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EU economy 'at least 20 years' behind US
EUObserver ^

Posted on 03/12/2005 8:04:52 AM PST by Alex Marko

BRUSSELS - The US economy is 20 years ahead of that of the EU and it will take decades for Europe to catch up, according to an explosive new study published on Friday (11 March).

The survey, unveiled by pan-EU small business organisation Eurochambres, is intended as a sharp "wake-up call" for EU leaders as they gather on 22 March for a summit on how to boost growth and jobs in the EU economy.

The EU's current performance in terms of employment was achieved in the US in 1978 and it will take until 2023 for Europe to catch up, the report shows.

The situation is scarcely better when it comes to income per person. The US attained the current EU performance in 1985 and Europe is expected to close the gap in 2072.

But the bleakest picture comes when comparing the two economic blocs in terms of research and development. Europe is expected to catch up with the US in 2123 and then only if the EU outstrips America by 0.5 percent per year in terms of R&D investment.

Presenting the survey, Arnaldo Abruzzi, the Secretary-General of Eurochambres, said, "the current EU levels in GDP, R&D investment, productivity and employment were already reached by the US in the late 70s/early 80s".

"Even the most optimistic assumptions show it will take the EU decades to catch up and then only if there is considerable EU improvement", he concluded.

Furthermore, the survey points out that enlargement will make the EU's mountain even harder to climb.

"Data clearly suggest that including the 10 new member countries in the comparison would further deteriorate Europe's position compared to the US for all four major indicators", says the report.

The survey was conducted using a method called the "time distance measure", pioneered by Professor Pavle Sicherl at Ljubljana University.

Eurochambres called for EU leaders to focus on concrete actions to revive the EU's economy and for a communications strategy to lay out the economic challenges facing the EU.

The group represents 18 million enterprises across Europe.


TOPICS: Business/Economy; Foreign Affairs; Front Page News; Germany; News/Current Events; Politics/Elections; United Kingdom
KEYWORDS: economy; eu; eueconomy; france; germany; uk
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To: Alex Marko
... it will take until 2023 for Europe to catch up...

Actually, this could happen. If America continues to slide to the left, we could end up a sullen, stagnant mess like the EU.

On the brighter side, the EU will probably be a Caliphate in twenty years, which could make them a lot more straightforward to deal with.

21 posted on 03/12/2005 9:22:51 AM PST by Starve The Beast (I used to be disgusted, but now I try to be amused)
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To: ARCADIA
"LOL, I wish the US had the economy it had 20 years ago."

Why? Do you like higher National Unemployment?

22 posted on 03/12/2005 9:24:52 AM PST by Mad Dawgg ("`Eddies,' said Ford, `in the space-time continuum.' `Ah,' nodded Arthur, `is he? Is he?'")
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Comment #23 Removed by Moderator

To: Chgogal

Well, the dollar can fall on a number of reasons. From consumer confindence, oil prices,etc etc but its usually Policy set by the treasury department.

The high euro is actually good for the US as it boosts our exports and devalues our deficit.


24 posted on 03/12/2005 9:30:12 AM PST by Alex Marko
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To: Mad Dawgg
Why? Do you like higher National Unemployment?

Was that really a higher national unemployment, or just a higher national unemployment rate?
25 posted on 03/12/2005 9:31:40 AM PST by ARCADIA (Abuse of power comes as no surprise)
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To: Alex Marko
This study does not take into consideration the fact that the United States economy is on the verge of spectacular growth. The study assumes that the U.S. economy will be relatively stagnant during the period of time that the EU needs to "catch up" to it.

Not going to happen.

Furthermore, the EU is destined to break up. The different cultures that make up the EU are too diverse for them to truly be a unified "nation". Petty squabbles between them will continue to drive them apart and prevent them from achieving true cohesiveness.

It took the Civil War to truly bring the United States together. It was only after the Civil War that this nation truly achieved the explosive growth that made it the premier superpower it is today. Even still, the bitterness of the Civil War took decades to dissipate and even today, 140 years later, there are still pockets of the country that haven't gotten over it. But without the Civil War, we would have turned out much like Europe - a group of separate countries always bickering among each other.

At any rate, I stated earlier that the United States is poised to achieve even more spectacular growth in the decades ahead. This country is still only about 230 years old and it is still very much in it's "adolescence" phase. We have built ourselves into the worlds biggest superpower and our true rival is not going to be the EU but will be China.

How will the United States avoid being replaced by China as the world's superpower?

Growth.

To our north, Canada sits with its vast natural resources and virtually untapped wealth. Canada is destined to join the United States someday. Sound ridiculous? Imagine if I stated 20 years ago that someday soon, the nations of Europe would attempt to cobble together a super-nation with a super-economy with a common currency and elimination of borders? It would have sounded far-fetched. Yet here we are today.

What if I told you 20 years ago that soon, the Soviet Union would collapse and break up into separate nations? You would have laughed at me right? 20 years ago, we saw the Soviet Union as the greatest threat to our existence and many actually saw the Soviet Union as a greater superpower than even the United States!

But in reality, the Soviet Union never had a chance.

Neither does the EU and neither does China.

The United States has the entire Western Hemisphere to itself. While Europe and China must contend with well-established nations in their hemisphere, the United States sits in the Western Hemisphere pretty much by itself.

Mexico and the Central American countries. The South American countries of Brazil, Venezuela, Chile, etc. All these nations will eventually join with the United States to ensure that our superpower status is secure. Imagine the United States extending from the Arctic Circle to Antartica. It's going to happen. Might take another 100 years, but it's going to happen eventually and perhaps much quicker than we think. Probably even within many our our lifetimes.

Again, think of how ridiculous it seemed that the Soviet Union was going to collapse just 20 years ago. Imagine how different things might be looking 20 years from now.

I see Canada and Mexico becoming part of the U.S. in my lifetime along with Cuba and much of the Carribean. The Central American and South American countries might take much longer but it will happen.

After that, Greenland, Iceland and perhaps even Great Britain itself will finally join the U.S. as well as other English speaking countries such as Australia and New Zealand.

Think of Australia sitting all by itself over there with the Chinese behemoth to its north. You think it would rather join with them? I doubt it. I see Australia eventually becoming part of the United States of America as well.

In summary, I see the globe reducing to three major spheres of influence. The United States of America, Chinese Asia and whatever is left of Europe.

Africa is currently up for grabs. It will become very interesting to see what becomes of that over the next 100 years. I do not see that continent becoming a superpower of it's own. It will need to choose between Europe, Chinese Asia and the United States.

It will be interesting to see how India goes as well. I think they might end up leaning towards the United States.

26 posted on 03/12/2005 9:32:20 AM PST by SamAdams76
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To: SamAdams76

Sam, i cannot agree with you more. From China, to Canada, to the EU catching up, you are 110% correct.


27 posted on 03/12/2005 9:34:03 AM PST by Alex Marko
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To: ARCADIA
"Was that really a higher national unemployment, or just a higher national unemployment rate?>

7.2% national average for 1985. Which by grading standards is close to average unemployment. Right now we are near 3/4 of a point below the national average for the last 40 years.

28 posted on 03/12/2005 9:36:02 AM PST by Mad Dawgg ("`Eddies,' said Ford, `in the space-time continuum.' `Ah,' nodded Arthur, `is he? Is he?'")
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To: Alex Marko
Well it's not consumer confidence since it is low in Europe with the two largest economies suffering double digit unemployment. Europe's GDP growth barely hits 1%. The two largest economies have a slightly greater than 3% deficit. The EU has no military to speak of, therefore, only can only bark when negotiating foreign policy. I am saying all the above because of the statements that were released by Japan and South Korea regarding their Central Banks positions vis a vie the U.S. dollar. I am saying those things because of words that escape Buffet's mouth.

High oil prices just hurts the US since Europe pays in well, Euros.
29 posted on 03/12/2005 9:39:06 AM PST by Chgogal
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To: ARCADIA
Productivity is being whipped off the backs of American workers. We are working longer, for less.

With all due respect, you do not understand the meaning, in labor economics terms, of the word "productivity."

In claiming, in the context of your discussion of productivity, that people are working "longer," you seem to be implying that increased productivity is achieved as the result of people working longer hours.

In fact, productivity is the measure of the PER/HOUR value of goods or services produced by a worker. It is precisely by increasing productivity that workers become more valuable, and can earn as much or more than they previously earned by working FEWER hours.

If people become more productive, and choose to work longer hours, than they would be multiplying their earning power. But again, to recapitulate, productivity increases are entirely unrelated to longer working hours.

30 posted on 03/12/2005 9:40:24 AM PST by governsleastgovernsbest (Watching the Today Show since 2002 so you don't have to.)
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To: Chgogal

Europe suffers more from high oil prices from the middle east because it imports nearly 90% of its oil from the region. The US gas prices are a result of refining capacity limits compounded with oil prices.


31 posted on 03/12/2005 9:41:37 AM PST by Alex Marko
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To: RedBeaconNY
Won't the Kyoto Protocol they all signed make it even harder to catch up?

NO because they will just pay lip service to Kyoto while completely ignoring it. If the US got into that mess, you know we would attempt to abide by its rules and enforce it. In this case, the President showed great foresight in getting us out of that crappy treaty.
32 posted on 03/12/2005 9:42:55 AM PST by MikefromOhio (Silly Hippies, Bush Won!!!!)
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To: governsleastgovernsbest
In fact, productivity is the measure of the PER/HOUR value of goods or services produced by a worker.

Those are paid hours, or part of the cost of goods sold. If you are working 60 hours a week and getting paid the same amount that you were being paid for 40, that's productivity.
33 posted on 03/12/2005 9:45:25 AM PST by ARCADIA (Abuse of power comes as no surprise)
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To: ARCADIA

Wrong. Productivity is simply the value of goods/services produced by a worker divided by the number of hours worked.


34 posted on 03/12/2005 9:48:22 AM PST by governsleastgovernsbest (Watching the Today Show since 2002 so you don't have to.)
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To: Alex Marko
The Euro is worth about $1.33 US. Oil is a commodity. It does not matter where the barrel comes from Nigeria, Venezuela, Iran, Norway or Russia the common denomination is the US greenback.

I am referring to the price per barrel not the price of the final product, therefore, the refining capacity is not a variable in our discussion. If it were you would have to address the large taxes applied to the final product in Europe which brings the cost of gas to about $5.
35 posted on 03/12/2005 9:51:31 AM PST by Chgogal
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To: governsleastgovernsbest
Productivity is simply the value of goods/services produced by a worker divided by the number of hours worked.

I am not disputing that. I am saying that the hours counted are the hours paid, not the hours that were actually put in. Do you really think that XYZ Inc. has a ledger that reads John Doe put in 60 hours last week, but we decided to pay him for 40?
36 posted on 03/12/2005 9:54:49 AM PST by ARCADIA (Abuse of power comes as no surprise)
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To: governsleastgovernsbest

But how are the hours worked counted?

If someone works 60 hours, but only 40 are counted, then ARCADIA's point holds.

If, on the other hand, all those hours are counted somehow (surveys or whatever), then you are correct.


37 posted on 03/12/2005 10:20:14 AM PST by freedomcrusader (Proudly wearing the politically incorrect label "crusader" since 1/29/2001)
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To: freedomcrusader
But how are the hours worked counted?

I suspect that most of this is people just looking at a financial statement. Company XYZ sold $100 Million in product last year and had an operating cost of $60 Million; If they can generate $110 million in revenue this year, while holding the operating costs at $60 million, they are said to have increased their productivity.
38 posted on 03/12/2005 10:26:39 AM PST by ARCADIA (Abuse of power comes as no surprise)
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To: Alex Marko
Yes, it is that bad for Europe.

If the European Union were a state in the USA it would belong to the poorest group of states. France, Italy, Great Britain and Germany have lower GDP per capita than all but four of the states in the United States. In fact, GDP per capita is lower in the vast majority of the EU-countries (EU 15) than in most of the individual American states. This puts Europeans at a level of prosperity on par with states such as Arkansas, Mississippi and West Virginia. Only the miniscule country of Luxembourg has higher per capita GDP than the average state in the USA. The results of the new study represent a grave critique of European economic policy.

EU richest compares to US poorest

39 posted on 03/12/2005 10:36:42 AM PST by dervish (Nihilism is dead)
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To: Alex Marko
Well, US Freepers can be entitled to 10... no, make it the whole 15 seconds of self-congratulation and patting ourselves on the back.
In reality, given the seriously uneven picture of economic development in EU (as the article itself confirms when discussing the effects of EU enlargement), it would make more sense looking at "time-lag" numbers for individual countries or even regions.
Northern Italy would in all probability be much closer to US in development than southern Italy; the numbers for Netherlands or Luxembourg would be clearly different from, say, Greece.
One would suspect that there do exist EU areas with little lag, and that some of these areas can be significant. EU has not yet descended into baboonery, despite all their socialism.
40 posted on 03/12/2005 10:41:41 AM PST by GSlob
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