Monday, June 6, 2011

European Union Economy

The European union economy refers to the economy of 27 different states, or countries, primarily located in Europe. The EU can trace its history back to the European Coal & Steel coalition, of which six countries were members in 1958. The current members of the EU include Spain, Italy, United Kingdom, France, Germany, Poland, the Netherlands, Sweden, Belgium, Greece, Austria, Denmark, Ireland, Finland, Czech Republic, Portugal, Hungary, Romania, Luxembourg, Slovakia, Bulgaria, Slovenia, Lithuania, Bulgaria, Malta, Estonia, Cyprus, and Latvia.

The main unit of currency within these states is the euro. The change to using the euro for economic convergence within the countries and to maintain economic stability. This is the most common currency form used in Europe, as 17 of the current members use the euro with the remaining members pledged to change once they have met the specific requirements needed to change currencies. This economy is the largest in the world with more a gross domestic product, GDP, estimated at more than 16 billion dollars in 2011. This makes it the largest single market in the world. However there are differences between the EU countries. It will be interesting to see if the EU can maintain its position as the largest market as the growth of the economy in Brazil, India and China has caused the rate of GDP increase to slow.

The success of the EU is primarily due to the many energy resources available in EU countries. There are six oil producing countries in the Union, mainly drilling oil form the North Sea. The Union is the seventh largest producer of oil in the world. Countries within the Union also have large natural gas reserves and large coal reserves. The the amount of coal being mined has decreased. Services, mainly tourism and agriculture, make up the rest of the profit in the GDP. The EU is a major tourist destination and the ability for EU citizens to easily travel to other EU countries has only promoted further tourism. Of all the countries France is the top tourist destination in the world.

Agriculture is also important to the EU's economy as EU farmers to have protection. The EU frowns upon the trade agriculture from developing countries while promoting agriculture from EU countries. The agricultural sector also receives many subsidies through the Common Agricultural Policy. The other cause of the large GDP is the fact that the EU is the largest exporter found on the globe. The internal trade between members is also an advantage as border control and tariffs are reduced. Many of these trade benefits are due to a common currency and the European Union Association Agreement also has trade agreements with many other countries.

Some of the largest companies in the world are found in EU member states and these states are home to the local headquarters. Some of the largest companies include Airbus, Allianz, Air france-KLM, Amorim, Inditex, ArcelorMittal, Anhaeuser-Busch InBev, L'Oreal Group, Royal Dutch Shell, LVMH, Nokia Corporation, HSBC, and Grupo Santander. The automobile industry is also an important sector for the European Union Economy.

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