THE ECONOMIC SITUATION OF THE EU AND ITS CONTRIBUTION TO THE INCREASE IN POPULATION’S STANDARD OF LIVING

Abstract

The basic structure of our research for this article focuses on identifying, with arguments, reasoning for the following question: „How do we explain the switch between industry and services as a determinant of growth/prosperity for the 28 member countries of the EU?” In order to answer this question, we need to analyze the problems that EU member countries face from an economic standpoint, as well as the contributions of macroeconomic indicators to economic and welfare growth. There are gaps between developed countries and EU new-entrants (in 2004, 2007 and 2013). In the same context, the analysis of the GDP after the plummeting that occurred during the world economic crisis is a must. We highlight a slower GDP growth for EU-28 in 2011, 2012, 2013 (since 2011, the average EU GDP started growing, but the annual growth rate varies across countries; Romania’s average GDP growth rate was approx. 2-3% per year since 2011, which translates into a significant growth when compared to other EU member states), as a result of the major contribution of the service sector to GDP growth and its adaptability to the volatility of competitor markets. Amongst other things, we have showed that the contribution of the service sector to GDP growth was higher for countries with higher GDP per capita. We underline the fact that both developed and developing countries have services-oriented economies. Simply put, in any modern capitalist state, economic growth is particularly based on a broad service sector, as well as industries that comprise high-end technologies (certain industries such as robotics, lasers, IT, biotechnology, pharmaceutical etc. have been directly/indirectly associated), as well as extremely intensive services that are based on knowledge exploration.