Does the EU have a future?

Europe is in decline while the European project is grinding to a halt. Population is in decline across large areas of the EU which in turn will reduce the economic weight of Europe in the world and for a bloc that relies upon its economy for its say this will mean a decline into irrelivence in global politics. Meanwhile the member states bicker about how to advance the club and some like Britain drag their feet and don’t join the Euro.



Does the EU have a future?

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Does the EU have a future?
Yes because...

Single market

A single market allows for clear communication and transparency of costs. This means that businesses can out source work to countries with lower labour costs. This will result in lower prices and greater competition, giving greater choice for consumers.

Countries will be forced to create more business friendly environments, in order to keep work within their borders. Consequently countries and, ultimately the parent economy, will become more efficient.

No because...

The market allowed for clear communication has it's flaws. If businesses from the EU go into another country that business will overtake the original business and then the foreign business will be in charge; which will mean that there will be no original companies in that country.

Lower prices don't necessarily mean greater things and greater competition won't mean getting a greater choice, the choice could be the same just a different packaging.

If you force someone to do something sooner or later that someone will explode with the pressure, this will mean that sooner or later some of the countries will be angry and they won't create a friendly business enviroment they will attack by force and demolish everything.

Does the EU have a future?
Yes because...

Encourages a single community

By using a common currency and by all being subservient to the ECB, a feel of 'togetherness' is created. The lack of trade and employment barriers also contributes to a feeling of a single entity.

An individual from one member country can go and work and/or study in another member country. This allows for an ease in transporting human capital across countries, to wherever it may be needed.

No because...

Individual countries may be resentful of the dominance of the English language and of using a common currency. Many countries may feel that they lose their identity by joining a common currency. The UK uses this reason as one, of many reasons, as to why it refuses to join the EU.

Many nations also feel resentful to the liberal employment barriers, which easily allow illegal immigrants to slip into their territories.

Does the EU have a future?
Yes because...

Lisbon Treaty

The Lisbon Treaty has been ratified (it came into force on the 1st December) and a President of the European Council and a Foreign Minister have been chosen. This just shows that the process of integration is continuous, despite any stagnation. The treaty seeks to streamline decision making so that decisions can be made more efficiently and quickly within the Union. The pillar system of Maastricht has been abolished and all policy areas are now brought together. This means that the European Union has been consolidated with a legal body. This seems to imply that there is in fact a future for the European Union, one which is concerned with deepening integration.

No because...
Does the EU have a future?
No because...

Power of the US and China

The USA and China are now becoming the new driving forces of the world's economy.

Although the US has less citizens than the EU (the EU has 170 million more inhabitants), its GDP is around 25% greater than that of the EU. The US have specialised in services and manufacturing and so have managed to survive the recent recession.

China, on the other hand, has a growing population and specialises in cheap labour. As a result, it can churn out cheap products and so providing a more competitive environment in which to work. Other countries are now outsourcing to China in order to take advantage of the cheap labour. Therefore, money is flowing into China and this is helping her to become a new super power.

Yes because...
Does the EU have a future?
No because...

High unemployment

The Eurozone has been suffering with persistently high unemployment for the past couple of years. Termed 'hysterisis' by economists, this means that unemployment is structural and deep rooted. Strong labour protection laws mean that turnover is very low and so those without jobs find it extremely difficult to enter the labour market. As a result, the long term unemployed become used to be out of work and become unskilled.

As well as being a direct hinderance to GDP by not maximising the use of labour, paying unemployment benefits is a constant and high drain on the Eurozone finances.

Yes because...
Does the EU have a future?
No because...

The Euro Bank

By joining the Eurozone, countries must forfeit control of their domestic interest rates to the European Central Bank. This is needed to ensure that one country does not profit economically at expense of another. By surrounding domestic power over interest rates to the ECB, the bank can ensure a constant inflation and interest rate across the Eurozone.

However this means that, in order to comply with these rules, individual countries must use their fiscal policies to try to ensure that their domestic rates are equal to that of the Eurozone interest rates. In practice, this means that some countries may end up having higher/lower domestic interest rates than the Eurozone average. This could mean dramatically different results for the various countries e.g. when Ireland joined the EU it need to lower its domestic interest rates to match the Eurozone average causing an economic boom whereas Italy had lower rates than th EU average and so had to raise interest rates causing a contraction in GDP.

Yes because...


Does the EU have a future?

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Continue the Debate - Leave a Comment

3 Comments on "Does the EU have a future?"

Andy

No in its present format it is becoming more and more like a politburo, were all real power is sitting in the centre and is controlled by non-elected bureaucrats.
The idea of free trade and free travel between nations is fantastic. The idea that financially powerful nations such as Germany/France can have the same currency as Greece and Poland at the same exchange rate is wrong it doesn’t work unless you control all tax and spending across all nations.A number of nations have tried to control Europe from Russia to the UK they have all failed each nation needs its individuality within Europe from East to West North to South to trade and grow with one common goal peace with that in mind and as the fundamentals Europe could have a great relationship with all its neighbours and not an elitist undemocratic fundamentally flawed non sustainable club.

Joseph

A no from me I’m afraid. The EU is not an “organic entity”: it is a union which a collection of groups are part of but one which no group has any great affinity for. In other words the members are part of the EU because it is a tool for greater convenience and greater profit: as long as its going well everyone is happy. That is all the EU is worth to them.

The problem occurs when the union is placed under stress: migrant crises, terrorism, ageing populations, bank crises etc. When this happens the tribal factor manifests within the members which encourages them to look to their own needs first. They do not view the other nations as “blood” or “kin” and thus during terms of hardship would not perceive further unity with them as a safe-haven. In the end you would have a series of nations pursuing their own survival at the expense of the greater entity. Example: Poland and Hungary in regards to migrant quotas. They do not want them in their lands, the EU does. One side will have to fold sooner or later and it will leave a lasting legacy of resentment. If the aforementioned problems continue the divisions will grow greater and greater.

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tl;dr version: the EU will eventually fail because it is an inorganic entity. Member states (and populations) are German/Irish/French first and European second and will under stress become more German/Irish/French under stress and less European. Compare that to an organic entity such as the USA: its members are American first and Texan/Californian/Nebraskan second. When under stress the American states shall unite and grow closer together.

The EU could have survived if it had allowed member states to become more organic. Had it stayed as the EEC for 200-300 years or so and then evolved into the modern EU over a further 200-300 year period you could have had one united people and thus a fundamentally stable EU. Instead it rushed the programme and now the whole house of cards will likely collapse in the next 10-20 years (if not sooner).

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