In terms of the distribution of economic activity, Germany has by far the largest economy, accounting for 29% of the EU's GDP, followed by France (18%), Italy (13%), and the United Kingdom (13 percent). Per capita income for the EU as a whole is about $21,748, ranging from over 180 percent of the average in Luxembourg to less than 70 percent in Spain, Greece and Portugal (Hoover, 1995).

Stagnation, Growth and the Economic Union

As stated in the introduction, in the first half of the 1980s, prior to the single-market program, the economies of the soon to be Economic Union countries experienced a surge in investment. Stagnation had reduced European competitiveness in the 1970s and the increasing inability of the European Community to function effectively and resolve problems led member governments to conclude that increased cooperation would be necessary to increase economic efficiency and competitiveness (Calingaert, 1988).

The European Community Commission published a white paper on "Completing the Internal Market" in June of 1985. This paper was a detailed plan for the removal of mo

According to Paul Krugman (1996), in the early 1980s the problem of European unemployment became an obsession with many European economists. They began to argue that high European unemployment was the unintended byproduct of the European welfare state, which reduced the incentives both for firms to offer jobs and for workers to accept them.

The International Monetary Fund has generally painted a bleak picture of Europe, as a region plagued by sky-high unemployment and boxed in by its drive to launch a single currency in 1998 (Miller, 1996). In the short-run the IMF sees some better times ahead for Europe, estimating that growth will average 2.5% in 1997 up from approximately 1.6 percent in 1996. However, the IMF also believes that its economic projections could prove too optimistic, especially if Europe's drive to cut budget deficits under the Maastricht Treaty acts as more of a drag on growth than expected (Miller, 1996).

In the 1960s, European unemployment rates were consistently lower than those in the U.S. Indeed, American labor economists often wondered why the U.S. could not seem to push its unemployment rate down to European levels. But over the course of the 1970s European unemploym