Contemporary European Politics

Has European Integration Been a Success?

Introduction

The question that “European Integration has been a success or not”, requires much research and future outcomes. Depending on what one reads, the European economy is either a basket case or a dynamo. For a decade now, Europe's gross domestic product, the broadest measure of output, has grown more slowly than in the United States. Euro area labor productivity growth, as measured by real GDP per hour worked, declined from an average of 2.1 percent between 1990 and 1995 to a disappointing 1.2 percent between 1996 and 2005. Productivity growth has been especially anaemic in sectors where the United States successfully boosted it through the rapid assimilation of radically new information technologies, but the malaise is more general.

Discussion

The convergence of living standards across Europe, under way for half a century, has stalled out in the “convergence economies” of the continent's west—that is, in countries like Portugal, which are still behind and hence should have scope for growing relatively rapidly. Combine the slow growth of output per capita with the slow growth of population (a reflection of fertility rates below levels needed to maintain a stable population) and restrictive immigration policies, and questions inevitably arise about Europe's ability to match the United States—and, looking forward, India and China—in its capacity to project economic and military power.

But a variety of other indicators paint a more positive picture. For a year now, output and productivity growth have been accelerating again, presumably as the fruits of prior reform begin to be reaped. Countries like Finland and Ireland have been anything but slow in their uptake and development of new information and communications technologies. Germany has cut costs and is growing faster on the back of exports of precision manufactures. The portion of Central and Eastern Europe that joined the European Union (EU) in 2004 has shed its economic stagnation, if not also its political problems, and is now growing rapidly.[1]

GDP per capita in Western Europe may be only about three-quarters of us levels, but the gap all but disappears if one instead compares GDP per hour worked, reflecting the fact that Europeans work shorter days and take longer vacations. If one cares about the ability of an economy to enhance the quality of life, and not just its implications for the global balance of power, then one should count the value of Europeans' more extensive leisure time in addition to the market value of goods and services produced. Judged this way, the European economy continues to perform on a par with that of the United States.

System Envy

Confusion about the success or failure of the European Integration within the global economy stems in part from an inability to agree on how to characterize recent developments. But it also reflects different assumptions about the future. In the 1980s it was fashionable to argue that a vibrant Japan would overtake the United States and that the United States urgently needed to remake its institutions along Japanese ...