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Prince Amir Al Saud

Top Five Economic and Political Issues in the European Union

Top Five Economic and Political Issues in the European Union

 

The European Union (EU) is described as a political and economic coalition composed of 28 member-nations within the euro region. It operates through multinational institutions while decisions are made through negotiated decisions. At present, the bloc is faced with pressing concerns which are many and potentially serious.

Issues to Deal With

Critics and observers say the European Union has an exceptionally unstable political system. Decisions cannot be implemented without the explicit approval of the members.

The Union is not a typical federal system. The central institutions are frail since everything depends on consensus. In other words, EU individual countries influence the collective decision with compromise as the primary means of resolving domestic issues.

Member-states can be overruled by their peers or the Powerful European Commission. There is also a European Council where heads of governments can sort out complicated decisions.

The EU has restricted democratic authority. Democratic legitimacy cannot be achieved through the European Parliament because many voters are not able to do so. Again, member-countries remain the source of independent political accountability in the euro zone.

Social problems have increased. Unemployment is one problem with over six million jobs lost between 2008 and 2013. The EU resorted to fiscal consolidation primarily to save social protection from reduction in spending. However, allocation of adjustment expenditures between the old and the youth was not equal which proved disadvantageous to the younger generation.

Effectiveness of social security within the European Union varies extensively. This contributes to higher unemployment, increasing private debt and inadequate access to education. All these undercut long-term economic progress as well as socio-political stability.

Policymakers have to deal with joblessness, poverty and sustainability of public debt. There should be enhanced management of demand at the EU level to generate more jobs. There is a need for more enterprising policies from the alliance itself.

Unfortunately, social, labor and monetary guidelines are left to the members. As a result, reforms at the national level are almost non-existent. At the same time, the EU should evaluate tax benefits carefully for more efficiency, equality between generations and reasonable sharing of burden between the rich and poor.

Economic weakness is obvious while growth of Gross Domestic Product (GDP) has become lackluster. The inflation rate dropped to 0.3 percent. Italy is experiencing its third downturn during the last few years.

Germany’s economy is actually declining while that of France has fallen flat. Greece is on the verge of collapse and is believed to be abandoning the euro zone.

Spain, Portugal and Ireland are in no better condition. That is why the EU seems to have adopted a soft position on sanctions against Russia.

There is a big possibility that the United Kingdom will leave the Euro if the economy continues to flounder.

The UK and France are the most potent military powers in the EU. This can mean a big disaster in terms of regional security.

Italy and France are obliged to hasten structural reforms. Fortunately, there have been positive indications. Italy carried out measures to change its impaired civil justice system which is a big letdown on the country’s economy. French President Francois reorganized the government by removing assertive socialists who were arguing against reforms.

There is widespread dissatisfaction at the apparent lack of control over judgment which impacts economic and political life in the EU. The so-called European Integration is not seen as having the capacity to attend to concerns of EU citizens. There is escalating bitterness in Southern Europe even as regional integration has not really been effective in the northern areas. Many European economists point to trade liberalization as one of the causes of increasing de-industrialization. Meanwhile, EU foreign and security policies have proven to be an embarrassment. This is demonstrated by the feeble responses to crises in the Ukraine, Iraq and Syria.

Last but not least, the European Union is not capable of addressing the most burning challenges that current confronts the entire region. It remains hobbled by an institutional system which will pale in comparison to the United States of America and China or even India.

Even as the National Atlantic Treaty Organization (NATO) serves s the major guarantee for European security, the EU only has a minor role in international relations.

The European Central Bank can do a lot to breathe life into the euro zone economy with relaxed monetary policies along with less fiscal severity as well as providing governments in the implementation of long-term reforms.

What the European Union needs to attain is to implement a decision-making process that will be dependent on the impartiality of all member-nations, respond to the need for aggressive negotiations between different institutions and quick consensus-building in the years to come.

All the 28 countries of the Union must pool their efforts and resources together to achieve these goals.  

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