Challenges and economic adjustment policies in the EU

Abstract

The following article focuses on the uncertainties and economic adjustment policies in the EU. The author explores the balance between uncertainty and speed of economic adjustment policies as well as practical factors that influence political stability in the EU. Certain factors, such as unemployment, the level of tax, growth in incomes and inflation are examined as being essential for the provision of economic stability within the EU. Special attention is paid to the ongoing sanctions introduced against Russia due to its aggression in Ukraine, which can be labelled as "economic war". It is argued that the ensued refugee crisis may also largely affect economic stability of the EU countries as well as the whole architecture of European security. Moreover, Russia's behavior in the EU neighborhood has manifested that political stability is of crucial importance for the economy of the EU members since instability in a neighboring country, for example in Ukraine is apt to provoke repercussions for the EU as a whole. It is stated that the effective economic development and political stability, being the main objectives of the European Union, can be achieved only if the EU politicians thoroughly consider the factors hindering the development of EU member states in terms of legislation, security policy, welfare and economic determinants.