Today, the economy of Europe is comprised of more than 733 million people in the 48 nations. The wealth of states in Europe varies like in other continents although the majority of the poorest are well up compared to the poorest states in other continents particularly in regards to living standards and GDP. Across Europe, the difference in wealth can be determined through a nominal GDP. For instance in 2010, Europe had a GDP of $19.890 trillion which was 30.1% of the world’s GDP. Germany has the largest national economy in Europe, which is ranked 5th in Purchasing Power Party (PPP) and 4th in nominal GDP. Germany is followed by France, which ranks 5th globally in nominal GDP. It is closely followed by the United Kingdom at 6th place, followed by Italy, and Russia which ranks 10th globally in nominal GDP (Zeitlin, 2013).
The introduction of ‘the euro’ the unified currency brought European countries closer together. This led to the formation of the European Union (EU) making it the largest and wealthiest economy in the world. Notably, during the high economic slowdown, Europe’s economy topped the US by over 2000 billion. Europe still remained the wealthiest region in the world in 2009
The rates of unemployment globally are still escalating, and this trend is worrying especially in Europe and U.S.A. The unemployment rate continues to escalate to about 12 % in the Eurozone while, in America, it falls at about 6.6%. This trend appears so because of America’s exemplary economic performance that considerably resumed growth and development in 2009 following a recession triggered by the subsequent financial crisis (Zeitlin, 2013). On the other hand, euro zone suffered sovereign-debts that impacted negatively on the whole economy. Conditions get bad in countries like Spain and Greece where a quarter, or more, of the people supposed to be working remains jobless. Labor-force rate participation for women or ladies under 45 tends to be equivalent both in the U.S.A and also in the euro area. It is estimated to be around or slightly below 70%. However, in Europe, there are less than 40% women who are over 45 in their respective workforce—whereas in U.S, the figure ranges to about 50% which is a respectable thing. As women penetrate the workforce more and more, lowering the unemployment rate in Europe will appear to be quite a struggle.
Euro area uses a common currency which is the euro while America uses the American dollar. The euro is more powerful than the dollar in the markets. When comparing the GDP’s growth rate in the US and euro area, the average rate of US GDP is around 1.2 % points more than the GDP of the euro area. However, the typical measure of rising prosperity is the GDP per individual. United States’ general population growth then becomes a complete percentage point more than that experienced in the euro zone, primarily because of the high rate of US immigration. Expressing it on the basis of per capita, U.S’s GDP rate of growth and that of the EU, technically can be seen to be similar over the last decade. This also reflects some similarities in the both region’s growth of the labor productivity.
In terms of economic resilience, US have effectively bounced back quicker than Europe. Presently, both GDP augmentation per head and productivity of labor are rising more rapidly in America. However, recent productivity gains in America are concentrated mostly in distribution and not production as it is the case in the Eurozone. The US growth consistently pulls in much more imports to the country, than it generates exports, leading to rise external deficit which is very negative to the economy– partly funded by the euro zone present account surplus.
U.S. GDP averages about 17.1 trillion dollars constituting 22 percent of the entire world product in the rates of market exchange and more than 19 percent of the entire world product on PPP. Although bigger than other nations, the national GDP is around 5% lesser at PPP than that of the EU whose total populace is 62percent more. America has the most technologically sophisticated and diversified economies in the globe; this is relatively similar to Europe’s. Insurance, finance, real estate, health care, rental, educational, professional among others account for about 40% of the country’s GDP. Wholesale and retail trade makes 12% of the affluence. Services fuel is about 13% of the total GDP. Transportation, warehousing, information and utilities account for about 10%. Mining, manufacturing, and building compose 17% of the essential output. Agriculture, however, contributes about 1.5% of the total GDP, this is because of the indiscriminate use of advanced technologies, the. However, in Europe the service and not the goods sector are considered exceedingly the most imperative sector, it makes up to 69.4% of the region’s total GDP. Also, the difference between America and Europe can be majorly seen here in the production industry whereby in Europe it is less significant than in America. At about 28.4% of the total GDP manufacturing industry is recorded and agriculture having 2.3%.
The U.S. government debt estimates approximately11.888 trillion dollars; this is around 75% of the GDP of U.S. Intra-governmental overall holdings are about 4.861 trillion dollars, revealing a collective debt of 16.749 trillion dollars. In recent times, huge budget insufficiency and the ensuing rise in debts, have questioned future sustainability and resilience of the national fiscal policies. On the other hand, the debts in Europe fall about 10,320,106,100,000 Euros. 8.2 trillion Euros of the said debt is owed by national governments in the vast euro zone – and represents about 87.4% of all those countries' total GDP.
The U.S and European Union have the biggest relationship in bilateral trade and benefit from the most incorporated economic rapport in the whole world. These two giants undeniably have successfully traded and improved the economic situation in the west. The EU investment, for example, in America is estimated to be about 8 times the total amount EU usually invests in China and India together (Parker, 2010). The U.S-EU investments appear to be the driving force to the economic transatlantic relationship. About a third or more of the subsequent trade in the regions consists of massive intra-company relocation. It is also established that the transatlantic relationship plays an important role in defining the shape and health of the economy of the world. Europe and America are strategically endowed with political and economic influence over the world and this further depicts the many similarities observed in the two. Either the US or EU appears as the biggest investment and trade partner for nearly all other nations in the world’s economy. Finally, both EU and America’s economies account collectively for half the total world GDP or a third of the globe trade flows.
References:
Parker, William N. Europe, America, and the Wider World: Essays on the Economic History of Western Capitalism. Cambridge [Cambridgeshire: Cambridge University Press, 2011. Print.
Zeitlin, Jonathan. Governing Work and Welfare in a New Economy: European and American Experiments. Oxford [u.a.: Oxford Univ. Press, 2013. Print.
