While some have already proclaimed the 21st Century to be the Asian century, the swift rise of the European Union could complicate matters, leaving the once-dysfunctional economic and political union to compete with the U.S. as the world’s foremost superpower, according to Newsweek’s Stefon Theil.
The EU’s meteoric rise over the past few decades has been remarkable, as nation’s have put aside centuries-old differences and through cohesion and compromise they have been able to achieve a great deal when they find a common purpose.
In the wake of the financial crisis, however, the EU is in a unique position to challenge U.S. supremacy around the world, especially economically, according to Theil.
“Even as America and Russia have been humbled by the economic crisis and China and India remain preoccupied with internal problems, Europe is thriving,” he writes. “Exactly two decades after the fall of the Berlin Wall, the continent has been transformed: it is more united, prosperous, and secure than at any time in history.”
According to Theil, the EU passed the U.S. in total wealth this year, and soon, perhaps even next year, the EU’s GDP should match that of the U.S. and China combined.
The rest of the world is beginning to model their economies after the free and open, but highly regulated, markets in Europe. For years nations around the world had followed the U.S. model - unfettered capitalism. But, since the financial crisis, led by U.S. markets tanking, even the U.S. is moving in a more Euro-centric direction.
The EU is also achieving parity with the U.S. on many other levels that will propel it to a world superpower, including military might, strength of currency, and worldwide foreign investment.
In fact, the U.S. is expected to more closely resemble the EU once the financial crisis is over. Analysts expect the normal rate of unemployment in the U.S. to match that of Europe’s - roughly 7 percent.
The EU is also gaining influence around the world through its currency. Euros make up roughly 27 percent of global currency reserves, a rise from just 18 percent 10 years ago.
And, in many ways, the EU is in much better shape than the U.S. economically. Next year, the U.S. deficit will reach 94 percent of GDP. In the EU the deficit will account for just 79 percent of GDP.
“In only 20 years, the EU has evolved from a loose free market completely dependent on U.S. protection to an ambitious, new-style, uniquely collective power. For the foreseeable future, it will be the only force that can come close to matching the clout of the United States,” Theil writes.