Impact of European integration in its member

As well as, there are some cases where there are advantages and disadvantages of joining to European Union. EU is international entity where many states united and became as Union. In such cases all countries who are members of EU have sovereignty, independence, flag, nationality, background, culture, mentality, tradition and some other criteria which are not mentioned make a sense that they are different but in order to avoid preceded incidents of history, they have united to go hand in hand.

Items that I mentioned above and according to it disadvantages follow as:


Disadvantages


1. The instability of the system.

Throughout most of the 1980s the UK refused to join the ERM (Exchange rate

mechanism). It argued that it would be impossible to maintain exchange

rate stability within the ERM, especially in the early 1980s when the

pound was a petro-currency and when the UK inflation rate was consistently

above that of Germany. When the UK joined the ERM in 1990 there had been

three years of relative currency stability in Europe and it looked as

though the system had become relatively robust.

2. Loss of Sovereignty.

On the political side, it is argued that an independent central bank is

undemocratic. Governments must be able to control the actions of the

central banks because Governments have been democratically elected by the

people, whereas an independent central bank would be controlled by a non

elected body. Moreover, there would be a considerable loss of sovereignty.

Power would be transferred from London to Brussels. This would be highly

Undesirable because national governments would lose the ability to control

policy.

4. Deflationary tendencies.

Perhaps the most important economic argument relates to the deflationary

tendencies within the system. In the 1980s and 90's France succeeded in

reducing her inflation rates to German levels, but at the cost of higher

unemployment, for the UK, it can be argued, that membership of the ERM

between 1990 and 1992 prolonged unnecessarily the recessional period. This

is because the adjustment mechanism acts rather like that of the gold

standard. Higher inflation in one ERM country means that it is likely to

generate current account deficits and put downward pressure on its

currency. To reduce the deficit and reduce inflation, the country has to

deflate its economy. In the UK, it could be argued that the battle to

bring down inflation had been won by the time the UK joined the ERM in

1990. However, the UK joined at too high an exchange rate. It was too high

because the UK was still running a large current account deficit at an

exchange rate of around 3 Dm to the pound. The UK government then spent

the next two years defending the value of the pound in the ERM with

interest rates which were too high to allow the economy to recover. Many

forecasts predicted that, had the UK not left the ERM in Sept 1992,

inflation in the UK in 1993 would have been negative (ie prices would have

fallen).The economic cost of this would have been continued unemployment

at 3million and a stagnant economy. When the UK did leave the ERM and it

rapidly cut interest rates from 10% to five and a half %, there was strong

economic growth and the current account position improved, but there was

an inflation cost.





EU is not only economic and political union but traditional and cultural aspects includes as well. But today situation is changing and EU entity is going to influence it and gradually Political Union might be achieved by EU, then all values beliefs, cultures, traditions will be the same because might be presented as a one nation. According to my outlook these values and beliefs of each nation is important because, it what does motivates them as a nation (country), however the union drains them. From economy point of view is good to stabilize the economy but they ignore subjective matters as I have mention in previous statements but objectives matters have been achieved but have not finalized the union because Political Union not achieved, which is the hardest stage and further one.


However, if take into consideration other points, which are advantages then we can see also some advantages that EU benefits in fact. As follows:



Advantages

  1. Transaction costs will be eliminated.

For instance, UK firms currently spend about 1.5 billion sterling a year buying

and selling foreign currencies to do business in the EU.

With the EMU this is eliminated, so increasing profitability of EU firms.

Advice to young people: You can go on holiday and not have to worry about

getting your money changed, therefore avoiding high conversion charges.


  1. Price transparency

EU firms and households often find it difficult to accurately compare the

prices of goods, services and resources across the EU because of the

distorting effects of exchange rate differences.

  1. Uncertainty caused by Exchange rate fluctuations eliminated.

Many firms become wary when investing in other countries because of the

uncertainty caused by the fluctuating currencies in the EU. Investment

would rise in the EMU area as the currency is universal within the area,

therefore the anxiety that was previously apparent is there no more.


4. Single currency in single market makes sense.

Trade and everything else should operate more effectively and efficiently

with the Euro. Single currency in a single market seems to be the way

forward.


5. Rival to the "Big Two".

If we look out in the world today we can see strong currencies such as the

Japanese Yen and The American $. America and Japan both have strong

economies and have millions of inhabitants. A newly found monetary union

and a new currency in Europe could be a rival to the "BIG TWO".

EMU can be self-supporting and so they could survive without trading with

anyone outside the EMU area.

The situation that EMU is in is good as it seems that it can survive on

its own, with or without the help of Japan and U.S.A.


6. Prevent war.

The EMU is, and will be a political project. It's founding is a step

towards European integration, to prevent war in the union. It's a well

known fact that countries who trade effectively together don't wage war on

each other and if EMU means more happy trade, then this means, peace

throughout Europe and beyond (we hope).


  1. Increased Trade and reduced costs to firms.

Proponents of the move argue that it brings considerable economic trade

through the wiping out of exchange rate fluctuations, but as well as this

it helps to lower costs to industry because companies will not have to buy

foreign exchange for use within the EU. For them, EU represents the

completion of the Single European Market. It is vital if Europe is to

compete with the other large trading blocs of the Far East and North

America.


  1. The Political agenda.

There is also a political agenda to European bank (the European System of

Central Banks -ESCB), the complete removal of national control over

monetary policy and the partial removal of control over fiscal policy.

Individual nation states will lose sovereignty (i.e. the ability to

control their own affairs). It will be a considerable step down the road

towards political union.


  1. Inflation

From the mid-1980s onwards, there were a number of economists and

politicians who argued that, for the UK at least, EMU provided the best

way forward to achieve low inflation rates throughout the EU. During the

first half of the 1980s high inflation countries, such as France and Italy

were forced to adopt policies which reduced their inflation rates to

something approximating the German inflation rates to something

approximating the German inflation rate. If they had not done this, the

franc and the lira would have had to be periodically devalued, negating

the fixed exchange rate advantages of the system. Effectively, the German

central bank, the Bundesbank, set inflation targets and therefore monetary

targets for the rest of the EU.

In order to express whether EU has positive or negative points, we have to take in consideration both advantages and disadvantages of EU and it also depends upon point of view you are considering because of good and bad sides of integration. Behind Economic Integration there is logic to unite politically since EU wants to achieve Political Union we have to consider two sides of coin. And in this case I can say that Economic integration has both negative and positive sides. According to my opinion the union of EU is good because they strengthening economy and cooperate with each other. At the same time it is not good because each member states lose not only sovereignty but also some other matters which belong only to that nation, and can not represent themselves as independent states because they are tighten to each other. Moreover, EU with its member states concentrated on economical and political matters but not on values and beliefs of its citizens, of course they increase living standards of people by improving the economy but it is related materially but not subjective points, you can say it is not important, however, in fact those items make them feel whether he is British or someone else and Economic Integration might drain them. Europe and Western part have sexual harassment and consumption of alcoholic drinks increase in great number and much of fun that makes young generation lazy and keeps out of consciousness. Unless Europe reverses trend -- low birthrates it faces a bleak future of rising domestic discontent and falling global power. In case of rejecting of EURO currency by England, Denmark, and Sweden, these countries do not want to change their official currency, for instance, British people want to see their queen on their home currency because it motivates and makes them to have perception of being British. Also Denmark and Sweden rejected EURO because own currency shows independence and political solidarity.

 

 

 

DEMOGRAPHIC PROBLEM (Population is shriveling)

 

 

 

It's hard to be a great power if your population is shriveling. Europe's birthrates have dropped well below the replacement rate of 2.1 children for each woman of childbearing age. For Western Europe as a whole, the rate is 1.5. It's 1.4 in Germany and 1.3 in Italy. In a century -- if these rates continue -- there won't be many Germans in Germany or Italians in Italy. Even assuming some increase in birthrates and continued immigration, Western Europe's population grows dramatically grayer. Now about one-sixth of the population is 65 and older. By 2030 that would be one-fourth, and by 2050 almost one-third, the trouble is that so much benevolence requires a strong economy, while the sources of all this benevolence -- high taxes, stiff regulations -- weaken the economy. With aging populations, the contradictions will only thicken. Indeed, some scholarly research suggests that high old-age benefits partly explain low birthrates. With the state paying for old age, who needs children as caregivers?

High taxes may also deter young couples from assuming the added costs of children.
So in sentences which are above clearly explains us that financially situation is ok but for who Europe is uniting and to whom this economy will belong when there is neither sound generation with sound mind nor generation itself, too much sick young people. For who symbolized such transnational change in the continent of Europe? *


Beside of aging of population Europe has problem with its generation. Europe is by the heaviest-imbibing region in the world, with alcohol consumption per head over twice the world average-11 L of pure alcohol per year. During the mid-1970s, as southern countries have slowly lost the habit of drinking throughout the day. But younger generation is yanking it up again. Irish Minister of State Noel Ahern, speaking about his own country, captures the European trend: People used to drink for enjoyment, but now many young people are drinking to get plastered. **

Kids may think binge drinking is cool, but the hangover-in terms of health problems, crime and accidents causing death or disability-is huge. Spanish Health Minister Elena Salgado says that the number of hospitalizations from alcohol abuse has doubled in a decade. Martin Plant, an alcohol researcher at the University of the West of England, says that people in their 20s are now dying of alcohol-related liver disease, and even teenagers are developing it. British accidents and 47% of violent crimes, in Germany young people are drinking almost 30% more alcohol than four years ago.


Average age Europeans start drinking


ITALY; 12.2

IRELAND; 12.7

E.U; 14.6

U.K; 14.8

GERMANY; 15.1

GREECE; 17.2* **


In Spain, young girls are keeping up with the boys and drinking to get plastered; 82% of 14-to 18-year olds say they drink regularly, and reckon they are drunk every 10 days.

This information is the fact about Europe before stating it I have said about the generation and to make my statement more reliable or authentic I mention about young people of EU and trend of youth is-wrong, plus administration of EU doest not take effective action according to it even if they do but is not really significant. Today EUs young descendants do not take such progress between European nations.

So much consumption of alcohol causing not only death or disability, but it leads to unplanned sex, it spreads either sexual harassment or leads to many HIV (human immunodeficiency virus) that reducing population and healthy people.

















CONCLUSION













































BIBLIOGRAPHY



 

 

BOOKS:

 


EC/EU FACT BOOK, Sixth Edition Alex Roney (2000)


 

 

INTERNET:


#"#">#"#">#"#">#"#_ftnref1" name="_ftn1" title="">[*] The Information Wave, by Peter Cochrane, taken from Information Superhighways, Academic Press

* #"#_ftnref3" name="_ftn3" title="">** #"#_ftnref4" name="_ftn4" title="">** #"#_ftnref5" name="_ftn5" title="">* Sixth edition of EC/EU fact book by Alex Roney p.3

* #"#_ftnref7" name="_ftn7" title="">* #"#_ftnref8" name="_ftn8" title="">* The Treaty of Rome, Single European Act and Maastricht, Sixth edition EC/EU fact book by Alex Roney p. 10

** The Treaty of Rome, Single European Act and Maastricht, Sixth Edition of EC/EU fact book of Alex Roney p.17

 

* #"#_ftnref12" name="_ftn12" title="">* The End of Europe By Robert J. Samuelson Wednesday, June 15, 2005; Page A25

* * Source: BBC online; British Crime Survey, published by Time, December 19, 2005,p.22

 

** * Source: Euro barometer, health, food and alcohol and safety, published by TIME, December 19,2005,p.23

 

 


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