Nobel Peace Prize awarded to European Union
The European Union has been awarded the Nobel Peace Prize for six decades of work in advancing peace in Europe.
The committee said the EU had helped to transform Europe "from a continent of war to a continent of peace".
The award comes as the EU faces the biggest crisis of its history, with recession and social unrest rocking many of its member states.
The last organisation to be given the prize outright was Medecins Sans Frontieres, which won in 1999.
Announcing the award, Nobel committee president Thorbjoern Jagland acknowledged the EU's current financial problems and social unrest.
But he said the committee wanted to concentrate on the EU's work over six decades of advancing "peace and reconciliation, democracy and human rights".'Biggest peacemaker'
End Quote Angela Merkel
We must never forget that in order to keep this peace, democracy and freedom, we have to work hard over and over again”
Mr Jagland highlighted the EU's work in sealing the reconciliation between France and Germany in the decades after World War II and praised the organisation for incorporating Spain, Portugal and Greece after their authoritarian regimes collapsed in the 1970s.
The EU's reconciliation work had now moved to Balkan countries, he said, pointing out that Croatia is on the verge of membership.
And he added that the possibility of EU membership for Turkey had also "advanced democracy and human rights in that country".
Senior EU figures were overjoyed with the award.
EU Commission President Jose Manuel Barroso called it a "great honour", while European Council President Herman Van Rompuy said it was recognition for the work of "the biggest peacemaker in history".
In an interview with the BBC, Mr Barroso said that in awarding the prize to the EU, the Nobel Committee was saying that the European project should be cherished, both within and beyond Europe.
"I believe it is justified for the European Union to see its work for peace recognised, not only in the unification of the continent, but also outside our Europe," he said.
"This started after the war - putting together former enemies. It started with six countries and we are now 27, another one is going to join us next year and more want to come. So the EU is the most important project for peace in terms of transnational, supernational co-operation."
German Chancellor Angela Merkel said she regarded the Nobel as a "personal incentive" to build on six decades of peace in Europe.
Europe's leaders fell upon this rare piece of good news with an almost desperate embrace. If there is a core justification for the European project, it is to make war impossible again on the continent. That has been the EU's outstanding achievement”
"We must never forget that in order to keep this peace, democracy and freedom, we have to work hard over and over again," she said.
French President Francois Hollande said the EU needed to show it was "worthy" of the award. "We are honoured, we are proud and at the same time we have our responsibilities before us," he told journalists during a visit to Senegal.
The BBC's Europe correspondent Matthew Price says the EU's achievements are clear, but the committee has picked a strange time to highlight them.
The eurozone crisis has made the EU look more divided and fragile than it has for decades, he says.EU 'like Yugoslavia'
Alongside the chorus of praise, several eurosceptic politicians were quick to deride the award.
Nigel Farage of the UK Independence Party (UKIP) likened the EU project to the former Yugoslavia.
"Rather than bring peace and harmony, the EU will cause insurgency and violence," he said.
Dutch eurosceptic Geert Wilders questioned the timing of the award.
"A Nobel prize for the EU at a time Brussels and all of Europe is collapsing in misery. What next? An Oscar for Van Rompuy," he said.
The Nobel committee has rarely shied away from controversy with its choice of winner.
US President Barack Obama won the award in 2009 despite leading a country that was fighting two separate wars.
And the choice of detained Chinese dissident Liu Xiaobo in 2010 enraged China, which made an official complaint to Norway.
This year's Nobel Prize for literature winner, Chinese writer Mo Yan, said on Friday he hoped Mr Liu would be freed as soon as possible.