European Union: Economy#

Internally, the 28 EU member states have adopted the framework of a single market with free movement of goods, services and capital. Internationally, the EU aims to bolster Europe's trade position and its political and economic weight.

Despite great differences in per capita income among member states (from $13,000 to $82,000) and in national attitudes toward issues like inflation, debt, and foreign trade, the EU has achieved a high degree of coordination of monetary and fiscal policies. A common currency – the euro – circulates among 19 of the member states, under the auspices of the European Economic and Monetary Union (EMU). Eleven member states introduced the euro as their common currency on 1 January 1999 (Greece did so two years later). Since 2004, 13 states acceded to the EU. Of the 13, Slovenia (2007), Cyprus and Malta (2008), Slovakia (2009), Estonia (2011), Latvia (2014), and Lithuania (2015) have adopted the euro; 7 other member states - not including the UK nor Denmark, which have formal opt-outs - are required by EU treaties to adopt the common currency upon meeting fiscal and monetary convergence criteria.

The EU economy is slowly recovering from the 2008-09 global economic crisis and the ensuing sovereign debt crisis in the euro zone in 2011. The bloc posted moderate GDP growth in 2014 and 2015, but the recovery has been uneven. Some EU member states (Czech Republic, Ireland and Spain) have recorded strong growth while others (Finland, Greece) are struggling to shake off recession. The recovery has been buoyed by lower commodities prices and accommodative monetary policy, which has lowered interest rates and the euro’s foreign exchange value. Despite EU/IMF rescue programs in Greece, Ireland, Portugal, Spain and Cyprus, significant drags on growth remain, including high public and private debt loads, low domestic demand that discourages investment, aging populations, onerous regulations, and high unemployment. These factors - in combination with low oil prices - have subdued inflation in the euro zone despite the European Central Bank’s (ECB) efforts to spur more lending and investment through its asset-buying program and negative interest rates. The ECB in December 2015 stated it would widen its asset-buying program and extend it until March 2017 to fend off deflation and improve borrowing conditions in the euro zone.

Beyond the risk of deflation, the EU economy is vulnerable to a slowdown of global trade that would shrink the EU’s ample external trade surplus. Another round of financial market turmoil because of disagreements between bailed-out Greece and its euro-zone creditor could also be detrimental to a stronger EU recovery if it hurts consumer and investor confidence. To bolster economic growth and create jobs, EU leaders have moved forward with plans to use $28 (€21) billion in public money as seed capital to attract private investors to fund $421 €315 billion in infrastructure projects from 2015 to 2017, focusing on energy, broadband, transport, education, and research and innovation. They also are forging ahead on creating a capital markets union to ease the burdens of cross-border investment in the bloc. Externally, the EU continues to negotiate an ambitious and comprehensive free trade agreement with the US, the goal of which is to expand already large trade and investment flows.

Economic Facts#

GDP (purchasing power parity)$19.18 trillion (2016 est.)
$18.64 trillion (2015 est.)
$18.08 trillion (2014 est.)
note: data are in 2016 dollars
GDP (official exchange rate)$16.27 trillion (2015 est.)
GDP - real growth rate1.9% (2016 est.)
2.3% (2014 est.)
1.6% (2014 est.)
GDP - per capita (PPP)$37,800 (2016 est.)
$36,900 (2015 est.)
$35,900 (2014 est.)
note: data are in 2016 dollars
Gross national saving21.4% of GDP (2015 est.)
21.1% of GDP (2014 est.)
21% of GDP (2013 est.)
GDP - composition, by end usehousehold consumption: 58.2%
government consumption: 21.6%
investment in fixed capital: 17.3%
investment in inventories: 0.1%
exports of goods and services: 44.9%
imports of goods and services: -42.1% (2013 est.)
GDP - composition, by sector of originagriculture: 1.6%
industry: 25.5%
services: 73.6% (2016 est.)
Agriculture - productswheat, barley, oilseeds, sugar beets, wine, grapes; dairy products, cattle, sheep, pigs, poultry; fish
Industriesamong the world's largest and most technologically advanced regions, the EU industrial base includes: ferrous and non-ferrous metal production and processing, metal products, petroleum, coal, cement, chemicals, pharmaceuticals, aerospace, rail transportat
Industrial production growth rate1.5% (2016 est.)
Labor force232.9 million (2016 est.)
Labor force - by occupationagriculture: 5%
industry: 21.9%
services: 73.1% (2014 est.)
Unemployment rate9.5% (2015 est.)
9.4% (2015)
Population below poverty line9.8% note - see individual country entries of member states
Household income or consumption by percentage sharelowest 10%: 2.8%
highest 10%: 23.9% (2014 est.)
Distribution of family income - Gini index30.9 (2014 est.)
30.5 (2013 est.)
Taxes and other revenues45.2% of GDP (2014 est.)
Budget surplus (+) or deficit (-)-3% of GDP
Public debt86.8% of GDP (2014)
85.5% of GDP (2013)
Fiscal yearNA
Inflation rate (consumer prices)0.1% (2015 est.)
0.5% (2014 est.)
Central bank discount rate0.05% (31 December 2013)
0.3% (31 December 2012)
note: this is the European Central Bank's rate on the marginal lending facility, which offers overnight credit to banks in the euro area
Commercial bank prime lending rate0.32% (31 December 2014 est.)
0.56% (31 December 2013 est.)
Stock of narrow money$7.165 trillion (31 December 2013)
$7.422 trillion (31 December 2012)
note: this is the quantity of money, M1, for the euro area, converted into US dollars at the exchange rate for the date indicated; it excludes the stock of money carried by non-euro-area members of the European Union, e.g., UK pounds, Danish kroner, and Czech k
Stock of broad money$12.49 trillion (31 December 2012 est.)
$12.29 trillion (31 December 2011 est.)
note: this is the quantity of broad money for the euro area, converted into US dollars at the exchange rate for the date indicated; it excludes the stock of broad money carried by non-euro-area members of the European Union
Stock of domestic credit$21.71 trillion (31 December 2012 est.)
$21.29 trillion (31 December 2011 est.)
note: this figure refers to the euro area only; it excludes credit data for non-euro-area members of the EU
Market value of publicly traded shares$7.185 trillion (31 December 2014 est.)
$7.932 trillion (31 December 2013 est.)
$10.4 trillion (31 December 2012 est.)
Current account balance$351.9 billion (2015 est.)
$88.12 billion (2014 est.)
Exports$2.259 trillion (2014 est.)
$2.306 trillion (2013 est.)
note: external exports, excluding intra-EU trade
Exports - commoditiesmachinery, motor vehicles, pharmaceuticals and other chemicals, fuels, aircraft, plastics, iron and steel, wood pulp and paper products, alcoholic beverages, furniture
Exports - partnersUnited States 17.1%, China 8.5%, Switzerland 7.8%, Russia 7.2%, Turkey 4.4% (2013 est.)
Imports$2.244 trillion (2014 est.)
$2.238 trillion (2013 est.)
note: external imports, excluding intra-EU trade
Imports - commoditiesfuels and crude oil, machinery, vehicles, pharmaceuticals and other chemicals, precious gemstones, textiles, aircraft, plastics, metals, ships
Imports - partnersChina 16.1%, United States 11.4%, Russia 11%, Switzerland 5.9%, Norway 4.3% (2013 est.)
Reserves of foreign exchange and gold$740.9 billion (31 December 2014 est.)
note: $746.9 billion (31 December 2013)
Debt - external$13.05 trillion (31 December 2014 est.)
$14.14 trillion (31 December 2013)
Stock of direct foreign investment - at home$NA $5.148 trillion (2012)
$4.828 trillion (2011)
Stock of direct foreign investment - abroad$9.121 trillion (2012)
$8.721 trillion (2011)
Exchange rateseuros per US dollar -
0.9214 (2016 est.)
0.885 (2015 est.)
0.885 (2014 est.)
0.7634 (2013 est.)
0.7752 (2012 est.)