"It is justified recognition for a unique project that works for the benefit of its citizens and also for the benefit of the world," he said.
The idea of a united Europe began to take a more defined shape when, on May 9, 1950, French Foreign Minister Robert Schuman proposed that France and the Federal Republic of Germany pool their coal and steel resources in a new organization that other European countries could join.
Over time, the EU has grown from six countries to 27, absorbing countries in Eastern Europe as they emerged from decades under communist rule.
"Today war between Germany and France is unthinkable. This shows how, through well-aimed efforts and by building up mutual confidence, historical enemies can become close partners," the committee said.
The citation also noted the democratic reforms the EU demands of nations waiting to join. It referred to Greece, Spain and Portugal when they joined the EU in the 1980's after emerging from dictatorships and to the talks with Balkan nations seeking membership following the bloody wars there in the 1990s.
Jagland said it was up to the EU to decide who should come to the prize ceremony in Oslo on Dec. 10, the anniversary of prize founder Alfred Nobel's death in 1896.
While there have never been wars inside EU territory, the confederation has not been able to prevent European wars outside its borders. When the deadly Balkans wars erupted in the 1990s, the EU was unable by itself to stop them. It was only with the help of the United States and after over 100,000 lives were lost in Bosnia was peace eventually restored there, and several years later, to Kosovo.
However, the EU's success in making war between Germany and France unthinkable is beyond dispute, Those two countries tend now to be the EU's dominant players, with the French president and the German chancellor often getting together to, in effect, hash out EU policy.
Britain has always been a half-hearted member since joining in the 1970s, and is not part of the 17-nation eurozone that shares a common currency.
Right now, Europe is stuck in a three-year financial crisis caused by too much government debt. To combat this, governments across the region have imposed harsh tax and spending measures to bring their deficits under control. However a fall in government spending has had a damping effect on Europe's economy - in the second quarter of this year, the EU's gross domestic product shrank 0.2 percent compared to the previous quarter. A wide variety of indicators are pointing to a further slump in the third quarter.
The austerity measures have also hit jobs -the EU's unemployment rate is currently 10.5 percent. But some countries such as Spain and Greece have rates as high as 25 percent. In Spain, every other person under 25 is unemployed.
Europe's stumbling economy is making it harder for other economies around the world to recover and policymakers from all round the world are urging more decisive action from the region's governments to deal with the crippling debt crisis to restore confidence to the global economy.
The region is the U.S.'s largest export customer and any fall-off in demand will hurt U.S. businesses - as well as President Barack Obama's election prospects.
The EU has been seen as possible candidate for the Nobel for many years, and the members of the committee had previously praised the community's significance as a promoter of peace and democracy in Europe. Jagland is also the secretary-general of the Council of Europe, a human rights group.
Ironically, skepticism against the EU runs high in oil-rich Norway, which is not a member and where popular opinion is firmly against membership. Norwegian voters rejected joining the EU twice, in 1972 and 1994.