Economic Regionalism in EU: Performance during and Post Global Financial Crisis

Running head: INTERNATIONAL POLITICAL ECONOMY
International political economy
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1INTERNATIONAL POLITICAL ECONOMY
Introduction:
Economic regionalism is acknowledged as the institutional arrangement designed in
order to facilitate the free flow of goods and services to the different economic zones and
while coordinating with the foreign economic policies. Economic regionalism can be
regarded as the continuous attempt to handle and manage the constraints and opportunities
established by the dramatic rise in the international economic ties since the fame of World
War II and it has been enhancing the cooperation between the different economic zones
around the world (Francis 2017). As the outcome of the economic integration, during the last
six or seven decades there has been various development in the form custom unions, Free
trading areas, economic unions and others. apart from the these international bonding
between the world economies, over the last three decades as the form of the economic
regionalism, it can be seen that one new type of economic regionalism has been taking place
within the regional economies allowing them to provide level playing ground and better
trading prospect resulting better trade performance of the regional trading partner (Cai 2016).
one of the outstanding example of the same can be found in case of the European Union (EU)
nations, where the member countries are indulged with trading within the regional economic
in large magnitude compared to the other economies around the world providing them better
trading scenario as well as higher trade balance to each of them.
This essay is aimed to discuss the economic regionalism within the EU nations and
trace out how it has performed through the various crisis situation. It will the reader to
determine the magnitude of economic regionalism among the European nations and
understand how good or bad it has performed through the economic crisis like situation. Main
focus of this essay will be on the recent Global Financial Crisis (GFC) scenario, where the
world economy has it second largest financial crisis post Great Depression. In addition to
this, the essay will try to find out how well the economic regionalism in the EU regional has

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been performing post the financial crisis so as to determine the performance of the EU
economic regionalism during the time of recovery from the financial crisis like situation.
Regionalism in EU:
EU acknowledge itself as a profound model of legitimate and effective governance
that can be emulated by the other regions and countries in order to face better economic
integration with the trade participating nations (Garzon 2017). in addition to this, EU actively
promote the growth of the intra-regional political and economic cooperation that build the
issue related regime and germination of joint institutions for the decision making and
consultation within its trading zone specially within the local region where its member
countries operate. Since the 1980s EU member countries are highly indulged with the
exploration and enhancement of the regional economic integration in order promote better
international relationship through better trading prospect and higher amount of the balance of
trade (Park et al. 2018). Through the studies from different principal of the regional economic
cooperation among the member countries, it can be seen that EU largely focus on diffusing
the regional integration that allow the non-EU countries to understand, experience and utilise
the same in order to enhance economic performance of the said economy. as the method of
the diffusion it can be seen that EU utilise manipulation of utility calculations and
socializations work that allow the idea of economic regionalism to spread to the different
parts of the world economy (Sunkel et al. 2016). However there is certain amount of
questions regarding the necessity of the economic regionalism within the EU framework and
in other parts of the world economy. As per the economists like Carranza (2017), economic
regionalism rather expanding the trading capability, trading balance of the trading partners,
reduce the scope of trading for the participating nations. As the participating nations remains
focused on the economic integration with the regional economies, they completely overlook
the broader scenario of the world economy leading to fall in the trade opportunities. as

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example, it can be seen that, England and France post World War II was mainly focussed to
trade with the regional economies for the mutual growth of the both (Soderbaum 2017).
However, in present date understanding the loss of the trading scope, these countries has
largely focussed on the international trade rather than depending upon only on the regional
economies. Contrary to this, smaller countries of the EU believes that depending upon the
economic regionalism is good for their interest because it will allow the small countries to
protect them from the large market players in the international market and let their trading
potential grow (Gilpin 2018). As per the latest data, it can be seen that within the EU
Germany, France, Italy and Netherlands are the largest traders considering their export values
and most of the export is directed towards the third world countries depicting the economic
regionalism on hold within the EU region during the present date. However, if the data of the
1980 to 2000s is considered, then it can be seen that, same countries directed their most of the
exports to the regional economies showcasing a paradigm shift in case of the economic
regionalism (Telo 2016). Now, this shift may be arisen for the recent GFC like situation or
any other instance or it has simply be so due to the inefficiencies within the operational
framework of the economic regionalism. Next section of this essay will put focus on the same
and portray how economic regionalism has performed during and post GFC like scenario
sourced by the subprime mortgage crisis in the US market taken place since 2008 to 2010
(Molle 2017).
Regionalism in EU during Global Financial Crisis:
Global Financial Crisis that took place since 2008 to 2010 is one of the largest
financial crisis in the world that shook overall all the economies around the world more or
less. Sourced by the subprime mortgage crisis in the US economy, caused huge loss and
slump to the trading proposition of the western countries because GFC has influenced them
most (Wunderlich 2016). In addition to this, GFC led to massive loss of wealth and serious