EU in Malaysia

The European Union (EU) is a political and economic union comprised of 28 Member States. The European Union was established under the Maastricht Treaty in 1993 and evolved from the European Coal and Steel Community (ECSC) and the European Economic Community (EEC) formed by six countries in 1957.

On 1 December 2009 the Treaty of Lisbon entered in force. It amends the EU and EC treaties providing a legal framework and tools necessary to meet future challenges and to respond to an increasing desire for more integration.

The Member States of the EU are: Austria, Belgium, Bulgaria, Cyprus, Croatia, the Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Italy Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Poland, Portugal, Republic of Ireland, Romania, Slovakia, Slovenia, Spain, Sweden and the United Kingdom. In July 2013, Croatia joined the EU and is the most recent country to join.

Another key to strengthening the Union is the institution of the internal market, one of the pillars of the EU since its completion in 1993. It provides 4 basic freedoms:

Free movement of goods, Free movement of services, Free movement of capital, Free movement of people

The internal market has also been facilitated by the common currency, the euro, which came into use in 2001 and has been adopted by the following countries: Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Malta, The Netherlands, Portugal, Slovakia, Slovenia and Spain.

Politics and Administration

The administrative set-up of the EU is unique and globally unparalleled: the countries that make up the EU remain independent sovereign nations but they pool their sovereignty in order to gain strength and influence none of them could have on their own. [1]

The European Council sets the EU's overall political direction – but does not pass law. Led by its President – currently Herman Van Rompuy – and comprising national heads of state or government and the President of the Commission, the Council meets for multiday sessions at least every 6 months.

There are 3 main institutions involved in EU legislation:

  1. European Parliament (EP), which represents the EU's citizens and is directly elected by them. Currently the President of the EP is Martin Schultz.
  2. Council of the European Union, which represents the governments of the individual member countries. The Presidency of the Council is shared by the Member States on a rotating basis.
  3. European Commission, which represents the interests of the Union as a whole. Currently the President of the EC is Josè Manuel Barroso and every Member State chooses a Commissioner.

This pooling of sovereignty means, in practice, that the Member States delegate some of their decision-making powers to shared supranational institutions, so that decisions on matters of joint interest can be made democratically at the European level.

This 'institutional triangle' produces the policies and laws that apply throughout the EU. In principle, it is the Commission that proposes new laws, but it is the Parliament avnd Council that adopt them. The Commission and the Member States then implement them, and the Commission ensures that the laws are properly taken on board.

Other important EU institutions include:

  1. European Central Bank – in charge of managing the regional monetary policies
  2. Court of Justice of the European Union – arbiter in disputes about European law European Court of Auditors – handling the financing of the EU
  3. European Economic and Social Committee - represents civil society, employers and employees
  4. ECommittee of Regions - represents regional and local authorities
  5. European Investment Bank - finances EU investment projects and helps small businesses through the European Investment Fund
  6. The European Ombudsman - investigates complaints about maladministration by EU Institutions and bodies.

From the political perspective, the EU has a Common Foreign and Security Policy. It primarily deals with security and defence considerations, but also includes external trade and commercial policy as well as foreign aid.[2]

The EU has its own foreign and security policy, enabling it to speak – and act – as one in world affairs.

Changes introduced by the Lisbon Treaty in 2009 make it easier for the EU to be more active and coherent in its approach. These changes include the appointment of an EU High Representative for Foreign Affairs and Security Policy, who coordinates with the EU countries to shape and implement foreign policy. The High Representative is assisted by civilian and military staff, the European External Action Service.


The EU is the largest economy in the world with 504 million consumers and an annual GDP of €12,268,387 million (2010) and in 2013 had a share of 28% of world GDP. With just 7% of the world's population, the EU's trade with the rest of the world accounts for around 20% of global exports and imports. The EU is the world's biggest exporter and the second-biggest importer.

Around two-thirds of EU countries' total trade is done with other EU countries.

The United States is the EU's most important trading partner, followed by China. In 2005, the EU accounted for 18.1% of world exports and 18.9% of imports.

The EU's population is highly urbanized, with some 75% of inhabitants (and growing, projected to be 90% in 7 states by 2020) living in urban areas. Furthermore, the EU's giant population represents the world's most lucrative consumer market, adding on to its strategic market value.

The EU has established two core institutions which are the secret behind its unparalleled economic attractiveness: a single market and a growing monetary union.

All 28 member countries form a single market across the whole. The founders of the EU shared a coherent economic policy view, with the Treaty of Rome calling for "a single internal market with no obstacles to trade and strong competition, as well as for multilateral liberalisation."[3] Ever since the EU's trade policy has been based on two pillars: multilateral liberalisation and regional integration.

The centralized decision-making process in foreign trade affairs enhances the economic attractiveness of the European Union. Beyond this, 17 of the EU Member States are simultaneously part of the eurozone, the monetary union of the EU. With the euro as a common currency, it streamlines their member's monetary policies.

[1] Official Website of the European Union. (2011). EU institutions and other bodies. Accessed on July 6th, 2011 from

[2] European Commission. (2010). The EU in the world: The foreign policy of the European Union. Accessed on July 6th, 2011 from

[3] Organization of Economic Cooperation for Development. (2000). The European Union's Trade Policies and their Economic Effects. Accessed on July 6th, 2011 from OECD: Geneva.

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