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The Republic of Austria is a landlocked country in central Europe. The capital of Austria is Vienna. The primary language of Austria is German.


Austrians are a homogeneous people; 91% are native German speakers. However, there has been a significant amount of immigrants, particularly from former Yugoslavia and Turkey, over the last two decades. Only two numerically significant autochthonous minority groups exist–18,000 Slovenes in Carinthia (south central Austria) and about 19,400 Croats in Burgenland (on the Hungarian border). The Slovenes form a closely-knit community. Their rights as well as those of the Croats are protected by law and generally respected in practice. Some Austrians, particularly near Vienna, still have relatives in the Czech Republic, Slovakia, and Hungary. About 74% of all Austrians are Roman Catholic. The church abstains from political activity. Small Lutheran minorities are located mainly in Vienna, Carinthia, and Burgenland. Small Islamic (immigrant) communities have arisen in Vienna and Vorarlberg.

  • Population (2007): 8,332,000.
  • Annual growth rate (2007): 0.4%.
  • Ethnic groups: Germans, Turks, Serbs, Croats, Slovenes, and Bosnians; other recognized minorities include Hungarians, Czechs, Slovaks, and Roma.
  • Religions: Roman Catholic 73.6%, Lutheran 4.7%, Muslim 4.2%, other 5.5%, no confession 12.0%.
  • Language: German about 90%.
  • Education: Years compulsory–9. Attendance–99%. Literacy–98%.
  • Health (2007): Infant mortality rate–3.6 deaths/1,000. Life expectancy–men 77.4 years, women 82.9 years.
  • Work force (2007, 4.2 million): Services–67%; agriculture and forestry–5%, industry–28%.


Since 2000 Austria has experienced some immigration from countries such as Turkey and Bosnia-Herzegovina, which increased the number of Muslims. The Muslim community more than doubled between 1991 and 2001 to 339,000, or 4.2% of the population. Estimates for 2007 indicate that there are approximately 400,000 Muslims in the country. In recent reporting periods immigration has slowed down due to the gradual introduction of a quota system in the late 1990s.<ref> According to U.S. State Department, "International Religious Freedom Report 2008"</ref>

According to the 2001 census, membership in major religious groups is as follows: Roman Catholic Church, 74%; Lutheran and Presbyterian Churches (Evangelical Church-Augsburger and Helvetic confessions), 4.7%; Muslim community, 4.2%; Jewish community, 0.1%; Eastern Orthodox (Russian, Greek, Serbian, Romanian, and Bulgarian), 2.2%; other Christian churches, 0.9%; and other non-Christian religious groups, 0.2%. Atheists account for 12%, and 2% do not indicate a religious affiliation.

According to a poll by the German market research institute FESSEL-GfK conducted in June and July 2007, 81% of respondents state that they belong to a church or religious group. Of that number, 2% attend services more than once a week, 10% attend weekly, 9% attend a minimum of once a month, 26% attend several times a year (on special occasions), and 53% nearly never attend.

The provinces of Carinthia (10.3%) and Burgenland (13.3%) have higher percentages of Protestants than the national average of 4.7%. The number of Muslims is higher than the national average of 4.2% in Vienna (7.8%) and the province of Vorarlberg (8.4%), where industry draws a disproportionately higher number of guest workers from Turkey and the former Yugoslavia.

The vast majority of groups termed “sects” by the Government are small organizations with fewer than one hundred members. Among the larger groups is the Church of Scientology, which claims between 5,000 and 6,000 members, and the Unification Church, with approximately 700 adherents. Other groups termed “sects” include Divine Light Mission, Eckankar, Hare Krishna, the Holosophic Community, the Osho Movement, Sahaja Yoga, Sai Baba, Sri Chinmoy, Transcendental Meditation, Center for Experimental Society Formation, Fiat Lux, Universal Life, and The Family.


The Austrian president convenes and concludes parliamentary sessions and under certain conditions can dissolve Parliament. However, no Austrian president has dissolved Parliament in the Second Republic. The custom is for Parliament to call for new elections if needed. The president requests a party leader, usually the leader of the strongest party, to form a government. Upon the recommendation of the Federal Chancellor, the president also appoints cabinet ministers.

The Federal Assembly (Parliament) consists of two houses–the National Council (Nationalrat), or lower house, and the Federal Council (Bundesrat), or upper house. Legislative authority resides in the National Council. Its 183 members serve for a maximum term of four years in a three-tiered system, on the basis of proportional representation. The National Council may dissolve itself by a simple majority vote or the president may dissolve it on the recommendation of the Chancellor. The nine state legislatures elect the 62 members of the Federal Council for 5- to 6-year terms. The Federal Council only reviews legislation passed by the National Council and can delay but not veto its enactment.

The highest courts of Austria's independent judiciary are the Constitutional Court; the Administrative Court, which handles bureaucratic disputes; and the Supreme Court, for civil and criminal cases. While the Supreme Court is the court of highest instance for the judiciary, the Administrative Court acts as the supervisory body over government administrative acts of the executive branch, and the Constitutional Court presides over constitutional issues. The Federal President appoints the justices of the three courts for specific terms.

The legislatures of Austria's nine Bundesländer (states) elect the governors. Although most authority, including that of the police, rests with the federal government, the states have considerable responsibility for welfare matters and local administration. Strong state and local loyalties have roots in tradition and history.

Principal Government Officials

  • Federal President–Heinz Fischer
  • Federal Chancellor–Werner Faymann
  • Vice Chancellor–Michael Spindelegger
  • Foreign Minister–Michael Spindelegger
  • Ambassador to the United States–Christian Prosl
  • Ambassador to the United Nations–Thomas Mayr-Harting

Political Conditions

Since World War II, Austria has enjoyed political stability. A Socialist elder statesman, Dr. Karl Renner, organized an Austrian administration in the aftermath of the war, and the country held general elections in November 1945. All three major parties–the conservative People's Party (OVP), the Socialists (later Social Democratic Party or SPO), and Communists–governed until 1947, when the Communists left the government. The ÖVP then led a governing coalition with the SPÖ that governed until 1966.

Between 1970 and 1999, the SPO governed the country either alone or with junior coalition partners. In 1999, the OVP formed a coalition with the right wing, populist Freedom Party (FPÖ). The SPÖ, which was the strongest party in the 1999 elections, and the Greens formed the opposition. The FPÖ had gained support because of populist tactics, and many feared it would represent right wing extremism. As a result, the European Union (EU) imposed a series of sanctions on Austria. The U.S. and Israel, as well as various other countries, also reduced contacts with the Austrian Government. After a period of close observation, the EU lifted sanctions, and the U.S. revised its contacts policy. In the 2002 elections, the OVP became the largest party, and the FPÖ's strength declined by more than half. Nevertheless, the OVP renewed its coalition with the FPÖ in February 2003. In national elections in October 2006, the SPÖ became the largest party, edging the OVP. On January 11, 2007, an SPO-led Grand Coalition took office, with the ÖVP as junior partner.

The Social Democratic Party traditionally draws its constituency from blue- and white-collar workers. Accordingly, much of its strength lies in urban and industrialized areas. In the 2006 national elections, it garnered 35.3% of the vote. In the past, the SPO advocated state involvement in Austria's key industries, the extension of social security benefits, and a full-employment policy. Beginning in the mid-1980s, it shifted its focus to free market-oriented economic policies, balancing the federal budget, and European Union membership.

The People's Party advocates conservative financial policies and privatization of much of Austria's nationalized industry. It finds support from farmers, large and small business owners, and some lay Catholic groups, mostly in the rural regions of Austria. In 2006, it received 34.3% of the vote. The Greens won 11.1% of the vote in 2006, becoming the third-largest party in parliament. The rightist Freedom Party traditionally had a base in classic European liberalism. However, after losing much of its support in the 2002 elections and suffering a split, the FPO won slightly more of the vote in 2006–11%–than it did in 2002, due to a populist, anti-immigration theme. The Alliance-Future-Austria (BZÖ) split from the FPÖ in 2005. All the FPÖ's Federal Ministers and most of its parliamentarians joined the BZÖ, and that party formally became the junior partner in the governing coalition. The BZO was unable to draw significant popular support away from the FPÖ, but managed to enter parliament in 2006 with 4.1% of the vote.

Foreign Relations

The 1955 Austrian State Treaty ended the four-power occupation and recognized Austria as an independent and sovereign state. In October 1955, the Federal Assembly passed a constitutional law in which “Austria declares of her own free will her perpetual neutrality.” The second section of this law stated that “in all future times Austria will not join any military alliances and will not permit the establishment of any foreign military bases on her territory.” The date on which this provision passed–October 26–became Austria's National Day. From then, Austria shaped its foreign policy on the basis of neutrality.

In recent years, however, Austria began to reassess its definition of neutrality, granting overflight rights for the UN-sanctioned action against Iraq in 1991, and, since 1995, contemplating participation in the EU's evolving security structure. Also in 1995, it joined the Partnership for Peace with NATO, and subsequently participated in peacekeeping missions in Bosnia.

Austrian leaders emphasize the unique role the country plays both as a trans-European hub and as a moderator between industrialized and developing countries. Austria is active in the United Nations and experienced in UN peacekeeping efforts. It attaches great importance to participation in the Organization for Economic Cooperation and Development and other international economic organizations, and it has played an active role in the Organization for Security and Cooperation in Europe (OSCE). Austria has participated in the UN-mandated International Security Assistance Force (ISAF) in Afghanistan since 2002. In August 2005, Austria deployed 93 soldiers to the northern Afghan city of Kunduz to help support the parliamentary and provincial elections. Austria has also participated in international reconstruction assistance efforts and has provided about 8.5 million euros since 2002 to combat drugs, to strengthen women's rights and for mine removal.

Vienna hosts the Secretariat of the OSCE and the headquarters of the International Atomic Energy Agency, the UN Industrial Development Organization, and the UN Drug Control Program. Other international organizations in Vienna include the Organization of Petroleum Exporting Countries, the International Institute for Applied Systems Analysis, the Comprehensive Test Ban Treaty Organization, and the Wassenaar Arrangement (a technology-transfer control agency).

Austria traditionally has been active in “bridge-building to the east,” increasing contacts at all levels with Central Europe and Russia. Austrians maintain a constant exchange of business representatives, political leaders, students, cultural groups, and tourists with the countries of Central Europe and Russia. . Austrian companies are active in investing and trading with those countries as well. In addition, the Austrian Government and various Austrian organizations provide assistance and training to support the changes underway in the region.


Austria has a well-developed social market economy with a high standard of living in which the government has played an important role. The government nationalized many of the country's largest firms in the early post-war period to protect them from Soviet takeover as war reparations. For many years, the government and its state-owned industries conglomerate played a very important role in the Austrian economy. However, starting in the early 1990s, the group broke apart, state-owned firms started to operate largely as private businesses, and the government wholly or partially privatized many of these firms. Although the government's privatization work in past years has been very successful, it still operates some firms, state monopolies, utilities, and services. The Schüssel government's privatization program further reduced government participation in the economy. The Gusenbauer government will not reverse privatizations, but does not plan to undertake any further privatizations. Austria enjoys well-developed industry, banking, transportation, services, and commercial facilities.

Some industries, such as several iron and steel works and chemical plants, are large industrial enterprises employing thousands of people. However, most industrial and commercial enterprises in Austria are relatively small on an international scale.

  • GDP (2007): $373.6 billion.
  • Real GDP growth rate (2007): 3.4%.
  • Per capita income (2007): $44,890.
  • Natural resources: Iron ore, crude oil, natural gas, timber, tungsten, magnesite, lignite, cement.
  • Agriculture (1.9% of 2007 GDP): Products–livestock, forest products, grains, sugarbeets, potatoes.
  • Industry (31.2% of 2007 GDP): Types–iron and steel, chemicals, capital equipment, consumer goods.
  • Services: 66.9% of 2007 GDP.
  • Trade (2007): Exports–$156.4 billion: iron and steel products, timber, paper, textiles, electrotechnical machinery, chemical products, foodstuffs. Imports–$155.9 billion: machinery, vehicles, chemicals, iron and steel, metal goods, fuels, raw materials, foodstuffs. Principal trade partners–European Union, Switzerland, U.S., and China.

Austria has a strong labor movement. The Austrian Trade Union Federation (ÖGB) comprises constituent unions with a total membership of about 1.2 million–about 31% of the country's wage and salary earners. Since 1945, the ÖGB has pursued a moderate, consensus-oriented wage policy, cooperating with industry, agriculture, and the government on a broad range of social and economic issues in what is known as Austria's “social partnership.” The ÖGB opposed the Schüssel government's program for budget consolidation, social reform, and fiscal measures that favor entrepreneurs. However, because of a scandal involving a bank the ÖGB owned, the ÖGB lost much of its political influence in the SPÖ.

Austrian farms, like those of other European mountainous countries, are small and fragmented, and production is relatively expensive. Since Austria became a member of the EU in 1995, the Austrian agricultural sector has been undergoing substantial reform under the EU's common agricultural policy (CAP). Although Austrian farmers provide about 80% of domestic food requirements, the agricultural contribution to gross domestic product (GDP) has declined since 1950 to about 2%.

Austria has achieved sustained economic growth. During the 1950s, the average annual growth rate was more than 5% in real terms and averaged about 4.5% through most of the 1960s. In the second half of the 1970s, the annual average growth rate was 3% in real terms, though it averaged only about 1.5% through the first half of the 1980s before rebounding to an average of 3.2% in the second half of the 1980s. At 2%, growth was weaker again in the first half of the 1990s, but averaged 2.5% again in the period 1997 to 2001. After real GDP growth of 0.9% in 2002, the economy grew again only 1.1% in 2003, with 2001-2003 being the longest low-growth period since World War II. In 2004, Austria's economy recovered and grew 2.4%, driven by booming exports in response to strong world economic growth, but it declined to 2.0% growth in 2005.

Primarily due to higher growth in Europe and continued export growth, Austrian GDP was a higher-than-expected 3.3% in 2006. Predictions are for the economy to grow 3.1-3.2% in 2007 and 2.5-2.8% in 2008.

Austria became a member of the EU on January 1, 1995. Membership brought economic benefits and challenges and has drawn an influx of foreign investors. Austria also has made progress in generally increasing its international competitiveness. As a member of the Economic and Monetary Union (EMU), Austria has integrated its economy with those of other EU member countries, especially with Germany's. On January 1, 1999, Austria introduced the new Euro currency for accounting purposes.

In January 2002, Austria introduced Euro notes and coins in place of the Austrian schilling. Economists agree that the economic effects in Austria of using a common currency with the rest of the members of the Euro-zone have been positive.

Trade with other EU-27 countries accounts for about 73% of Austrian imports and exports. Expanding trade and investment in the new EU members of Central Europe that joined the EU in May 2004 and January 2007 represent a major element of Austrian economic activity. Austrian firms have sizable investments in and continue to move labor-intensive, low-tech production to these countries. Although the big investment boom has waned, Austria still has the potential to attract EU firms seeking convenient access to developing markets in Central Europe and the Balkan countries.

Total trade with the United States in 2006 reached $12.0 billion. Imports from the United States amounted to $4.3 billion, constituting a U.S. market share in Austria of 3.3%. Austrian exports to the United States in 2006 were $7.6 billion, or 5.9% of total Austrian exports.


Austrian history dates back nearly 2,000 years, when Vindobona (Vienna) was an important Roman military garrison along the Danube. The city grew through the Middle Ages and in 788, the territory that is present-day Austria was conquered by Charlemagne, who encouraged the adoption of Christianity. In 976, Leopold von Babenberg became the first in his family to rule the territory; the Babenberg line of succession lasted until the death of Frederick II in 1246. There was a brief interregnum when the territory was ruled by Otakar II of Bohemia, but in 1276 Rudolf I defeated Otakar II at Dürnkrut and became the first Habsburg to ascend to the throne.

The Habsburg Empire

Although never unchallenged, the Habsburgs ruled Austria for nearly 750 years. Through political marriages, the Habsburgs were able to accumulate vast land wealth encompassing most of Central Europe and stretching even as far as the Iberian Peninsula. During the 16th Century, the Ottoman Empire gained strength and in 1529, the Ottoman army surrounded Vienna. The Habsburgs held their ground and the Ottomans retreated, to return again in 1683. This time, Vienna was successfully defended by Polish King Jan Sobieski III. To this day Austrians are still proud of defending their territory from the invading Ottomans.

Habsburg rule in Europe was particularly unsettled in the 18th and 19th Centuries, when various wars were fought over their landholdings. Emperor Charles VI (1711-1740) and his daughter Maria Theresa (1740-1780) ruled the Empire during these tumultuous times. Maria Theresa was only able to take the throne as a result of the Pragmatic Sanction, which allowed a female to ascend when there was no male heir. She became a great reformer within the Empire, advocating many changes, most notably in the educational system. Maria Theresa's son Josef II (1780-1790) continued many of her reforms and he himself has been described as an enlightened absolutist.

In 1848 Franz Josef I ascended to the throne and remained in power until his death in 1916. With a reign spanning from the Revolutions of 1848 to World War I, Franz Josef saw many milestones in Austrian history. The Compromise of 1867 allowed some minor sovereignty to the territory of Hungary and created what became known as the Dual Monarchy. Under the new system, Franz Josef remained the head of state (Emperor of Austria/King of Hungary), but the Hungarians were now permitted to have a parliament and legislate on their own.

The old Habsburg Empire slowly began to deteriorate in the beginning of the 20th Century. This deterioration culminated in the June 28, 1914, assassination of Archduke (and heir to the throne) Franz Ferdinand and his wife Sophia. This incident sparked the beginning of World War I and assured the end to the Habsburg domination of Central Europe. In 1919, the Treaty of St. Germain officially ended Habsburg rule and established the Republic of Austria.

Political Turmoil and the Anschluss

In the years leading up to the Nazi period, Austria experienced sharpening political strife among the traditional parties, which since 1918 had created their own paramilitary organizations. By the late 1920s and early 1930s, these organizations were engaged in strikes and violent conflicts. Unemployment rose to an estimated 25%. In line with similar trends among other Central European countries, a corporatist and authoritarian government came into power in Austria under Engelbert Dollfuss, who abolished existing political parties and Austria's Constitutional Court. The Social Democrats, now excluded from the political process, took up arms, and a brief civil war ensued in February 1934. Austrian National Socialists (NS) launched an unsuccessful coup d'etat in July 1934 and murdered Dollfuss. The Nazi leaders were, however, arrested, tried, and received death sentences. Following this unsuccessful coup, the Austrian President asked an ultra-conservative Christian Social leader, Kurt Schuschnigg, to form a government. Like Dollfuss, Schuschnigg sought to appease his neighbors and, at the same time, obtain support from Britain and France against pressures from Hitler's Germany, but without success due to the authoritarian trends in Austria and Austria's poor reputation. In February 1938, under renewed threats of military intervention from Germany, Schuschnigg was forced to accept Austrian National Socialists (Nazis) in his government. On March 12, Germany sent its military forces into Austria, an action that received enthusiastic support among most Austrians, and Schuschnigg was forced to resign. He and many other political leaders were arrested and imprisoned until 1945.

The Holocaust in Austria

The dissolution of the Austrian Empire and consequent loss of territory following World War I, as well as the political strife of the 1930s, set the stage on March 13, 1938, for Germany's Anschluss (“Annexation”) of Austria and the beginning of the Nazi period, the darkest chapter in Austria's history, during which most of the Jewish population of the country was murdered or forced into exile. Other minorities, including the Sinti and Roma, homosexuals, and many political opponents of the Nazis also received similar treatment. Prior to 1938, Austria's Jewish population constituted 200,000 persons, or about 3 to 4 percent of the total population. Most Jews lived in Vienna, where they comprised about 9 percent of the population. Following the Anschluss, the Germans rapidly applied their anti-Jewish laws in Austria. Jews were forced out of many professions and lost access to their assets. In November 1938, the Nazis launched the Kristallnacht pogrom in Austria as well as in Germany. Jewish businesses were vandalized and ransacked. Thousands of Jews were arrested and deported to concentration camps. Jewish emigration increased dramatically. Between 1938 and 1940, over half of Austria's Jewish population fled the country. Some 35,000 Jews were deported to the ghettos in Central Europe. Some 67,000 Austrian Jews (or one-third of the total 200,000 Jews residing in Austria) were sent to concentration camps. Those in such camps were murdered or forced into dangerous or severe hard labor that accelerated their death. Only 2,000 of those in the death camps survived until the end of the war.

Post World War II

At the Moscow conference in 1943, the Allies declared their intention to liberate and reconstitute Austria. In April 1945, both Eastern- and Western-front Allied forces liberated the country. Subsequently, the victorious allies divided Austria into zones of occupation similar to those in Germany with a four-power administration of Vienna. Under the 1945 Potsdam agreements, the Soviets took control of German assets in their zone of occupation. These included 7% of Austria's manufacturing plants, 95% of its oil resources, and about 80% of its refinery capacity. The properties returned to Austria under the Austrian State Treaty. This treaty, signed in Vienna on May 15, 1955, came into effect on July 27, and, under its provisions, all occupation forces departed by October 25, 1955. Austria became free and independent for the first time since 1938.

Compensation Programs and Acknowledgement of its Nazi Role

During the immediate postwar period, Austrian authorities introduced certain restitution and compensation measures for Nazi victims, but many of these initial measures were later seen as inadequate and containing flaws and injustices. There is no official estimate of the amount of compensation made under these programs. More disturbing for many was the continuation of the view that prevailed since 1943 that Austria was the “first free country to fall a victim” to Nazi aggression. This “first victim” view was in fact fostered by the Allied Powers themselves in the Moscow Declaration of 1943, in which the Allies declared as null and void the Anschluss and called for the restoration of the country's independence. The Allied Powers did not ignore Austria's responsibility for the war, but nothing was said explicitly about Austria's responsibility for Nazi crimes on its territory. With the collapse of the Soviet Union in 1991, greater attention was given in many countries to unresolved issues from World War II, including Austria. On November 15, 1994, Austrian President Thomas Klestil addressed the Israeli Knesset, noting that Austrian leaders “… spoke far too rarely of the fact that some of the worst henchmen of the NS dictatorship were in fact Austrians. …. In the name of the Republic of Austria, I bow my head before the victims of that time.” Since 1994, Austria has committed to providing victims and heirs some one billion dollars in total compensation.

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European Union

The European Union (EU) is an experiment in globalism, combining very different cultures and nations into one legal, political and economic union of 28 European countries. It was formed in 1993 with the ratification of the Maastricht Treaty, though its predecessor, the European Economic Community, was founded in 1957. It is not the same as “Europe”, though most European nations have joined the EU.

As a set of institutions, the EU has more powers over its member states and their citizens than other international bodies; many of its competencies are supranational (above the member states) rather than intergovernmental (between them). Despite having a legal personality and sovereignty in agreed areas, it is not regarded as a federation or state in its own right: rather, it stands somewhere between these two points. Fifteen member states use a common currency, the euro<ref>Five other states formally agree to use it, and four others use it without formal agreement.</ref>.

There is no EU military. Each nation has its own forces, but nearly all are members of NATO, in which the U.S. has a preponderant voice.

The EU is a driving force of global economic and political integration, but Hix (2008) sees three problems with the EU: policy gridlock, lack of popular legitimacy and the democratic deficit. He notes, “In substantive terms … the EU is closer to a form of enlightened despotism than a genuine democracy.”<ref> Hix (2008) </ref>


Each nation elects members to the Parliament in proportion to population. The June 2009 elections saw sweeping gains by conservative and anti-immigration parties, as labor and socialist parties lost heavily. Since the 2004 elections the largest grouping has for the last five years been the centre-right European People's Party EPP (288 seats out of a current 785), followed by the centre-left PES (216) and the liberal ALDE (100). With the 2009 election EPP made gains and retains power in the parliament.

Conservative Jose Manuel Barroso, who will have a second term as European Commission president, thanked voters and assured them their voices would be heard.

In 2009 The British Labour Party, Germany's SPD (Social Democrats) and France's Socialist Party suffered historic defeats–the worst defeat for Labour in Britain in a century..

Turnout was at an all-time low in some countries, including France (41%) and Germany (42%).


The European Commission

In September 2009 Jose Manuel Barroso, was re-elected as president of the European Commission after the European Parliament voted to give him a second term. This ended weeks of uncertainty during which Socialist, Green and Liberal critics tried to block Mr Barroso's candidacy on the grounds that he had yielded too much power to national governments and promoted the kind of free-market liberalism that led to the financial crisis.

The role and responsibilities of the European Commission place it at the centre of the EU's decision-making process. Acting as the EU's policy and executive engine, the Commission is composed of 28 Commissioners, one from each state, and is supported by a substantial staff located primarily in Brussels, Belgium. In matters relating to economic integration (“First or 'Community' Pillar”), only the Commission has the right to propose legislation for approval by the EU Council and European Parliament. As “guardian of the Treaties,” the Commission ensures that EU laws are applied and upheld throughout the EU, prosecuting member states and other institutions for failing to follow treaty precepts or otherwise apply Community law. The Commission has full authority to enforce Community competition policy, and its policing of implementation of Community legislation preserves the integrity of the EU single market. The Commission likewise manages and develops the Common Agriculture Policy (CAP), implements the budget, and represents the European Community in its areas of competence, notably including international trade negotiations.

The Commission President is appointed by agreement of the EU heads of government and is subject to approval by the European Parliament. Commissioners serve for a renewable five-year term. New Commissioners are identified by member state governments in consultation with the President-designate of the Commission and are normally put in place at the beginning of the term of the Commission President. The entire Commission must be confirmed as a collective whole by the European Parliament before its formal appointment by common accord of EU governments.

The European Council

The European Council brings together EU heads of government and the President of the European Commission; foreign ministers of member states also participate. Finance ministers are normally included when the leaders discuss questions related to the euro and the economy. The European Council meets at least twice a year, usually quarterly, at the end of each Presidency, to review major EU projects, set guidelines for policies and provide necessary guidance. The Presidency of the Council rotates every six months among EU member states (January&ndash;June; July&ndash;December). Its role has become increasingly important with the expansion of EU responsibilities and competencies. The Presidency organises and presides over the meetings of the European Council and EU Council (ministerial) meetings, drafts compromises, and seeks solutions to problems submitted to the European Council.

Council of Ministers

The Council of Ministers of the European Union (the “EU Council”) is the body in which representatives of the individual member state governments, usually ministers, legislate for the EU, set its political objectives, coordinate national policies and resolve differences among their governments and with other EU bodies. Legally speaking, there is only one Council, but it meets in nine different formations, depending on the matters on its agenda. Foreign ministers usually meet at least once a month in the General Affairs and External Relations Council (GAERC), which deals with major foreign policy issues and plays a coordinating role. Ministers for the Economy and Finance (ECOFIN) and ministers responsible for agriculture also hold monthly meetings. Ministers for Justice and Home Affairs (JHA) hold regular meetings to coordinate policies within their competence.

The Council holds formal sessions in its Brussels headquarters, except in April, June and October, when all sessions take place in Luxembourg. Most formations of the Council also meet informally (tasking no legally binding decisions) in the country holding the EU Presidency, usually once in the course of the Presidency's six-month term. The most prominent of these informal meetings is the so-called “Gymnich” meeting of foreign ministers, named for a town in Germany where the first such meeting took place.

The Council takes most decisions under the Community Pillar by qualified majority voting (QMV) but endeavours to reach the broadest possible consensus before approving legislation. Unanimity is required for a number of specific areas related to economic integration (e.g. taxation), constitutional matters such as amendments to the treaties, the launching of a new common policy, the accession of a new member state, and matters falling within the EU's Common Foreign and Security Policy, European Security and Defence Policy, and aspects of law enforcement and judicial cooperation. The number of votes cast by each member state when the EU Council votes by qualified majority voting was determined by the Nice Treaty and roughly correlates to the size of its population.

The [[European Parliament]]

The European Parliament is the largest trans-national parliament in the world, and the second-largest overall (behind India), with an electorate of almost half a billion. Members of the Parliament are directly elected by all EU citizens for five-year terms; elections follow national election procedures, except they have to be a form of proportional representation. Members do not sit in national delegations; rather, they sit in groups according to political affiliation (including Socialists, Christian Democrats/Conservatives, Liberals, Greens, et cetera).

Parliament's powers have gradually grown with the entry into force of the Single European Act (1986), the Maastricht Treaty (1993) and the Treaty of Amsterdam (1999). Parliament shares decision-making power on an equal footing with the Council in many areas under the Community Pillar to which the “co-decision procedure” applies. The European Parliament is one of the two branches with budgetary authority &ndash; the Council is the other. The signature of the EP president brings the overall EU budget into effect.

The European Parliament also plays a role in the process of selecting the President and other members of the Commission. The European Council's nomination of the President is subject to approval by the Parliament. The EP holds U.S.-style public hearings of Commission nominees before taking a formal vote to approve the nomination of the Commission as a body. Parliament has the power to censure the entire Commission, but not to dismiss individual Commissioners.

The European Court of Justice

The European Court of Justice (ECJ) ensures uniform interpretation and application of both the Treaties establishing the European Communities and the secondary legislation and other law adopted under their authority. To enable it to carry out that task, the Court has wide jurisdiction to hear various types of cases. For example, the Court has the authority to hear and issue binding judgements in lawsuits that seek to annul a law adopted by the EU, to compel an EU institution to act, or to require that a member state comply with EU law. The ECJ may issue clarifications of EU law (in response to a request for a preliminary ruling from any member state court) and hears appeals on legal questions arising out of cases at the Court of First Instance. The ECJ currently has 28 justices and eight advocates-general, who are appointed by common accord of the governments of the member states and who hold office for six-year renewable terms.


The member states of the European Union fall under the jurisdiction of the Union's legislative and judicial institutions (the Court of Justice, the Commission, the Council and the Parliament) in those competences that they have conferred to the Union (the principle of subsidiarity). Similar to Federal Law trumping State Law in United States politics, EU member states are obliged to follow the laws set forth by the European Court of Justice, even if their national laws are contradictory. This system of government pools sovereignty in those agreed areas from the nation, and rests it in the EU institutions. Some political theorists argue that the EU is thus the death of the nation, as by the Treaty of Westphalia, nations are defined by their right of self-sovereignty; however, each member state has a legal right to cede from the EU, which non-sovereign components of states do not.


See also: Eurozone Crisis

The institutions of the European Union were originally created to oversee the operation of the several economic communities that later became the Single European Market. Even as the EU's political integration has continued, the area of greatest integration has always been in the economic sphere: goods, capital, and labour move freely between member states (with exceptions for goods which pose a public health risk), businesses in all member states are increasingly subject to common basic rules, and fifteen of the 28 member states use a common currency, the euro. The rest of the states are legally obliged to adopt the euro when their economies meet strict Convergence Criteria. The fifteen euro-area countries share a common monetary policy administered by the European Central Bank in Frankfurt, Germany. The EU strives to eliminate internal barriers to the free flow of goods, services, labour, and capital, and to promote the overall convergence of living standards. Internationally, the EU aims to strengthen Europe's trade position and capitalise on the political and economic leverage that a large, unified market brings.


The EU is the world's largest economic area (the U.S. is second) with a 2007 GDP of $16.6 trillion. Growth in many member states has been slow; between 2001 and 2003, the overall growth rate dropped from 1.8 percent to 1.0 percent, then recovered in 2004 to 2.4%, fell to 1.8 percent in 2005, then rose to 2.8% in 2006 and 2.4% in 2007. Within the euro area, growth varies as much as 4.5 percentage points between the fastest and slowest-growing economies: in 2005, the economies of Germany, France and Italy, grew by less than two percent. Growth remains strong in the new Central European member states with rapidly industrialising economies.

In spring 2000, the EU committed to a ten-year strategic goal of transforming the EU into a more competitive, knowledge-based economy capable of sustaining higher levels of growth. Focusing on labour market reform, macroeconomic and fiscal policy, and promotion of e-commerce and entrepreneurship, the EU's “Lisbon Agenda” was an attempt to stimulate growth while remaining committed to the EU social model. Some suggest that it has so far failed to achieve its goals in large part because national governments (which retain authority over employment policy, immigration, large public sector workforces, entitlement programs and pensions) have not completed the necessary reforms, with unemployment at 6.9 percent in 2007. The European Commission re-launched the Lisbon Agenda in March 2005, promising three percent growth and six million new jobs by 2010. The revamped strategy focuses on developing political consensus within member states to make the changes necessary to complete elimination of barriers in the internal market, reduce the regulatory burden on business, improve labour market flexibility, provide incentives to work and increase investment in human capital.

Fiscal and Monetary Policy

Introduced in 1999, the euro is currently the official currency of fifteen of the 28 EU member states. The United Kingdom, Denmark and Sweden chose to retain their national currencies, and some of the newer EU members have yet to meet the strict economic conditions required to adopt the euro. Prior to the euro's launch in 1999, national currency exchange rates of countries intending to join the euro were fixed within an Exchange Rate Mechanism. Following the January 2002 introduction of euro notes and coins into general circulation, national currencies were removed from circulation. Each of the euro area countries agreed to abide by a shared fiscal policy rule book known as the Stability and Growth Pact (SGP). This agreement generally obliges national governments to limit government budget deficits to 3 percent of GDP and established a target debt-to-GDP ratio of below sixty percent. Although enforcement actions have been forgiving – France and Germany, for example, avoided sanctions despite missing SGP targets – countries violating the SGP are technically subject to sanctions by the European Commission. As of March 2005, national governments have been granted budget leeway to achieve structural reforms and to combat prolonged stagnation, negative growth or other factors, such as the cost of German reunification or state pensions. The revised standards still require deficits to remain close to the targets; they may only temporarily exceed the three percent limit.

The euro area's monetary policy is set by the European Central Bank (ECB), which must devise a monetary policy to accommodate a wide range of domestic policies and economic conditions within the euro area. The Treaties require that the ECB's primary objective be to maintain price stability (i.e., to keep inflation low). Euro area national governments have sometimes criticised the ECB for guarding against inflation at the expense of interest rate flexibility that could enable struggling economies to gain traction. The ECB's consistent overnight interest rate of two percent has been credited with creating favourable conditions for growth in Spain and Ireland, but has been blamed for hindering growth in France, Germany, Italy, and Portugal. Non-EU countries have also adopted the euro, including Andorra, United Kingdom base areas, Kosovo, Monaco, Montenegro, and the Vatican City. Additionally, several countries have currencies pegged to the euro, including French African states and those in the Exchange Rate Mechanism.


The EU is the world's largest exporter of goods and services. In 2003, the then fifteen EU members exported $987 billion worth of goods to non-EU countries. The EU's exports grew rapidly between 1996 and 2000 but have grown more slowly since. Except for 2002, the EU as a whole has posted a trade deficit every year since 1999; it was $62 billion in 2004. The EU is a major exporter of chemicals, transport equipment, and industrial machinery. The EU has large trade deficits in raw materials and energy, and a small deficit in food and drink.

The U.S. is the EU's main trading partner by a wide margin. U.S. goods and services exports to the EU reached $283 billion in 2004, while U.S. goods and services imports from the EU totalled $388 billion. Asian economies such as Japan and China, however, account for an increasingly important share of EU trade. The EU's two-way merchandise trade with China grew to $223 million in 2004, while merchandise trade with Japan was $149 million. Internal trade between euro area and non-euro area countries was down one percent in the first quarter of 2005, but the EU's external trade was up four percent, particularly with Russia and Norway.

Member states have given almost exclusive authority to the EU to negotiate binding international trade treaties. The European Community (EC) is a full member of the World Trade Organisation and plays an active role in the Doha Development Round to foster international trade in services and agricultural products. Bilaterally, the EC maintains framework agreements to facilitate trade flows with thirty-five countries worldwide, mostly elsewhere in Europe, in North Africa, and in the Middle East.

Foreign Direct Investment

The EU is both a major destination for foreign direct investment (FDI) and a major source of FDI. U.S. foreign direct investment in the EU totalled $83.3 billion in 2004; EU FDI into the U.S. totalled $46.6 billion. Following strong year-upon-year growth in the late 1990s, however, inward and outward flows of FDI have contracted since 2001. The EU is a net recipient of FDI from Japan, receiving $81 billion in 2003. Conversely, the EU is a net investor in Canada ($86 billion in outward investment in 2003), and China ($29 billion in outward investment in 2003). Growth of intra-EU FDI has increased rapidly in recent years and has increased much faster than FDI in non-EU countries.

The pattern of foreign investment by European firms reflects deep commercial ties with the United States. U.S. and EU businesses invest heavily and operate profitably on both sides of the Atlantic. U.S. affiliates in Europe accounted for 56 percent of the aggregate output of U.S. affiliates worldwide. European firms were the largest foreign investors in 44 U.S. states and the second largest foreign investor in the remaining six. Sales by U.S. affiliates in Europe totalled $1.5 trillion in 2002, more than double those of U.S. affiliates in the Asia/Pacific region. European affiliate sales in the U.S. were $1.2 trillion in 2002, more than three times the value of U.S. imports from Europe.

Intra-firm trade involving foreign affiliates is particularly important to the transatlantic trade and investment relationship. Approximately 58 percent of U.S. imports from the EU in 2004 involved trade between related parties, as did 30 percent of U.S. exports to Europe in 2003. This high level of intra-firm trade has contributed to the persistence of the U.S. trade deficit with Europe even as the dollar has lost value against the euro since 2002.


The EU's budget is composed of member state contributions. Equivalent to roughly one percent of the member states' combined gross national income (GNI), it was $123 billion in 2005. The UK receives a rebate for some of its contribution, as the CAP benefits the UK less than other states. In June 2005, the EU failed to agree on a budget plan for 2007 through 2013, due in part to a disagreement between the UK and France over the persistence of the UK budget rebate and the funding of the Common Agricultural Policy (CAP). Costs attributable to the CAP constitute the EU's largest annual budget item, benefiting farmers across the EU, especially in France. Payments to net-recipient member states, designed to reduce economic and social disparities among EU countries and regions, are another budget item which has become more contentious with the accession of ten new states poorer than the EU average.


A significant number of Europeans on the political right of centre are opposed to the EU on the grounds that it undermines national sovereignty and identity. The term “eurosceptic” has risen in popularity in Britan to describe these people, and among them are such members as the former British Prime Minister Margaret Thatcher (although, while in power, she committed Britain to the 1986 Single European Act, a major integrationist measure). They also, however, include less well-respected politicians belonging to far right or nationalist parties, such as France's Jean-Marie Le Pen. There are also extreme left-wing opponents of the European Union, such as Die Linke in Germany, who regard it as constituting an anti-progressive “Fortress Europe”, and claim that EU membership impedes countries from following socialist policies.


In 2013 the European Union forced their 28 members not to cooperate with Israeli entities in the West Bank and East Jerusalem.<ref></ref>


Following World War II, traditional European rivals sought to solidify peace by bringing their nations together under a common institutional structure. Influenced by his compatriot Jean Monnet, French Foreign Minister Robert Schuman officially tabled a plan on May 9, 1950 to pool French and German coal and steel production under an organisation that would be open to other European countries. German Chancellor Konrad Adenauer supported this proposal, and six founding countries – Belgium, France, Germany, Italy, Luxembourg and the Netherlands – took an early step toward European integration by establishing the European Coal and Steel Community (ECSC) in 1951.

After failing to establish a European Defence Community in the 1950s, the six countries then decided to set up a common market. With the entry into force of the 'Treaty of Rome in 1957, they created the European Economic Community (EEC), with an objective of liberating the movement of goods, capital, workers and services. (The European Atomic Energy Community (EURATOM) was also established at this time.) The Treaty of Rome established the basic institutions and decision-making mechanisms still in place in today's European Union. in 1968, the EEC abolished customs duties between member states on manufactured goods. New policies, including a common agricultural policy (CAP) and a common trade policy, were in place by the end of the 1960s.

The success of the European integration project during a period of steady economic growth in the 1960s set the stage for a first enlargement &ndash; the accession of Britain, Ireland and Denmark &ndash; in 1973. Further “deepening” of European integration followed: the Community acquired executive authority in social, regional, and environment policies. The benefits of economic convergence became more evident in the context of the 1970s energy crisis and financial turmoil, which led to the launch of the European Monetary System in 1979. In the same year, the first direct elections to the European Parliament (EP) took place. Previously, delegates from national parliaments had represented their country's legislative bodies at the EP in Strasbourg, France.

The Community further expanded southward with the accession of Greece (1981, the second enlargement), followed by Spain and Portugal (1986, the third enlargement). These accessions led the EEC to adopt “structural programs” in order to reduce economic and social disparities among its regions.

During the 1960s and 1970s, the Community began to assert itself on the international scene with the conclusion of agreements with southern Mediterranean countries. Starting in 1963, the EEC signed four successive Lome Conventions, which guaranteed trading advantages and development aid for member states' former colonies in Africa, the Caribbean, and the Pacific (ACP).

World recession and internal disputes over member states' financial burdens gave way, from 1985 onward, to renewed efforts for economic integration, enshrined in the 1985 “Single European Act” (SEA) and marked by the 1992 “Single Market Project.” The SEA set January 1, 1993 as the date by which an internal single market was to be established and, by extending the practice of majority voting rather than unanimity in the EU Council, gave Community institutions the means of adopting the 300 Community-wide Directives required to abolish the remaining barriers and obstacles to intra-Community trade. In 1995, the Community entered into the “Barcelona” partnership with twelve southern Mediterranean countries. The partnership, reinforced by agreements on social, cultural, and human cooperation, was intended to lead to a free-trade area.

The collapse of the Berlin Wall and German unification prompted member states to negotiate the 1992 Treaty on European Union (the “Maastricht Treaty”). In addition to establishing the European Union, the Maastricht Treaty set an ambitious program of further integration: establishment of Economic and Monetary Union (EMU) by 1999 (part of the “First or 'Community' Pillar”), setting up of a Common Foreign and Security Policy (CFSP) (“Second Pillar”); and cooperation on Justice and Home Affairs (JHA) (“Third Pillar”). Shortly thereafter, in 1995, Austria, Finland and Sweden joined the EU &ndash; the fourth enlargement.

Signed in 1997 and entering into force on May 1, 1999, the Amsterdam Treaty partially streamlined the EU institutional structure. Its most significant effects were: (1) to transfer aspects of Justice and Home Affairs policy to the Community Pillar, enabling the Commission to propose decisions to be taken by the EU Council by qualified majority voting instead of by consensus, and (2) to establish a High Representative for the CFSP (who also serves as Secretary-General of the Council Secretariat). Ten countries in Central Europe and Cyprus began accession procedures in 1997, followed by Malta. The prospect of eastward enlargement raised significant resource concerns and prompted the adoption in March 1999 of the “Agenda 2000” package, which covered amendments to the CAP and EU structural policies, as well as a budgetary framework through 2006.

In May 1998, EU heads of government officially designated eleven member states eligible to adopt a single currency. Britain and Denmark “opted out.” On January 1, 1999, the euro became the official currency of the EU, and the European Central Bank (ECB) put euro notes and coins into circulation in 2002. Today, fifteen countries use the euro: Austria, Belgium, Cyprus, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Malta, the Netherlands, Portugal, Slovenia and Spain.

Streamlining the size and procedures of EU institutions to make the expanded EU more efficient was also an aim of the 2003 Treaty of Nice.


In 2004, Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia, and Slovenia joined the EU, and in 2007 Bulgaria and Romania acceded, bringing total membership to 28. Candidate countries currently include Turkey, FYR Macedonia and Montenegro, Serbia, and potential candidates include the rest of the Western Balkan states.

In October 2004, member states signed an EU Constitutional Treaty designed to replace all previous treaties. French and Dutch voters rejected the treaty through referendums in 2005, thereby suspending the ratification process. In 2007, a modified Treaty of Lisbon was agreed upon, which retains most of the reforms of the Constitution, but amends rather than replaces previous treaties.

At the late 2009 the European sovereign-debt crisis started. Greece, Ireland, Portugal, Cyprus, Spain and Italy are most affected.

Candidates for membership

There are three official candidates being considered for membership, Turkey, Iceland, Montenegro, Serbia and Macedonia. The western Balkan states of Kosovo, Bosnia-Hercegovina and Albania are officially potential candidates. A country that is expected to accede is required to make some economic, social and governmental changes to bring it in line with other member states.

The status of Turkey is highly controversial. It has repeatedly applied to join the EU but has been rejected each time on numerous grounds. Despite being one of the first countries to join the post-war Council of Europe and being a key regional power with a strong military Turkey has a long list of obstacles to overcome before accession. Many nations have cited its poor relations with other countries such as Cyprus, as well as its views on the rights of women and the Turkish Penal Code which includes the notorious Article 301. Article 301 is a recent piece of legislation that provides that “a person who publicly insults the Turkish nation, the State of the Republic of Turkey, or the Grand National Assembly of Turkey, shall be punishable by imprisonment of between six months and two years”. Turkey's population of 70 million would make it one of the largest states in the EU with the second-highest amount of MEPs, and would be the first Muslim-majority state in Europe. Britain supports admission while France is strongly against Turkey's membership.

Gateway to the European Union (EU official website) <ref></ref>

Member states


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Further reading

  • Cini, Michelle, and Nieves Perez-Solorzano Borragan, eds. European Union Politics (2009)
  • Craig, Paul and Gráinne de Búrca. EU Law, Text, Cases and Materials (4th ed. 2007)
  • Dinan, Desmond. Europe Recast: A History of European Union' '(2004).
  • Hix, Simon. What's Wrong with the Europe Union and How to Fix It (2008) excerpt and text search
  • Kaiser, Wolfram. Christian Democracy and the Origins of European Union (2007)
  • Peterson, John, and Michael Shackleton eds. The Institutions of the European Union (2nd ed. 2006)
  • McCormick, John. The European Union: Politics and Policies (2007)
  • Pinder, John, and Simon Usherwood. The European Union: A Very Short Introduction (2008) excerpt and text search
  • Podmore, Will & Nicholls, Doug (2006), The EU: bad for Britain - a trade union view. Bread Books, ISBN 0-942112-5-1.
  • Staab, Andreas. The European Union Explained: Institutions, Actors, Global Impact (2008) excerpt and text search
  • Yesilada, Birol A. and David M. Wood. The Emerging European Union (5th ed. 2009)

European Politics European History

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