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4 - Europe: a continent in decline?

Published online by Cambridge University Press:  14 January 2010

Riccardo Faini
Affiliation:
Dipartimento di Studi Economico-Finanziari e Metodi Quantitativi, University of Rome “Tor Vergata”
Paul W. Rhode
Affiliation:
University of North Carolina, Chapel Hill
Gianni Toniolo
Affiliation:
Università degli Studi di Roma 'Tor Vergata'
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Summary

Introduction

Euro-pessimism is back. The last bout of optimism about the economic prospects of the European Union came at the beginning of 2001, following the launch of the Lisbon reform agenda (which was supposed to modernize the EU economy and make it the most dynamic and competitive in the world) and the first indications of a significant slowdown of the US economy. At that time many European ministers expressed their belief that Europe, and the European Union in particular, was poised to become the engine of growth for the world economy.

Economic performance has not been kind to such forecasts. Between 2001 and 2003 average economic growth in the Union was slightly above 1 percent, versus 2 percent in the United States. Prospects for 2005/2006 are not much better, with US growth according to the OECD projected at 3.5 percent against 2.3 percent in the European Union. Looking backward does not offer much consolation either: between 1990 and 2000 GDP increased at an average annual rate of 3.2 percent and 2.1 percent in the United States and in the European Union respectively. Focusing on the performance of the Euro area rather than on the Union would only make the gap with the United States larger.

Adding to the concerns of the Euro-pessimists is the steady erosion of the EU export share in world markets. Between 1990 and 2001 Germany's export share fell from 12.1 percent to 8.1 percent.

Type
Chapter
Information
The Global Economy in the 1990s
A Long-Run Perspective
, pp. 69 - 88
Publisher: Cambridge University Press
Print publication year: 2006

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  • Europe: a continent in decline?
    • By Riccardo Faini, Dipartimento di Studi Economico-Finanziari e Metodi Quantitativi, University of Rome “Tor Vergata”
  • Edited by Paul W. Rhode, University of North Carolina, Chapel Hill, Gianni Toniolo, Università degli Studi di Roma 'Tor Vergata'
  • Book: The Global Economy in the 1990s
  • Online publication: 14 January 2010
  • Chapter DOI: https://doi.org/10.1017/CBO9780511616464.005
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  • Europe: a continent in decline?
    • By Riccardo Faini, Dipartimento di Studi Economico-Finanziari e Metodi Quantitativi, University of Rome “Tor Vergata”
  • Edited by Paul W. Rhode, University of North Carolina, Chapel Hill, Gianni Toniolo, Università degli Studi di Roma 'Tor Vergata'
  • Book: The Global Economy in the 1990s
  • Online publication: 14 January 2010
  • Chapter DOI: https://doi.org/10.1017/CBO9780511616464.005
Available formats
×

Send book to Google Drive

To send content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about sending content to Google Drive.

  • Europe: a continent in decline?
    • By Riccardo Faini, Dipartimento di Studi Economico-Finanziari e Metodi Quantitativi, University of Rome “Tor Vergata”
  • Edited by Paul W. Rhode, University of North Carolina, Chapel Hill, Gianni Toniolo, Università degli Studi di Roma 'Tor Vergata'
  • Book: The Global Economy in the 1990s
  • Online publication: 14 January 2010
  • Chapter DOI: https://doi.org/10.1017/CBO9780511616464.005
Available formats
×