Introduction
Has the European Union had a positive economic effect on its member states? Would they have better benefitted by not joining and continuing to make their own Trade Agreement separately? Today, the European Union’s economy is one of the largest in the world with an average GDP per head of 25,000 euros for over 500 million occupants.
The European Single Market is the European Union’s most well-known accomplishment. It has made a strong singular market, built of millions of occupants, with no hard borders for trade and the free movement of products. The EU is one of, if not the largest trade organization in the world.
The EU represents about 15 percent of global exports and imports, second only to China and the United States, which gives member nations huge market access with next to no import tariffs to take advantage of. (European Parliament, 2019) Not only does the amount of trade opportunities that the EU provides its member states continue to grow but so has the security benefit of being a member state. This security the EU provides allows for safe trade which ultimately cuts the loss of product and more efficient trade.
Hypothesis
The data shows that EU enlargement has an immensely large positive impact on EU member states and new members (Baldwin, Portes, & Francois, 2014). There is a reason countries are trying to join the EU. It is because membership has such a proven positive effect on and can lead to an increased rate of economic growth. EU membership has been tied to significant positive economic growth and even higher growth for poorer member countries (Cuaresma, Ritzberger-Grünwald, & Silgoner, 2008). In agreement with Baldwin and Silgoner, I hypothesized that the EU has had a largely, if not totally positive impact on the economic growth of its member states. The only country that was shown not to have had increases in GDP per capita is Greece; all other countries showed enormous increases in economic growth tied to European Union membership. (Campos, Coricelli, & Moretti, 2014)
Review and Critique of Literature
The articles all show that European integration has had a tremendous effect on the positive GDP growth of member states. The only exception to this was the member country of Greece who experiences negative GDP growth and economic turmoil due to external and internal policies. (Campos, Coricelli, & Moretti, 2014) addresses Greece as an outlier. They found that Greece would have had a higher GDP if it had not had integrated in 1981. However, they suggest that Greece should not leave the European Union due to the high probability of positive economic growth yet to come out of its relationship with the EU. (Anderson & Reichert., 1995) states that there are two kinds of economic opinions that are utilized to explain the differences in help for understanding the benefits to member people and states: direct and indirect. Direct benefits are payments made by the EU to part states or people; Indirect benefits are those linked to Union participation, for instance, exchange with EU persons, open doors for trade opportunities, and jobs available across member states. (Jovanovic & Damnjanovic., 2014) stated that residents have held a progressively strong opinion of their nation’s inclusion in the combination procedure in the event that it exchanges with other EU member states and if the nation benefits to a higher degree from EU enrollment than others.
The voxeu., (2019) states that many member states have greatly benefited from EU membership. Not only did they continue to benefit free membership but had they not joined the EU, their GDP is estimated to be significantly lower than it is now, with the only outlier being Greece due to a separate financial crisis. They suggest that part of the Greek problem was that opening up to a domestic non-competitive industry may have happened too quickly for the Greek economy.
By advancing an increasingly proficient division of work and upgrades in the lawful, institutional and administrative conditions, extension has improved the strength and intensity of the complete EU economy. Jan in ’t Veld., (2019) stated that the new Participant States are profiting by the EU’s solidarity standards which suggest critical exchanges of EU reserves, while the officeholders approach an enormous inward market and an enormous potential inventory of work. Hoeller et al., (1998) stated that EU Participant Countries are a part of a customs union, deprived of taxes of any kind on products moving among Participant States, and common tax applied to merchandise entering externally in the EU. Member States cannot work independent exchange provisions. For example, by looking for respective facilitated commerce agreements with non-EU nations; rather, external exchange links are coordinated at EU level by the Common Commercial Policy (CCP).
It probably would not be sensible to anticipate the accomplishment of such goals by multilateral dealings for the time being. A combination on a provincial scale might be quicker in accomplishing these objectives, particularly where there is another base up wave of mixing by a system of supply chains similar to Southeast Asian case. Donny Tang., (2003) stated that any customs union or particular exchanging region is possibly great to all nations that think about interest since they can be made up for possible misfortunes acquired in the integration procedure. This implies the customs union between nations can be stretched out to n+1 nations. This likewise infers there is a motivator to expand the customs union till the entire world is incorporated until facilitated commerce wins over the world. Particular exchange alliances can be built such that the wellbeing of the separate nations is unaffected.It probably would not be sensible to anticipate the accomplishment of such goals by multilateral dealings for the time being. A combination on a provincial scale might be quicker in accomplishing these objectives, particularly where there is another base up wave of mixing by a system of supply chains similar to Southeast Asian case. Donny Tang., (2003) stated that any customs union or particular exchanging region is possibly great to all nations that think about interest since they can be made up for possible misfortunes acquired in the integration procedure. This implies the customs union between nations can be stretched out to n+1 nations. This likewise infers there is a motivator to expand the customs union till the entire world is incorporated until facilitated commerce wins over the world. Particular exchange alliances can be built such that the wellbeing of the separate nations is unaffected.
The development, by rushing the pace of auxiliary changes, has likewise better arranged Europe to grasp the benefits and handle the difficulties of globalization by making it progressively focused in the world. An amplified EU likewise conveys more weight when tending to issues of worldwide significance, for example, environmental change or the worldwide financial crisis. In general, the promotion of 12 new Participant States has expanded the importance of the EU on the planet and made it a more grounded global performer, in both political and economic terms. EU promotion secured economic strategies that made a steady and focused economic condition and, encouraged public interest in human foundation and capital, along these lines making plenty ofl open doors for private activities. Commissione europea., (2009) designated that speculators from the old Participant States, and everywhere throughout the world, immediately took advantage of these new lucky breaks, realizing a remarkable arrival of private capital into the new Participant States. They experienced falling joblessness, quick profitability development, and quick pay combinations.
The four new Member States that joined the euro region since development has profited significantly more, as they have wiped out swapping scale chance, decreased exchange costs, and accessed capital at lower loan costs. Fast integration brought numerous benefits for development yet, in addition, made vulnerabilities in few of the new Participant States. Commissione europea., (2009) stated that post-expansion intra-EU portability has not prompted original work to advertise unsettling influences. Free development of labor is a significant advantage a unified European offers to its ventures and residents. Euro territory membership offers various benefits, for example, the end of swapping scale dangers and lower exchange costs, higher trade, and FDI, expanded rivalry, and upgraded money related integration. EU’s approach of competition from one perspective anticipates state-financed firms increasing an out of line advantage over independent contenders. Yet on different restrictions the degree to which governments can support household business or shield parts from the troublesome impacts of remote challenge.
The EU has selective skill to arrange venture and exchange conditions with nations outside the Union and is a customs union with a common external assessment on exchange items. Membership in this way positively impacts the trade relations of the nations with non-EU members. There are likewise, money related outcomes to membership because of the promises of the nations to the EU budget plan, and buyer costs are partial through the Common Agrarian Policy and regular outside taxes taken on imports. The reality of EU membership may similarly impact selections made by unknowns about whether to contribute or not. Benefits creating from trade creation might be standardized by calling worry from countries outside the EU. Thompson & Harari., (2013) designated that a few analysts accept the EU is so ‘protectionist’ that it redirects more exchange than it makes, although such ends are mostly dependent on information from a period when typical EU charges were significantly higher, and lay on the assumption that, were the UK to pull once more from the EU, it would independently empty all its duties on non-EU imports. The free development of individuals and capital supposedly expands the productivity with which contributions to generation process are dispensed, by enabling work and venture to stream to where returns are most raised. Supposedly, this helps to reduce costs and raise by and large financial welfare.
When investigating the available literature there is surprising data that the economic technique has accepted a prominent activity in examinations of occupants’ dispositions toward European incorporation. The procedure of economic combination in Europe is the greater part exceptionally old. The effortlessness of membership is vital to develop counterfactuals. However, it should square with the unpredictability and timing of joining. The opening up of the uncompetitive local industry may have been too sudden (voxeu., 2019). Yet, passage into the monetary and economic association speaks to a turnaround, with development rates quicker than in the EU for 1996-2008, driven by the travel industry, by shipping, and the financial area. Without integration, development rates would have been roughly one percentage point lower.
The normal pro-competitive impacts and the inferred development reward from the Single Market seem to have not been completely acknowledged up until now. The advantages of EU membership for this situation appear to be bound to be permanent than temporary. Since membership is reported ahead of time, expectation impacts are an issue. Specifically, they may reduce the pertinence of the official date of EU promotion as a treatment. Economic incorporation is a continuum. There are numerous zones over which economies coordinate (merchandise, finance, administrations, approaches, and so forth) and it is conceivable that this procedure differs crosswise over zones and overtime.
Conclusion
While the EU has had its own set of problems, what organization or country hasn’t? Overall the Supported opinion across all the articles says that the EU has had an astronomically positive impact on the countries that decided to join. The only caveat being Greece which I would theorize is more to do with poor at home economic policy decisions rather than the effect of the European Union on them. Now the question will just be will the EU continue to prosper economically with one of its most important members abandoning it.
References
- Anderson, C. J., & Reichert, M. S. (1995). Economic benefits and support for membership in the EU: A cross-national analysis. Journal of Public Policy, 15(3), 231-249.
- Commissione europea. Direzione generale per gli affari economici e finanziari. (2009). Five Years of an Enlarged EU: Economic Achievements and Challenges. Office for official publications of the European communities.
- Hoeller, P., Girouard, N., & Colecchia, A. (1998). The European Union’s trade policies and their economic effects.
- in’t Veld, Jan. (2019). The economic benefits of the EU Single Market in goods and services. JOURNAL OF POLICY MODELING, 41(5), 803-818.
- Jovanovic, M. N., & Damnjanovic, J. (2014). EU Eastern Enlargement: Economic Effects on New Members 2000-2012. Journal of Economic Integration, 29(2).
- Lejour, A., De Mooij, R. A., & Nahuis, R. (2001). EU enlargement: Economic implications for countries and industries.
- Tang, D. (2003). The effect of European integration on trade with the APEC countries: 1981–2000. Journal of Economics and Finance, 27(2), 262-278.
- Thompson, G., & Harari, D. (2013). The economic impact of EU membership on the UK. House of Commons Library Briefing Paper.