by Lucas Juan Manuel Alonso Alonso
With the objective to draw some conclusions about macroeconomic stability and economic structure, this article examines for the 28 Member States of the European Union, the following aspects: GDP and AIC per capita, General Government Gross Debt, Labour Productivity (monetary units and percentages), Average Annual Wages, Annual Hours Worked, Jobless and Average Hourly labour Costs. To develop this analysis, Member States have been divided into three blocks by the number of inhabitants: less than 6 million, between 6 and 17 million and more than 17 million.
Macroeconomic Stability and Economic Structure
As a result of Brexit, the EU is going to face increasing socio-economic uncertainty. The day after the British referendum result, we have seen sharp falls in European equity markets, particularly of banking shares. In my view, this sharp fall is going to undermine consumer and business confidence and, consequently, and it is very likely to drag down economic growth— this situation is not unique and unusual but we are going to face a turbulent period in financial markets for several months—. Additionally, there is the Syrian refugees’ humanitarian crisis as well as serious social conflicts in many member states. Furthermore the advantage deriving from lower oil price was negated by the abrupt depreciation of the Euro against the U.S. dollar — indeed QE (Quantitative Easing) was a high priority when the exchange rate was about USD 1.5858 in July 2008 straining the socio-economic situation in the Euro area(one may wonder: why does nobody question it?). Now it is of little help to exports because these have already reached the maximum level, while leading to more expensive imports needed to support the domestic economy.
Despite the painful austerity measures, in 2015, general government gross debt (gross public debt as a percentage of the GDP) ratios in the EU-28 remain at a very high level—in Spain, Portugal, Greece is around 100%, Italy has the second highest debt load at 132.7% and in France and Ireland is between 85 and 95 percent. Concerning the volume index of GDP (Gross Domestic Product) per capita in PPS (Purchasing Parity Standards) we find a remarkable dispersion among the EU countries, such as Luxembourg, founder member with a population of 562,958 people, has the highest GDP per capita, 171% higher than the EU-28 average, while Bulgaria, state member since 2007 with a population of 7,202,198 people, records the lowest level of this index, 54% lower than the EU-28 average, but it is important to stress that it showed a steady GDP per capita growth, however still lower than the EU-28 average, from 65% in 2004. We now turn to carefully examine these facts.
The contrast between control and compromise is important, and the lesson it yields sobering. In an ‘interdependent, globalised world’, to recycle the cliché – more-or-less accurate as it happens – the notion of control intervenes as a comforting delusion. It soothes the angst of those who would stop the world in order to get off. But it also appeals to the individual scale, and evokes domestic analogies in which control is seen as something achievable.
The EU is a relatively new entrant to the complicated politics of the South Caucasus. Co-operation with Azerbaijan increased at the turn of the century due to the country’s significant energy repositories and became more formalised with the EU’s Eastern Partnership initiative, launched in 2009 along with Armenia, Belarus, Georgia, Moldova and Ukraine. Here, the EU’s “more-for-more” approach would — in return for internalising the acquis communautaire — grant benefits such as visa-free travel and privileged trade agreements.
