Why the European Union Dream is Failing?

The European Union was formed with the goal of creating a large zone that would create more opportunities for the people in the region. It was also created to create a bigger voice on global issues. To a large extent, the latter has been achieved because EU is represented in all major global deliberations. However, the dream of the EU is currently under threat. It all started with the UK’s decision to leave the EU and the problems it has caused.

The European Union has achieved a lot. For example, before its formation, a journey through the total 19 countries was hectic because one needed multiple currencies. One also needed a visa to move from one country to another. For those travelling to work, a work
permit was also a necessity.

However, to a larger extent, the European dream has not been net positive in economic terms. Research by a number of economists shows that the economic wellbeing of the Europeans has not changed a lot since the EU was created. In fact, a number of countries like
Greece have not benefited a lot from the union. Those like Germany that have grown, the pace of growth has been relatively slow.

There are a number of reasons why the EU dream is having problems. First, all the EU member countries gave up their local currencies and moved to the EU. As mentioned above, this is a good thing for travelers, who don’t need to change currencies when travelling.
However, a single currency eliminated important issues for the countries. For example, the ECB decisions might not always be in the best interest of all the EU countries. This is because the bank uses the averages, which might not be a good representative of the individual countries.

Second, if a country’s exports are lagging, it can lower its local currency in a bid to spur growth. The EU removed this capability from individual countries, making the uncompetitive in trade.

Third, the EU has been known for its large regulations. Last year, the region launched the MIFID II regulations that were more than a million pages long. They also launched the massive GPDR regulations that dealt with privacy issues. This year, they will launch Article
13 that is expected to have major changes in the internet. While regulations are good, the EU has created it difficult for businesses to exist.

Fourth, there is a social barrier that relates to the language and personal identity. In the United States, when a person moves from South Dakota to New York, they view themselves as Americans. They also speak a common language. In the EU on the other hand, when a person moves from Italy to London, they view themselves as Italians. They are also not allowed to vote in local elections. Therefore, all this makes the integration of the region almost impossible.

Finally, the EU is viewed by many as a club for the elite. Around the world, people want to feel as if they were part and parcel of the decision making process. This is why many countries are devolving the national government issues to the local level. In Europe however,
most decisions are made in Brussels by unelected bureaucrats.

The post Why the European Union Dream is Failing? appeared first on Forex.Info.

Source:: Why the European Union Dream is Failing?