Impact of the European Union on France - Essay Example

Impact of the European Union on France Contents Contents 2 Synopsis 3 Introduction 3 Discussion 4 Impact of Euro and European Union on France in economic, political, social and cultural context 4 Conclusion 8 References 9 Appendices 10 Appendix 1: GDP growth 10 Appendix 2: External Trade 11 Appendix 3: Public Deficit 12 Appendix 4: Unemployment and Employment Rate 13 Appendix 5: Social benefits breakdown 14 Appendix 6: Disability and health expenditures 15 Synopsis The European Union can be defined as an association which was formed in order to implement economic integration and political stability across European countries. There are many countries which have been positively or negatively impacted by such Treaty, but this study will be focused on a particular country, France. In this research study those reforming conditions of European Union would be highlighted that has been able to create magnificent changes in the nation. The entire analysis has been conducted in terms of four major perspectives: political, economical, social and cultural. This study will even outline the areas of deficit prevalent in the specific country so as to drive attention towards segments of further improvement. Introduction The European Union (EU) is a political and economic federation comprising 27 member countries, and all of them design same policies for different areas. In 1993 the EU was formed with the signing of the Maastricht Treaty, but later there was a great contribution from multiple European organizations, which led to the development of European Union. This represents an effort to bring forth unity in Europe encompassing various attempts of establishing unity through armed forces. France was one of the member nations involved in European Union. There were several criteria associated with joining the Union which were evaluated by the European Council country-wise. The major benefit of EU was that it focused on a stable democracy where one nation would not be unduly harmed by other nations. One European currency and economic integration proved to be primary goals of European Union. The research question for this particular study is – “what is the impact of Euro and EU on France in economical, social, political and cultural context.” This study will help to evaluate the positive and negative impacts created on France by European Union. Discussion Impact of Euro and European Union on France in economic, political, social and cultural context In the economic context the impact of EU and Euro on France would be analysed on the basis of GDP components, productivity, public finances, external trade and labour market. EU possessed GDP of 11,600 billion Euros and a total population of 500 million in 2006. 12.7% of the total population of EU was accounted by France and the nation even contributed towards GDP by more than 14%. There are certain leading players in EU and they contribute immensely towards GDP per capita such as the Netherlands, Denmark, Austria, etc. Amongst them France can be considered as an intermediate group. The real GDP growth and the growth rate of France are further illustrated in Appendix 1. It can be stated that GDP is directly associated with labour volume and productivity. The hourly productivity rate is higher in France in comparison to average of 27 of EU but the major challenge for the nation is its employment rate. Though EU has been able to increase productivity of France but there is no such right balance achieved till date in terms of open markets for services and goods, training efforts, more fluidity in labour markets, investment, and R&D. Working hours are less for France which increases rate of productivity but there is no such gains achieved in employment unlike other EU nations. However in comparison to other countries which have reached the maturity stage France has been benefitted by EU in terms of consumption engine which proved to be more buoyant in 2005 than elsewhere (McCormick, 2011). This factor always does not ensure that a nation will have better performance in context of employment and productivity. The economic impact of EU was such that there was a growth in employment rate between 2001 and 2006 by 0.4% annually which was 0.8% for all other nations of EU (Bulmer and Lequesne, 2013). On the other hand GDP growth which was noticed to be at an average of 2.0% was 1.7% for France. These figures clearly indicate that EU had provided large supplies for the nation which improved the scenario of the nation in relation to some developed countries. The greater performance of France was due to the opportunity provided by EU in terms of more open trade. Foreign direct investment was another factor which improved GDP rate of France and in 2006 it ranked second for inward FDI after United States and third after United Kingdom and United States for outward FDI. European Union had given France an opportunity to explore surplus funds and improve the overall economic condition of nation by investing in appropriate segments. There are current-account deficits which are normally witnessed in catch-up countries such as France due to the import requirements whether for services, capital or goods. EU trade and current account deficits are stated in the form of statistical figures in Appendix 2.The policy of single currency Euro proved to be productive for other nation such as Denmark, Germany, etc., but it was not so in case of France. There were deficits observed in France due to appreciating Euro as well as increasing commodity prices. The impact was such that the overall deficit of France was 1.3% of total GDP which was higher in comparison to other EU countries that was at an average of 0.8%. Public finance stabilization is another element which is a matter of concern for all EU countries. This factor was stable in the initial years indicating economic upswing but from the year 2001 there has been significant debt witnessed in EU nations and its impact was prominent in France where public debt was 64.2% of the total GDP as stated in Appendix 3. There is no such fiscal equilibrium achieved by France which demonstrates the negative impact of European Union on the nation (El-Agraa, 2011). From the economic viewpoint it is evident that the EU has not been successful to establish much of economic stability in the nation. There is increase in prices due to increased cost of imports and exports which is not a favourable situation when the nation is in the phase of declining growth. The other element which denotes economic stability of a nation is employment rate. Appendix 4 states the employment rate of France and its corresponding unemployment rate. The country possess high unemployment rate which indicates that EU council has not been able to establish right balance in terms of increasing flexibility of labour market and extending work hours. EU has resulted into shift in labour market from France to other countries which in turn decreased industrial opportunities in the country and increased rate of unemployment. European Union accounted for increase in social benefits which was not noticed earlier in any of the EU countries. 27% of the total EU GDP was dedicated to social protection benefits. France was able to incorporate certain societal facilities on the basis of its GDP growth. However such benefits are not only dependent on GDP but there are other elements such as population pyramid, unemployment rate, household structure, etc., which sets forth differences in social system of different nations. France in the present scenario even encompasses old age benefits and this constitutes for the maximum expenditure in social protection benefits. 43.9% is the average rate of expenditure for such benefits by France which is close to that of the EU average. The breakdown of overall social benefits of all EU nations is given in Appendix 5. These benefits that are offered by EU council vary from one country to another. Unemployment benefits and family benefits which are gained by France are not similar to that of Belgium or Italy. The family benefits which France is been able to offer are 8.5% of the total social protection benefits. EU has provided the platform to each of the member nations in order to develop a better society and this opportunity to a great extent has been effectively exploited by France (Richardson, 2006). There are measures taken by the EU council towards road safety which has decreased the rate of death caused by road accidents. In France such measures has proved to be effective which has decreased the death rate and now the frequency of road accidents is 50 deaths per million inhabitants. This has been further illustrated in Appendix 6. It can be stated that before European Union was formed there was no such significant culture which hold importance for all the member nations. This was majorly due to the barriers which were present between the countries. However the major initiative of EU was to establish a stable democracy throughout the nations. Culture forms a vital component of such an initiative and France was benefitted to a great extent in terms of cultural perspective of EU. Education, music, crafts, sports, audiovisual, cinema, etc., were not that prominent in France but it gained more importance after foundation of EU. Majorly sport was considered to be a significant element that changed cultural dimensions of France. In the previous year sports was treated to be secondary by majority French people but EU brought forth such openness in culture that many people got eagerly involved in such activities (Bindi and Angelescu, 2012). The economic growth was able to support such cultural reform and apart from sports, education also gained high importance in this country. There was less of rigidity in the system and it proved to be a major positive impact created by EU. European Union laid the foundation for stable political conditions across European countries. Political stability forms the major pillar for business, industrial growth, employment conditions, societal progress, etc. However there was a lot of unrest prevailing in many European regions before the Treaty was signed and criteria’s were set for joining EU. France can be considered as the most typical example in this context because there were politically tough situations witnessed by the country (Krotz, 2014). The positive impact which was created by EU was the special relationship formed between Germany and France. There were certain guidelines of EU council and the most essential one was of a stable democracy where all the member nations would be actively involved in maintaining peaceful conditions in the country. This factor helped to enable immense collaboration and cooperation between the two rival nations. France was benefitted by such political collaboration and proved to be one of the forces to drive changes in the system (Krotz and Joachim, 2013). Democratic approach which was not prevalent in the country gained importance due to EU and in present scenario this democracy has helped the country to seek growth in every possible field. Conclusion France over the years has tried to achieve growth and success in every dimension and this is due to the impacts of European Union and singular currency Euro. The scenario was not such productive before the formation of European Union as there was political instability across the region. European Union was able to bring forth political reform in the country and established healthy relationship between Germany and France. To some extent this positively impacted the economy of the country. France witnessed a desirable GDP growth which was close to the average EU GDP growth. The economic conditions of the country are favourable but there is a need for further development in employment rate and labour hours. In comparison to other member nations France possess a lower rank in terms of employment opportunities. This indicates that there is a need to extend labour hours and create more business opportunities. EU has benefitted the country by incorporating societal advantages and bringing about cultural reform. However there are certain areas such as increasing public debt which needs to be attended appropriately so as to maintain stability in the overall system. References Bindi, F. M., and Angelescu, I., 2012. The Foreign Policy of the European Union: Assessing Europes Role in the World. Virginia: Brookings Institution Press. Bulmer, S., and Lequesne, C., 2013. The Member States of the European Union. UK: Oxford University Press. El-Agraa, A. M., 2011. The European Union: Economics and Policies. New York: Cambridge University Press. Krotz, U., 2014. Three eras and possible futures: a long-term view on the Franco-German relationship a century after the First World War. International Affairs, 20(2), pp 337-350. Krotz, U., and Joachim, S., 2013. Shaping Europe: France, Germany, and Embedded Bilateralism from the Elysée Treaty to Twenty-First Century Politics. UK: Oxford University Press. McCormick, J., 2011. Understanding the European Union: A Concise Introduction. UK: Palgrave Macmillan. Richardson, J. J., 2006. European Union: Power and Policy-making. UK: Psychology Press. Appendices Appendix 1: GDP growth Appendix 2: External Trade Appendix 3: Public Deficit Appendix 4: Unemployment and Employment Rate Appendix 5: Social benefits breakdown Appendix 6: Disability and health expenditures Read More