The European Union (EU) was launched as a response to the economic dominance of the United States and to a lesser degree the Soviet Union. The nations of Western Europe were too small to compete against large scale and diversi?ed economies on their own. Six countries, eventually expanding to 27 (and counting), took a series of steps toward progressively deeper integration: the removal of int- nal tariffs, the construction of a common external tariff, the elimination of many (but not all) non-tariff barriers leading to a single market, and the adoption of a c- mon currency by 15 of the member states. The EU today equals and even exceeds the U. S. on many key indicators of performance. In the process, two similar but nonetheless divergent models of social and economic life stand in contrast with each other. The U. S. is more committed to capitalism and does little to dilute its harsh edges while the nations of Europe support wider social safety nets and more active regulation of commercial activity to mute the crueller aspects of the free-market. Until recently, the economic dynamism of the U. S. called into question whether the so-called European social model was sustainable in an era of globalization. The EU was slipping in competitiveness and was being challenged by new global pow- houses like China and India. Although the U. S. economy has slowed, there is little indication that European countries are capable of leveraging the situation to their advantage.

Competitiveness of the European Union.- Origins of the European Union.- Overview of Member States.- Competitiveness of the European Economy.- Competitiveness and Quality.- Research and Technology Policy in the European Union.- EU Research: Objectives and Results.- Framework Programs.- Entrepreneurship, Innovation, and Competitiveness.- Competitiveness in the Knowledge-Based Society.- The Position of the EU in the Quest for Competitiveness and Beyond.- Overview of the Institutional Context of the European Union.- From the Treaty of Rome to the Reform Treaty of Lisbon.- Enlargement of the European Union.- Budget of the European Union.- Internal Market and Competition.- Economic and Monetary Union.