Is Europe likely to catch up with the US?
Is Europe likely to catch up with the US?The European Union has gone through a number of different stages of economic integration since the late 1950s. Having started as a Free Trade Area the process of globalisation increased the need of further integration and led to a rapid development in the 1990s. Although a partial union is achieved with the Euro as the common currency in 12 of the 25 member states adequate competitiveness on the global market has still to be gained. To reach the level of the US economy urging on the world market, more harmonisation within the EU is of necessity.As the tables show, when comparing recent economic performance of the European Union with the US, the gap between those regions is still of great importance. The economy of the US has developed at a much greater pace in the last few years due to their dynamism and flexibility. In terms of economic growth the US managed to develop much faster since the 1970s than the EU and widened the gap particularly from 1993 to 2000. However some countries in the EU for example Ireland have had a strong increase in growth. This is also true for trade. Ireland
5% of GDP in coming years for the new members, its multilateralism and the will to improve and harmonise procedures within the union, the EU seems to be in good shape. However the economies of scale are to some extent also a consequence of the economic cycle and globalisation and not only a result of a restructuring effect. The common market in the US has existed for much longer and has not been formed by totally independent countries. Furthermore the figures show that the growth of the M&A activity of the US exceeds that of the EU. Apart from this some of the expected benefits of economic integration leading to economies of scale seem to have occurred. The EU has undergone an impressive development in economical and political respect since its formation. Whereas the US rates of labour productivity significantly diverged from those of the EU around 1985, the rates have almost converged during the 1990s. The Single market, the common currency and flexibility achieved through labour market reforms have contributed to this. Consisting of 25 members the enlarged EU has created the biggest internal market worldwide, with a GDP of around 9. On the contrary, inflows of foreign direct investment, usually related to trade, have declined during this period. When comparing the economies of the European Union and the United States it has to be mentioned that the EU is still in the process of economic integration. Regarding competitiveness in a globalised world the enlargement of the EU is expected to bring valuable contribution to the economy of the EU and open up new opportunities. Foreign investors should significantly benefit from a single tariff, a single set of administrative procedures and trade rules. Flows of FDI within the EU becoming of less importance can be seen as a positive effect of economic integration.
Common topics in this essay:
Union United,
European Union,
FDI EU,
Free Trade,
EU Labour,
Finland Spain,
Single Market,
R&D Europe,
economic integration,
european union,
,
economies scale,
single market,
labour productivity,
1990s single,
common currency,
1990s single market,
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Acceptance Essays
