(VOVworld)- In 2013, Europe made every effort to overcome difficulties caused by the global economic downturn. Many European countries began to realize that an austerity policy was not the only way out. Many countries have adapted to budget risks to regain growth momentum and seek new ways to escape the crisis. However, these efforts have not been effective enough and have had side effects in the region and in the European Union’s external policies.
The European Union’s GDP in the second quarter of this year grew 1.1% more than last year. The trust index of individual consumers and enterprises in 17 countries in the Euro zone has increased from minus 17.4 points in August to minus 5.6 points. Germany and France, the two biggest economies in the European Union, are leading the economic growth.
Major economic reforms
In 2013, the European Union carried out major reforms and resolute measures including efforts to establish a banking union, combat tax evasion, and generate jobs for young people. The effectiveness of these policies are not immediately visible but according to experts, they will become influential after 2014.
Growth figures for the European Union show that in 2013, the worst of the crisis ended. The two leading economies, Germany and France, maintained their dominance. The economies most seriously hit by the crisis- Spain, Italy, and Greece have survived the most critical period. However, challenges remain such as unemployment.
External policies and political stability impacted
The global economic crisis negatively impacted the European Union’s foreign policies in 2013. Due to the crisis, EU member countries focused their efforts on the economy and neglected other issues. Nationalism in some countries increased. In France, the far right National Front promoted its anti-Europe policy. In Germany, a debate arose on Germany’s responsibility for helping other EU members. The weak economy undermined EU solidarity and cohesion as reflected in the failure of the recent summit in Vilnius, where Eastern European countries like Ukraine refused to join the bloc, nullifying EU’s efforts to move towards the East.
On top of this, austerity measures have plunged Europe into another crisis. More than 27 million workers are jobless and several countries including Spain and Greece are facing an unemployment rate of 27% (equivalent to the US unemployment rate during the Great Depression). European economies are caught in a vicious circle. Government austerity has made people’s living standards fall and rising unemployment is sparking protests.
Priority for economic recovery in the next two years
According to forecasts by the IMF and the ECB, European economies are likely to recovery by the end of 2014 or early 2015. These are just forecasts and it will take strong efforts by the EU countries to match them. The EU’s success over the past few years has been attributed to its economic connectivity, so if the economies can’t recover, the bloc would be on the verge of breaking down. If the economies cannot escape poverty, the governments will collapse and far-right parties will assume power. If that happens, many EU members may leave the bloc. To avoid that risk, it is vital for the EU to recover its growth. Major changes are expected next year because in May, 390 million European voters will elect a new European Parliament. This election will determine the face of the European Union for the future. In 2014, the European Union needs to strengthen people’s trust. This will take time. Meanwhile, Eurozone member countries are working hard to reach political and financial consensus.