Economic developments in Germany and their impact on the EU economy Essay

Economic developments in Germany and their electrical shock on the EU economy - Essay ExampleThis paper demonstrates the main two economic pillars foot the unification were the theories of Regional Trading Block and Optimum Currency Area. The former deals with a renounce trade area with a two-tier tariff system i.e. zero tariffs within the union members and some substantiative rate of tariff for the non union-members. (Robson 1999 109-110) The latter deals with the introduction of a unique currency it would enable the member states to make out the expediency of a fixed exchange rate system with the facility of full currency convertibility. (Krugman and Obstfeld, 1997 631-33) The synchronal functioning of a trading block and the optimum currency area was the main theoretical standstill of the European Union and economic integration was the result of that. Economic integration is desired for the transfer of the benefit of economic development of one country to another. (Czinkota , Rivoli, Ronkainen 1989 14-16)Let us consider the economic development of Germany and its catch on the European Union. Here our analysis would be concentrated on the economic development of Germany later on the establishment of EU. German economy marks itself as a companionable market economy as the government undertakes a wide array of social services. As German economy is highly export oriented it advocated for European economic integration. After unification German commercial policies have been highly centred towards union. The social reform policies adopted by Germany for the welfare of the society and the structural industrial reform enhanced the execution of instrument of the economy and its global competitiveness. (US Dept of State 2008)