The European Union will not Fall in the Next Decade - Coursework Example

Name: Course: Tutor: Institution: Date: The European Union will not Fall in the Next Decade Introduction Since the development and emergence of the European Union, arguments have been developed on its eventual fall. In this regard, a number of its formation critics argued against its economic integration approach as well as the development of a common currency. In This regard, Hofmann and Türk (122) argued that such critics forecasted its fall at its formative years. However, despite a series of challenges, the union evolved past its formative years. However, changing world economic dynamics risk the unions fall. This research paper evaluates on factors that are likely to hold and knit together the union in the next ten years. Federalism The European Union is developed and based on a federal form of government. In this regard, the Union has the respective European nations and countries as its member States headed by the EU president. Under a federal government such as the one adopted by the USA, the central government divides its mandate and responsibility with the respective State governments. As such, through devolution, responsibility and obligations are divided for increased efficiency. The EU divides its administration, political and economic mandate with its member states, for enhanced efficiency. As such, the member states retain their political obligations and administration purposes. Moreover, they retain their domestic economic management. On the other hand, Hinarejos (1623) stated that through its current surveillance federalism model, the EU acquires the foreign and international economics management responsibility. Through its executive management and parliament, the Union develops appropriate international economics regulations and policies for its member states. The development of these policies enhances increased free trade among the EU partners. Therefore, the EU has increasingly enhanced free trade across Europe. Free trade is a major determinant of economic development within nations. Therefore, despite their respective domestic economic and political challenges, the EU member states develop a comparative edge through EU related policies. Thus, due to its increased role in facilitating free trade across Europe, the Union will into the future continue to receive increase support and funding from its member states and thus enhancing its continued existence against speculations that it will fall in the next 10 years. Common Currency The European Union has over the years evolved from regional union to an economic union. A common market economic union is a market through which factors of production move freely across the member States. As such all the factors have the free will to interact and participate in production in any of the member states. This has been the case in Europe under the EU free trade policies. Moreover, the union facilitated the development of a common European currency, the Euro. It is on the basis of this currency that transactions are conducted. Although developed European nations with a strong currency such as the UK sterling Pound are still hesitant to adopt the Euro currency, a majority of the other members’ states readily adopted the currency. Through the currency issuance, the EU engages in foreign exchange in the European financial market. In this regard, the Union earns revenues in the foreign exchange market through reduced exchange rate risks of the diverse member states currencies (Colander and Gamber 298). Therefore, despite its reliance on direct funding from the member states, the union has an added revenue stream. In addition, the Union treasury organ is tasked with the responsibility of maintaining and controlling Euro currency supply. In the recent past, a majority of the EU member states have expressed willingness to adopt the Euro as their domestic currency. In this regard, the EU will acquire an increased control of the European economy against speculation that it will run irrelevant into the future. Due to its grip and control of the money market in Europe today and the expected increased control of the economy with increased State adoption of the Euro as a domestic transactions currency, the EU will increasingly grow relevant and indispensable in Europe into the future. This argument concludes that due to its control on the Euro currency, the EU will not collapse in the next 10 years as forecasted despite its current administration challenges. The Asian Threat Besides the economic reasons for the continued existence of the EU there are social political reasons too. One among them is the rise of Asian states as economic as well as political powers in the region. For instance, China has over the last decade emerged as not only an economic powerhouse in Asia but also a democratic political governance system. Due to a combination of these factors China has emerged as a radically growing economic nation with expected increased future growths. In its expansion trend, in conjunction with other Asian economically developing nations such as India and Taiwan, the nations have engulfed both the Asian and African markets as well as penetrating the European and USA markets. One of their comparative advantages is the presence of low production costs as well as a large domestic consumer base. On one hand, the nation’s high populations offer ready and affordable labor supplies as well as a large consumer market base. Therefore, they enjoy increased domestic revenues for low cost products. These developments are a major threat to the European nations (Lee, Ma and Park 217). Traditionally, the EU member states exercised trade control across Asia and Africa. However, the emergence of this Asian economic powerhouse has altered the trend. As such, the European nations have to develop counter economic developments to mitigate against this influence. One among them is the development of an economic bloc. In this regard, the economic bloc would develop policies and regulations inhibiting increased market penetration. In addition, such an economic bloc would facilitate the development of a wide domestic market through which they can sell their products to realize their domestic revenues prior to internationalization ventures. This was among the core reasons for the EU establishment. Recently, the Eastern nations developed the BRICS (Brazil, Russia, India China and South Africa) economic bloc. The development of this economic bloc sought to enhance free trade among partners further developing their international influence capability. In order to counter this development, European nations will have to empower their union into the future to accommodate exclusively free trade barriers and the use of a common currency to reduce on transaction costs. Therefore, based on this analysis, it is apparent that as long as the Asian economic power house retain their influence [, the EU will remain increasingly relevant and thus it’s continued existence. Economic growth statistics indicate that Asia will economically grow into the future consequently guaranteeing the existence of the EU into the next 10 years. Conclusion In summary, this research paper evaluates the future of the European Union in the face of changing global dynamics. In this regard, the paper seeks to contribute into the emerging debate on the likelihood of the Union’s fall within a decade. However, the paper based on statistical and theoretical evidences argues that the union’s fall is unlikely to happen. In this regard, the paper highlights key success factors that are likely to facilitate the unions’ existence into the future. On one hand, it identifies the federal system of administration as a key success factor arguing that the union has its own revenue streams allowing for self funding and economic independence into the future. In addition, the paper evaluates the role EU plays in the Euro financial market. As such, it establishes that with its increased roles and responsibilities in managing the currency demand and supply, the union control on the European economics is bound to increase consequently increasing its indispensability nature in the union. Finally, on a political angle, the research establishes that the Asian dominance threat and the formation of the BRICS economic bloc among others pose a threat to Europe’s dominance. Therefore, the development of a union to enhance their domestic market is absolute, thus the forecasted development and existence of the EU. Therefore, this research paper concludes that despite the forecasted and current EU challenges, the union existence in the next decade is guaranteed. Works Cited Colander, David C, and Edward Gamber. Macroeconomics. Cape Town: Pearson/Prentice Hall, 2006. Print Hinarejos, Alicia. "Fiscal Federalism in the European Union: Evolution and Future Choices for Emu." Common Market Law Review 50.6 (2013): 1621-42 Hofmann, Herwig, and Alexander Türk. Legal Challenges in EU Administrative Law: Towards an Integrated Administration. Cheltenham, UK: Edward Elgar, 2009. Print Lee, Wang Hwi, Sang Yoon Ma, and Kun Young Park. "Korean Foreign Policy and the Rise of the BRICS Countries." Asian Perspective 31.4 (2007): 205, 224,3-4. Read More