Significant Position of European Union in Global Economy Essay

Submitted By Yangyu-Chen
Words: 1420
Pages: 6

The EU still holds a significant position in global economy

According to Europa (nd), the European Union (EU) is a politico-economic union of 28 member states which is headquartered in Brussels, Belgium. The EU was emanated from the aftermath of the Second World War. Its original organisation is the European Economic Community (EEC) that was initially aimed to boost economic cooperation and avoid repeated wars which destroy economy to a large extent. This paper mainly focus on the significant position of the EU in the global economy and whether it still owns the power to meet global competition. Cable (2012) argued that: ‘When foolish and costly initiatives come out of Brussels, it is tempting to wave the Union flag and plead British exceptionalism.’ There may be some points of view that are against the EU. Nevertheless, the EU does make its members powerful and help to gain more opportunities to compete with other countries such as China and the US. So the EU still holds the key to facing global challenges because of the combination between weak and powerful countries, the free movement of goods and people and standardisation of products.

The first reason why the EU is relatively strong is that it combines weak countries and powerful countries to develop together. Take Ireland for example, it had experienced a significant growth in financial transfers from the aid of the EU budget since following reformation of the Structural Funds in 1998 and the volume of transfers decreased to 2006 given its higher standard of economic development in the 1990s(Laffan and O’Mahony, 2008).To some extent these sorts of countries really need some assistance from the European Union, for it is difficult to make a difference on their own in today’s markets which are full of challenges. In return, with the addition of small states, the gross product of the EU has ascended rapidly which makes itself more formidable. Once joining in the EU, these small developing countries may not be seen as uncompetitive ones any more but members of a strong organisation. When making a bargain with other countries or unions, they are much more confident and get more opportunities to demonstrate themselves well. Also, on the other hand, there are more chance for those relatively powerful countries to expand their markets and it is beneficial to merge enterprises of different countries. The Royal Dutch Shell is one of the most successful example. Shell is an Anglo-Dutch multinational energy and petrochemical company headquartered in The Hague, the Netherland and incorporated in the United Kingdom. Created by the merger of Royal Dutch Petroleum and UK-based Shell Transport & Trading, it is the first largest petroleum company in the world (Shell, nd). There are many other companies like Shell that benefit from the combination. They not only develop their markets in a small group of states but also expands to the whole world, which is increasingly common currently. Developed countries also need land and resource to progress their economic plans, since being combined with many other countries, they can set up factories, industry and branches there to make them bigger and stronger. So throughout combination of the EU, weak and powerful countries can cooperate with each other frequently and both make great progress. Accordingly, the EU itself could also get benefits and become much more combat-worthy to confront the challenges of modern global economy.

Another reason for the EU’s significant position in global economy is the free movement of goods and people which is unique in the world. Firstly, the free movement of people has changed the lives of every European and moved the EU into several new areas of policy activity. McCormick (2011) stated that the most practical and immediate effect of the single market on ordinary Europeans has been freedom of movement. With limited conditions, almost every legal resident of an EU member state can now work and live in any…