> The EU is by far the world's largest economy and manufacturer - the US
> manufacturing base has been hollowed out for decades, and its GDP is less
> than 90% that of the EU. Add in all of the rich European countries, and
> you get an economic space 15% to 20% bigger than the US, and a bigger
> consumer market, too.
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I think we've had this discussion before.
It depends on whether you compare the European economy as a whole or its major national economies separately to the US. Maybe the correct measure should be the US versus the EU - I don't know - but the international agencies and most other analysts still use country by country comparisons.
So, for example, the most recent World Bank ranking of the major economies by percentage share of global GDP at market exchange rates at the end of 2006 had the US at 28%; Japan at 10%; Germany at 6%; China, the UK, and France, all at 5%; and Italy at 4%. In terms of purchasing power parity, the US global output share was 23%, followed by China (10%), Japan (7%), Germany (5%), and India (4%). http://siteresources.worldbank.org/ICPINT/Resources/ICPreportprelim.pdf.
This data shows the combined major EU economies still well behind the US in terms of total world output, and at wide variance with your assertion that the EU is "by far" the world's largest economy and manufacturer, with US GDP "less than 90% that of the EU", and the latter's "economic space 15%-20% bigger".
More narrowly, as concerns manufacturing, another recent study by the Washington-based economic consultancy, Global Insight, has the EU and the US in a virtual dead heat, with the estimated US share of global industrial output at 25.5% in 2006, slightly behind Westen Europe's 26.1%. However, a disaggregated country ranking by the UN's Industrial Development Organization, based on 2002 figures, showed the US share of global industrial output at 23.3%, followed by Japan (18.1%), Germany (7.9%), China (6.6%), France (4.7%), Italy (3.5%) and the UK (3.2%). (http://www.unido.org/file-storage/download/?file_id=44686 table 9.2, p.131)
Even accounting for the continued rise in the value of the euro over the past five years, these statistics still show the main European economies lagging the US. The Global Insight study, incidentally, projected Europe manufacturing output would decline relative to that of the US by 2020, and that both would be overtaken by China as the world's major manufacturing nation by that time. ("US to lose role as top manufacturer", Financial Times, May 23 2007).
What sources are you relying on, and how do they contradict the above?