The ongoing economic crisis was the foremost issue on the European Union agenda in 2013 with member states striving to strike a deal over a banking union to avoid a repeat of the financial crisis.

EU institutions and the member states announced their agreement on the key elements of a banking union  on March 19 . The negotiations, however, are still ongoing.

The main goal of the banking union project is to  break the link between indebted countries and their banks by directly delivering EU funds to European banks through an independent board. The proposed new union will also allow banks to be directly supervised by the European Central Bank.

The move towards a banking union is seen as a crucial step towards further integration of the bloc, which has already been implementing common stricter fiscal benchmarks for its member states after  European Fiscal Compact entered into force on January 1. The compact grants the European Commission and the European Court of Justice, broad monitoring and enforcement authorities respectively, starting from the beginning of 2014.

The economic outlook for the block improved somewhat during 2013. Among the  countries bailed out by eurozone funds , Greece and Portugal are forecast to return to growth next year, while Spain has already emerged from recession and Ireland has ended its bailout programme. However, the gap between decreasing living standards and positive macro-economic indicators continues to frustrate many European citizens.

Trade deals

In October, the EU and Canada  reached a deal on a historic free trade agreement that is to remove over 99 percent of the tariffs between the two economies. The bloc's free trade talks with the US - despite the  hit from the NSA surveillance scandal - and Japan continue.

In the area of foreign policy, in May, the EU extended sanctions on Syria until June 2014.

Following the  deal struck in November , the EU is preparing to  ease sanctions towards Iran in early 2014. The bloc currently imposes economic, commercial and banking sanctions on Tehran as well as various Iranian companies, banks and financial institutions.

The EU launched an ongoing  military training mission for Malian troops in February following France's intervention in the country. It also  started a civilian mission in Libya in May to support local authorities in improving the security of the country’s borders.

After its unilateral intervention in the Central African Republic in December,  Paris called for more support from its EU partners, an issue that will likely top the EU foreign policy agenda in near future.

Meanwhile, the bloc slammed crackdowns on anti-government protesters in its periphery, namely in  Turkey Azerbaijan and  Ukraine . It remained quieter on the coup in Egypt.

On July 1, Croatia  become the 28th member of the EU and the second post-Yugoslavia country after Slovenia to join the bloc. The EU has decided to  commence accession negotiations with Serbia in June and in October the bloc  opened a new chapter in talks with Turkey after three years of stalemate. The renewal of Turkey-EU talks  remained on a razor's edge for several months following Ankara's crackdown on anti-government demonstrations.

Follow Umut Uras on Twitter: @Um_Uras

Source: Al Jazeera