The 2012 Nobel Peace Prize has been awarded to the European Union for its long-term role in fostering peace, democracy and rights on the continent.
The announcement was made by the chairman of the Norwegian Nobel Committee Thorbjorn Jagland on October 12 in Oslo, Norway.
"The Union and its forerunners have over six decades contributed to the advancement of peace and reconciliation, democracy and human rights in Europe."
The award comes as the EU faces the biggest financial crisis of its history, with a number of its member states stuck in recession.
In a statement, the Norwegian Nobel Committee said it wished to focus on the "stabilizing part" played by the EU as it undergoes "grave economic difficulties and considerable social unrest."
In Brussels, European Commission President Jose Manuel Barroso called the award a "justified recognition for a unique project that works for the benefit of its citizens and also for the benefit of the world."
'Biggest Peacemaker In History'
European Council President Herman van Rompuy said the awarding of the Nobel Peace Prize recognized the bloc's role as the "biggest peacemaker in history."
European Parliament President Martin Schulz said that "from the Balkans to the Caucasus, the EU serves as a beacon for democracy and reconciliation."
Speaking to RFE/RL, European Commission spokeswoman Pia Ahrenkilde Hansen called the award "a big pat on the back."
"It is a fantastic moment in these times, with enormous challenges for the European Union, to have this acknowledgement and recognition that we are a peace project that inspires the world and that can send a message of hope to the world."
U.S. Secretary of State Hillary Clinton congratulated the 27-nation bloc, saying it reflected the EU's hard work in striving for unity.
WATCH: Europeans react to the news that the EU has won the Nobel Peace Prize
Meanwhile in Moscow, veteran human rights activist Lyudmila Alekseyeva criticized the decision to award the EU, saying the prize should have gone to political prisoners in Iran or Russian rights campaigners rather than to a political bloc.
"Our movement is almost half a century old. It developed in very difficult conditions. The [European Parliament’s] Andrei Sakharov Award was once colossal moral support. The Norwegian Nobel Committee could have played the same role. Unfortunately, it didn't," Alekseyeva added.
Transforming A Continent Of War
The Norwegian Nobel Committee said the EU had helped to transform Europe from a continent of war to a continent of peace.
The committee highlighted the EU's work in sealing the reconciliation between France and Germany after World War II. The two countries had previously fought three wars over a seventy-year period.
"This shows how, through well-aimed efforts and by building up mutual confidence, historical enemies can become close partners," the statement said.
The committee praised the EU for incorporating Spain, Portugal, and Greece in the 1980s, after the collapse of their authoritarian regimes.
It also praised the 27-nation EU for its role in spreading stability to former communist countries after the 1989 fall of the Berlin Wall.
"The division between East and West has to a large extent been brought to an end; democracy has been strengthened; many ethnically-based national conflicts have been settled," the statement added.
The committee noted that the EU's reconciliation work had now moved to Balkan countries: "The admission of Croatia as a member next year, the opening of membership negotiations with Montenegro, and the granting of candidate status to Serbia all strengthen the process of reconciliation in the Balkans," it said.
With reporting by Reuters and AP