For the last half of the decade, the European Union has been on its knees reeling from negative and low growth of the economy that has resulted in the increased rate of unemployment. The turbulence has resulted in the partial splitting of the European states. The countries to the North such as Germany and the United Kingdom have managed to weather the economic crisis that swept across Europe while on the other hand, the countries to the south such as Greece, Spain, and Portugal experienced the catastrophic impacts of the crisis same as the one witnessed in the Great Depression. So far, Greece has been greatly affected while at the same time, Bulgaria is occasionally on the edge of plunging into a political standoff (Feldstein). In addition, some major economies in Europe such as France are still facing hard economic and fiscal times despite economic growth indications across Europe. Similarly, the United Kingdom has been contemplating with a prospect of quitting the European Union. Some of these factors lead to contentious questions regarding the survival of the European Union. There are multiple existing and emerging challenges threatening the survival of the European Union.
The extreme at which some countries found themselves affected by the financial crisis prompted them to consider exiting European Union and the single currency altogether. Even though the euro has helped in simplifying trade among its members, it has created major issues for monetary policies. Before the European Union was born, a number of economists questioned the desirability of adopting a single currency in a heterogonous continent of Europe. The economic disparities among the nations in Europe has threated the use of the common currency (Feldstein).
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"Will the European Union Survive?".
One of the factor threatening the survival of the European Union is the threat of quitting the Union by some countries such as Britain. Britain has been divided whether to remain in the European Union or not. British Prime Minister David Cameron has been aggressively countering the call by advocating against the Britain quitting the Union (Betancor). A number of countries which include Greece and Turkey have also threatened to exit the Union. The rate at which independent countries are threatening to exit the Union can threaten its future survival.
Secondly, there has been monetary disagreements among the countries. For instance, German and France have been on the loggerheads over the value of the Euro. France is suggesting for the weakening of the exchange rate so that it can benefit from its exports. In contrast, German is opposed to the idea and it argues that it is comfortable with the current exchange rates since it understands that its independent deutschmark is stronger than the single currency. The President of ECB has stuck with the position of leaving the interest rates unchanged as supported by Germany (Feldstein).
However, even though there are multiple existing and emerging challenges threatening the survival of the European Union, then the organization will survive since most of the countries such as German led by Angel Merkel are committed to ensure its survival for the benefit of the European people. Similarly, the European Central Bank is currently on the progress of easing monetary policies. The overall economy of the European is improving, therefore the ECB will begin raising the short term interest rates while reducing liquidity. The action will be effective for some nations than others. Tightening the monetary policies is opposed by nations that have a weaker economies. In a nutshell, the European is more likely to survive than to fall over the coming years. Even though some countries such as Sweden and Britain are threatening to exit, there are other countries that are eager to join.
- Betancor, Fernando. Can Europe survive without Britain? Open Democracy, 2014. Web. 16 November 2014
- Feldstein, Martin. Can Eurozone Survive economic recovery. Project Syndicate, 2014. Web. 16 November 2014
