Economy of the European Union

2008/9 Schools Wikipedia Selection. Related subjects: Economics

Economy of the European Union
Currency	1 Euro (€) = 100 cents
Other currencies in member states Bulgarian lev • Czech koruna • Danish krone • Estonian kroon • Hungarian forint • Latvian lats • Lithuanian litas • Polish złoty • Romanian leu • Swedish krona • Slovak koruna • Pound sterling
Statistics
GDP ranking	1st (2006)
GDP ( PPP)	US $13.06 trillion (2006)
GDP growth rate	3.1% (2006)
GDP per capita	US $29,900 (2006)
GDP by sector (2006)	70.5% services 27.3% industry   2.1% agriculture
Inflation	1.9% (2007)
Population below poverty threshold	17%
Labour force	221.5 million
Labour force by occupation (2006)	67.0% services 27.3% industry   4.4% agriculture
Unemployment	7.0% (May 2007)
Sources:
Trading partners
Imports	US $1.466 trillion (2006)
Main import partners (2005) China, Japan, Russia, United States
Exports	US $1.33 trillion (ranking: 1st) (2006)
Main export partners (2005) China, Russia, Switzerland, United States
Public finances
Public debt	€ 7,240.8 billion (58.7% of GDP) (2007)
Public deficit	€ 109.5 billion (-0.9% of GDP) (2007)
Expenditure	€ 5,648.6 billion (2007)
Revenue	€ 5,537.6 billion (2007)
Note: The data in this section is derived from the combined public finance figures of each of the 27 EU member states Sources: Eurostat Data 2008

If it were considered as a single state, the economy of the European Union's twenty-seven member states would be the world's largest national economy. The EU accounts for 30.3% of the world's total GDP in 2005 ( World Bank figures).

Currency

The official currency of the European Union is the euro, used in all its documents and policies. The Stability and Growth Pact sets out the fiscal criteria to maintain for stability and (economic) convergence. The euro is also the most widely used currency in the EU, which is in use in 15 member states known as the Eurozone. All other member states, apart from Denmark and the United Kingdom which have special opt-outs, have committed to changing over to the Euro once they have fulfilled the requirements needed to do so - although Sweden also has an effective opt-out by choosing when or whether to join the European Exchange Rate Mechanism which is the preliminary step towards joining. The remaining states are committed to join the Euro through their Treaties of Accession.

Economic variation

Below is a table showing, respectively, the GDP ( PPP) and the GDP (PPP) per capita for the European Union and for each of its 27 member states, sorted by GDP (PPP) per capita. This can be used as a rough gauge to the relative standards of living among member states, with Luxembourg and Ireland the highest; Romania and Bulgaria the lowest. Eurostat, based in Luxembourg, is the Official Statistical Office of the European Communities releasing yearly GDP figures for the member states as well as the EU as a whole, which are regularly updated, supporting this way a measure of wealth and a base for the European Union's budgetary and economic policies. Figures are stated in euro. All data for 2007 are projections.

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

Member States	GDP (PPP) 2007 millions of euro	GDP (PPP) per capita 2007 euro	Percentage of EU27 average GDP (PPP) per capita
European Union	12,172,536	24,600	100%
1  Germany €	2,340,372	28,200	115%
2  United Kingdom	1,847,105	29,400	120%
3  France €	1,744,444	27,800	113%
4  Italy €	1,500,475	25,500	104%
5  Spain €	1,121,961	25,400	103%
6  Netherlands €	530,564	32,800	133%
7  Poland	525,277	15,143	55%
8  Belgium €	319,867	30,200	123%
9  Sweden	274,499	30,000	122%
10  Austria €	264,472	31,900	130%
11  Greece €	246,671	22,100	90%
12  Romania	208,220	9,700	39%
13  Czech Republic	207,174	20,100	82%
14  Portugal €	190,882	18,200	74%
15  Denmark	171,298	31,200	127%
16  Hungary	166,031	16,200	66%
17  Ireland €	157,070	35,700	147%
18  Finland €	153,595	28,900	117%
19  Slovakia	88,602	16,400	67%
20  Bulgaria	86,500	10,844	41%
21  Lithuania	50,241	15,000	61%
22  Slovenia €	44,040	21,800	89%
23  Latvia	33,630	14,900	61%
24  Luxembourg €	31,376	69,900	284%
25  Estonia	23,919	17,900	73%
26  Cyprus €	17,773	22,900	93%
27  Malta €	7,824	18,600	76%
Candidate countries: (not included in the EU total above)
Croatia	57,948	14,153	57%
Turkey	541,418	7,300	30%
Republic of Macedonia	13,897	6,900	28%

Source:GDP(PPP): EUROSTAT
PERCENTAGES: EUROSTAT( ). Recalculated manually to EU27.

Economies of member states

Economic performance varies from state to state. The Growth and Stability Pact governs fiscal policy with the European Union. It applies to all member states, with specific rules which apply to the eurozone members that stipulate that each state's deficit must not exceed 3% of GDP and its public debt must not exceed 60% of GDP. However, many larger members have consistently run deficits substantially in excess of 3%, and the eurozone as a whole has a debt percentage exceeding 60% (see below).

With the exception of Greece and Portugal, all countries with below average GNI per capita are those which joined the EU in May 2004 and all countries with above average GNI per capita come from the existing (pre-2004) member states.

The following table shows information relating to the member states of the European Union, ordered according to the 'Size' of their economies. (NB: Were the table ordered according to 'GDP per capita' this would perhaps better reflect the strength of an individual economy. But this is not how such tables are commonly structured).

The colours denote how a member state is performing relative to the rest of the European Union, above average (green) or below average (red). The smallest and greatest values in each column are emphasised. The 2007 data are IMF estimates made in April 2007.

Member State sorted by GDP	GDP in billions of US $ (2007)	GDP % of EU (2007)	Annual change  % of GDP	GDP per capita in PPP US $ (2007)	Public Debt % of GDP (2006)	Deficit % of GDP (2006)	Inflation % Annual (2007)	Unemp. % (2006)
European Union	15,183.4	100.0%	2.8	29 342	63.8	-2.6	2.2	7.5
Germany	3,080.6	19.4%	1.8	32,179	66.0	-3.7	2.0	7.8
United Kingdom	2,660.7	16.8%	2.9	36,568	41.6	-3.2	2.3	5.3
France	2,401.4	15.2%	2.0	31,873	65.6	-3.7	1.7	8.3
Italy	1,993.7	12.6%	1.8	31,694	105.8	-3.0	2.1	6.8
Spain	1,359.1	8.6%	3.8	28,445	48.9	-0.3	2.6	7.8
Netherlands	720.9	4.5%	2.9	36,240	55.7	-2.5	1.8	3.2
Sweden	423.6	2.7%	3.3	35,729	51.2	-1.4	1.8	5.5
Belgium	423.5	2.7%	2.2	35,693	95.6	-0.1	1.9	7.8
Poland	364.8	2.3%	5.8	15,894	43.6	-3.0	2.2	10.5
Austria	348.7	2.2%	2.8	37,536	65.2	-1.3	1.6	4.5
Greece	341.8	2.2%	3.8	27,360	106.5	-2.8	3.2	8.3
Denmark	302.6	1.9%	2.5	38,072	42.7	-2.8	2.0	4.7
Ireland	250.2	1.6%	5.0	46,786	29.9	-1.3	2.4	4.5
Finland	225.4	1.4%	3.1	36,324	43.6	-2.1	1.5	7.5
Portugal	211.7	1.3%	1.8	23,464	61.9	-2.9	2.5	7.4
Czech Republic	160.4	1.0%	4.8	24,679	37.4	-3.0	2.9	6.6
Romania	157.6	1.0%	6.5	10,661	21.2	-4.0	4.5	4.5
Hungary	125.0	1.0%	2.8	20,700	57.6	-4.5	6.4	7.9
Slovakia	69.3	0.8%	8.2	19,172	36.9	-2.9	2.4	10.8
Luxembourg	45.8	0.3%	4.6	84,507	7.5	-1.1	2.1	4.6
Slovenia	41.1	0.3%	4.5	25,266	29.4	-1.9	2.7	6.4
Bulgaria	35.8	0.2%	6.0	10,677	24.8	-4.0	5.3	7.8
Lithuania	35.4	0.2%	7.0	16,863	19.7	-2.5	3.5	6.1
Latvia	24.1	0.2%	10.5	17,364	14.4	-0.8	7.3	6.3
Cyprus	19.9	0.1%	3.9	31,053	62.3	-3.5	2.1	4.8
Estonia	19.6	0.2%	9.9	20,114	4.9	-1.8	4.8	4.2
Malta	6.2	0.1%	2.3	21,061	75.0	-5.2	2.4	6.8

Economic growth

The EU's share of Gross world product (GWP) is stable at around one fifth . GDP growth, though strong in the new member states, is being affected by sluggish growth in France, Italy and Portugal.

Estonia and Latvia, also referred to as the Baltic Tigers, have the highest GDP growth rates in the union and one of the highest in the world.

EU15 GDP growth rates

New member GDP growth rates

Member State  % GDP Growth 2005 2006 2007 2008  Austria 2.0 3.3 3.3 2.5  Belgium 1.4 3.0 2.6 1.9  Denmark 3.1 3.5 1.9 1.5  Finland 2.9 5.0 4.3 3.0  France 1.7 2.0 1.9 2.0  Germany 0.8 2.9 2.4 2.0  Greece 3.7 4.3 3.9 3.6  Ireland 5.9 5.7 4.6 3.0  Italy 0.1 1.9 1.7 1.3  Luxembourg 4.0 6.2 5.4 4.2  Netherlands 1.5 3.0 2.6 2.5  Portugal 0.5 1.3 1.8 1.8  Spain 3.6 3.9 3.7 2.7  Sweden 2.9 4.2 3.6 2.8  United Kingdom 1.8 2.8 3.1 2.3

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