1 MZA Europe GSB April 2, 2002

2 MZA Europe

3 MZA EU Members and Aspirants

4 MZA US. Dollars to Euro

5 MZA The euro-zone recovers

6 MZA EU GDP at constant prices (EUR billions) GDP

7 MZA EU Gross fixed capital formation at constant prices EUR billions)

8 MZA The Big EU Economies and the Rest

9 MZA Why Europe Matters uIn 1998, the European Union had a population of 375m, against 268m in the US and 126m in Japan. uIn 1998, the EU was the world’s largest economy. It generated 30 per cent of world output, against 25 per cent for the US and 18 per cent for Japan. uIn 1999, the EU was the world’s largest merchandise exporter. It generated 19 per cent of world exports (excluding internal trade), against 16 per cent for the US and 10 per cent for Japan. uIn 1999, the EU was the world’s second largest merchandise importer. It imported 19 per cent of world imports, against 24 per cent for the US and Japan’s 7 per cent.

10 MZA EU standards of living compared

11 MZA How incomes compare inside the EU

12 MZA Productivity growth slows

13 MZA The US moves ahead in the late 1990s

14 MZA Productivity picture is mixed

15 MZA But one size fails to fit all

16 MZA Jobs and costs in US and EU

17 MZA EU’s high labour costs

18 MZA EU - not enough jobs

19 MZA But unemployment is falling

20 MZA EU - jobs for prime-aged adults

21 MZA EU - but not for young and old

22 MZA Welfare states are expensive

23 MZA But someone has to pay

24 MZA Inflation converges

25 MZA So do interest rates

26 MZA Fiscal deficits contract