The European Economy

© European Community

Through successive rounds of enlargement, the European Union - now with 27 member states - constitutes the largest common market in the world. Two-thirds of the EU's total trade volume takes place between the member states themselves. This is particularly advantageous for the German economy, with its strong orientation toward exports. In 2007, Germany exported goods with a total value of nearly 627 billion euros to other EU member states.

Along with the trade in goods, services are becoming an increasingly important component of the EU internal market. Services now account for 60-70% of economic activity within the EU and are therefore a crucial factor in the creation of jobs. The EU Services Directive went into effect on 12 December 2006 and must be transposed into national law by 28 December 2009. This Directive will help to eliminate the remaining legal and administrative barriers to the trade in services between the member states, and this in turn will foster the emergence of a genuine EU internal market for services.

An efficiently functioning internal market is a key precondition for ensuring that the EU's economic power continues to grow. This is because the internal market serves an essential building block for strengthening the international competitiveness of European companies. In this way, it safeguards jobs and thereby provides social security in this era of globalisation. As a result, the free movement of goods, services, capital and persons has helped to achieve a higher standard of living for over 490 million consumers in Europe. Today Europe's consumers can purchase goods at lower prices, take advantage of more services and travel more easily than they could 20 years ago. Thus the European economy - boosted decisively by a well-functioning internal market - forms a cornerstone of our economic and social well-being.