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The European Union (EU) is an economic and political federation consisting of twenty-seven member countries that make common policy in several areas. The EU was created in 1993 with the signing of the Treaty on European Union, commonly referred to as the Maastricht Treaty, but it was preceded by various European organizations that contributed to the development of the EU. The EU represents the latest and most successful in a series of efforts to unify Europe, including many attempts to achieve unity through force of arms, such as those seen in the campaigns of Napoleon Bonaparte and World War II.

In the wake of the Second World War, which devastated the European infrastructure and economies, efforts began to forge political union through increasing economic interdependence. In 1951 the European Coal and Steel Community (ECSC) was formed to coordinate the production and trading of coal and steel within Europe. In 1957 the member states of the ECSC ratified two treaties creating the European Atomic Energy Community (Euratom) for the collaborative development of commercial nuclear power and the European Economic Community (EEC), an international trade body whose role was to gradually eliminate national tariffs and other barriers to international trade involving member countries. Initially the EEC, or, as it was more frequently referred to at the time, the Common Market, called for a twelve- to fifteen-year period for the institution of a common external tariff among its members, but the timetable was accelerated and a common tariff was instituted in 1967.

Despite this initial success, participation in the EEC was limited to Belgium, France, Germany, Italy, Luxembourg, and the Netherlands. Immediately following the creation of the EEC a rival trade confederation known as the European Free Trade Association (EFTA) was created by Austria, Britain, Denmark, Finland, Norway, Portugal, Sweden, and Switzerland. Although its goals were less comprehensive than those of the EEC, the existence of the EFTA delayed European economic and political unity.

By 1961 the United Kingdom indicated its willingness to join the Common Market if allowed to retain certain tariff structures which favored trade between Britain and its Commonwealth. Negotiations between the EEC and the United Kingdom began, but insurmountable differences arose and Britain was denied access to the Common Market in 1963. Following this setback, however, the Common Market countries worked to strengthen the ties between themselves, culminating in the merger of the ECSC, EEC, and Euratom to form the European Community (EC) in 1967. In the interim the importance of the Commonwealth to the British economy waned considerably and by 1973 Britain, Denmark, and the Republic of Ireland had joined the EC. Greece followed suit in 1981, followed by Portugal and Spain in 1986 and Austria, Finland, and Sweden in 1995.

Even as it expanded, the EC worked to strengthen the economic integration of its membership, establishing a European Monetary System (EMS) featuring the European Currency Unit (ECU, later known as the Euro) in 1979. The EC then passed the Single European Act, which strengthened the EC's ability to regulate the economic, social, and foreign policies of its members, in 1987. The EC took its largest step to date toward true economic integration among its members with the 1992 ratification of the Maastricht Treaty, after which the EC changed its name to the European Union (EU). The Maastricht Treaty also created a central banking system for EU members, established the mechanisms and timetable for the adoption of the Euro as the common currency among members, and further strengthened the EU's ability to influence the public and foreign policies of its members.

The EU originally had twelve member nations: Belgium, Denmark, France, Germany, Greece, Italy, Luxembourg, the Netherlands, Portugal, the Republic of Ireland, Spain, and the United Kingdom. In 1993, the European Council, meeting in Copenhagen, Denmark, determined the criteria for joining the EU. These requirements, known as the Copenhagen criteria, included: (1) a stable democracy which respects human rights and the rule of law; (2) a functioning market economy capable of competition within the EU; and (3) the acceptance of the obligations of membership, including EU law. The European Council has the responsibility for evaluating a country's fulfillment of these criteria.

The EU has enlarged three times since its creation. In 1995, three new members were added: Austria, Finland, and Sweden. In 2004, ten new members were added, mostly from the former Soviet bloc: Czech Republic, Cyprus, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia, and Slovenia. In 2007, Romania and Bulgaria, who were not ready to join in 2004, were admitted. As of 2008, there were three official candidates for membershipCroatia, Macedonia, and Turkeyand five nations officially recognized as potential candidatesAlbania, Bosnia and Herzegovina, Kosovo, Montenegro, and Serbia.

One of the goals of the EU is economic integration and a common European currency. EU leaders expect great benefits from the adoption of a single currency. International trade within the single currency area will be greatly facilitated by the establishment of what amounts to a single market, complete with uniform pricing and regulation, in place of separate national markets. The creation of a single market is also expected to spur increased competition and the development of more niche products, and ease the acquisition of corporate financing, particularly in what would formerly have been international trade among members of the single currency area. Finally, in the long term, the establishment of the single currency area should simplify European corporate structures, since in time nearly all regulatory statutes within the single currency area should become uniform.

The Maastricht Treaty established conditions that EU member nations would be expected to meet before they would be allowed to participate in the introduction of the single European currency. These conditions were designed to create a convergence among the various national economies of Europe to ease the transition to a single currency and ensure that no single country would benefit or be harmed unduly by its introduction. Such a convergence would also create greater uniformity among the various national economies of the EU, making administration of economic activity within the single-currency area more feasible. The conditions set for participation in the introduction of the Euro and inclusion in the single-currency area included the following:

Despite difficulties faced by some members in meeting these conditions, implementation of the Euro went ahead on schedule through the three phases set forth at Maastricht. Phase one began in 1998 with an EU summit in Brussels, Belgium, that determined which of the fifteen member states had achieved sufficient convergence to participate in the introduction of the Euro. The selected participants were Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, the Netherlands, Portugal, and Spain (exceptions were Demark, Greece, Sweden and the UK). Phase two, which commenced on 1 January 1999, introduced the Euro as legal tender within the eleven selected countries, referred to as the single-currency area, although the new currency would only exist as a currency of account, that is, it would exist only on paper or for electronic transactions, as no Euro notes or coins were yet in circulation. Instead, the existing currencies of the participating countries functioned as fixed denominations of the Euro. Phase two also included the subordination of the eleven national banks in the single-currency area to the European Central Bank.

Phase three, which began on 1 January 2002, set the Euro banknotes and coins into circulation and by July 2002, it became the legal tender of the countries, replacing their national currencies. At the time of introduction there were twelve countries in the area using the Euro, known as the Eurozone: Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, Netherlands, Portugal, Spain, and Greece. Denmark, Sweden and the UK chose not to use the Euro. By the beginning of 2008, the Eurozone had expanded to include fifteen member nations, with Cyprus, Malta, and Slovenia having joined the original members. Nine of the new EU member states were still operating with a currency other than the Euro. The Accession Treaties signed by all of

these countries requires them to join the Euro; some have already joined the ERM and others have set themselves the goal of joining the Euro as follows:

The initial introduction of the Euro as a currency of account began with a resounding success, as the new currency rose immediately to an exchange rate of 1.17 U.S. dollars to the Euro. Uncertainties about the further progress of European Union raised by conflicts in the Balkans in 1999 soon dampened investor interest in the Euro, however, and its value fell to 1.04 U.S. dollars per Euro by the summer of that year. The Euro continued to slip, and by late 2000, it had fallen to a record low of $0.83. Since 2003, however, the Euro has steadily risen against the dollar, gaining strength in 2007 as the U.S. economy began slipping towards recession; by mid 2008, the Euro was holding steady in the mid $1.50s.

The EU maintains four administrative bodies dealing with specific areas of economic and political activity.

Council of Ministers. The Council of Ministers comprises representatives, usually the foreign ministers, of member states. The presidency of the council rotates between the members on a semiannual basis. When issues of particular concern arise, members may send their heads of state to sit on the council. At such times the council is known as the European Council, and has final authority on all issues not specifically covered in the various treaties creating the EU and its predecessor organizations. The Council of Ministers also maintains the Committee of Permanent Representatives (COREPER), with permanent headquarters in Brussels, Belgium, to sit during the intervals between the council's meetings; and operates an extensive secretariat monitoring economic and political activities within the EU. The Council of Ministers and European Council decide matters involving relations between member states in areas including administration, agriculture and fisheries, internal market and industrial policy, research, energy, transportation, environmental protection, and economic and social affairs. Members of the Council of Ministers or European Council are expected to represent the particular interests of their home country before the EU as a whole.

European Commission. The European Commission serves as the executive organization of the EU. Currently each country has one commissioner except for the five largest countries that have two. The Commission enlarges as more countries join. The European Commission seeks to serve the interests of Europe as a whole in matters including external relations, economic affairs, finance, industrial affairs, and agricultural policies. The European Commission maintains twenty-three directorates general to oversee specific areas of administration and commerce within the EU. It also retains a large staff to translate all EU documents into each of the EU's twenty official languages. Representatives sitting on the European Commission are expected to remain impartial and view the interests of the EU as a whole rather than the particular interests of their home countries.

European Parliament. The European Parliament comprises representatives of the EU member nations who are selected by direct election in their home countries. Although it serves as a forum for the discussion of issues of interest to the individual member states and the EU as a whole, the European Parliament has no power to create or implement legislation. It does, however, have some control over the EU budget, and can pose questions for the consideration of either the Council of Ministers or the European Commission.

Court of Justice. The Court of Justice comprises thirteen judges and six advocates general appointed by EU member governments. Its function is to interpret EU laws and regulations, and its decisions are binding on the EU, its member governments, and firms and individuals in EU member states.

From its creation the EU has maintained the Economic and Social Committee (ESC), an appointed advisory body representing the interests of employers, labor, and consumers before the EU as a whole. Although many of the ESC's responsibilities are now duplicated by the European Parliament, the committee still serves as an advocacy forum for labor unions, industrial and commercial agricultural organizations, and other interest groups.

One ongoing area of contention among the members of the EU is agricultural policy. Each European nation has in place a series of incentives and subsidies designed to benefit its own farmers and ensure a domestically grown food supply. Often these policies are decidedly not beneficial to the EU as a whole, and lead to conflict between rival national organizations representing agricultural and fisheries industries. The degree of contention on agricultural and fisheries issues within the EU can be seen in the

fact that nearly 70 percent of EU expenditures are made to address agricultural issues, even though agriculture employs less than 8 percent of the EU workforce. In an attempt to reduce conflict between national agricultural industries while still supporting European farmers, the EU adopted a Common Agricultural Policy (CAP) as part of the Treaty on European Union.

The CAP seeks to increase agricultural productivity, ensure livable wages for agricultural workers, stabilize agricultural markets, and assure availability of affordable produce throughout the EU. Although the CAP has reduced conflicts within the EU, it has also led to the overproduction of many commodities, including butter, wine, and sugar, and has led to disagreements involving the EU and agricultural exporting nations including the United States and Australia.

The European Social Fund (ESF) and the European Regional Development Fund (ERDF) were established to facilitate the harmonization of social policies within EU member states. The ESF focuses on training and retraining workers to ensure their employability in a changing economic environment, while the ERDF concentrates on building economic infrastructure in the less-developed countries of the EU.

The European Investment Bank (EIB) receives capital contributions from the EU member states, and borrows from international capital markets to fund approved projects. EIB funding may be granted only to those projects of common interest to EU members that are designed to improve the overall international competitiveness of EU industries. EIB loans are also sometimes given to infrastructure development programs operating in less-developed areas of the EU.

Although the EU has accomplished a great deal in its first two decades, many hurdles must still be crossed before true European unity can be achieved. Many EU nations experienced great difficulty in meeting the provisions required by the EU for joining the EMS, although eleven countries met them by the 1 January 1999 deadline. Meeting these provisions forced several EU members, including Italy and Spain, to adopt politically unpopular domestic economic policies. Others, such as the United Kingdom, chose not to take politically unpopular action and thus failed to qualify for participation. Even though the Euro was introduced according to schedule, economic unity has far outstripped political cooperation among EU members to date and real and potential political disagreements within the EU remain a threat to its further development. Although the Eurozone represents a formidable force in international trade, the EU faces several grave challenges as it strives to form an ever closer linkage of its national constituents.

Despite the fact that the Treaty on European Union created a central bank to supercede the national banks of its members, responsibility for the creation of fiscal policies remains in the hands of each national government. As such, there is great potential for the central authority and national economic policy making agencies to adopt conflicting programs. Furthermore, national political institutions within the EU are likely to be more responsive to the desires of their national constituencies than to the well being of the Eurozone as a whole, especially in times of economic instability. It is difficult to see how voters in the nations of the EU will be able to put the good of Europe ahead of their own particular interests.

This difficulty is particularly troublesome as political integration has progressed much more slowly than economic integration, and further political integration has recently suffered several potentially insurmountable setbacks. In 2004, the Treaty establishing a European Constitution (TCE) was signed by the representatives of all twenty-seven member nations, but the treaty failed to be ratified by all of the members. Most members did in fact ratify the TCE by parliamentary measure or popular referendum, but France and the Netherlands both rejected it in referendums. These failures led other members to postpone or call off their ratification procedures. As a result, the European Council called for a period of reflection, which subsequently led to negotiations over a new constitutional treaty, known as the Lisbon Treaty. The Treaty of Lisbon, signed on 13 December 2007, was in the process of being ratified by member nations when the Irish electorate rejected the treaty in June 2008, creating uncertainty as to the future ratification of this version of a European constitution.

Another problem also arises out of the composition of the Eurozone. According to the optimal currency theory first posed by American Robert Mundell in 1961, in order for a single currency to succeed in a multinational area several conditions must be met. There should be no barriers to the movement of labor forces across national, cultural, or linguistic borders within the single-currency area; there should be wage stability throughout the single currency area; and an area-wide system should exist to stabilize imbalanced transfers of labor, goods, or capital within the single-currency area. These conditions do not exist in present-day Europe, where labor mobility is small, largely because of language barriers, and wages vary widely among EU member countries, particularly between those in the West and in the East. Furthermore, the present administrative structure of the EU is not powerful enough to redress imbalanced transfers, which are bound to occur periodically. Such imbalances would engage the sort of

political response discussed previously, to the detriment of the EU as a whole.

Optimal currency theory also holds that for a single currency area to be viable it must not be prone to asymmetric shocks, that is, economic events that lead to imbalanced transfers. Ideally, a single-currency area should comprise similar economies that are likely to be on similar cycles, thus minimizing imbalances. Similarly, the need for a freely transferable labor force within the single-currency area is also necessary to minimize imbalances, since each national member of the area must be able to respond flexibly to changes in wage and price structures.

The EU has made remarkable progress during its first two decades. Although there are significant obstacles in the way of further strengthening of the EU, especially in political matters, the continued enhancement of economic ties binding members is likely to increase the political unity of EU members over time. That this is feasible is evidenced by the efforts of EU nations to conform to the stipulations of the Maastricht Agreement. Maintaining stable currency exchange rates, reducing public and overall government debt, and controlling long-term interest rates are all areas in which national governments and fiscal agencies had exercised complete autonomy in the past. Before the implementation of the Euro's second phase, many doubted that the EU member states could put aside their own internal interests to meet the Maastricht provisions; however, eleven of the fifteen managed to do so, and currently over half of the EU members belong to the Eurozone. Significantly, many had to experience economic slowdowns and increased unemployment in order to do so. Such resolve bodes well for continued strengthening of European unification in both political and economic areas. In fact, the history of the EU to date has been one of overcoming obstacles similar to those faced during the first two phases of the introduction of the Euro, and a unified Europe is and will remain a fact of international economic life for the foreseeable future.

SEE ALSO Free Trade Agreements and Trading Blocs; International Business; International Management

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Blair, Alasdair. The European Union Since 1945. New York: Longman, 2005.

Europe Ten Years from Now. International Economy 18, no. 3 (2004): 3439.

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McCormick, J. Understanding the European Union: A Concise Introduction. 3rd ed. New York: Palgrave, 2005.

Phinnemore, D., and L. McGowan. A Dictionary of the European Union. 3rd ed. London and Chicago: Europa, 2006.

Pinder, John and Simon Usherwood. The European Union: A Very Short Introduction. 2nd ed. New York: Oxford University Press, 2008.

Reid, T.R. The United States of Europe: The New Superpower and the End of American Supremacy. New York: Penguin Press, 2004.

Vanthoor, W.F.V. A Chronological History of the European Union, 19462001. 2nd ed. Northampton, MA: Edward Elgar, 2002.

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European Union facts, information, pictures | Encyclopedia ...

The United Kingdom's decision to exit the European Union in June and a EU summit meeting Friday have cast a spotlight on the organization. Yet few Europeans understand the massive bureaucracy based here that governs their lives. Sara Snyder, USA TODAY

European Commission chief Jean-Claude Juncker in Brussels on June 24.(Photo: AFP/Getty Images)

BRUSSELS The United Kingdom's decision to exittheEuropean Union in June and a EU summit meetingFriday havecast a spotlight on the organization.Yet fewEuropeans understand themassive bureaucracy based here thatgovernstheir lives.

A series of polls published in 2014 by the Robert Schuman Foundation, an EU research center,found that about half ofthebloc's 500 million citizensdon't knowhow the EU works or have little confidence in how it operates.

"The EU is not good at explaining itself what it's forand what it's done for people. To an extent, that's itsbiggest problem," said Giles Merritt, chairman of Friends of Europe, a think tank in Brussels that specializes in analyzing European public policy issues.

"It can be hard to remember nowadays, but the EUmanages in a globalized world to focus on Europe's needs for collective strength. It just does it in its rather bumbling, mysterious and impenetrable way," he said.

To help remove some of that mystery, here is a closer look alook at the organization:

The predecessor to the EU was set up in 1951, soon afterWorld War II, with the aim of forging unity to prevent another conflicton the continent.The six founding countries Belgium, France, Germany, Italy, Luxembourg and the Netherlands believedthat economic cooperation on their coal and steel industrieswould make it difficultto turn their weapons ofwar against each other.More than half a century later, the EU's steady expansion, including ex-communist states, has ballooned to 28nations 27 after the U.K. formally leaves. Nineteen of the EU membersshare the euro currency in what is known as the eurozone.

The EUemploys 55,000 publicservants in seven institutions the European Parliament, European Council, Council of the European Union, European Commission, Court of Justice of the European Union, European Central Bank and the Court of Auditors. Altogether, these brancheshave anannual budget of $160 billion togovern 500 million people in a1.7-million-square-mile area.

Top officials includeEuropean Council President Donald Tusk, European Commission President Jean-Claude Juncker, European Parliament President Martin Schulz, European Central Bank President Mario Draghiand EUHigh Representative Frederica Mogherini, who serves as the bloc'sforeign secretary.

The EU spends money on more 80 differentprograms. More than a third is usedon five specific fundsknown as European Structural and Investment Funds. Thesepromoteeconomic and social cohesion among inhabitants ofpoorer member states, support common fisheries and agricultural policies and underwrite infrastructure projects in less developed regions. Itspends 6% of its budget on buildingmaintenance.

It regulateseverything from the shape ofbananas to workers' rightsto the size of vacuum cleaners. The European Central Bank tries to maintain price stability across the euro-area. The Court of Justice makes sure that all EU law is applied in the same way in all EU countries. The Court of Auditors keeps tabs on what the bloc earns and spends. All of these institutions and bodies in turn derive their legitimacy fromtreaties that need to be unanimously agreed by all memberstates.

The European Parliament has751 parliamentariansdirectly elected for a five-year period by voters in their home countries. They can't propose legislation but can only amend or rejects bills that have been initiatedby one of the 28 officials oftheEuropean Commission.These officials are not elected butappointed one each by each ofthe 28 Europeanleaders who make upthe European Council, the body that decidesthe EU'soverall political direction. The Council meets behind closed doors.

"The European Parliament really isn't a parliament," said Ray Finch, a Brussels lawmakerfor the U.K. Independence Party, the right-wing anti-immigration group that backedJune's successfulvote toexitthe EU."We might as well be in North Korea for all the power wehave here."

A commoncomplaint is wasteful spending.One example:One week a month, at an estimated costof $200 million a year, the entireEuropean Parliament in Brussels including legislators, aides, support staff, translators and several thousand plasticboxes containing key documentsaretransported by truck and train270 miles awayto Strasbourg in northeastern France.The EU says it does this because Strasbourgis the official venue for the parliament's full plenary sessions,and it would take a treaty change to end the practice.

Critics such as theU.K. Independence Party'sFinchsay the reason is that France insists on it and makes a lot on money on hotel rooms.

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The European Union: What it's all about

DEFINITION of 'European Union - EU'

The European Union (EU) is a group of 28 countries that operates as a cohesive economic and political block. Nineteen of the countries use the euro as their official currency. The EU grew out of a desire to form a single European political entity to end the centuries of warfare among European countries that culminated with World War II, which decimated much of the continent. The European Single Market was established by 12 countries in 1993 to ensure the so-called four freedoms: the movement of goods, services, people and money.

The EU had its beginning in the European Coal and Steel Community, which was founded in 1950 and had just six members: Belgium, France, Germany, Italy, Luxembourg and the Netherlands. It became the European Economic Community (EEC) in 1957 under the Treaty of Rome, and subsequently became the European Community (EC). The early focus of the Community was a common agricultural policy as well as the elimination of customs barriers. The EC first expanded in 1973 when Denmark, Ireland, the United Kingdom, Greece and Spain joined. A directly elected European Parliament took office in 1979.

In 1986, the Single European Act solidified the principles of foreign policy cooperation and extended the powers of the community over the members. It also formalized the idea of a single European market. The Maastricht Treaty took effect on Nov. 1, 1993, and the EC was replaced by the EU. The Treaty provided for the creation of the euro, which is intended to be the single currency for the EU. It debuted on Jan. 1, 1999. Denmark and the United Kingdom negotiated "opt out" provisions that permitted them to retain their own currencies. Several newer members of the EU have not yet met the criteria for adopting the euro. In 2014, the GDP of the EU totaled $13.8 billion, which is larger than that of the United States.

The EU and the European Central Bank (ECB) have struggled since the global financial market collapse of 2008 to deal with very high sovereign debt and collapsing growth in Portugal, Ireland, Greece and Spain. Greece and Ireland received financial bailouts from the community in 2009, which were accompanied by fiscal austerity. Portugal followed in 2011, along with a second Greek bailout. Multiple rounds of interest rate cuts and economic stimulus failed to resolve the problem. Northern countries such as Germany, the United Kingdom and the Netherlands increasingly resent the financial drain from the south. Repeated rumors that Greece would be forced to withdraw from the euro failed to materialize amid disagreement as to whether the move was legally possible as it was not covered in the Maastricht Treaty.

As the situation moved to stagnation from crisis, the government of the United Kingdom announced it would hold a referendum on June 23, 2016, on whether the country should remain in the EU. The UK has retained its own currency.

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European Union (EU) Definition | Investopedia

The European Union (EU) is a customs union of 27 member nations. France, West Germany, Italy, the Netherlands, Belgium, and Luxembourg formed the EU by signing the Treaty of Rome in 1957 to stimulate the economic integration and recovery of Western Europe. The United Kingdom, Ireland, and Denmark joined in 1973; Greece joined in 1981; and Spain and Portugal in 1986. East Germany was unified with West Germany in 1989. Austria, Finland, and Sweden joined in 1995 to form the EU-15. Poland, Hungary, the Czech Republic, Slovakia, Slovenia, Estonia, Latvia, Lithuania, Cyprus, and Malta joined in May 2004 to form the EU-25. Bulgaria and Romania joined on January 1, 2007, bringing the total to 27 member states. General criteria for EU membership require that a country be governmentally democratic, geographically European, and economically viable. A country joining the union must also adopt the acquis communautaire, the body of laws and rules that apply to EU members.

The EU began as a compact between sovereign nations that created a successful customs union for industrial goods. Control of most economic policy except for agriculture was formally retained by the national governments. The economies of EU member nations became more closely linked with the enactment of legislation in 1993 to form a single market that eliminated border controls between member states. Diverse economies, language, cultural differences, and historical barriers have complicated economic and political integration. Nevertheless, the EU Commission, appointed by the member states' governments, represents the EU-27 in various international forums such as the World Trade Organization.

The EU took a major step toward deeper economic integration in 1999 with the adoption of a single currency by 11 members (16 in 2009). The EU's monetary union integrates national economies through a common monetary policy and a common currency, the euro. A single currency was seen as a necessary step in creating a unified European market to ultimately allow the free flow of capital, goods, services, and people. The current members are Germany, France, Italy, Belgium, Luxembourg, the Netherlands, Austria, Ireland, Slovenia, Slovakia, Portugal, Spain, Malta, Cyprus, Finland, and Greece.

The EU is a major political and economic force. With a population of nearly 500 million in 2008, the EU has about 200 million more people than the United States. Population density in the EU-27 in 2007 was nearly four times the U.S. level, at 290 inhabitants per square mile compared with 80 inhabitants per square mile in the United States. The EU's economy, measured by Gross Domestic Product (GDP) in purchasing power parity (PPP), which adjusts for living standards and costs, was $14.7 trillion in 2007 compared with the U.S. figure of $13.8 trillion. In per capita terms, U.S. GDP was $43,444 in 2007, compared with $33,482 for the EU-27.

EU agricultural production is dominated by livestock products (including dairy), grains, vegetables, wine, fruits, and sugar. Major export commodities include grains (wheat and barley), dairy products, poultry, pork, fruit, vegetables, olive oil, and wine. Most agricultural imports are products not well suited to the climate of northern Europe and include soybeans and soybean products, cotton, tobacco, tropical products, off-season fruits and vegetables, coffee, cocoa, tea, and spices. CAP reforms of 2003-05 have transformed the EU from a net exporter of beef and sugar to a net importer. The EU imports large quantities of animal feed to supplement domestically produced supplies.

The EU is the world's largest importer, and, at times, the largest exporter of agricultural commodities in competition with the United States. It is also the largest agriculture importer from developing countries due to numerous trade preferences granted to former colonies. However, these preferences are being reexamined to conform to World Trade Organization (WTO) rules on reciprocity. The United States is the EU's largest single trading partner.

EU farms are, on average, considerably smaller than U.S. farms. In 2007, the average farm size in the EU-15 was 46.2 acres, whereas the average farm size in the United States was 418 acres. The addition of 12 new member states with smaller farm sizes than the EU-15 makes U.S. average farm size more than 12 times that of the average EU-27 farm of 34.1 acres. However, farm size varies greatly by country, ranging from an average of 171 acres in the United Kingdom to 7.2 acres in Hungary.

Responsibility for agricultural policy is centralized in the European Commission and the Council of Agricultural Ministers, while some discretionary power over the budget can be exercised by the European Parliament. The Common Agriculture Policy (CAP), the cornerstone of EU agricultural policy, helped change the EU into a major food exporter (although it remains the world's largest food importer). CAP is based on three principles: common prices, common financing, and community preference. EU agriculture has thrived under a system of generous support to farmers. These high subsidies led EU farmers to overproduce, building up large surpluses of grain, butter, skim milk powder, beef, olive oil, wine, and other products. According to estimates by the Organization for Economic Cooperation and Development (OECD), EU-27 subsidies and other transfers from governments of member nations accounted for 25 percent of farm revenue in 2008, compared with 7 percent in the United States. A series of CAP reforms in 2003-05 has led to more reliance on direct payments to farmers rather than support through high prices. Agricultural tariffs remain high to protect community preference.

CAP is a large component of the EU's budget. In 2003, the EU member governments agreed to limit increases in CAP expenditures to 1 percent annually during 2007-13. The estimated CAP budget for 2008 was 55 billion euros, with 5 billion going to market support, 37.2 billion going to direct payments to farmers, and 12.6 billion going to rural development. In the 1980s and 1990s, market support was the dominant mechanism in providing benefits to EU farmers. Moreover, the 2008 CAP budget represents only 45 percent of EU spending, compared with 70 percent in the 1980s and 1990s.

The CAP can also be a source of tension among EU member states because the amount a country contributes to the CAP budget can differ dramatically from the amount received in agricultural support. For example, Germany has the largest economy in the EU and contributes the most to the EU's budget. Since agriculture is less than 1 percent of Germany's total GDP, Germany is helping finance agricultural support for other EU countries, particularly France, the largest agricultural producer in the EU.

EU commitments under the Uruguay Round Agreement on Agriculture imposed limits on the EU's ability to support its agricultural sector, raise barriers to imports, and subsidize exports. CAP reforms in 1992, 1999, 2003, 2004, and 2005 were undertaken, in part, to adhere to WTO rules, prepare for future negotiations on agricultural trade, and adjust to EU enlargement.

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USDA ERS - European Union: Basic Information

Asterisks (*) indicate the most recent revision to these requirements. To search, click on your browser's "Edit" menu, then click on "Find (on this page)". Enter "*" in the "Find What" field, then click "Find" or "Find Next" until all asterisks have been identified.

The EU member countries are Austria, Belgium, Bulgaria, Croatia, Denmark, Finland, France, Germany, Greece, Italy, Ireland, Luxembourg, the Netherlands, Portugal, Spain (including areas in the Outermost Regions, such as the Canary Islands), Sweden, the United Kingdom, Cyprus, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Romania, Slovak Republic, and Slovenia.*

Finland and Sweden have additional requirements. See Section XIV for more information.

At this time, Croatia will accept export certificates in English.

IMPORTANT: Please see section below for areas under EU restrictions. From these areas U.S. fresh poultry meat is not eligible for export or transit through the EU. Processed poultry products continue to be eligible provided the product has undergone the appropriate heat treatment.

Requirements related to packaging material, wall/floor junctions, wooden pallets, separation of lavatories and work areas, dry storage of non-food material, waste water, separate storage of edible and inedible products, separate storage of packaged and unpackaged products, structural wood, use of suspended showers/sprays/hoses, sterilization of utensils/implements, stunning, batch condemnation, and casings facilities have been removed.

Requirements related to employee medical certification and water testing have also been removed.

Establishments must continue to comply with the following requirements:

Establishments that slaughter both animals whose meat is eligible for export to the EU and animals whose meat is not eligible for export to the EU shall comply with the following conditions.

There must be a separate room for emptying and cleaning stomachs and intestines, unless the processing is done by closed-circuit mechanical equipment which avoids contamination and eliminates odors.

These products must be derived from animals/birds that passed antemortem and postmortem inspection at federally inspected establishments and comply with the following applicable EU marking requirements.

Antemortem inspection will be performed by FSIS in accordance with 9 CFR 309 and according to FSIS procedures.

The European Union applies the same SRM requirements to meat derived from bison as is applied to meat derived from cattle. Since U.S. BSE regulations do not apply to bison, meat and meat products derived from these species for export to the EU must be produced under an approved AMS EV program. Bison slaughtered for export to the EU on or after November 1, 2009 must comply with this requirement.

Additional information about the EV program for bison and a list of EV approved establishments can be obtained from AMS' Website.

If FSIS inspection personnel become aware of concerns that an AMS approved EV establishment is not properly executing its EV program, AMS should be notified at QAD.AuditService@ams.usda.gov. Inspection personnel should include their immediate supervisor on messages to AMS. The following information should be included in the message:

With the exception of lactic acid solutions used on bovine or bison carcasses, antimicrobial treatments (for example, hyperchlorination, TSP, citric or ascorbic acids, etc) are not allowed for treatment of red meat or poultry carcasses, parts or viscera. Only the application of water, recycled hot water or steam is permitted. Use of recycled hot water is only permitted when integrated into the facilities HACCP system and applied consistently with Commission Regulation (EU) 2015/1474.

Note: The EU regulation which allows the use of recycled hot water to remove microbiological surface contamination from carcasses becomes effective September 18, 2015. Provided they meet all other export requirements for export to the EU, the entire carcass or half carcasses of domestic ungulates and farmed game treated with recycled hot water on or after September 18, 2015 can be certified for export by FSIS.

Conditions of use of lactic acid to reduce microbiological surface contamination of bovine and bison carcasses, half carcasses or quarters at the slaughterhouse. The EU does not permit the use of lactic acid on cuts or trimmings.

During the course of the day, plant management should select 30 or more carcasses prior to entry into the chiller and the same number of carcasses at the exit of the chiller. Samples should be taken randomly throughout a day's production. Whole bird rinses should be used for sample collection. Analysis of samples should be done using an AOAC International approved method. Plant management should submit a report of the assessment and results to FSIS at Phone (202) 720-0082 or (855) 444-9904, Fax (202) 720-7990 or importexport@fsis.usda.gov.

This assessment shall be carried out each time any changes are made to a plant's chilling system. Records shall be kept of the validation and assessments, and shall be available to the EU.

All samples collected under the EU Additional Residue Testing Program will be forwarded to an AMS approved laboratory for screening.

The FSIS coordinates the additional residue testing program for products destined to the EU. However, AMS has set up the Laboratory Approval Program for export where they provide information on approved laboratories which conduct the required residue testing.The Official Listing of USDAApproved Laboratories Export Laboratory Approval Program is available on the AMS Website.

Table 1: EU Residue Sampling Frequency for Pork, Steers/Heifers, Wild Boars and Turkey Table 2: EU Residue Frequency for Bison. This plan is designed by FDA. The sample forms, supplies and collection of the samples are the same as described in Section IX with the exception that a portion of samples (project code with a suffix of _DEN) will be forwarded to a FDA laboratory for analysis instead of one of the AMS approved laboratories. Only U.S. born and raised Bison are eligible for the _Den testing. FDA will be responsible for the analytical cost for samples with the _Den suffixin 2016. Contact Andrew Yeung at (240) 402-1541 with questions.The FDA laboratory address is as follows: FDA/ Denver Laboratory Sample Custodian, 6th & Kipling St., DFC,BLDG 20, Entrance W-10, Denver, CO 80225. Note: If the establishment is slaughtering imported Bison on the day IPP have scheduled the __Den residue sampling task, IPP are to reschedule the sample for a day when a sample from U.S. born and raised Bison can be collected and submitted for analysis.

All bovine meat exported to the European Union must originate from animals that have never been treated with hormonal growth promotants. In order for FSIS to provide export certification for this product, there must be assurances that there are effective controls in all phases of production, from birth to slaughter, and subsequent processing and final packaging activities. FSIS has developed guidelines for the industry, which provide the system requirements and components of the program (Program for Certifying Non-hormone Treated Beef to the European Union).

Each phase of the production of these animals will maintain a written control program that describes the procedures for maintaining identity of and segregating non-hormone treated cattle, as well as the controls that are in place to prevent the administration of restricted compounds to the animals. The documented system will be audited by the Agricultural Marketing Service (AMS), or by an AMS-accredited independent third party. AMS has developed instructions providing the general policies and procedures for providing service under the NHTC Program, ARC Instruction 1013 Procedure. Contact FSIS at Phone (202) 720-0082 or (855) 444-9904, Fax (202) 720-7990 or importexport@fsis.usda.gov, if necessary, for a copy of these documents.

Pending further discussion with the EU, cow meat and cow offal will not be eligible for export to the EU unless it is produced according to the NHTC program guidelines referenced above.

Each establishment involved in the production of NHTC beef must maintain documentation in accordance with an approved written control program and follow procedures that will assure the production and shipment of product derived from non-hormone treated cattle. Mandatory in-plant controls include:

The IIC will verify that the establishment's written control program is adequate to maintain product and identification controls throughout the slaughter, fabrication, processing, packaging process, to the point that the EU Health Mark is applied in a tamper evident fashion. FSIS inspection personnel will perform random checks of these procedures in operation throughout the EU production, as well as checks of the records maintained by plant management. In addition, FSIS will check company records, when necessary, to verify proper transfer for subsequent storage prior to certification of the product to the EU. Compliance oversight by FSIS includes:

All pork exported to the EU must originate from animals that have never been treated with hormonal growth promotants. In order for FSIS to provide export certification for this product, there must be assurances that there are effective controls in all phases of production in growing the animal, as well as at the slaughter establishment. FSIS has developed guidelines for the industry, which provide the system requirements and components of the program (Program for Certifying Pork Intended for Export to the EU). Though each phase of production (or ownership stage) will have to demonstrate that their system controls are adequate, emphasis will be placed on the controls at the finishing unit to ensure ractopamine hydrochloride (ractopamine) is not fed. The documented system will be audited by AMS (or by an AMS-accredited independent third party). AMS has developed instructions providing general policies and procedures for providing services under the PFEU Program MGC Instruction 710, Pork to the European Union Program Contact FSIS at Phone (202) 720-0082 or (855) 444-9904, Fax (202) 720-7990, or importexport@fsis.usda.gov for a copy of these documents.

Each establishment involved in the production of pork must maintain documentation in accordance with an approved written control program and follow procedures that will assure the production and shipment of product derived from hogs that have not been fed ractopamine. Mandatory in-plant controls include:

The IIC will verify that the establishment's written control program to determine if it is adequate to maintain product and identification controls throughout the slaughter, fabrication, processing, packaging process, to the point that the EU Health Mark is applied in a tamper evident fashion. FSIS inspection personnel will perform random checks of these procedures in operation throughout the EU production, as well as checks of the records maintained by plant management. In addition, FSIS will check company records, when necessary, to verify proper transfer for subsequent storage prior to certification of the product to the EU. Compliance oversight by FSIS includes:

All poultry exported to the EU must originate from birds that were produced under an approved AMS Poultry Export Verification (PEV) program. In the case of turkeys, the PEV program must include controls at the finishing unit to ensure ractopamine hydrochloride (ractopamine) is not fed. In order for FSIS to provide export certification for this product, there must be assurances that there are effective controls in all phases of production in growing the birds, as well as at the slaughter establishment. AMS has developed instructions providing general policies and procedures for providing services under the PEV Program. This information is available on AMS' website

Each establishment involved in the production of poultry must maintain documentation in accordance with an approved written control program and follow procedures that will assure the production and shipment of product derived from birds that have been produced under the AMS PEV program. Mandatory in-plant controls include:

The IIC will verify that the establishment's written control program to determine if it is adequate to maintain product and identification controls throughout the slaughter, processing, packaging process, to the point that the EU Health Mark is applied in a tamper evident fashion. FSIS inspection personnel will perform random checks of these procedures in operation throughout the EU production, as well as checks of the records maintained by plant management. In addition, FSIS will check company records, when necessary, to verify proper transfer for subsequent storage prior to certification of the product to the EU. Compliance oversight by FSIS includes:

Cutting and processing plants intending to prepare products for export to the EU must source the raw meat or poultry from EU approved slaughter establishments. The raw material must be eligible for export to the EU and bear the EU health mark. Adequate records supporting control of product transferred to separate processing facilities and cold storage warehouses must be maintained by plant management. Identification and segregation of the raw material must be acceptable to the IIC.

Raw material may be imported into the United States for the purpose of EU production provided it bears the EU Health Mark, as described above, and has accompanying documentation that identifies the establishment of origin and demonstrates its EU eligibility. The product must also be eligible for importation into the United States. Imported product must be handled exclusively in facilities approved for the European Union, including import and cold storage facilities.

The health mark for wild game must be pentagonal shaped rather than oval. The pentagonal mark should be similar in size and bear the same information as the oval mark as indicated above. For information concerning the marking of small wild game, contact FSIS at Phone (202) 720-0082 or (855) 444-9904, Fax (202) 720-7990).

Finland and Sweden require additional microbiological testing of fresh veal, beef, pork, and poultry meat for salmonella prior to export certification. The sampling methods and number of samples to be taken varies with the class of product and the size of the consignment. Specific information regarding sampling methods, number of samples to be taken, and the testing methodology is available.

The additional testing is not required if the fresh veal, beef, pork or poultry meat is destined for the manufacture of meat products in Sweden or Finland.

Production modes - Plants must be in an EU production mode whenever producing for EU export. It is not necessary that establishments be in an EU mode when producing for non-EU markets. However, all establishments must provide an EU mode control program to the IIC to assure that all EU requirements are met before beginning EU production. The plant must be in the EU mode during prescreening by FSIS and during any EU review. The key role in assuring compliance with the requirements for export to the EU is with the IIC. If an approved plant is not in compliance with the EU requirements, the IIC should withhold the use of the EU health mark label (See Section XIII.) and notify plant management of the non-compliance through a memorandum of interview (MOI). The EU health mark label should be returned to the secured location until the deficiency has been corrected. Product not bearing the EU health mark label was not produced according to the requirements for export to the EU and is not eligible for export certification to an EU member state.

An EU approved plant will be reviewed periodically to assure that the EU listed plant continues to comply with standards for export of product to the EU. Export Notice 2005-2, April 1, 2005, provides information regarding the EU conformance verification review procedure, including documenting the review on the revised FSIS Form 9100-1 (03/25/2010), EU Conformance Verification Checklist for Meat and Poultry Establishments to be Used in Conjunction with the Export Requirements for the European Union. The new FSIS Form 9100-1 has been revised to reflect the requirements indicated in Section II above. In accordance with Export Notice 2005-2, the Checklist should be completed a minimum of once per year and for plants that produce product for export to the EU on a routine basis, the review should be conducted each calendar quarter that product is produced. The FSIS inspector in charge (IIC) at the establishment should submit a scanned copy of the Checklist to FSIS at importexport@fsis.usda.gov, or by fax at (202) 720-7990. Any change in the status of the establishment, such as alteration of name or discontinuation of operation in the EU mode should also be submitted to the EPS.

Advisory - Exporters should verify that the shipping date on any export certificate or accompanying shipping documents does not precede the FSIS signature date on the certificate. Failure to do so can result in the detention of the shipment at the Port of Entry into the European Union.

The exporter should check with their importer whether letterhead certificate for each product type, in one shipment, should have a unique number in Box I.2, which is the number serial number of the corresponding 9060-5, Meat and Poultry Export Certificate of Wholesomeness.

Note: Many of the EU Model Health Certificates below contain material that is pre-marked through. While that material must remain marked through, there may be additional statements, words, species, etc. that must be marked through prior to certification. Applicable statements shall be kept as appropriate and statements which are not relevant, should be marked through (single line through non-applicable text), initialed and stamped by the certifying FSIS veterinarian. Only the additional marked through material should be initialed and stamped by the FSIS veterinarian.

Note: All of the EU certificates listed below require the gross and net weights in kilograms in box I.20.

See Guidelines to complete.

SRM certification is included in the certificate. Therefore, the separate SRM statement on FSIS letterhead is not necessary with the revised certificate.

See Guidelines to complete.

SRM certification is included in the certificate. Therefore, the separate SRM statement on FSIS letterhead is not necessary with the revised certificate.

Effective immediately, one of the following certificates may be issued if the applicant provides a completed and signed AMS Statement of Verification (SOV) for High Quality Beef and has documentation that associates the SOV with the specified product:

Note: Bison is not eligible for the high quality beef quota B and only the reference to Regulation (EC) No 593/2013 (quota A) can be added to FSIS Form 9180-3 as described below. FSIS PHVs should not certify bison under the high quality beef quota, B, (EC) No 481/2012.

FSIS Form 9180-3, Certificate of Authenticity, may be issued upon request of the applicant when producer affidavits are provided to FSIS personnel as part of the export certificate application. The affidavits must attest to the origin of the animals (U.S. or Canada) and that the animals meet the age and feeding requirement stated on the certificate. When used for exports to the European Union, the phrase "Regulation (EC) No 593/2013" must be added to Box 5 of FSIS Form 9180-3 prior to being presented to the FSIS veterinarian for signature.

See Guidelines to complete.

See Guidelines to complete.

See Guidelines to complete.

See Guidelines to complete.

See Guidelines to complete.

For meat products and treated stomachs, bladders and intestines that are destined for a non-EU country but that transit through or are stored in an EU country, see "Transit Certificates" section below.

Facilities, at which export certifications for casings to the EU are provided, are deemed to be processing facilities for purposes of export to the EU. These facilities must be present on the list of EU-approved casings establishments in the United States. See Section XX, Plants Eligible for Export, to access the list. Casings do not have to originate from animals slaughtered at establishments approved by the EU.

Note: the EU defines all U.S. origin bovine intestines/casings as SRM and therefore they must originate from countries with negligible BSE risk. The following SRM statement must be presented on a separateFSIS letterhead certificate as an attachment to FSIS Form 9180-23 for bovine casings originating from negligible BSE risk countries. This letterhead certificate is also available in French, which can be issued in conjunction with the English version upon request of the exporter. The ileum of the small intestine of lamb is defined as SRM by the EU.

Obtain one of the following certificates:

An important feature of FSIS Form 9180-23 requires the application of an Export Stamp identifying the Serial Number indicated on FSIS Form 9060-7 or FSIS Form 9060-18, as appropriate. This is the same number used at the top right hand block of FSIS Form 9180-23 next to "No." The Export Stamp is applied below Section 9 (c), in the block provided for an "Official stamp." The Export Stamp must be applied to FSIS Form 9180-23 in a color of ink other than black. The signature of the official signing the certificate must be in a color of ink other than black.

Animal casings not destined for an EU member state, which will be transiting or temporarily stored in an EU member state, must have an appropriate transit certificate related to animal health. See "Transit Certificates" in the appropriate section below.

Meat, poultry or egg products destined for a non-European Union country, for ships stores, or for U.S. military use that is transiting through, is destined for a U.S. military base within, or is being temporarily stored in an EU member state must have the appropriate transit certificate related to animal health.

The transit certificates attest only that the product complies with the animal health requirements of the EU. Currently, there are no animal health restrictions on U.S. meat, cooked poultry and egg products exported to the EU, however, see the pre-requisite flock health certification required below for raw poultry. Any changes to the animal health status will be included in these requirements.

Transshipments of fresh meat or fresh poultry, meat or poultry products, meat or poultry preparations, egg products (on and after 4-26-2007), or animal casings through EU member countries, or shipments that will be temporarily stored in an EU member state, including ship stores and military shipments, must be accompanied by animal health certification. In addition to the certification/s required by the final destination country, the following EU transit certificates (as appropriate), must accompany shipments. For ships stores and military shipments, in addition to the appropriate transit certificate, the following statement must be included in the Remarks section of FSIS Form 9060-5: "Product consigned to ships stores" or "Product consigned to US military".

FSIS letterhead certificate, "Veterinary Certificate for Fresh Meat for Transit and/or Storage in the European Union", is available in English, French, German, Greek, Spanish, Netherlands, Lithuanian, and Polish.

This transit certificate is related to animal health only and applies to fresh/frozen meat (red meats) that will transit through or be temporarily stored in a member state of the European Union.

See Guidelines to complete.

Veterinary Certificate for transit/storage of specified pathogen-free eggs, meat, minced meat and mechanically separated meat of poultry, ratites and wild game-bird, eggs and egg products is available in English, Bulgarian, French, German, Lithuanian, Romanian, Greek, Italian, Netherlands, Polish, and Spanish.

Plant management must present a monthly certification from an APHIS accredited veterinarian when making application for the fresh poultry meat transit/storage certificate. The veterinarian must have Category II accreditation in the State where the flock is located to sign the flock health certificate. To determine if a veterinarian is accredited in a particular State, the contact information for location of offices in each State is available at APHIS' Web site. The certificate must be dated within the previous 30 days of the date of slaughter. This certificate is for U.S. use only and should not be sent with the transit certificate.

See Guidelines to complete. If the consignment consists of poultry enter U.S., enter US and US-1. If the consignment consists of egg products, enter US and US-0. If from another country, enter appropriate code.

See guidelines to complete

If the consignment consists of poultry enter U.S., enter US and US-1. If the consignment consists of egg products, enter US and US-0. If the consignment consists of heat treated poultry and poultry products from a restricted state, enter US and US-2. If from another country, enter appropriate code.

Please see new guidelines to complete I.28.

Effective immediately, revised certification is required for meat preparations shipments transiting or being stored in the EU.

Veterinary Certificate for Meat Preparations for Transit/Storage is available in English, Spanish, Italian, French, German, and Netherlands.

See Guidelines to complete.

Certification is required for composite products transiting or being stored in the EU. Composite product is defined by the EU as "a foodstuff intended for human consumption that contains both processed products of animal origin and products of plant origin and includes those where the processing of primary product is an integral part of the production of the final product".

Composite products regulated by FSIS, including products containing processed egg components sourced from an FSIS inspected plant or eligible foreign country, can be certified for transit through the EU. Note that all FSIS inspected and passed egg products (or legally imported egg products) have been pasteurized to comply with the time and temperature requirements described in this certificate.

If the dairy products trigger the need for the certification statements marked through on the Veterinary Certificate for Composite Products for Transit/Storage, the exporter is to contact the Import/Export Program Development Staff at importexport@fsis.usda.gov or call (202) 720-0082.

Veterinary Certificate for Composite Product for Transit/Storage is available in English, Bulgarian, Estonian, French, German, Greek, Italian, Latvian, Lithuanian, Netherlands, Polish, Romanian, and Spanish.

See guidelines to complete.

Veterinary Certificate for transit/storage of specified pathogen-free eggs, meat, minced meat and mechanically separated meat of poultry, ratites and wild game-bird, eggs and egg products is available in English, Bulgarian, French, German, Lithuanian, Romanian, Greek, Italian, Netherlands, Polish, and Spanish.

Note: The letterhead transit certificate for fresh poultry meat and egg products is the same certificate. See Guidelines to complete.

The APHIS monthly certificate is no longer required for egg products transiting the EU.

Establishment management seeking approval of only the part of their plant that processes product for EU export can request partial plant approval for certain products under the following conditions:

The European Union official website where EU lists are published is available at https://webgate.ec.europa.eu/sanco/traces/output/non_eu_listsPerCountry_en.htm. Scroll to "United States" and click on the list of interest.

Originally posted here:
European Union - USDA Food Safety and Inspection Service