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.
Please cast your vote after you've read the arguments.
You can also add to the debate by leaving a comment at the end of the page.
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.
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.
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.
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.
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.
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.
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.
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.
What do you think?