No. 117. THE ECONOMIC ROLE OF THE EU IN THE GLOBAL ECONOMY: A COMPARATIVE ANALYSIS

Published in DISCUSSION PAPERS

P. Paraskevaidis. 2011.

 

The paper analyzes and evaluates the economic role of the EU-27 using cluster analysis. First, the most important forms of economic relations between the EU and the USA, the EU and Japan as well as the EU and China are investigated. Then it is shown that the creation, the evolution and the outcome of the economic relations determine, often with feedback effects, the content of the economic role. The emphasis is both on the economic outcome, i.e. the economic efficiency of these relations, and the economic role of the EU and the USA. This role is characterised by a series of crucial economic performance indices leading to the construction of a ranking of the relative importance of each performance index and is important mainly for two reasons: (a) it denotes the economic significance of each country in the global market and (b) it expresses their capabilities to impose and regulate the political and economic terms in the implementation of the new global division of labour. The results indicate that Japan is dissimilar to the EU-27 and the USA as regards the importance of their economy, particularly to the USA economy. In 2011 the dissimilarity between the economies of the EU-27 and the USA on the one hand and the Japanese economy on the other is expected to be an outstanding characteristic feature. This dissimilarity is expressed in the form of strong opposite signs demonstrated mainly by the following performance indices: the current account balance as % of GDP, the annual % change in employment and the inflation. For the three economic blocks, i.e. the EU, Japan and the USA, especially under the continuing severe global depression it is imperative to expand those external markets with lower cost inputs aiming at the efficient utilisation of both physical and human capital. This means that the external markets should function as a process that contradicts the tendency of a declining overall profitability of enterprises. Especially for the EU, the final result, i.e. its expected economic role, still lacks behind that of Japan and the USA. The political unification of Europe is still pending. 

 

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