This survey of the European Union economy reviews the EU's economic performance and discusses the main challenges, including pushing ahead with the internal market, opening up network industries to competition, removing barriers to labour mobility, making regional cohesion policy more effective, and enhancing Europe's global role. It focuses on the common and shared policies of the Union. It complements the Euro AreaSurvey, which deals with monetary and fiscal policy, and the individual country Surveys that assess national policies. While many of the necessary policy changes are firmly under national sovereignty, the EU can play an important role by providing good framework conditions and continuing to enhance the internal market.