The financial superpower of Europe has changed drastically since 2007. The recently agreed Greek bailout and the unfolding political pantomime of Berlusconi’s Italy are testament to the continuation of these changes to this day. The established economic regions are not the only ones changing, in 2011 we are very aware of the BRIC economies and to a lesser extent the emerging Next Eleven: Korea, Mexico, Indonesia, Turkey, Egypt, Nigeria, Bangladesh, Pakistan, Iran, the Philippines and Vietnam.
Through the European Union, ‘Europe’ and it’s 27 member states trade with one another and the world. This collective style of interaction is designed to promote wide-spread European prosperity and protection, and via international organisations such as the G8 and G20, Europe is independently represented on the largest global scale. However, inter-European economic interaction in 2011 is enduring one of the most strained periods since the Second World War as EU member states find themselves engrossed in a battle to save fellow nations, and ultimately, a currency.
Since the financial crisis swept itself across the Atlantic in 2007, European trading has continued to feel the squeeze. The services sector continues to struggle, particular in the epicentre of London, where growth totalled at 0.5% in the last quarter (3rd qtr. 2011) (BBC, 2011). Manufacturing in Europe has also taken a severe hit in recent years, meaning many of Central and Eastern Europe’s production hotbeds, such as Hungary and Slovakia, have severely slowed, and in the case of some industries stagnated.
The world’s emerging economies find themselves in varying positions in relation to the current state of the European economy. At one end of the scale nations such as Vietnam and Egypt, two of the ‘Next Eleven’ whom rely heavily upon their vast tourism sectors, and have suffered badly as European’s have less expendable cash. (Smithers, 2010). At the other end of the spectrum: China. Europe is China’s largest trading partner and it relies heavily upon European expenditure (EU, 2011). However, although China’s economy is based largely upon it’s power to manufacture, it is increasingly supported by its services sector, unlike many of the ‘Next Eleven’ and various other manufacturing nations. For these nations, the stagnation of car sales in Europe for example, stunts their own growth as much as it does Europe’s. In this sense we understand the very global role of Europe’s economic power; the non-secondary production of a car in Krakow, not only means the non-sale of a car in Slough, nor does it only mean the non-financing of it’s purchasing from a German bank, but it also means the non-primary production of said car in Indonesia, Turkey or the Philippines (World Bank, 2011).
In order for the all of the emerging economies, large and small, to continue to prosper they clearly need the economic super-powers to continue spending. It is for this reason that many of the more developed growth economies have purchased European debt in recent years and continue to do so today. By propping up the European economy, nation’s such as India and China hope to see a return to economic growth in their own and other emerging regions, with much of Europe’s wealth returned via trade, and of course, interest (Morris, 2011; IBT, 2011). The connection of Europe and the world’s emerging economies is clearly two-way: Europe needs the most well-financed of the emerging economies to fund it through the on-going economic crises and eventually return it to stability. Meanwhile, all of the world’s emerging economies, big and small, need Europe to spend in order to recognise their full potential.
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