European people had an important role in the history of the humanity. Starting from the old times, and especially in the 18th century the cultural development started to grow very fast.
The only fact that market economy was born in Europe is enough to prove this. Collection of capital inside their countries and inflow of capital from the colonies supported this process much. It was also crucial that the biggest group of qualified workers in the world was established in Europe. It was a result of application of compulsory elementary education (first time in the world), and later application of secondary education and rapid growth of the number of universities. In the 16th century Europe was the leader of world production, but in the 20th century it gave place to the US. The European economy grew rapidly especially after the WWII. In the period from 1950 to 2006 the GDP of European countries grew by more than 6 times from 2 trillion to more than 12 trillion dollar. On the other hand, the aspect ratio of Europe’s economy in the world GDP significantly fell down from 37% to 21%. However 21% is a small ratio because Europe occupies only 4% of the earth (10.8 mln cm). The work productivity level in European countries is high, which is expressed in GDP per capita. The average GDP per capita in Europe amounts to 30 thousand USD. For example, For example, in 2006 the GDP per capita in Germany was 31.400 USD, in France – 30.100 USD, in Great Britain – 31.400 USD, and in Italy – 29.700 USD.
Economic policy
In the European economic policy the role of governments in economic regulations is higher than in the US or Japan. In 1980-90 the state sector was significantly cut down, however its role is big now too. For example, in France about 15% of the production is provided by state-owned companies. In Japan this proportion is 8%, and in the US – 5-6%. In Europe economy planning by the state is rather developed. In the Western world the procedure of national economy state planning was born in Europe. As a result of this practice specific mechanisms were invented. In the period after the WWII there have been 13 plans of social and economic development, which have played a significant role in economic development and rapid growth. The social and economic development model of the European region is famous with specific ratio and activeness of small and medium businesses. Small and medium businesses provide about 50% of the GDP and employment rates.
Branch structure
The branch structure of the European economy is being modified in the recent period. In developed countries the sector of agriculture covers 1-3% of the GDP, and production covers 20-25%. The biggest share of the GDP, about 70%, is provided by the sector of services. Even though the ratio of agriculture in the GDP is small, in Europe agriculture is highly productive and meets the demand of the population in agricultural products. Europe provides 1/3 part of the world industry. Atomic energy and oil economy are growing, the aviation, car and electronics industry fields are growing as well. Chemistry, electronics and food production are growing as well. The transportation system is very developed too, and the biggest harbor in the world is in Europe, Rotterdam.
Foreign economic relations
Europe has always been the most active participant of international economic relations. The European countries, in consideration of their economic relations, have the half of the world trade capacity, and more than the half of the world foreign currency reserves and export capacity. Generally the connections in the European region are very developed. About 2/3 of the economic relations of Europe are with their inner regional countries. This is a result of intensive integration processes, and the European Union has a very active role in this process. The European Union has a very big active role in the process of regional development with a joint economic, fiscal and monetary policy. The European Union is very active in integration processes as will not only within Europe but outside too. Currently the closest economic partners of the European Union are the US, Japan, as well as the countries which used to be the colonies of Europe in the past. Europe is trying to develop deeper relations with neighboring countries as well and for this purpose is implementing projects such the Eastern Partnership project. The implementation of the Eastern Partnership Project started two months ago. Armenia participates in this project as well, which opens new windows of opportunities for Armenia in different sectors too. It is worth mentioning that currently Euro Union is Armenia’s largest trade partner, which covers more than 1/3 part of Armenia’s foreign trade.
The population of the European Union equals to 7% of the world population, however Europe is in the first place with export and in the second place with import in the world. The largest trade partners of the European Union are the United States and China. The European Union is an important partner for non-developed countries as well, and Europe has granted access to the European market to many countries (for example, they are free of customs taxes). Through such policy the EU is encouraging economic growth in developing countries in the entire world.
The common market is the main achievement of the European Union. During the past 50 years, especially since 1980, a lot of work has been done to overcome the barriers between the EU national economies and establish a common market. As a result, the level of competition has grown, resulting in better qualities and prices. The price fall tendencies are more visible in the fields of aviation passenger transportation and communication. For example, the phone call costs from Holland to the US are lower now by 10 times than in 1997-2006.
This supplement has been produced with the assistance of the European Union. The content of this supplement is the sole responsibility of “168 Hours” Newspaper and can in no way be taken to reflect the views of the European Union