Socio-Economic Analysis - Term Paper Example

Socio-Economic analysis Which countries should enter the EU? College: Introduction The First World War in 1914 to 1918 and the Second World War in 1939 to 1945 greatly affected the unity of the European nations. Most of the nations of the words nations including the modern day super powers were on the fore front in the war. The war was mainly between the Western European and Eastern European nations, who formed alliances with other nations out of Europe to give them support. The two wars resulted to hatred and enmity between the two main blocks, and most importantly, economic, social and political retrogression. With time, there rose a need to form Union between the two main warring blocks. The union known as the European Union would focus developing policies that will promote economic, political and social development of the European nations. This necessitated and continues to necessitate the need for officials in strategic positions to come up with policies that will help bring a balance in fiscal, social, economic and environmental goals of the European Union Member states. The biggest challenge however is to develop and implement policies that will not disrupt or compromise the life of citizens, owing to the fact that some states were more adversely affected by the war than others. Socio-economic analysis therefore becomes paramount in order to determine which decisions will contribute to the development of long-term solutions. The development solutions should contribute to economic prosperity and the general well-being of the society (Anderson et al, p.1). Socio-economic analysis will be an important tool or method to assess the impact of developments for the Member states Interested in joining the European Union and the EU as a whole. a comprehensive socio-economic analysis will require the officials to investigate how policies developed will affect the social, economic and political welfare on the EU population. In relation to the economic development, the EU should also look at macroeconomic impacts (Gencay 2010, p.1). Socio-economic analysis will revolve around two factors: quantitative changes and community perceptions. Each of these factors is discussed below. Qualitative Changes Societal development causes several changes in a society. Such changes include demographics, public services, housing, levels of employment and income, aesthetic quality and market. These changes affect the administration and perceptions of the community regarding the governing agencies. Communities in the European Union member states are skeptical about some countries joining the outfit. This is due to the underlying issues in different countries such as past historical ties, trade ventures, historical wars and other unpleasant experiences with each other. Countries that have been involved in wars with each other are not ready to be integrated into a single outfit that caters for their interests. Such countries include the former Yugoslavian outfits of Bosnia, Kosovo, Croatia, Serbia, Montenegro and Herzegovina (Edward 2012, p.1). However, joining the European Union comes with benefits. For instance, due to the requirements that each member stated is supposed to meet, and the fact that every nation must respect fully-fledged members of the European Union, there are no chances of future conflicts that would give rise to wars like previously observed. The union is also geared towards reconstructing and improving the economies, and social and political systems of the member states thereby promoting integration and cohesion among the member states (European Commission 2012, p.1). Community Perceptions Diverse communities around Europe think that the European Union is a huge obstacle to member states economic progression. They blame the Brussels-based outfit for being influenced by France. This influence resulted in economic bureaucratic ways, which have halted development and investment across the member states in the European Union. This has led to most conservative nations being sidelined by the European Union hence leading to complacency in realizing economic gains. Most of the European member states economic status is generally on the increase because of a combination of aspects that positively improve their integration with the world economy. The rate of their debts compared to their national revenue has increased significantly. This increase has made it easier for the member states governments to pay off their foreign debts. The member states have weathered political and economic instabilities occasioned by the European debt crisis to record an impressive income per capita against other countries outside the European Union (Edward 2012, p.1). Prerequisites of Joining the European Union (Convergence Criteria) The EU is a conglomeration of European countries that use the Euro as their currency. The current Membership of the European Union is 17 member states who together make up the Euro era. The introduction of the European Union and consequently the Euro in 1999 has immensely contributed to the integration of Europe. In 1999, it was a common currency for 11 Member States but currently about 330 million citizens are using the Euro as their exchange currency. In addition to using the Euro as a common currency, Member states of the European Union must adopt common values such as democracy, policies to promote and sustain economic and social development, and respect of human rights for both the majority and the minority groups in the country. The interested Member states should belong to the continent Europe (European Commission 2012, p.1). Although the prerequisites of join the European Union have been clearly stated in the Copenhagen Criteria, there has been a debate on whether Turkey should be allowed to join the European Union or otherwise. Some argue it should not be allowed to join the Union because it lies between Europe and Asia, and actually, the biggest geographical area of Turkey lies in Asia, the biggest percentage of the population lives in Asia, and Ankara, the Turkish capital is not in Europe. In addition, they argue that Turkey is largely a Muslim nation (99%) as opposed to other European Union nations who are largely Christians. This implies that culture in Turkey is different from other nations. That Turkey does not recognize Cyprus, yet it is a member of the European Union, and that human rights for the Kurds, and religious outfits that defy Islam are not respected, is an argument raised as to why Turkey should not be allowed to join the EU. After Germany that has a declining population of 82 million, Turkey would be the second largest nation in the EU. Hence, it would disrupt the balance of power in the greater EU whose parliament is based on population. The low income per capital in Turkey would also affect the EU negatively. On the contrary, the European Union and the EU neighbors to Turkey are still working to help build a stronger Turkey. For instance, they have allocated billions of Euros to support Turkish projects that will help build a stronger Turkey that will one day qualify to become a member of The EU. The argument is that by joining the EU, Turkey will adopt common values, policies, and rule of law that will cause Turkey to become even stronger. In addition, the EU is not a religion based or cultural based block; it is designed to advance healthy and beneficial policies that help promote the development of social, political and economic well-being of the population (Martin 2012, p.2-7). The Convergence Criteria (also known as the ‘Maastrichtcriteria’) of the European Union member states requires them to meet certain obligations. Member states must meet the Maastrichtcriteria in order to use Euro as their currency and consequently join the Euro zone. Interested member countries must join the Exchange-rate mechanism (ERM II) for at least two years consecutively. During this time, the candidate country should not have devalued its currency.All member states should not have an inflation of more than 1.5 percent, points higher than the average of 3 lowest inflation rates of EU members’ states of the previous year.The gross debt to GDP ratio must be 60% or less at the end of the preceding fiscal year. The government’s budget deficit should be less than 3 percent of the GDP of every country at the end of the preceding fiscal year.The rates of long-term interests should not be higher than 2% points the lowest inflation rates of the EU countries over the previous year (World Bank Group 2005, p.8). There are concrete and measureable methods that have been established in the Stability and Growth Pact that are used to monitor member countries that have joined the European Union. The Stability and Growth Pact rules and coordinates policies on finances in the Economic and Monetary Union of the member countries. It is vital to put in place financial policies that promote an Economic and Monetary Union among the member countries of the European Union. The Pact has put in place a strategy that is geared towards preventing excessive budget deficits for the money countries. The members of the European Union must submit to the EU Commission programs demonstrating annual convergence and stability as a requirement set in the preventive approach of excess deficit of the budget. Members demonstrate how they intend to achieve and maintain mid-term acceptable fiscal positions (Jones 2008, p.134). The preventive approach that EU commission has taken on its members to fulfill the achievement of their economic and monetary goal has adopted the strategies these two strategies:Members alignwith proposals made by the European Union Commission and the Council to prevent occurrence of excessive deficit through giving an early warning. The Commission also addresses recommended policies directly to the respective Member State on large-scale implications of the respective Member State fiscal policy.The Stability and Growth Pact has a dissuasive approach that is related to excessive deficit procedure (EDP), which is caused by a deficit that does not abide by the 3% requirement in the GDP policy as stated in the Treaty(Gencay 2010, p.1). What Countries Want To Become A Member Of The EU? While some of the European countries are working towards joining the European Union because of the benefits that they will accrue, some prefer not to join. Russia is one of the countries that prefer not to join the EU. Among some of the reasons for the decision is because Member States of the European Union are required to follow specific rules and guidelines stated in the Treaty. These rules and regulations include exemption of taxes on certain imports and experts. Russia wishes to continue levying taxes on certain imports and exports in order to protect her own industries. Other counties refused to join European Union because they are comfortable doing business on their own. Such countries would want to remain neutral, or are not comfortable with the long-term outcome of being in the European Union (European Union Committee 2008, p.4). Joining the European Union involves a rigorous vetting process following the conditions set in the MaastrichtCriteria/Treaty. Interested member states are required to send an application letter to the European Union. However, the country should belong to the European continent. The EU reads the application letter and accepts it, after which the interested Member state goes through a thorough vetting proves by members already in the Union. The members in the Union discuss the issue and later subject it for voting for full membership. Upon approval, the country is addressed in the Union and required to pledge an allegiance and loyalty to the European Union(European Commission 2012, p. 1). Gaining the membership of the European Union has numerous benefits. The set systems and restrictions set are favorable to the political and economic development of the member states. The members promote peace and cohesion because war would harm the economy of the entire region. The EU as single unit has bargaining power compared to other strong economies. This reduces monetary instability and there is creation of jobs in different countries. As such, countries such as Croatia, Iceland, Serbia, Turkey, Albania, Montenegro, The Former Yugoslav Republic of Macedonia, Bosnia, Herzegovina and Kosovo want to join the European Union (European Commission 2012, p. 1). By joining the European Union, these countries will also enjoy other benefits such as easy travelling as there are no boundaries necessitating the use of visas to move from one region to another. Other benefits include cheaper trade operation cost as there is freedom and ease of transferring goods, capital and provision of services, unification of market laws, which promote trade balances.Market laws and trade balances promote a more competitive market and lowering of prices.The laws and balance also encourage specialization among different members states thereby reducing production cost during the manufacturing process is another benefit gained from joining the EU. Generally, life among the citizens will improve in reference to health, job safety, and education among others (European Commission 2012, p.1). To What Extent Do These Countries Fulfill The Convergence Criteria? For a country to join the EU, a certain criteria must be met as stated in the in the convergence criteria. The countries mentioned in the previous section have fulfilled or are in the process of meeting this criterion in their different capacities. In the recent past, there have been developments on the criteria used to vet member states that desire to join the European Union such as the Copenhagen criteria. This helps in ensuring that members conduct themselves following a particular guideline that promotes the well-being of the different member states. For any members to join the Union or have the prospects of joining the Union, the country must demonstrate stability of institutions that guarantee, the rule of law, democracy, human rights and protection and respect of the minority in the country. The country must have a functional market economy and have a capacity that can cope with market forces and pressure within the European Union.In addition, the country must demonstrate an ability to take responsibility on the membership. For example, the country can demonstrate the ability to adhere to the economic, political and monetary union and administrative capacity to apply the requirements of the Union effectively (European commission 2012 p.1). The member countries that also desire to join the European Union are also required to fulfill the requirements of the acquis. Over the years, the content of the acquis has changed and currently includes the content, standards and political goals of the Treaties upon which the Union is instituted. The acquis also includes legislation and resolutions implemented pursuant to the Treaties, and the Court of Justice case law Supplementary acts, lawfully binding or not, approved within the Union agenda. Other contents include mutual actions, general arrangements, pronouncements, conclusions and other acts contained by the agenda of the general foreign and security guidelines among others (European commission 2012, p.1). Global accords concluded by the communities cooperatively with their constituent states, the Union and those concluded by the European Union nations among themselves with regard to the union activities.The members will also be required to bring up to the standards of the European Union their institutions, administrative and judicial systems and management capacity. This helps the candidate countries to implement the contents of the acquis prior to accession as a requirement(European commission 2012, p.1). In the next 10-15 years, which one of these countries will most likely join the EU? The countries that are likely to join the EU in the next 10-15 years are Croatia, Iceland, Montenegro, the Former Yugoslav Republic of Macedonia, Turkey and Serbia. However, accession talks with The Former Yugoslav Republic of Macedonia, Montenegro, and Serbia have not yet started. Joining the EU presents members with economic, political and social benefits among others. Consequently, different countries have gone ahead to fulfill the requirements of the convergence criteria. On the other hand, there are challenges that EU members states face. These challenges include inflexible monetary policy, poorly designed mortgages by the institutions that encompass the Euro zone, trade imbalances and high levels of government debt, usage of the same currency and lack of a proper fiscal policy (European commission 2012, p.1). Conclusion Countries that join theEuropean Union access different privileges and rights that guarantee social economic progress. Such incentives include enhanced regulation with obligatory business evaluations for fresh legislative suggestions, changes of social security schemes,and amplified investment in modernization by Member States. Other benefits include growth of universities and commerce, cut backs of company taxes, improved education on entrepreneurship, flexible guidelines of labor markets and execution of domestic market legislation. The member states that are interested in joining the European Union should conduct a comprehensive socio-economic analysis.   References Anderson, J. R., Barnum, H. N., Belli, P., Dixon, J. A., & Tan, J.-P2001, Economic analysis of investment operations: analytical tools and practical Applications, Washington, DC, World Bank. Edward, M., Socio-economic impact analysis from community guide to development impact Analysis,Viewed May 13, 2012 http://www.lic.wisc.edu/shapingdane/facilitation/all_resources/impacts/analysis_socio.htm Europa.eu 2012, Economic and financial affairs, Viewed May 13, 2012 http://ec.europa.eu/economy_finance/economic_governance/index_en.htm European Union Committee, 2008, the European Union and Russia, London the Stationery Office. Gencay, S 2010, The debt crisis in Greece and the euro zone, Viewed May 13, 2012http://www.ikv.org.tr/images/upload/data/files/the_debt_crisis_in_greece_and_the_euro_zone%281%29.pdf Jones, A. 2008, A glossary of the European Union. Edinburgh University Press, Edinburgh World Bank Group 2005, Public expenditure management and financial accountability in Niger, World Bank,Washington, D.C. Read More