There is much discord among EU nations over the disparity between economically strong members -- particularly Germany, which has fronted European bailout money -- and economically weaker countries suffering from strict austerity measures and unemployment.
But in its choice for this year's recipient, the five-member Norwegian Nobel Committee focused on decades of accomplishments in the political arena, saying that the prize was a message to Europe to continue down the path of integration and peace and to avoid the evils of nationalist extremism.
Committee Chairman Thorbjorn Jagland read the award statement aloud, praising the EU for its peaceful reconciliation after World War II between former foes Germany and France, and for spreading democracy and human rights through Europe.
"In the inter-war years, the Norwegian Nobel Committee made several awards to persons who were seeking reconciliation between Germany and France. Since 1945, that reconciliation has become a reality," the committee said in a statement.
The notion of a unified Europe was born out of the suffering of the bloodiest war in human memory, which was the last conflict in a series of three fought between the neighboring countries over the course of 70 years, the committee said.
"Today, war between Germany and France is unthinkable."
The committee statement then focused on the spread of democracy to newer member nations before moving on to progress in peace made in EU candidate nations that once made up Yugoslavia, which were at war with each other in the 1990s.
"In the 1980s, Greece, Spain and Portugal joined the EU. The introduction of democracy was a condition for their membership," the committee said. All three countries saw dictatorships in the 20th century, even after World War II.
When asked about the economic suffering in these countries, Jagland, himself a high European Council official, said the committee wanted to focus on achievements in politics and peace and deliver a message on what can happen when disintegration occurs and nationalist extremism begins to rise again, "which is already a dangerous phenomenon."
"This is, in a way, a message to Europe that we should do everything we can and move forward," Jagland said, defending the committee's choice.
Referring to the former Yugoslavia, he said: "We have to keep in mind that there are not so many years ago since people on this part of Europe killed each other -- awful wars."
The committee had "no ambitions" to save the euro, Jagland said to persistent follow-up questions on the economy. "We don't have a position on how to solve the economic crisis."
But he did stress the importance of finding a solution.
Jagland is the current secretary general of the Council of Europe and a former prime minster of Norway, which is not an EU member and where sentiment against membership runs high.
Journalists asked in Norwegian and English how the Nobel honors would affect any future decision by Norway to join the EU.
"This no argument in any direction for what Norway should do, and I don't think it will affect the public opinion in Norway right now," Jagland answered. "It is at an all-time low," he admitted.
Reacting to the award, European Commission President Jose Manuel Barosso said he was pleasantly surprised.
"It was with great emotion that I received the news of the award of the Nobel Peace Prize to the European Union," he said.
"It is indeed a great honor for all 500 million citizens of Europe, for all the member states and all the European institutions," he added.
He also stressed the pacifist roots laid down by the European Coal and Steel Community, an EU predecessor that began in 1950 and brought together "nations emerging from the ruins of the devastating Second World War and united them in a project for peace."
German Chancellor Angela Merkel read a short statement praising the committee's decision to a news conference in Berlin.
"The Nobel Prize Committee, with this, acknowledges the idea of the European conciliation. After centuries of horrible bloodshed, atrocious wars, murder and ravages, the cornerstone was laid with the Treaty of Rome, so that a 'peace union of Europe' could arise."
Before walking away from the podium without taking questions, she took the opportunity to speak to the common currency, the euro.
"I often say that the euro is more than a currency, and we should not forget this -- in particular during these weeks and months, in which we are working to strengthen the euro."
"Six decades of peace in Europe: For those of us who live in the European Union, that's a long period of time," Merkel added. "It's merely the blink of an eye in the course of history, which is why we must never forget that we must again and again work, strain and strive for this peace, for democracy, for freedom."
This year's winner was picked from 231 different nominations, 43 for organizations and the rest for individuals, the Nobel Committee said.
Last year's peace prize came as a surprise to many observers, split as it was among three women: Liberian President Ellen Johnson Sirleaf and grassroots activist Leymah Gbowee, and Yemeni media freedom campaigner Tawakkul Karman, a symbol of the Arab Spring.
Johnson Sirleaf is one of many heads of state to have received the prize, including four U.S. presidents: Theodore Roosevelt, Woodrow Wilson, Jimmy Carter and Barack Obama.
The Peace Prize is the fifth Nobel Prize to be awarded this week, preceded by honors in medicine, physics, chemistry and literature.
Two American scientists, Robert J. Lefkowitz and Brian K. Kobilka, won the Nobel Prize in chemistry Wednesday for their work revealing protein receptors in cell membranes that tell the cells what is going on in and around the human body. Their achievements have allowed drug makers to develop medications with fewer side effects.
On Tuesday, the Royal Swedish Academy of Sciences bestowed Nobel honors in physics on Serge Haroche of France and David Wineland of the United States for their work in quantum optics that allowed scientists to observe the workings of atoms without disturbing their properties. As a side effect, their work lays down principles that could lead to quantum computers, which are astronomically fast computers that would radically change human life, if ever invented.
The Nobel Assembly on Monday awarded the prize for physiology or medicine to Sir John B. Gurdon and Shinya Yamanaka jointly for their discovery that stem cells can be made of mature cells and need not necessarily be taken from fetuses or embryos.
The prize for excellence in the field of economics will be announced Monday in Stockholm, Sweden, wrapping up this year's awards.
The Nobel Peace Prize has been awarded 93 times since 1901 to 99 individuals and 24 organizations, according to the Nobel Prize website.
Many heads of state received it for their contributions to forging peace with conflict partners, fighting for human rights within their own borders or making amends for their countries' past atrocities.
They have included German postwar Chancellor Willy Brandt; Egyptian President Anwar Sadat and his Israeli counterpart, Menachem Begin; South Africa's Nelson Mandela and Frederik Willem de Klerk; Myanmar/Burma's Aung San Suu Kyi; former Tibetan exiled spiritual leader the 14th Dalai Lama; and Northern Ireland's John Hume and David Trimble.
Well-known organizations honored with the prize are the Quakers, UNICEF, UNHCR, Doctors Without Borders and the Red Cross, which the Norwegians picked three times.
The youngest Nobel Peace Prize Laureate is Mairead Corrigan, who was 32 years old when she was awarded the prize in 1976. The oldest winner is Joseph Rotblat, who was age 87 when he was awarded the prize in 1995.
Soviet dictator Joseph Stalin was nominated, but did not receive the prize, for his efforts to put an end to World War II.
A Swedish politician nominated Nazi dictator Adolf Hitler in 1939 as a form of critical social commentary. Hitler, of course, was not considered for the prize.
Winston Churchill was nominated after World War II for both the peace and literature prizes and received the latter for his inspired oratories in the cause of human dignity.
Nonviolence icon Mahatma Gandhi was nominated five times, including in 1948, the year of his assassination, and did not receive the prize, as the Nobel rules stipulate that prizes may not be awarded posthumously. That year, no prize was handed out.
The Nobel Peace Prize is awarded by a committee of five people chosen by Norway's parliament and is named for Alfred Nobel, a Swedish scientist and inventor of dynamite.
Nominations come from lawmakers around the world, university professors, previous Nobel laureates and members of the Nobel Committee.
The prize for peace is the only Nobel Prize not to be awarded by Swedes but by the Norwegian Nobel Committee in Oslo instead -- a stipulation in Alfred Nobel's will, determined during a time when Norway and Sweden were ruled by a common monarch.
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