Europe's leaders hailed Friday's award of the 2012 Nobel Peace Prize to the EU in recognition of 60 years without war even as critics attacked it as a misplaced, even undeserved, honour.

Alongside congratulations, there were calls too for the EU to live up to its responsibilities as the bloc struggles with soaring unemployment and a slumping economy -- causes enough for war in the past.

Chancellor Angela Merkel of Germany, the bedrock along with France of the early steps towards the union after the horrors of World War II, said naming the European Union was a "wonderful" decision.

The prize given by the Nobel Committee in Oslo "honours the idea of European integration", Merkel said, noting the "years of terrible bloodshed, horrible wars, murder and devastation" that had come before.

France said the prize, "which every European is proud of", meant there was a new responsibility now to create a continent that is "more united, more just, stronger and a bringer of peace".

For Italian Prime Minister Mario Monti, the prize should encourage EU governments and people to press forward, "overcoming the current economic difficulties".

Top EU leaders themselves were aglow with pride.

"I have to say that when I woke up this morning I did not expect it to be such a good day", was the first response from a beaming Jose Manuel Barroso, the European Commission head more used to a daily diet of criticism over the bloc's economic travails.

"The European Union has reunified a continent split by the Cold War," EU president Herman Van Rompuy said in a joint statement with Barroso.

But eurosceptics were aghast at the award, finding in it fresh grounds for complaint against an institution they see as overblown, over-extended, and damaging to the true interests of its people.

"This goes to show that the Norwegians really do have a sense of humour," said European parliament member Nigel Farage, head of the UK Independence Party, who wants a referendum on Britain leaving the EU.

"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," Farage charged.

Czech President Vaclav Klaus took a similar line, calling the prize a "tragic mistake".

"I really thought it was a hoax, a joke. I couldn't imagine even in a dream that someone could be serious about it," he added.

Lech Walesa, who won the 1983 Nobel Peace Prize for leading Poland's anti-communist movement, said he had been "unpleasantly surprised" by the award.

"Certainly the European Union is trying to change Europe and the world in a peaceful way but it gets paid to do that," while individual activists routinely make sacrifices and take huge risks to do so, Walesa said.

Both he and Klaus suggested it might have been better to award the prize to an individual rather than an organisation.

In marked contrast,UN Secretary General Ban Ki-moon welcomed the award as "a richly-deserved recognition of its accomplishments" not just in Europe but around the world.

"The European Union has more than lived up to its founding dream of forging a united and peaceful continent out of the devastation of two world wars...," Ban said.

"Its unifying potential is all the more important in today's economic climate," he added.

US Secretary of State Hillary Clinton was also fulsome in her praise. The unity and peace in the continent had not happened by accident, she said.

"It happened because of the very hard work and dedication of leaders and citizens across Europe."

An Israeli foreign ministry statement of congratulations noted Israel's "particular interest in the European peacemaking achievement".

"During World War II, the Jewish People lost one third of its members on European soil, and European reconciliation, therefore, affects Israel directly," it said.

Palestinian foreign minister Riyad al-Malki also sent congratulations, while at the same time imploring them to "remember that the Palestinian issue is still relevant".

"We expect to see more work from the EU and it to utilise this prize to solve our problem and give the Palestinian people their right to have a state," he told AFP.

NATO, the military alliance set up after World War II to defend Western Europe from the Soviet Union, likewise saluted the EU's "vital role in healing the wounds of history".

Martin Schulz, head of the European Parliament, sounded a note of caution, however, highlighting the dangers posed by the debt crisis to Europe's "internal peace" in exacerbating the rich-poor divide.

"We cannot live in a union where in one country people are really rich ... and in others, people, even academics, have to rummage around rubbish bins to find something to eat."

Social media networks meanwhile were awash with comments ridiculing the choice.

Many people in the Twitter community dismissed the award as a bad joke.

"Anti-austerity protests in Portugal, Spain, Greece, Italy & France, Nationalism, Fascism, unemployment and poverty. Yeah EU deserves it!" @AnonOpGreece said on Twitter.