And perhaps the biggest challenge of all is restoring growth to a region where the economies of many are shrinking. That is unlikely to happen, De Grauwe said, unless EU leaders relax their unrelenting drive for austerity, through which they are creating what he called "a recession that could have been avoided."
Those hit by this recession were not impressed by the prize.
"The peace prize?" asked Giorgos Dertilis, who works at an insurance company in Athens. "The way things are going, what will happen in the immediate future? Peace is the one thing we might not have."
George Tzogopoulos, a political analyst from the Hellenic Foundation for European and Foreign Policy, said the prize might help people understand the role the EU has played in preserving peace. But it could also be viewed as "a hypocritical gesture, because the European Union has so far completely failed to deal with the social dimension of the crisis and problems like poverty and unemployment."
Still, German Chancellor Angela Merkel said the Nobel committee had made a "wonderful decision," and linked it to efforts to salvage the euro, even though the judges didn't mention the common currency.
"I often say the euro is more than a currency. We shouldn't forget this in these weeks and months in which we work for the strengthening of the euro," Merkel told reporters at the Chancellery in Berlin. The euro "has always primarily been about the original idea of Europe as a community of peace and values."
Strong reactions to the choice for the $1.2 million award crackled Friday over social media.
"The EU is a unique project that replaced war with peace, hate with solidarity. Overwhelming emotion for awarding of (hash)Nobel prize to EU," Martin Schulz, president of the European Parliament, wrote on Twitter.
"Nobel prize for the EU. At a time Brussels and all of Europe is collapsing in misery. What next? An Oscar for Van Rompuy?" said Dutch euro-skeptic lawmaker Geert Wilders, referring to Herman Van Rompuy, president of the European Council.