A haven of peace would not be the first phrase to describe the European Union as the economic crisis in the eurozone threatens to tear it apart.

With angry demonstrators donning Nazi uniforms to greet the German Chancellor's arrival in Athens, young people in Spain taking to the streets in protest at 50% youth unemployment and much of southern Europe in the brink of economic collapse, choosing this moment to award the Nobel Peace Prize to the EU seems strange. It risks being interpreted as crass and inflaming tensions when many of the EU's 500 million citizens have been thrown into penury by the worst recession since the 1930s.

And yet the timing can be seen as deliberate, even brave. This prize has been awarded for what has already been achieved: six decades of peace in Europe following hostilities that twice spread into world war. But, with the eurozone in a parlous state, it is also a public mark of support. It is when awarded to encourage the fulfilment of a promise of peace, most obviously when given to Barack Obama after only nine months as US President in 2009, that the peace prize becomes so controversial it is devalued.

There is a real risk this year's award amounts to no more than a hollow approbation of the founding principles of the European project when, after more than half a century, this ever-growing alliance of countries remains powerless to halt conflicts wreaking atrocious suffering on civilians from Syria to Afghanistan.

Despite the stalemate of international diplomacy, the EU should have an international role beyond that of a trading partnership. Croatia will become the 28th member country next summer. Five others, Macedonia, Iceland, Montenegro, Serbia and Turkey, are at various stages of negotiation and three further Balkan countries, Albania, Kosovo and Bosnia and Herzegovina are potential members.

Such an expanded union, provided new entrants meet all the democratic and governance requirements of membership, has the potential to achieve reconciliation on an unprecedented scale. That cannot be taken for granted. The EU must exercise greater vigilance than has been the case in Hungary and Romania, where a weakening of democratic institutions has gone unchecked as a result of the focus on economic problems.

It is almost certain that Nobel was spurred into leaving the bulk of his fortune to reward scientific advances, great literature and "the most or the best work for fraternity between nations, for the abolition or reduction of standing armies and for the holding and promotion of peace congresses" as a result of a premature obituary which described him as a merchant of death.

All 27 member countries of the EU (and the rest of the world) would benefit if the members and leaders of its various institutions, parliament, commission and council, were equally stung by the negative reaction to the award and similarly galvanised into reversing opinion. The award was a surprise in Brussels; it will be deserved only if the EU treats it as a challenge rather than an accolade.