Its collective economic growth rate is currently 3.3 percent, well ahead of the United States or Japan. Unemployment has fallen significantly, from as high as 11 percent in France and Germany three years ago to 8 percent and falling today.

Over the past five years the EU has created more than 13 million new jobs -- more than the United States. Productivity rates in France, Belgium, Germany and Scandinavia are now matching or exceeding those across the Atlantic.

The new euro has established itself not simply as a useful and widely accepted currency, run by a European Central Bank with a sound track record on fighting inflation; it has also become a formidable competitor for the U.S. dollar. There are more euros in circulation around the globe than dollars. More international bonds are now issued in euros than in dollars.

Perhaps the most dramatic way to signal the change in European fortunes -- and the parallel decline of America's -- is to look at the transformation in the pattern of global private equity investments.

In 2000 the United States accounted for 68 percent of them. By 2005 the U.S. share had fallen to just 40 percent. Over the same period the EU share rose from 17 percent to 43 percent. Europe also increased its share of funds raised from 17 percent to 38 percent in the same period.

Europe's recovery has slashed the once-alarming budget deficits of the EU members. The average public deficit in the EU fell last year to 1.7 percent of gross domestic product from 2.4 percent. The turnaround has been so remarkable that the European Commission, the EU's executive arm, is now appealing to its member states to use the European boom to improve their public finances further.

"Although the budgetary situation has improved remarkably in the last few years, it is quite clear that most member states need to improve their track record in implementing their budgetary targets," EU Economic Commissioner Joaquin Almunia said last week.

Despite this admonition, it is clear that the EU is doing something right. It is putting more of its people back in work, cutting its public spending, raising and investing more money as well as more jobs, and reforming its labor markets, its welfare systems and its universities.

The traditional European social model of high taxes and generous welfare systems is coming into serious question. Chresten Anderson, director of the Copenhagen Institute, and Neil O'Brien, director of Open Europe (a British-based group that wants the EU to run on more free-market principles), have launched a powerful critique of the fabled Scandinavian welfare state.

They point out that over the last decade, incomes of the poorest 10 percent of the population have grown eight times faster in Ireland than in Sweden (and six times faster in Britain). As a result, so-called Anglo-Saxon economies like Ireland and Britain now have a smaller proportion of their population below the poverty line than Sweden for the first time.

The EU is not perfect; far from it. It remains an unpopular, bureaucratic, elitist institution, cumbersome and secretive in its governance systems and too prone to ponderous, essentially political investments that make dubious financial sense.

Witness the latest fuss over the ill-fated Galileo project, to provide a European alternative to the Pentagon's satellites that provide the global navigation system.

The EU Council this month decided that the $5 billion program would have to be funded with taxpayer money because "negotiations have failed and should be ended" with the private consortium of eight private aerospace and telecom companies, who questioned both the commercial case and the EU interference.

A poll of 1,000 British chief executives conducted by ICM for the Open Europe group found that 54 percent now think the benefits of the EU's single market are outweighed by the costs of EU regulation.

Richard Lambert, the head of the Confederation of British Industry, this week said that after surveying his members, he found them less than enthralled by the furious constitutional debates about a new EU treaty that promise to turn this week's EU summit into a drama.

"If they think of treaty change at all, they think of it more in terms of risks than opportunities. They see few potential benefits for business and some potential hazards," Lambert said.

"The failure of the draft constitution has not had catastrophic consequences ... laws get passed, decisions get made. So the question people ask is: Isn't this all just a total waste of time, a distraction from the real big issues which the union has to face -- the current failing trade round, budget reform, energy security and climate change."

The European economy and its businesses are doing fine, and its people are becoming more employed and more prosperous while the politicians wrangle in Brussels over their arcane reform plans and whether the EU should have its own foreign minister.

Since its foundation back in the 1950s, the whole project of European integration has been based on the shared goal of providing Europeans with the double blessings of peace and prosperity.

So whatever the sound and fury coming from the EU summit meeting this week, for its core mission the EU is back in business.

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