Political overview
The European Union (EU) is comprised of 27 European countries, known as Member States.
The main institutions of the EU are the European Council, the Council of the European Union, the European Commission and the European Parliament. The European External Action Service is the EU's foreign service.
The European Council comprises the heads of state or government of the Member States, the European Council President and the President of the European Commission. It defines the overall political direction and priorities of the EU. The President of the European Council is elected by the EU Heads of State and Government. The current President is António Costa, former Prime Minister of Portugal (2015-2024), who took office on 1 December 2024.
The Council of the European Union (not to be confused with the European Council) is composed of Member State ministers meeting in ten 'configurations', based on policy areas including Environment, Transport, Telecommunications and Energy, Economic and Financial Affairs, Competitiveness, and Foreign Affairs. All configurations, except Foreign Affairs, are chaired by the Minister from the country that holds the Presidency of the Council, which rotates every six months. The Foreign Affairs Council is chaired by the High Representative of the Union for Foreign Affairs and Security Policy, Kaja Kallas, former Prime Minister of Estonia (2021-2024).
The European Commission is the EU's executive body and public service. The Commission, comprising one Commissioner or Executive Vice President from each Member State (each responsible for particular policy areas) is led by the Commission President. The Commission has the sole right of initiative to propose laws at the EU level, which then must be approved by the Council of the European Union and the European Parliament. The current European Commission President, Ursula von der Leyen, took office on 1 December 2019. President von der Leyen secured a second five-year term as European Commission President in 2024.
The European Commissioner for Trade and Economic Security is responsible for the EU's trade policy. The current Trade Commissioner is Maroš Šefčovič. The European Commissioner for International Partnerships is responsible for formulating the EU's international partnership and development policy. The current European Commissioner for International Partnerships is Jozef Síkela.
On 1 December 2024, the 2024-29 European Commission took office. The College of Commissioners is made up of the President and 26 Commissioners and Executive Vice Presidents – one nominated by every EU Member State.
The European Parliament is the only directly elected EU institution. In June 2024, citizens of the EU Member States voted to elect Members of the European Parliament for the 2024-2029 term. The Parliament shares decision-making power with the Council of the European Union on most internal market policies and has budget approval powers. The Parliament has the right to approve or reject the nomination of Commissioners. Roberta Metsola has been President of the European Parliament since January 2022. In July 2024, she was re-elected to lead the Parliament for another 2.5-year term.
Economic overview
As a bloc, the EU is equivalent to the second largest economy in the world, behind the US.
Member State economies operate within an EU system of 'competences' or responsibilities for policy areas. The EU (rather than individual Member States) has exclusive responsibility for the EU customs union, trade and competition rules.
Since 1993, the EU 'internal' or single market has facilitated free movement of goods, capital, services and people within the EU. The internal market was intended to drive economic integration amongst Member States to become a single EU-wide economy.
The EU's Economic and Monetary Union (EMU) involves the coordination of economic and fiscal policies, a common monetary policy, and a common currency – the euro. While all 27 EU Member States take part in the economic union, 21 Member States (collectively called the Eurozone) have adopted the euro as their currency.
The EU, together with its Members States, is the largest provider of Official Development Assistance globally.
Bilateral relationship
Australia and the EU enjoy a substantial bilateral relationship built on a shared commitment to democratic values and a like-minded approach to a broad range of international issues.
Since 2022, Australia and the EU have worked closely to respond to Russia's invasion of Ukraine.
Australia and the EU cooperate closely in the Indo-Pacific region, including to enhance security, stability and good governance and to improve the coordination of development cooperation assistance to the region.
The EU has been represented in Australia since 1981 by a Delegation of the European Commission, now a Delegation of the European Union. The Delegation's role is to represent the EU, to further develop bilateral relations, to inform the EU on political, economic, trade and development matters in Australia, to promote and protect the EU's interests and values, to spread knowledge, and to raise awareness of the EU in Australia. Sir Edwin McCarthy became the first Australian Ambassador to the European Economic Community in March 1962.
On 7 August 2017, then Foreign Minister Bishop and then High Representative Mogherini signed the Framework Agreement between Australia and the EU, which built upon the 2008 Australia-EU Partnership Framework. The agreement entered into force on 21 October 2022. It provides a platform for enhanced cooperation on a broad range of issues with the EU and/or its Member States. These issues include economic and trade cooperation, research and innovation, counter terrorism, development, non-proliferation, human rights, democracy promotion, climate change and environment, education and culture, and justice. Australian and EU officials meet annually in the Joint Committee Meeting to advance cooperation, as well as in a range of specialised dialogues.
The President of the European Commission, Ursula von der Leyen, visited Australia over 23-25 March 2026. During this visit, the Prime Minister of Australia, the Hon Anthony Albanese MP, and President von der Leyen, announced the conclusion of negotiations on the Australia-EU Free Trade Agreement, signing of a Security and Defence Partnership, and Australia's intention to commence negotiations to associate to Horizon Europe – the world's largest research and innovation fund.
Regular engagement between Australia and the EU at the leader and ministerial level continues to strengthen the relationship, alongside strong people-to-people links and practical collaboration in a wide range of fields.
Bilateral trade and investment relationship
As a bloc, the EU was Australia's third largest trading partner in 2025 and Australia's second largest source of foreign investment in stock terms in 2025. European investment is present across all sectors, particularly renewables, infrastructure, transport, and advanced manufacturing.
For further information on the bilateral trade and investment relationship, refer to the EU economy fact sheet [PDF].
For more information, see the Australia-European Union Free Trade Agreement.