Katerina Mansour
       Staff Writer

The European Union has been, overall, a successful endeavor in uniting the majority of European countries and avoiding another major war in the post World War II era.

Free trade has indubitably been a beneficial policy for the majority of EU nations, and for a while the Eurozone—the countries using the Euro—seemed to be a force to be reckoned with. However, within the past decade, challenges to its effectiveness have increased dramatically and many European nations are considering leaving the union. This is due to a variety of issues in which nations have lost patience. The economic failures of the eurozone ranks at the top of the list.

When a country joins the European Union, the expectation is that it will adopt the Euro as its currency. However, not all of the EU countries have adopted the Euro; in fact, several states such as Sweden, Denmark, and the UK are still using their own currency.

The original idea of installing one common currency was that it would reduce the exchange rate risks for businesses and help Europe compete with the U.S. Dollar and other major currencies. The reality has been much different. Most Western European countries argue that the European Central Bank (ECB) has too much power within this system, as it sets policies for the Euro and renders it close to impossible for countries to react to their own local economic issues.

An example of this is when a European country is facing a major recession, and is unable to devalue its currency or choose a different monetary policy as it might have otherwise.  The control to do so is out of its hands; its currency is not under its own control, but in the hands of the ECB.

Many have argued that the Euro could recover if countries such as Greece left the European Union. However, most economists agree that the problem goes deeper than Greece itself, or any other poor state dragging down the E.U.

The Euro has inherent problems that would still be present with or without these economically challenged nations. The differences in the various economies within Europe are massive. Each country relies significantly on different economic factors. Yet, within the eurozone, most economic strategies are out of their reach and in the hands of the ECB. This is a fundamental aspect of the Euro’s failure. One central bank cannot take into account the many differences between each country’s economic reality and its economic needs. For example, the increased price of oil will affect certain countries more drastically than others. Weather related problems will have more harm on certain regions versus others. Yet, monetary policy cannot be used to aid specific regions. If a change needs to happen, it has to be applied to all countries. So if the interest rates need to be reduced to help one country’s economy, this will have to apply to every single EU country at the same time. Who on earth thought that this would turn out well?

While eurozone nations can control their own fiscal policies, they are unable to coordinate with the monetary policies of the ECB.  This ‘disconnect’ has been at the heart of the problem. All this has led the eurozone to depend on the “economically robust nations,” such as Germany and France in order to cover the costs associated with “economically challenged nations,” such as Greece and Portugal. This situation is especially frustrating for Germany and France, because they are forced to keep giving and giving to save the struggling countries, while in turn they are unable to aid their own economies due to the constraints of a unified monetary system.

Another argument that nations have been advancing when selling the idea of leaving the EU is the issue of the lack of democracy within the system, commonly referred to as ‘democratic deficit’.

European countries are able to elect members to the European Parliament; however, this is the only institution out of the seven recognized under the European Union’s current treaty that is directly elected by the people. And despite being the only directly elected institution, it has very limited legislative authority. The European Commission, on the other hand, is the entity with all the power to formulate and enact legislation throughout the Union despite the fact that nobody has elected its members through democratic means.

European nations lack the ability to call for the changes they need in order to address their nation’s domestic needs. They even lack the ability to pick the people who have the power to make important legislative changes for them. This has caused the member states to become increasingly frustrated with the clear lack of power and influence over their own future.

Another fundamental issue for the EU is its international presence and how it handles international relations and conflict. A big problem that has been brewing is how to proceed with relations with Russia; another is regarding the possibility of Great Britain leaving the EU, which could have a fundamental impact over the rest of the union.

Yet, a Brexit—as they’re calling it—seems on the precipice of happening for some of the reasons I’ve outlined here, and many more. Regaining control of its security measures, like its military, is one of the many reasons Britain is contemplating leaving the EU. With Great Britain and France having the strongest militaries within the European Union, and both of them harboring strong desires to leave, the EU’s international stance could be significantly weakened.

Choosing between sticking with the EU, or leaving it may appear simple when you try to approach it in the most simplistic fashion.

Why stay? The benefits of free trade, unity, and many other economic policies do still have a positive impact on EU nations.

Why leave? It seems fairly evident that leaving the EU would result in a boom in one’s economy, and regaining full power over all aspects of one’s nation would allow for better control over the burdens a nation must face.

So, essentially, countries such as Great Britain, Germany or France would probably be better off in the end. But without them, the rest of the EU could be doomed for good, and that isn’t something that weighs lightly on one’s conscience.  A dis-integration of the EU will certainly lead to undesired consequences.

Reverting to the old nation-state economic and political structures may appeal to certain portions of the populations, but to ignore the cumulative positive benefits that the EU has brought over the years would be foolish.

The business cycle is an integral part of free capitalist societies; the EU simply need to find a way to manage its monetary policies with better coordination with the fiscal activities of the various member states. 

When times are hard, many people opt to ‘bail-out’. Quitting is not the answer to solving our problems; that’s true at the personal level, and it’s true at the global level.