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> EU is the worlds biggest single market The US is the world's biggest single market, by a considerable margin over the EU now. It was larger than the EU befor
by adventured 6y ago
> EU is the worlds biggest single market
The US is the world's biggest single market, by a considerable margin over the EU now. It was larger than the EU before Brexit, now it's that much bigger.
US GDP for 2019 was around $21.5 trillion.
EU GDP for 2019 minus the UK is $16 trillion ($18.7 trillion with the UK).
That giant $5.5 trillion gap is big enough to fit the world's #3 economy (Japan) into. It's larger than France + Italy ($4.7t), or Germany + Spain ($5.2t).
Given the major economies of the EU haven't seen any net economic growth since 2006-2007, it's unlikely the EU will match up to the US economically in the coming decades. Over the coming 10-20 years it will persistently fall away, an increasing distant third behind the two superpowers of the US and China. And that's the good scenario and assuming there are no more exits from the EU. The US will become more aggressive about its trade imbalance with the EU, with the EU heavily dependent on exports and in a position of weakness with the US accordingly; and China will seek to compete with and replace the high value manufacturing they import from the EU (with most of the focus in both cases on Germany, their future is stagnation if they don't figure out how to move to a modern tech economy and fast). Germany will go through a very painful deindustrialization that they've largely been able to avoid thus far, as China goes after their high-end manufacturing and then exports those competing goods to the rest of the world far cheaper than Germany can.
France GDP: 2008, $2.9 trillion | 2019, $2.7 trillion
Germany GDP: 2008, $3.8 trillion | 2019, $3.8 trillion
Italy GDP: 2008, $2.4 trillion | 2019, $2 trillion
Spain GDP: 2008, $1.6 trillion | 2019, $1.4 trillion
Netherlands GDP: 2008, $948 billion | 2019, $902 billion
And that's of course pre-pandemic. Those are the five largest economies of the EU, accounting for 73% of the EU economy. They're going to see a likely net zero (or negative) economic growth for 20 years or more (inflation adjusted it's going to be brutal).
- matthewmacleod 6y agoYour point is valid of course, but it’s interesting that the US is in some ways less of a single market than the EU is…
- perardi 6y agoSorry, going to need you to expand on that. Individual states in the States have far less regulatory power than nation-states in the EU.
- staticman2 6y agoExtrapolating based on the last 17 years doesn't make any sense. 17 years ago you would have made a very different prediction based on the 17 years before that.
- deleted 6y ago[deleted]
- dbspin 6y agoYou're making lots of questionable assumptions here. Primarily one being that the US (and indeed the EU) continue to exist in their current form on a 20 year timeline. Given the political climate in both, that seems unlikely. Given that the US is reindustrialising [https://doc-research.org/2018/06/reindustrialisation-us-deglobalisation-china/ https://doc-research.org/2018/06/reindustrialisation-us-degl...] right now, it's extremely unlikely we'll see a decline in German manufacturing - even if that means an increase in european protectionism. There's no way Germany (who hold vastly outsized power within the European Commission, especially in a post Brexit world) would willingly allow that strategic and economic advantage to wilt. Especially given the economic decline and social disintegration that the move to a service economy wrought on France and the UK. Chinese economic might is almost entirely based on exports, in an era of increasing protectionism and at a time when their manufacturing base is moving to places like Vietnam and to a lesser extent India. The US's failure to invest in infrastructure (everything from broadband to roads to dams) has left it in need of massive capital investment. And of course massive internal investment (arguably unsustainable and fraudulent) in construction. I'm not suggesting these are paper tigers, but neither are assured of 'superpower' status. Moreover - the enormous material costs we're starting to see from climate change will accelerate. We can estimate some impacts, such as enormously larger migrant crises and water wars. But the second order effects of this are extremely unpredictable.