Europe has come a long way since World War Two left large parts of the continent in ruins.

65 years later, the European Union is a powerful 27-nation bloc and on Friday the organisation was awarded the Nobel Prize for Peace.

European Commission President Jose Manuel Barroso says it's a great honour.

(SOUNDBITE) (English) EUROPEAN COMMISSION PRESIDENT JOSE MANUEL BARROSO SAYING:

''The European Union was able, starting with six countries, to reunite almost all the European continent. These values: freedom, democracy, rule of law and respect for human rights, are the ones that people over the world aspire to."

But the ongoing eurozone debt crisis is proving a monumental challenge.

The EU vice president is well aware of this but he's choosing to look on the bright side.

(SOUNDBITE) (English) EUROPEAN UNION VICE PRESIDENT, OLLI REHN, SAYING:

"With some gloom in the economy - in Europe - still, it's a great day for Europe. And this Nobel Peace prize has been apparently awarded for the contribution of the European Union over of the past sixty years for peace and reconciliation, for democracy and human rights."

The Nobel Committee's decision has been greeted by surprise in many quarters but it's a major morale boost that the EU sorely needs.