What is happening in France, Britain and many European countries, whether in the bloc “27 countries” or outside it, in terms of unrest and protests, has reached the point of chaos, and is likely to escalate in the coming weeks, after it gained fertile ground in the recent period with the decline of the economy, the lack of prospects for ending the Ukrainian war, and the escalation of the trade confrontation between The European Union and the United States due to green subsidies, and other factors, opens many questions about what is going on inside the European market and what does this mean for the world?
The European Union is the third largest economy in the world, and it also represents one-sixth of global trade, and its 27 member states constitute one internal market that allows the free movement of goods, services, capital, and people. The United Kingdom, which officially left in 2020, would have become the second largest economy in the region with a value of $3.4 trillion. dollar.
The International Monetary Fund has a bleak view of Europe as 2023 approaches. The war in Ukraine, spiraling energy costs, high inflation and stagnant wage growth mean EU leaders face “severe trade-offs and tough policy decisions”.
Reforms – to ease supply constraints in the labor and energy markets – are key to boosting growth and easing price pressures. According to the international body, the International Monetary Fund expects the European Union to grow by 0.7% in 2023.
But how did this unique political entity (a class in itself) arise?
The genesis of the union
After the devastating consequences of World War II, the Schumann Declaration was introduced in 1950. The coal and steel industries of Western Europe were brought together under a common administration, preventing countries from turning on each other and creating weapons of war. Six nations signed on — the eventual founders of the European Union.
Greater economic and security cooperation followed over the next four decades, along with the addition of new members. These strong ties discouraged conflict, and Western Europe – after centuries of constant war – experienced an unprecedented peace over the past eighty years.
The modern version of the European Union can trace its origins back to 1993, with the adoption of the name, “European Union”, the birth of a single market, and the promise of a single currency – the euro.
Since then, the European Union has become an economic and political force to be reckoned with, with a total GDP of $16.6 trillion in 2022, behind the United States ($26 trillion) and China ($19 trillion).
Front loading of the EU economy
As for the impressive numbers, however, the EU’s economic might is hampered by three economic giants, according to IMF data. Combined, the GDP of Germany ($4 trillion), France ($2.7 trillion) and Italy ($1.9 trillion) makes up more than half of the GDP. The total economic output of the European Union.
These three countries are also the most populous in the European Union and, together with Spain and Poland, account for 66% of the total EU population.
The top weight continues, with the addition of Spain ($1.3 trillion) and the Netherlands ($990 billion). The top five make up nearly 70% of EU GDP, this rises to 85% when the top ten countries are included.
This means that less than half of the 27 member states make up $14 trillion of the EU’s $16 trillion economy.
Aside from the more populous members with larger economies, another pattern emerges, with the country’s time spent in the European Union.
Five of the six founders of the European Union – Germany, France, Italy, the Netherlands and Belgium – are from the EU’s 10 largest economies.
Ireland and Denmark, the next entrants to the union (1973) ranked 9th and 11th respectively. The bottom ten countries joined the European Union after 2004.
The UK – which joined the bloc in 1973 and officially left in 2020 – would have been the second largest economy in the region at $3.4 trillion.
Sectoral analysis of the European Union
The European Union has four main sectors of economic output: services, industry, construction, and agriculture (including fishing and forestry).
Below is an analysis of some of these sectors and the countries that contribute the most. All figures are from Eurostat.
Services and tourism
The EU economy relies heavily on the services sector, which accounts for more than 70% of the value added of the economy in 2020, and it is also the sector with the highest share of employment in the EU, at 73%.
In Luxembourg, which has a large financial services sector, 87% of the country’s GDP came from the services sector.
Tourism economies such as Malta and Cyprus also have a share of more than 80% of services in the GDP.
Meanwhile, 20% of the EU’s GDP came from industry, the Irish economy had the largest share (40%) in GDP, and the Czech Republic, Slovenia and Poland also had a large share of industry output.
Coal and lignite mining in the European Union experienced a brief recovery in production in 2021, although levels remain low.
Less than 2% of the EU’s economy depends on agriculture, forestry and fishing. Romania, Latvia and Greece are major contributors to this sector, however the share in total production in each country is less than 5%.
Bulgaria has the highest employment rate (16%) in this sector compared to other EU members.
The European Union imports nearly 60% of its energy needs. Until the end of 2021