Although the European countries have widely varying economies, they have formed the European Union, an organization which is responsible for more trading activity than any single economy in the world.
THE EUROPEAN UNION
The European Union has its roots in the time just after World War II. France in 1950 suggested that European coal and steel industries should form a closer alliance; it was hoped that this would be the first part of the process leading to a united Europe. France, West Germany, Belgium, Luxembourg, Italy, and the Netherlands formed the European Economic Committee in 1957 in a further effort to foster economic unity.
Although desire for a more or less united European economy remained strong, many people did not believe such a thing could be achieved until the 1990s. Assorted European governments sent representatives in 1992 to Maastricht, in the Netherlands, to sign the Maastricht Treaty establishing the European Union. It was hoped that the Union would increase Europe’s economic clout by removing barriers and turning many small economies, effectively, into one larger one. The organization was also the birthplace of the euro, a united European currency, and a central bank for EU members.
As a rule, membership in the EU has caused countries to work toward improved economic conditions in an effort to be on a level, so to speak, with other members. However, the final step in European unity is yet to come: an EU constitution, which would have required general approval to become effective, was opposed by France and the Netherlands in 2005.
Although the constitution was unable to gain universal support, the Treaty of Lisbon, its replacement, has been ratified by all member countries in the EU (including the reluctant Czech Republic and Ireland). The commission to produce the treaty, meeting in Lisbon, Portugal and headed by Germany, eventually came up with a document that establishes a president of the EU as well as increasing unity in EU foreign policy. The treaty, which includes parts of the Maastricht Treaty, also speeds decision-making by requiring majority approval, instead of unanimous consent, in some EU decisions.
A NEW EASTERN EUROPE
Eastern Europe, once part of or effectively controlled by the Soviet Union, is undergoing significant difficulties in moving from a command economy to a market-based one. Although GDP is generally increasing, many of the countries in the East face the problems of outdated manufacturing equipment, untrained workers, and lack of outside investment. In addition, workers in these countries have lost many of the benefits – such as lifetime employment and free healthcare – formerly provided under the communist system. Sometimes the lack of these benefits has put a stop on general well-being and life expectancy in former communist countries, which are thus forced to work harder to achieve standards of living common 20 years ago.
Although EU membership is generally helpful, it can be very difficult for the relatively poorer countries in Eastern Europe to meet strict Union standards. Membership also means that workers in these countries are forced to compete with the nations of Western Europe, which by and large have a 40-year head start in the race for productivity.
“The 27 member states of the EU.” Map. EU Country List. EUCountryList.com, 2008. Web. 24 Jan. 2012. <http://www.eucountrylist.com/>.
Boehm, Richard G. “German Reunification.” World Geography and Cultures. Columbus: Glencoe/McGraw Hill, 2012.
1. What did the Maastricht Treaty establish?
2. What document replaced the failed EU constitution?
3. Summarize the benefits and disadvantages of EU membership.