The European Union as economic and political unions of 28 global countries as its member state represents important authoritative power throughout the continent. It has greater significance in transforming into a source of peace and stability to Europe. The union is promoter of democratic and sovereign power through conferring new rights pertaining to social, economic and political aspects. The recent years various political and economic turmoil spread through the continent has impacted the operations of EU as well as questioned its efficacy in sustaining its role as promoter of global peace and stability. Some of the contingencies are sourced from the exit of UK from EU known as BREXIT, Syrian refugee crisis and declination of US in the western economic civilization.
This paper aims to represent the current challenges surfaced in the operation of European Union and sheds light on the probable impact of its policies upon one of the core member state, Germany. The essay focuses upon the EU policies imposed upon Germany and what complications the nation face due to that with further shifting the mode of discussion towards the respective changes the nation wants to see in the context of present turmoil and disruption within EU.
The following are recent economic and political challenges faced by EU which further has greater implication on the economies of European nations.
The phenomenon of BREXT that is UK taking an exit from its long term union with European Union has led to disruption of internal equilibrium as well as erosion of cohesion, confidence and 0inyernational recognition of EU in the global context. Without Britain the contribution of non-EU members in the economic output of the bloc will die down by almost half to 15% as opposed to 30% with the presence of Britain, The incident has transferred the political and economic supremacy to Germany. The immediate impact of BREXIT was not only financial and trade crisis but also immense governmental crisis and political instability on the face of resignation and replacement of Prime Minister David Cameron by anti-EU administration. The BREXIT also caused and stirred up the massive euro zone crisis in almost 19 EU member nations.
The conflict of Syrian and Iraqi has led to political intensity that has been leading to an unprecedented level of refugee crisis beating up the ferocity of World War II. The political wars, conflicts and consequent migration has led to huge influx of people into European Union member countries like Italy. The frequent terrorist attacks and political turmoil evoke sense of fear and instability within population that compel them to migrate. This has posed severe threat to individual economies of the EU member states that not only poses threat of exhausting natural resources but also have grater implication on the bilateral international relation within countries.
The EU policies taken up to set out coherent international relationship framework with global nations contains greater importance. The publication of European Global Strategy by EU is important step taken to build cooperation with NATO in order to deal with threat as well as promote national level of defense and security collaboration within the operation of EU.
One of the chronic challenges faced by the EU is the deficiency of strategic and strong leadership and vision hindering the development of it. Several nations have been playing key role in bringing about motion in the operation within EU and economies of France and German are important ones keeping in mind their roles in severe economic debt and currency crisis in Europe. Such leaderships are missing in recent time. Germany receives a biased attention as too much of power lies with the nation due to its active participation in euro zone crisis, flow of migrants and refugees in post Russian aggression in Ukraine.
There have been significant lack of solidarity among member nations within EU that is found to be struggling over getting aright strategic vision and direction in the moments of crisis stuffed with multiple of challenges. The fading action of EU has also eroded its credibility and confidence among its neighborhood nations. Increased refugees issue, deflation, debt crisis and huge youth unemployment has taken down its image in the global economy.
Out of the 28 member nations included in EU, there is a consensus about Germany being one of the most influential member states of it. The collected data of the countries government reveals the frequency of Germany topping the chart of other member in relation to keeping in touch with EU operations. The statement is further consolidated by the fact that European Parliament has 96 members from Germany alone. 24 German members represents in the European economic & Social Committee which is an advisory body represents employers, employees and various other interest groups that operates upon the proposed law. Almost 23 Germans represent in the European Committee on the Regions that mostly work with amalgamation of local and regional representative bodies. The scenario of Germany in case of Permanent representation to EU, is even more powerful as it is
The biggest outcome of integration of EU is the internal solo market erected upon the standardized system of law applicable uniformly on all member states. Moreover, the policies of EU focuses upon uninterrupted movement of goods, services, capital and human resources within the single market formed and maintained by EU. The policies of EU can be broadly categorized within two sector: Internal and external policies. While the internal policies deal with agriculture, environmental standards and food safety, the external policies deal with aid and human assistance, enlargement of EU, external relation and trade with members lying outside the EU and promotion of stability, democracy and peace beyond the borders of EU. The over representation of Germany in the EU parliament reflects the greater potential of the nation upon the policies of EU.
Recent economic challenges facing the EU members specially Germany and its neighbors are of undeniable importance as it influences the functioning of entire European economy. Amid various national economic issues of other nations, it is German economy that has managed to sustain its stability, which got disrupted by few of the economic issues within economy that get chronic over time.
Since 2010, the economy of Greece is severely under crisis Elections and referendums helped achieve bailout agreements between the nations and its creditors. This bailout could avert the possibility of Grexit. The policies adopted by the nation target to bring few economic changes that includes liberalization of energy market, raising the bar on age of retirement, expansion of property tax and cutting back amount of pension hence the government expenditure to lower the fiscal burden on the national economy. As a neighbor economy, Germans face enough difficulty and faces enough pressure to put limit upon any further bailouts in Greece.
The continuous demise of euro zone economy evokes pressing concern for the economy of Germany that has been enjoying one of the most stable and strong economy in the euro zone. The interlinkage of European economy with German economy is consolidated through financial aid and assistance flowing from Germany to these nations and any disruption the entire economic situation The massive bond-buying haul by the European Central Bank leads to huge drop in the price level of the nations that further evoked concern of impending deflationary pressure on the economy. The deflation would generate a loop of falling price and lowered consumption spending. This poses difficulty for the national governments and businesses to clear the debts.
One of the crucial social issues that evoke political and economic concern for the German economy is the Syrian Refugee crisis. The event expedites advent of almost 1.04 million of immigrants in form of refugees who would require basic amenities from the national government. This would cause a spike of minimum 21.06 billion in the national spending of the nation putting strain on the fiscal balance. The refugees entering the nation also pose threat to limited resources available for the consumption and national income generation of the country with probability of an approaching national economic crisis. The recent terrorist attack in Paris evoked greater apprehension regarding flood of refugees in the nation. The cost of relocation and their nurtures cause greater pressure on the national economy of Germany.
Unification of Germany in 1871 was viewed as German Problem that gave birth to a powerful country whose power could not be counterbalanced by any neighboring country and further led toward war and animosity. Over time the concept of German Locomotive came to the front that made the nation engine to the growth and economic integration of Europe instead of considering it as a threat. Time again changed and under the wave of euro skepticism the German Locomotive got transformed into German Risk keeping in mind the excessive dependence of EU on Germany.
The EU spends almost € 11.013 billion which accounts for almost 0.37% of national income of the economy of Germany. Germany is the biggest contributor of EU budget representing significant position in the overall GDP of EU and gains both political and economic supremacy. EU budget receives almost € 24.283 billion from the Germany as a whole consist of the 0.80% of the Gross National Income of the nation. Most of the bailouts carried in distressed states of euro zone are invested by Germany reassuring the existence of the currency. The stronghold of Germany in the EU links them strongly having greater implication in the policymaking. The BREXIT, Greece debt crisis and consequent political turmoil lead to erosion in EU’s financial performance which further impacts the Germans and that in turn affect EU as a repercussion effect..
The European policies regarding euro as common currency has posed many problem in the recent times, which has created issues for German economy. . It has often been recommended exit of Germany from the common currency euro zone but being an exporting economy the nation has derived much of advantages from the common currency in contrast to the states in the south eastern segment of Euro zone who suffer from long term austerity through years. Another problem faced by Germans are the stringent migration policies drafted by EU that put more strain on the economic resources and policymaking of Germany posing a threat of national crisis.
Keeping in mind the excessive pressure of increased migration and refugee crisis at the heart of German economy, there should be more of EU funding in the national projects of the economy such as expanding the accessibility of public utility, providing subsidies to researches and development and protect environment. The policies regarding euro and migration should be less restrictive going in favor of the growth of the national economy. The excessive reliance of the nation on its export makes it exposed to vulnerability of euro fluctuation and impending crisis. The EU policies should be more focused toward the consolidation of the currency. Since Germany is the major source of GDP for EU as a whole and the outcome of the nation also partially dependent upon the contribution of the Union, the health of EU should be maintained to avid any disruption in the German economy which is found to be more dynamic and stable within the entire European Union.
Conclusion
From the above discussion the importance of Germany in the operation of EU is found to be immense. There is a chain effect or simultaneity of wellbeing between EU and German which stands out to be major source of political and economic supremacy. The recent economic turmoil sourced from exit of UK from EU and debt crises has dwindling effect on the EU, which further affects the German economic health. The EU policies focused upon migration and euro zone crises have to be upgraded in favor of German economic growth.
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