For all intents and purposes, the United States represents the most powerful economy in the world. But what must also be realized is that we rely on other countries, as well. If not for them, we wouldn't be as powerful as we are now. Other superpowers, such as Japan and the European Union, have a rather big influence on what happens here. This means that if their economies suffer, so does ours.
Case in Point: Europe
The economy of the United States those of dwarves most countries. In fact, you could combine a number of countries economies together and it wouldn't equal the economy of our great nation. Be that as it may, however, we must realize that some regions, when combined, do overtake us in GDP. That is not a terrible thing, of course. We are allies with all of these countries, and their success often means our success. But unfortunately, their "failures" can spell trouble for us, as well.
Take Europe, for example. Their four biggest economies consist of the United Kingdom, Germany, France, and Italy. When the GDP of each of these countries is added together, they don't exceed the economy here in this country. However, if you include all the other smaller economies in the European Union, you'll find that their GDP is just a wee bit higher than ours. What does this mean? This means that when the European economy takes a tumble, the United States can be negatively impacted. (http://www.usatoday.com/money/world/story/2011-10-27/eurozone-crisis-deal/50963370/1).
The Effect of a Financial Tumble
Not too long ago, Europe was on the edge of a banking crisis. Obviously, we are no stranger to such a situation. It seems like just yesterday that the United States was giving out billions of dollars to banking institutions in an attempt to fix our own problem. If such a crisis had occurred within the European Union, there would have been almost no way for them to have avoided a recession.
If such a thing were to happen to such a large economy, this could hurt the United States considerably. As it stands now, Europe buys a lot of goods from the United States. In fact, Europe, as a whole, is one of this country's most sizable trading partners. This means that if a recession was to occur, Europe would cut back on purchasing, which would equal lost money for the United States.
The United States of Europe
No, this is not the title of a revisionist film. This is a suggestion by former German Chancellor, Gerhard Schroeder. He believes that the European Union needs to move toward a more centralized government. He believes that if the countries could come together in a similar form of the United States, a lot could be done to improve the economy. He admits that this would take a great deal of time, but believes such a change would greatly benefit Europe.
Schroeder's opinion isn't shared by everyone. The global director of the Economist Intelligence Unit, Tony Nash, has said that such a movement -- the United States of Europe -- would be difficult to achieve. According to Mr. Nash, this simply isn't a viable strategy because the countries within the European Union are too different from one another. In his opinion, the political structures and cultures of each country are too perse in order to merge all of them together beneath one government. So, at least for now, this doesn't seem like a good way to improve Europe's economy, which means that the United States will still be affected by anything negative that may happen.
Source: http://firstsecurityfinancialshow.com/blog/bid/182659/Europe-s-Effect-on-the-U-S
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