Europe as a Global Power

The EU has long been a global power in the world economy and in international economic policy-making. The EU is the largest trader in the world economy; in 2005, its external merchandise trade equalled about $ 2,790 bill., with a rather well balanced position: the external deficit of the EU came to about $ 134 bill. 1 In the same year, the US total merchandise trade came to about $ 2,637 bill. , but with a massive external imbalance: the US trade deficit in 2005 was about $ 840 bill.. International trade negotiations traditionally have been dominated by the United States and the European Union, both of which continue to have effective veto power, though they are no longer able to settle the issues between themselves. Since its introduction, the Euro has become the second international reserve currency and the advantage of the Dollar on that score has been declining. Politically, however, the European Union is less well organised to project its influence on international monetary and financial matters: first, the Euro has been adopted only by some, but not by all member countries (the most notable non-member being the UK), and second, the Euro is represented internationally only by the head of the European Central Bank but not by an EU Monetary and Finance Commissioner, as in the case of trade negotiations. The closest the Euro comes to a political voice is that of Jean-Claude Juncker, the Prime Minister of Luxembourg, who heads the Euro-committee of economics and finance ministers. Nor does the EU speak with on voice in the Bretton Woods Institutions; its influence, while substantial, therefore remains below the EU members ́ combined voting rights. Still, overall the EU clearly is a Great Power in international economic relations, including their policy dimensions.