Does the EU have a future?
Last updated: March 9, 2017
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.
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.
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
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.
Many nations also feel resentful to the liberal employment barriers, which easily allow illegal immigrants to slip into their territories.
Power of the US and China
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.
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
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.