EU expansion

06 May, 2004

As the European Union celebrated its historic expansion last Saturday, having swelled from 15 members to a 25-member bloc with a 450 million common market, a single currency (used by 12 of the previous 15 members) and a new constitution in the making, the event created a fresh hope for many in the Third World countries.
The hope is that a strong and united Europe may serve as a much-needed counterpoint to the US arrogance of power that has led it to invade and occupy Iraq and threaten other weaker Muslim nations with a similar fate while extending an unconditional support to Israel's policy of land grab and bloody oppression of the Palestinian people.
When the EU becomes strong, and the 'new Europe' realises its best interest lies nearer home in a close co-operation with the 'old Europe' rather than across the Atlantic, unlike at present, it is expected to gravitate towards the former rather than the latter.
Besides, Britain, which traditionally has tended to prefer maintaining its trans-Atlantic ties at the cost of its relations with Europe, may also find it more useful to build a common future with its European neighbours rather than its trans-Atlantic cousins.
Before the latest expansion came about the EU economy's size was about the same as that of the US.
The new members, save for Cyprus, are relatively poor nations, whose combined wealth as per 2002 statistics is only about 4.8 percent of the total wealth of the previous 15 EU members.
The inequalities in the economic standards, it is rightly feared in some quarters, might result in large economic migrations threatening the idea of welfare state in Western European and Scandinavian countries.
The issue has been addressed by placing a time-bound bar on such migrations. But the poorer partners might get compensated in other ways as more and more investors from the richer nations will want to go and invest in countries that offer lower labour rates and other costs of production.
Together the new and old members of the EU have a great potential for progress not only in terms of trade and investment, but also in developing human resource.
There is opportunity to exploit a bigger pool of latent talent in the less developed partners.
Interestingly, a just published study in the US has revealed that during the recent years the volume of professional papers contributed to scientific publications in the country has diminished drastically while its annual share in Nobel Prizes in scientific disciplines has also come down by almost half.
The US loss on this score has resulted in gains by European scientists as well as an increasing number of Chinese making their mark in the field.
Which only goes on to show that with the widening co-operation within its expanded borders, the EU can achieve further successes in science and technology and strengthen its economic base.
As it is, in sharp contrast to the US, which relies not only on its economic strength but also military might to exert its influence in the world, the EU does not spend much on defence.
In fact, many in Europe are wary of this policy and argue that it must build its military muscle not only to act as counterpoint to America's power but also to promote its own interests.
In fact, France and Germany recently undertook an initiative to build a European military force independent of NATO, which, of course, did not amuse the Americans.
Whatever the merit of that argument, if America's adventure in Iraq continues to face setbacks and drags on for a long time, the situation is likely to put a serious strain on its economy - already running in deficit.
In case the EU also manages to attract an increased foreign interest, especially that of Opec, in doing business in euros rather than dollars, that can deliver a fatal blow to the US economy.
Such a development is likely to cause huge reverberations in the world economy, not necessarily all negative. Its one certain outcome will be a lot of vicarious pleasure for the weak and defenceless of the world only because of the bully image the US has, assiduously and consciously, built for itself.

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