To What Extent Can the European Union Be Considered a Success Politically and Economically?
Economics 
The European Wedlock: A Political Success, but not an Economic One
In recent decades, Europe has taken major strides toward political convergence. The Union's political success is evidenced by the eagerness of so many other countries to join, the cosmos of the single market (1993), the introduction of the euro, and the institutional reforms of Maastricht, Amsterdam and Nice. And yet, this progress "has non been matched by equal success on the economical front". At to the lowest degree, not compared with the United States. In the paper "¿Puede Europa competir con el gigante americano? La importancia del mercado interior" ("Tin can Europe Compete with the American Giant? The Importance of the Domestic Market"), Jordi Gual, head of the Department of Economics at IESE, argues that for many years before the latest enlargement, fifty-fifty with but 15 members, "the EU stopped converging with the U.s.a." both in Gross domestic product and in productivity per person. What he means is that "as far as wealth and welfare generation are concerned, the EU has been a relative failure, start only past its amend performance in terms of macroeconomic and fiscal equilibrium". Professor Gual cites claims that the and so-called European social model, with increased leisure and rising life expectancy, volition guarantee greater welfare for citizens and is a better measure of quality of life than GDP per capita, only to dismiss them as "wishful thinking" or even "self-delusion". He points out that while the employment rate in the United States stands at 55%, in the European union information technology is a mere 43%, with the further aggravating circumstance that the depression level of European labor market participation "is anything only voluntary". At the same time, he notes that "the Us continues to outshine the EU in the United Nations' human being development alphabetize". In Gual's opinion, the Achilles heel of the European economy in recent years has been the slowing of the productivity growth rate, particularly while Europe's chief benchmark and rival, the United States, has seen its economy recover and successfully weather such turbulent times equally the bursting of the engineering chimera. Europe's mediocre operation has often been put down to the so-called European social model. Professor Gual, withal, does not believe any such thing exists, as the social policies of the EU Member States differ then substantially. What's more than, some states have performed very well economically, while others have not. There are too major differences in public spending equally a proportion of GDP. For Gual, Europe's economic problems are due largely to the difficulties that the bigger countries (Germany, France and Italy) have had in reforming their economic systems. He also argues that Europe and the U.S. are not strictly comparable, as despite significant advances in economic integration, Europe still has huge internal barriers that prevent the free apportionment of people, intellectual property and services. Even in the areas in which most progress has been fabricated, the European union "is still far from reaching the caste of marketplace unification that exists in the U.s.a.". Professor Gual goes odue north, "Rather than a unmarried economy, it is still substantially a group of imperfectly integrated national economies; the potential for efficiency and productivity growth that would come from a truly single European market of 450 meg citizens is being wasted". one instance is the conclusion to shelve plans for an EU-wide patent, which shows just how far Europe still has to go. Similarly, there remain obstacles to cross-border acquisitions and business restructuring, differences in revenue enhancement, diverse national legislation with regard to mortgages or investor protection. And when information technology comes to labor policies and mobility, the diverseness is fifty-fifty greater. Gual is convinced that effective removal of economic borders would bring not bad benefits to European companies and consumers alike, generating a more dynamic and more than competitive economic system. Consequently, he suggests that the review of the Lisbon agreements due to take identify in 2005 "should give priority to the goal of overcoming the huge resistance to the process of economical integration". In some cases, the obstacles are based in nationalist credo; in others, they are the work of enormous pressure groups that do good from favorable national regulations. "It is imperative that Europe'south political leaders break those ties, even if it ways losing political support in the brusque term. The rewards for the citizens of Europe every bit a whole, and for each of its peoples, are enormous and worth fighting for," Gual concludes.
This article is based on: ¿Puede europa competir con el gigante americano? La importancia del mercado interior
Publisher: IESE
Year: 2005
Language: Spanish
Note: This article was published as a chapter in the Libro Marrón (Brown Book) 2004 by Círculo de Empresarios.
Source: https://www.ieseinsight.com/doc.aspx?id=431&ar=6
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