EU is Being Swept into Ronald Reagan's Dustbin of History
Markit Economics warned that its European Union Manufacturing Index dropped from 53.9 in July to 52.8 in August, with the index for Italy dropping below the level of “50”, which means that manufacturing actually contracted. Although the Leftist would like to blame the latest EU economic meltdown on the Ukraine conflict, government spending at over 50% of GDP explains why the EU for the last decade has grown by less than 1% a year.
Within six weeks of the Great December Revolution of 1991 that swept the Soviet Socialist Republics into Ronald Reagan’s dustbin of history, 18 Western European nations “Sovietized” by signing the Maastricht Treaty to form the European Union (EU) and adopt the common euro currency.
The European Union is now the second-largest economy in the world. If it was a country, it would be the fourth-largest in the world with 330 million inhabitants. France, Germany, Italy and Spain are the largest EU economies, accounting for over 74% of the Union’s GDP.
The welfare state economists often blame external factors to explain why the EU suffers from a chronic lack of consumer spending growth.
“The economic slowdown which began in the euro-zone core in spring is spreading,” said Christian Schulz, an economist at Berenberg Bank in London. “The latest escalation of Russia’s aggression, and the likely stepping up of Western sanctions and Russian countersanctions, indicate that the overall weakness could get worse.”
Despite its size and state of development, the EU only grew by .77% annually over the last 10 years. In comparison, Russia grew by 8% a year over the same period. The Russian economy might have grown even faster without the continuing burden of government corruption.
The major differences in the two economies is that Russia restructured its economy to be more capitalist; while the EU adapted most of Karl Marx's Ten Planks of the Communist Manifesto to be more socialist. Government spending as a percent of GDP in Russia is only 36%; but government spending rose in the EU to 50.3% of GDP.
Albert Einstein defined “Insanity: doing the same thing over and over again and expecting different results.”
Despite a horrible track record of anemic economic growth, the European Union Economic and Social Committee in July 2013 stated, “improved economic growth at the European level also depends upon investment in public service sectors such as education, transport and healthcare, offering an opportunity for public authorities to intervene by creating public enterprises.”
Chriss Street suggests that if you are interested in economic competition, please click on "China Faces Credit Crunch as Lending Falls 86%"