The European Union has won the Nobel Peace Prize for 2012.
Judges said Europe deserved the prize because it had helped advance the cause of peace, democracy and human rights since the end of World War Two.
The European Parliament's president Martin Schulz said he felt "overwhelming emotion" at the news, tweeting: "The EU is a unique project that replaced war with peace, hate with solidarity."
The European Union has won the Nobel Peace Prize
But many have questioned the Nobel committee's timing, given the economic crisis engulfing the eurozone. Cynics said the award is less about celebrating the past legacy of peace but more about delivering positive public relations when the EU needs it most.
The Nobel Peace Prize judges addressed this saying in a statement it was important to focus on its role in spreading peace.
"The EU is currently undergoing grave economic difficulties and considerable social unrest. The Norwegian Nobel Committee wishes to focus on what it sees as the EU's most important result: the successful struggle for peace and reconciliation and for democracy and human rights. The stabilising part played by the EU has helped to transform most of Europe from a continent of war to a continent of peace," they said in a statement.
Head of anti-Europe party UKIP Nigel Farage said in a statement it showed "Norwegians really do have a sense of humour".
"The EU may be getting the booby prize for peace because it sure hasn't created prosperity. The EU has created poverty and unemployment for millions. In the last two years the EU has caused huge animosity between the countries of Northern and Southern Europe."
He pointed out the prize had come in the same week Angela Merkel was welcomed in Athens by "Nazi flags."
Eurosceptic MP Douglas Carswell tweeted: "EU awarded Nobel Prize? Hilarious! I don't suppose most Norwegian people share the Nobel committee's enthusiasm for the EU though."
The European Commission's president Jose Manuel Barroso tweeted it was a "great honour." "It is a great honour for the whole of the EU, all 500 million citizens, to be awarded the 2012 Nobel Peace prize."
Two men dressed as German World War II soldiers with Nazi swastika armbands sit in the back of an open vehicle, in front of a banner reading "Merkel out, undesirable" this week
The decision came in the week when German chancellor Angela Merkel faced Nazi salutes from angry Greek demonstrators when she visited strife-torn Athens to reject claims that the country was, economically at least, under German control once again.
The award reminded everyone that the finance minister of Poland warned MEPs during a European Parliament debate last year that the economic and political crises could lead to war within 10 years.
Tory MP Michael Fabricant asked if the Nobel Peace Prizes judges had run out of ideas, tweeting: "Who next? Ed Miliband, Andrew Mitchell?"
Other possible winners said to be in the frame in 2012 included WikiLeaks founder Julian Assange, peace theorist Professor Gene Sharp and two bloggers from the Arab Spring.
But former prime minister Tony Blair said: "The European Union is one of the defining concepts of the last half century.
"Amidst the turmoil of today we would do well to remember that when the Second World War ended Europe was in ruins. What followed has been over 50 years of peace and progress.
"The rationale for Europe today has changed but the ideal of a Europe united and working together remains constant."
Sir Graham Watson, leader of the European Liberal Democrats and MEP for the South West, said the award was "an opportunity to remind ourselves of the reasons why we are a member of the EU: to never see a return to the dark days of nationalism that led to the slaughter on the fields of Northern Europe and to the barbaric scenes of the Holocaust.
"Peace and prosperity - these are the ideals that underpin the EU."
The Nobel Peace Prize is awarded by a committee of five people chosen by the Norwegian parliament.
This year 231 people and organisations had been nominated for the gong. In 2009 US President Barack Obama won the accolade. Since 1901 92 Nobel Peace Prizes have been awarded.