euro zone map

A National Market: The European Union

by Elaine Schwartz    •    Jun 23, 2013    •    535 Views

Asked who is trustworthy, arrogant and compassionate, respondents in European Union nations offered a fascinating picture of how they perceive each other and themselves.

Isn’t it interesting that the Italians named themselves as least trustworthy? And that Greece named itself for every positive trait? You can also see (below) the trustworthy but arrogant image of the Germans.

European Union stereotyping from Pew Research

Considering the these unsettling GDP and unemployment statistics (below), perhaps the stereotypes make a bit more sense.

European Union GDP and Unemployment

Next, let’s think, “Nevada.”

In a NY Times Magazine article, economist Paul Krugman provides further insight by citing Nevada. When Nevada has a housing crisis, the US picks up the tab for some of its woes. Nevada continues to receive federally funded unemployment benefits, Medicare, Medicaid without complaints from New Jersey and Texas. Why? In the US national market, we share a common history, language and culture.

Economically speaking, together, monetary and fiscal policy guide the US national market. With monetary policy involving money and credit and fiscal policy targeting spending, taxing, and borrowing, the US has the tools to fight recession and inflation. By contrast, the eurozone lacks the fiscal authority and cultural unity that would complement its monetary power.

Furthermore, divisive stereotypes constrain progress toward fiscal consolidation.

Thinking of the EU cultural divide, for a smile, do look at this excerpt from the comedy TV series, “Yes, Minister” for the British response to a euro sausage regulation.

Sources and resources: A 6 page paper, the Pew report, ‘The New Sick Man of Europe: the European Union” presents insightful analysis and a wealth of comparative national stats. Then, if you want more EU statistics,  Eurostats is always a perfect source.

On the other hand, if you would enjoy some EU history and analysis, this Krugman article is excellent as is a wonderful Teaching Company lecture from Dr. Timothy Taylor (Lecture 6, “America and the New Global Economy”).

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