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Economic disintegration of the European Union: Not unavoidable, but probable

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  • Leon Podkaminer

    (The Vienna Institute for International Economic Studies)

Abstract

It is argued that European integration has not fulfilled its chief economic promises. Output growth has been increasingly weak and unstable. Productivity growth has been following a decreasing trend. Income inequalities, both within and between the EU member states, have been rising. This sorry state of affairs is likely to continue – and likely to precipitate further exits, or eventually, the dissolution of the Union. However, this outcome is not unavoidable. A better integration in the EU is possible, at least in theory. Also, the negative consequences implicit in the existence of the common currency could be neutralised. However, the basic paradigms of the economic policies to be followed in the EU would have to be radically changed. First, the unconditional fiscal consolidation provisions still in force would have to be repelled. Second, “beggar-thy-neighbour” (or mercantilist) wage policies would have to be “outlawed”.

Suggested Citation

  • Leon Podkaminer, 2016. "Economic disintegration of the European Union: Not unavoidable, but probable," Acta Oeconomica, Akadémiai Kiadó, Hungary, vol. 66(supplemen), pages 49-60, December.
    • Handle: RePEc:aka:aoecon:v:66:y:2016:i:supplement1:p:49-60
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    File URL: http://www.akademiai.com/doi/pdf/10.1556/032.2016.66.S1.3
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    Citations

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    Cited by:

    1. Otilia-Roxana Oprea, 0. "Financial Integration or Disintegration during the Financial Crisis," Romanian Economic Journal, Department of International Business and Economics from the Academy of Economic Studies Bucharest, vol. 20(65), pages 122-136, September.
    2. Gregorz W. Kolodko & Marta Postula, 2018. "Determinants and Implications of the Eurozone Enlargement," Acta Oeconomica, Akadémiai Kiadó, Hungary, vol. 68(4), pages 477-498, December.
    3. Philipp Heimberger & Leon Podkaminer & Sandor Richter, 2018. "Monthly Report No. 10/2018," wiiw Monthly Reports 2018-10, The Vienna Institute for International Economic Studies, wiiw.
    4. G. W. Kolodko & M. Postula., 2018. "Determinants and implications of the Eurozone enlargement," VOPROSY ECONOMIKI, N.P. Redaktsiya zhurnala "Voprosy Economiki", vol. 7.

    More about this item

    Keywords

    European Union; integration; disintegration; economic growth; productivity; race to the bottom;
    All these keywords.

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory

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