Question

Name some reasons why the countries of the European Union periphery may be losing their competitiveness against the Maghreb countries.

Answer 1

Change in the geopolitics and mutual economic need is making the Maghreb the new frontier of European investments. The prospects for Maghreb looks relatively encouraging because of the following reasons:

1. Algeria and Tunisia are rich in crude oil and natural gas and they can supply much of the natural gas to Europe.

2. Wage rates in Maghreb region are less than the wage rate in East European Union countries.

3. More over the working hours are more in Maghreb are more as compared to the working hours in European Union.

4. The labor is non unionized in the region.

5. Also, Maghreb countries are relatively debt free as compared to European Union countries and thus continue to attract foreign investment.

Thus, the above mentioned reasons state why the countries of the European Union periphery may be losing their competitiveness against the Maghreb countries.