared to $57,084 in the United States and $14,340 in China.[22] With a low Gini coefficient of 31, the European Union has a more egalitarian repartition of incomes than the world average.[23][24]

Euronext is the main stock exchange of the Eurozone and the 7th world largest by market capitalisation.[25]Foreign investments made in the European Union total $5.1 trillion in 2012, while the E.U's investments in foreign countries total 9.1 trillion, by far the highest domestic and foreign investments in the world.[26][27]

Since the beginning of the public debt crisis in 2009, opposite economic situations have emerged between Southern Europe and Central and Northern Europe: a high unemployment rate and public debt in the Mediterranean countries, and a low unemployment rate with higher GDP growth rate in the former Eastern communist countries and in the Northern countries. In 2015, public debt in the European Union was slightly above 85% of GDP, with important disparities between the lowest rate, Estonia with 9,7%, and the highest, Greece with 176%.[28]

The seven largest trading partners of the European Union are the United States, China, Switzerland, Russia, Japan, Turkey and Norway. The EU is represented as a unified entity in the World Trade Organization (WTO), the G-20 and G7, alongside with the EU's member countries participating.

Beginning in the year 1999 with some EU member states, now 19 out of 28 EU states use the euro as official currency in a currency union. The remaining 9 states continued to use their own currency with the possibility to join the euro later. The euro is also the most widely used currency in the EU.

Since 1992 the Maastricht treaty sets out rigid economic and fiscal convergence criteria for the states joining the euro. Starting 1997, the Stability and Growth Pact has been started to ensure continuing economic and fiscal stability and convergence.

Denmark and the United Kingdom, not members of the eurozone, have special opt-outs concerning the later joining of the euro. Also, Sweden can effectively 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.

Starting with Greece in 2009, five of the 19 eurozone states have been struggling with a sovereign debt crisis, by many called the European debt crisis. All these states started reforms and got bailout packages (Greece, Ireland, Portugal, Spain, Cyprus). As of May 2015, all countries but Greece have recovered from their debt crisis (Greece is recovering as of April 2016, though[citation needed]). Other non-eurozone states also experienced a debt crisis and also went through successful bailout programmes, i.e. Hungary, Romania and Latvia (the latter before it joined the eurozone).[29]

The operation of the EU has an agreed budget of 141billion for the year 2011, and 862billion for the period 20072013,[30] this represents around 1% of the EU's GDP.

The services sector is by far the most important sector in the European Union, making up 74.7% of GDP, compared to the manufacturing industry with 23.8% of GDP and agriculture with only 1.5% of GDP.[31]

The agricultural sector is supported by subsidies from the European Union in the form of the Common Agricultural Policy (CAP). In 2013 this represented approximately 45billion (less than 33% of the overall budget of 148billion) of the EU's total spending.[32] It was used originally to guarantee 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 beneficiary of the CAP and the bloc's third largest economy, is its most vocal proponent. The CAP is however witnessing substantial reform. In 1985, around 70% of the EU budget was spent on agriculture. In 2011, direct aid to farmers and market-related expenditure amount to just 30% of the budget, and rural development spending to 11%. By 2011, 90% of direct support had become non-trade-distorting (not linked to production) as reforms have continued to be made to the CAP, its funding and its design.[33]

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 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 for international visitors, followed by Spain, Italy, Germany and the United Kingdom. It is worth noting, however, that a significant proportion of international visitors to EU countries are from other member states.

London, the capital of the United Kingdom is also the world's most visited city (16.9 million visitors in 2012) and the highest in tourism receipts, shortly followed by Paris with 16 million visitors.[34]

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; WPP plc which is the world's largest advertising agency by revenue; Airbus, which is the world's largest aircraft manufacturer;[35]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; Inditex which is the biggest fashion group in the world; Groupe Danone, which has the world leadership in the dairy products market.[citation needed]

Anheuser-Busch InBev is the largest beer company in the world; L'Oral 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 corporations 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 and Grupo Santander, the largest bank in Europe in terms of Market Capitalisation.[citation needed]

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. Europe is also home to many prestigious car companies such as BMW, Ferrari, Jaguar, Land Rover, Maserati, Mercedes, Porsche, as well as volume manufacturers such as Fiat, PSA group, Renault and Volkswagen.[citation needed]

Below is a table showing, respectively, the GDP and the GDP (PPP) per capita for the European Union and for each of its member states, ordered according to the 'Size' of their economies. The table can also be used as a rough gauge to the relative standards of living among member states, with Luxembourg the highest 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.

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. 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).

The EU's share of gross world product (GWP) is stable at around one fifth.[42]

The twelve new member states of the European Union have enjoyed a higher average percentage growth rate than their elder members of the EU. Slovakia has the highest GDP growth in the period 20052011 among all countries of the European Union (See Tatra Tiger). Notably the Baltic states have achieved high GDP growth, with Latvia topping 11%, close to China, the world leader at 9% on average for the past 25 years (though these gains have been in great part cancelled by the late-2000s recession).

Reasons for this growth include government commitments to stable monetary policy, export-oriented trade policies, low flat-tax rates and the utilisation of relatively cheap labour. In 2015 Ireland had the highest GDP growth of all the states in EU (5.2%). 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 EU28 GDP is on the increase, the percentage of gross world product is decreasing because of the emergence of economic powers such as China, India and Brazil.

The European Union has uranium, coal, oil, and natural gas reserves. There are six oil producers in the European Union, primarily in North Sea oilfields. The United Kingdom is by far the largest producer; 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 19th largest producer of oil in the world, producing 1,241,370 (2013) barrels a day.[citation needed]

It is the world's second largest consumer of oil, consuming much more than it can produce, at 12,790,000 (2013) barrels a day. Much of the difference comes from Russia and the Caspian Sea basin. 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 10 January 2007.[citation needed]

EU

Top 10 trading partners (2010)

Top 1120 trading partners (2010)

The European Union is the largest exporter in the world[45] and as of 2008 the largest importer of goods and services.[46] 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.[47]

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 (WTO), and acts on behalf of member states in any disputes. When the EU negotiates trade related agreement outside the WTO framework, the subsequent agreement must be approved by each individual EU member.[47]

The EU seasonally adjusted unemployment rate was 8.6% in May 2016. The euro area unemployment rate was 10.1%.[50]

Among the member states, the lowest unemployment rates were recorded in Czech Republic (4.0%), Malta (4.1%) and Germany (4.2%), and the highest in Spain (19.8%) and Greece (23.3% in April 2016).[50]

The following table shows the history of the unemployment rate for all European Union member states:

Evolution of unemployment ranking within the European Union (from lower to higher rates):[51]

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 (21,100km) or NUTS-1 le-de-France (12,011km), whilst other NUTS regions are much smaller, for example NUTS-1 Hamburg (755km) or NUTS-1 Greater London (1,580km). An extreme example is Finland, which is divided for historical reasons into mainland Finland with 5.3million inhabitants and land, an autonomous archipelago with a population of 27,000, or about the population of a small Finnish city.

One problem with this data is that 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).

The 10 NUTS-1 and NUTS-2 regions with the highest GDP per capita are almost all, except two, in the first fifteen-member states: Prague and Bratislava are the only ones in the 13 new member states that joined in May 2004, January 2007 and July 2013. The leading regions in the ranking of NUTS-2 regional GDP per inhabitant in 2014 were Inner London-West in the United Kingdom (539% of the average), the Grand Duchy of Luxembourg (266%) and Brussels in Belgium (207%). Figures for these three regions, however, are artificially inflated by the commuters who do not reside in these regions ("Net commuter inflows in these regions push up production to a level that could not be achieved by the resident active population on its own. The result is that GDP per inhabitant appears to be overestimated in these regions and underestimated in regions with commuter outflows."[53]).

Another example of artificial inflation is Groningen. The calculated GDP per capita is very high because of the large natural gas reserves in this region, but Groningen is one of the poorest parts in the Netherlands. Among the 46 NUTS-2 regions exceeding the 125% level, fourteen were in Germany, five in the Netherlands and in Austria, four each in Belgium and the United Kingdom, three in Italy, two in Finland and one in Czech Republic, Denmark, Ireland, France, Romania, Slovakia, Spain and Sweden, as well as in the single region Grand Duchy of Luxembourg. The NUTS Regulation lays down a minimum population size of 3million and a maximum size of 7million for the average NUTS-1 region, whereas a minimum of 800,000 and a maximum of 3million for NUTS-2 regions [1]. This definition, however, is not respected by Eurostat. E.g.: the rgion of le-de-France, with 11.6million inhabitants, is treated as a NUTS-2 region, while the state Free Hanseatic City of Bremen, with only 664,000 inhabitants, is treated as a NUTS-1 region.

Source: Eurostat[53]

Among the ten lowest regions in the ranking in 2014 most were in Bulgaria and Romania, with the lowest figure recorded in Severozapaden in Bulgaria. Among the 76 regions below the 75% level, fourteen were in Poland, eleven in Greece, seven in Romania, six each in Hungary and Italy, five each in Bulgaria, Portugal and Spain, four each in the Czech Republic and France, three in Slovakia, two each in Croatia and the United Kingdom, one in Slovenia as well as Latvia.[53]

Source: Eurostat[53]

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

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Economy of the European Union - Wikipedia