Europe's biggest financial centres both sit outside the European Union
The European Union is the world's second-largest economy by nominal output, behind only the United States, yet the continent's two largest financial hubs, London and Zürich, lie beyond its borders. Within the bloc, Frankfurt and Luxembourg lead in finance, and Paris is the economic heavyweight with output above a trillion dollars.
Measured by purchasing power, the EU ranks third and produces about a sixth of global output. Germany, France, Italy and Spain are its largest economies, and Germany and France dominate both exports and imports. China, the United States, Britain, Switzerland and Russia are its main trading partners. Services generate 64.7 percent of GDP, manufacturing 23.8 percent and agriculture only 1.5 percent. Wealth is uneven, with output per person far higher in the west than the east.
Since 1999, 21 member states have adopted the euro, now the world's second most used reserve currency after the dollar; the other six keep their own money for now. The 1992 Maastricht Treaty set strict convergence rules for joining, reinforced from 1997 by the Stability and Growth Pact. Denmark holds a formal opt-out, while other holdouts effectively decide their own timing by choosing when to enter the exchange rate mechanism that precedes membership.
The rules were tested when Greece's debt crisis erupted in 2009. Ireland, Portugal, Spain and Cyprus also needed reforms and bailouts, and all five had left their programmes by the late 2010s; Hungary, Romania and Latvia went through rescues outside the eurozone. In 2026 public debt averaged 81.7 percent of GDP, from 24.1 percent in Estonia to 146.1 percent in Greece, and social welfare spending reached 27.3 percent of GDP in 2024.
European companies lean more on bank loans than American ones, so in September 2015 the Commission proposed a Capital Markets Union of 33 measures to help firms raise money on markets. The bloc's 2021–2027 budget of €1.8 trillion pairs a regular seven-year framework with a €750 billion recovery fund called Next Generation EU. That fund answered a severe shock: 49 percent of EU firms reported falling sales after early 2020, and 35 percent of smaller manufacturing and service firms said they would not have survived without state help.
Source: Economy of the European Union
