Services The
services sector is by far the most important sector in the European Union, making up 64.7% of GDP, compared to the
manufacturing industry with 23.8% of GDP and agriculture with only 1.5% of GDP.
Financial services are well developed within the Single Market of the Union. Companies have a greater reliance on bank lending than in the United States, although a shift towards companies raising more funding through
capital markets is planned through the
CMU initiative, the EU plan put forward by the Commission in September 2015 to mobilise the
free movement of capital within the EU. The plan aims "to establish the building blocks of an integrated capital market in the EU by 2019". The CMU initiative comprises 33 measures in all. The plan was updated in 2017 and in 2019, since not a single legislation will deliver the CMU. The
Commissioner for Financial Stability, Financial Services and Capital Markets Union,
Mairead McGuinness, former vice-president of the European Parliament, is responsible for delivery of the initiative. According to the
Global Financial Centres Index, the two largest financial centres in Europe,
London and
Zürich, are outside the European Union. The two largest financial centres remaining within the EU will then be
Frankfurt and
Luxembourg. In the
European Investment Bank's Investment survey 2021, 58% of firms in the service sector were expecting long term effects of COVID-19. 56% of EU enterprises received governmental help to handle the pandemic's effects. The COVID-19 pandemic had a significant effect on sales. 49% of all EU enterprises claimed that their sales decreased since the start of 2020. The pandemic has affected sectors differently, with the number of enterprises losing money in the hotels, restaurants, arts, and leisure industries reaching roughly 25% compared to previous times, and transportation also being affected. Without government assistance, 35% of European
small and medium-sized firms (SMEs) in manufacturing and services indicated their businesses would not have survived the effects of the pandemic. In 2020, 86% of enterprises reported previous-year investment activity, while in 2021 only 79% reported investment. 23% of EU firms changed their investment plans in 2021, with only 3% reporting a higher amount. The highest proportion of enterprises that have reduced their investment plans due to a drop in sales are in Poland, where 49% of firms have reduced investment, and in Belgium, where 47% of firms stated the same. Most green or digital businesses in the EU operate in manufacturing (33%) or infrastructure (30%). The service sector has the greatest percentage of businesses that have not engaged in digitalisation or the green transition (41%). EU enterprises were growing in terms of innovation in 2023. 39% of EU enterprises created or introduced new goods, processes, or services in the previous fiscal year, compared to 57% of US firms. In the EU, over 12% of businesses introduced ideas that were novel to the country or the global market. Investment in intangible assets (
research and development,
software,
training, or
business processes) by EU enterprises accounted for around 38% of overall investment. Businesses in the EU were also optimistic about 2023, with 14% more predicting an increase rather than a drop in investment.
Agriculture region
Rheingau. Germany is the EU´s second-largest agriculture goods exporter and the fourth-largest worldwide. The agricultural
sector is supported by
subsidies from the European Union in the form of the
Common Agricultural Policy (CAP). In 2013 this represented approximately €45 billion (less than 33% of the overall budget of €148 billion) of the EU's total spending. It was used originally to guarantee a
minimum price for
farmers in the EU. This is criticised as a form of
protectionism, inhibiting trade, and damaging
developing countries; one of the most vocal opponents was the United Kingdom, the second largest economy within the union until
its withdrawal in January 2020, which repeatedly refused to give up the annual
UK rebate unless the CAP should undergo significant reform; France, the biggest beneficiary of the CAP and the union's third largest (now its second-largest) economy, is its most vocal proponent. The CAP is however witnessing substantial reform. In 1985, around 70% of the EU budget was spent on agriculture. In 2011, direct aid to farmers and market-related expenditure amount to just 30% of the budget, and rural development spending to 11%. By 2011, 90% of direct support had become non-trade-distorting (not linked to production) as reforms have continued to be made to the CAP, its funding and its design.
Tourism The European Union is a major
tourist destination, attracting visitors from outside of the Union and citizens travelling inside it. Internal tourism is made more convenient by the
Schengen treaty and the euro. All citizens of the European Union are entitled to travel to any member state without the need of a
visa. France is the
world's number one tourist destination for international visitors, followed by Spain, Italy, and Germany. It is worth noting, however, that a significant proportion of international visitors to EU countries are from other member states.
Energy ,
Slovakia The European Union has uranium, coal,
oil, and
natural gas reserves. There are six
oil producers in the European Union, primarily in
North Sea oilfields. The United Kingdom, whilst it was a member of the European Union was by far the largest producer; Denmark, Germany, Italy, Romania and the Netherlands produce oil. The European Union produced 19.8 million tonnes of oil equivalent (Mtoe) of
crude oil in 2019. The EU is one of the largest
consumers of oil, consuming much more than it can produce. It consumed about 350 Mtoe in 2019, importing 96.8% of the oil. The largest suppliers are Russia, Iraq, Nigeria, Saudi Arabia, Kazakhstan, and Norway. Transport is the largest consumer of oil, at 66.1% in 2019. All countries in the EU have committed to the
Kyoto Protocol, and the European Union is one of its biggest proponents. The European Commission published proposals for the first comprehensive
EU energy policy on 10 January 2007. During the green transition, workers in carbon-intensive industries are more likely to lose their jobs. In the years to come, the transition to a carbon-neutral economy will put more jobs at danger in regions with higher percentages of employment in carbon-intensive industries. Employment opportunities by the green transition are associated with the use of renewable energy sources or building activity for infrastructure improvements and renovations. Energy costs remain a major obstacle to investment to 46% of EU firms. 34% of EU firms say that stricter climate standards and regulations will affect their business over the next five years. This is compared to 42% of US firms. 27% of companies in the European Union see sustainability and the green transition as a business opportunity. According to the Financial Times, Europe may be at risk of a new energy crisis and a significant increase in gas and oil prices in the event of an escalation of
the war with Iran. ==Companies==