Abstract
The key issue of this paper is the analysis of the perspectives of the European Union under the framework of the tendencies of mainstream economics, which leads us towards the creation of mega-capitalism (i.e. the last phase of capitalism where the business of mega corporations is the key driver). In fact, the EU has fallen into the trap of the economic reality of globalization and the application of virtual neoclassical ideology. The process of structural adjustment of the European Union into the global economy has brought to the surface two contradictions which became differentia specifica of a protracted systemic crisis. The first contradiction will be presented from the aspect of the core-periphery model by describing the development strategies and structural differentiations in the European economic area. The second contradiction of the systemic crisis refers to the erosion of ‘the social state and national state’. Discrepancies between the promoted values for economic and social equality and the widening economic gap among the states make this process of erosion very obvious. This creates a dangerous potential for opening a new chapter in European history which will be characterized by intense processes of disintegration and fragmentation, deepening of the connection with the elite agglomerate enclaves of mega-capitalism and reducing the power of the national (social) state. Both processes have a common denominator and are products of the global market capitalism and the functional integration of mega capital. They confront the EU with the challenge to improve the competitiveness of its economy. Thus, the perspectives of the EU regarding its catching up with the global competitiveness will be analyzed from the point of view of this position, and the prospects of the Euro on the global market.
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Notes
- 1.
The Marxist economic theory gives the basis for core-periphery theory analyses. More recently the idea has been resurrected by Krugman (1991) and his concept about “New” economic geography” which unambiguously suggests formation of core-periphery development model based on the principle of increasing returns and decereasing costs. Also, Nikolovska (2000), Panic (2003), Stockhammer (2010, 2011) analyzed different models of development in the European economy from the perspective of the current crisis, and they pointed out on the relevance of the core-periphery development model.
- 2.
At the moment of accession into the EU the Mediterranean countries had a disparity of 30% with the northern countries, and today the disparity of the new member states compared to EU-12 is 60%.
- 3.
This was the purpose for the foundation of the European financial stabilization mechanism in 2010, which was replaced by a permanent instrument for crisis management, the European stabilization mechanism (ESM) with capital funding of 700 billion EUR.
- 4.
- 5.
The countless waves of settlement of different nations from their original Asian lands, which have blended together over the centuries, and the modern history of expansionary migrations in the European continent thorough the open process, which we might refer to as “clash of cultures”, could turn the heterogeneous Europe into a leopard skin patterned map.
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Natalija, N., Daniela, M. (2018). The Mega Capitalism and the Contradictory Perspectives of the European Union. In: Bilgin, M., Danis, H., Demir, E., Can, U. (eds) Eurasian Economic Perspectives. Eurasian Studies in Business and Economics, vol 8/2. Springer, Cham. https://doi.org/10.1007/978-3-319-67916-7_26
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