Towards a Single European Economy: Current Problems and Long Term Solutions

This paper is compiled with the objective of critically analysing whether the European Union can be classified as an integrated economy, focusing on the level of economic convergence. Against this backdrop, the current level of economic integration is assessed taking into account empirical research performed by other scholars and economic indicators shown by member states over the years 2004-2014. Results indicate that the European Union is a heterogeneous block of economic clusters with varying degrees of economic health, trends and capabilities. The heterogeneities hinder implementation of policy, which in turn prevents further integration. A “three-fold” solution for achieving a higher level of economic integration is discussed, which incorporates (i) differential treatment of member states depending on prevailing economic conditions, (ii) the establishment of a European Economic Government, and (iii) the introduction of parallel currency regimes in Eurozone countries with ailing economic health.