Is the EU an economic giant but a political dwarf?

Politically Weak


Although in 1957 the Treaties of Rome were signed promising a common political and economic market, they set up the EEC (European Economic Community), the name of which hints that the main objective was to improve the European Economy.
In 1991 the Maastricht Treaty was signed creating the European Union, and the first real step to improving the European Union's political function. This important step towards a stronger European political community came 40 years after the setting up of the ECSC to create a stronger European economy, and so it is not surprising that there are worries that 'Europe is an economic superpower but a political dwarf'.


The recent failure of the proposed European constitution seems to yet again reflect the political weakness of the European Union.


The French (and consequent Dutch) no vote shows that the European Union is politically unstable.


The French 'No' vote was considered a "real crisis" (Paul Reynolds, BBC) and even though the European Union consists of many countries, it only took one negative vote on the constitution by the people of one country, for 'the future direction of the European Union [to be thrown] into doubt.' (Paul Reynolds).


One of the major factors contributing to the political failings of the European Union is the conflicting aims of the member states. Franco-British confrontations over what the European Union should be deter any political developments.


Britain aims for 'a free trade zone and economic union with little political integration' (Lithuania's Lietuvos Rytas, via BBC), a stance which is supported by various European countries like Lithuania and Latvia. Conversely France aims for a strong political and economic union, according to Caroline Wyatt at the BBC; 'French politicians have long seen the European Union as …a deeply political project'. This vision is strongly supported by Germany, Luxembourg and Belgium.


These conflicting objectives do little to help the European Union politically, as one side wants a political union and the other doesn't. The result is a week political union with limited powers, and a democratic deficit.


Economically Strong


The European Union's roots are in the creation of a European common market.
The first step towards a united Europe was in 1948 when the Benelux (Belgium, Netherlands and Luxembourg) Customs Union was established.
In 1952 the ECSC (European Coal and Steel Community) was created by Benelux, France, Germany and Italy.


The ECSC, founded with the aim of establishing a common market, had a supranational structure, and it is most likely that the idea that Europe was economically strong and politically weak began here, as industries had powers above that of individual nations' governments.
The European Union's share of the world's total trade in services is greater by a fifth to that of the United States', and is more than 3 times larger than that of Japan's.
Also the purchasing power parity (The purchasing power parity measures how much a currency can buy in terms of an international measure, since goods and services have different prices in some countries than in others. purchasing power parity exchange rates are used in international comparisons of standard of living.) of Europe is $10,840 billion which is higher than that of the United States ($10,400 billion), Japan ($3,550 billion), or any country in the world.


Not Economically Strong


However, many statistics also support the claim that the European Union isn't an economic superpower. If you compare the purchasing power parity per capita of the world's countries, the United States is far ahead of any other country with $37,000. Europe comes third to Canada, but has no distinct lead over Japan, and Germany, France, United Kingdom and Italy aren't much lower.


Moreover, since 1997 the United States has had a greater GDP than the European Union, and the margin between the two countries grew between 1997 and 2001 by 2.4 trillion euros, an amount which even before 1997 the European Union had never had over the United States.
If you then compare the GDP per capita in 2001, it is clear that the United States is far richer than the European Union, as the United States has €39,023.5 per capita, and the European Union has a mere €23,360.7 per capita, an amount which is beaten by the United Kingdom's €26,641.6 per capita, and it is true to say that the United Kingdom, although rich, is not considered an economic superpower.
When one looks into the motives behind the no-votes, 'both in France and the Netherlands, economic weakness was a major factor in popular disillusionment.' (Lord William Wallace, the World Today).
In France, a founding member of the European Union and a country which is supposed to be extremely pro-European, the constitution was greeted with a strong 'non' campaign. Although there were various reasons for the negative result on the referendum, including rebellion against French President Jacques Chirac, Lord William Wallace claims that the main motive behind the resounding no vote is that the proposed liberalisation of European Union services, which was used to symbolise the threat to employment in a country where 11% are already unemployed, double the amount unemployed in the United Kingdom.
In the Netherlands, also a founding member of the European Union, 'economic grievances focused around the Dutch contribution to the EU budget, now the highest per head.' (Lord William Wallace)
Problems over the contribution to the European Union budget have regularly arisen during the lifetime of the European Union. "The Single European Act…. Followed Franco-British confrontation over budget contributions" (Lord William Wallace) and even now the rebate given to the United Kingdom due to our excessive contributions to the budget is a hotly debated topic.


As previously mentioned France has 11% unemployed. Figures like this are reflected all over Europe. In Germany the national level of unemployment is also 11%, moreover some regions, especially the East, have unemployment levels of over 20%.
In Italy 'economic problems have just contributed to the collapse of its government' (Ben Richardson, BBC). These are supposed to be the better off West European countries, yet they are economically weak compared with the USA where unemployment is at 5.3% and in Japan where the rate is 4.5%.
In fact the unemployment rate for the whole European area is a terrible 8.6%.
According to the Organization for Economic Cooperation and Development, GDP growth among the 12 countries that use the Euro as their common currency, was only 2.5% in the last quarter, whereas in America the GDP growth was 3.4%. This begs the question of what will happen when the proposed Eastern European countries join the EU, as these countries are economically weaker than the West.
From these figures it is hard to believe that Europe could be alleged to be an economic superpower, as 'Europe's economic performance has left much to be desired in recent years' (Pennsylvania University), and it is unlikely that Europe's performance will improve with the joining of Eastern European countries like Turkey, with unemployment rates of 10% plus underemployment rates of 4%, and 18% of the population below the poverty line.


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