European Union - Challenges, Opportunities, Advantages, and Disadvantages - Essay Example

Nations that experience increased labor costs are unable to regain competitiveness through depreciation. The uncompetitive prices have sparked lower domestic demand and increased current account deficits. Nations are striving to restore competitiveness through internal devaluation. However, the movie has more devastating effects on the economy than the usual approach of depreciating exchange rates (Bliss, 2002, p. 121)

Demographic changes
Nations like Germany and Italy are experiencing declining birth rates. As a result, the original population pyramid is being inverted since the population structure is gaining weight towards citizens aged 50 years and above. The overall result is an increase in demand for benefits and a reduction in tax revenue.

The Opportunities
High population
A large number of citizens ensures a market for goods and services that the member states produce. It also provides labor for the industries.

Improved infrastructure
Improved railway, roads, and other means of transport connect the European Union member states together (Bliss, 2002, p. 142). They have made it easier for the movement of people, goods, and services across the Union. As such, there is potential for more growth.

Diversity in the goods and services produced
Different countries in the European Union provide various products and services. As countries exchange these goods, they have the potential of developing due to availability.

High technological advancements
As the technology improves, information and communication become easier across the member states. New ideas, challenges, and other important information can be quickly relayed.

Advantages
Stimulatedindustrialandeconomicgrowth
Eliminated borders between member states hence allowed free movement of goods, people, and capital. The common Euro currency makes trade and exchange easier.

Increased ability to overcome financial crises
The increased ability to make secure transfers of goods at averaged prices strengthened the economy and led to stability in financial strengths. The unification of countries allowed them to gain a collective body that agrees on issues that affect the economy. The union also allowed poor regions to get financial assistance from the more economically stable areas.

Low prices of goods and service
The free movement of products and services across the European Union enables a country to exchange the excess of its goods and services for those which it does not have from another country. Thus, the goods are readily available, cutting down the prices.

Creation of employment opportunities
As the economy grows, and labor barriers are lowered, more people can move to any member state and work from there.

Increased ability to deal with global issues
The European Union requires member states to adhere to environmental standards and the use of natural resources (Bliss, 2002, p. 123). The Union has helped in solving water, land, and air pollution mainly. The Union also supports member states to deal with other global issues that would otherwise be difficult to explain if a state were operating alone, for example, the war against terrorism.

Louder voice and Increased political stand
The unified political efforts of the member states can gain global influence when it comes to defending the region’s international and diplomatic affairs.

Disadvantages

Loss of sovereignty
The European Union continues to formulate and implement new statutes that encourage the enlargement of the integration (Bliss, 2002, p. 142). As a result, a member state may be unable to exercise some of its independent powers in the existing new rules in the political and economic scenario of the European Union.

Overcrowding
The free movement of the citizens from place to place has created overpopulation in the principal cities. It has thus resulted in skyrocketing prices of social amenities due to the high demand.

Inefficient policies
A large portion of the European Union’s expenditure goes to irrelevant policies such as the Common Agricultural Policy. Many years have seen minimum prices being placed on distorted agricultural markets. As a result, there has been an oversupply of goods while prices have been going up.

Issues with the Euro
Being a member of the European Union does not necessitate the membership of the Euro (Bliss, 2002, p. 112). However, the EU has strongly emphasized Single Currency. The single currency has proved to result in many problems, including low economic growth rates and high unemployment in some regions.

High cost
The costs of joining the European Union are very high. It may amount to approximately 83 billion pounds if all the regulation costs are included.

Pressure to pursue austerity
The European Union has since 2008 been pressurizing southern European countries to reduce their expenditures in order to meet deficit targets. However, these austerity requirements have led to prolonged economic stagnation. Read More