European Economic Geography

By: CaraTan   Date: 6 August 2009

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Rome, Italy, 6 August 2009. In the fourth and final part of our series on how geography, particularly rivers and ports for transportation, play a crucial role in economics, we look at Europe.

Europe

Europe does have many good harbors, spread along the Atlantic Ocean, Mediterranean, Baltic and North seas, but its separated river network offers little cohesive connectivity.

Though the European Union has emerged, its diverse range of cultures, religions, and peoples - never mind its disparate rivers - mean it can never really unify.

Every nation in Europe is different and distinct, geographically, culturally, and in many ways economically too.

In the UK, a market economy is politically favoured and supported by the relative security of its sea defences, and the natural advantages of its many excellent ports and adequate river and canal system.

France can stick to economic nationalism and government control. Thanks to three major rivers to itself, it need not rely on neighbors for irrigation or transportation.

Germany has the Baltic Sea, but that is partially controlled by Sweden and Denmark. It does have plenty of good arable land, and rivers, though not connected, which it has to share with its neighbors. It therefore has some resources but needs to manage them carefully.

Extensive planning is needed to make the most of its disparate resources, resulting in an economy that is fairly free and which places a premium on efficiency and self-sufficiency, but which needs central co-ordination.

Italy has a few seas, no cohesive river network, and mountains in the north. Spain has a sea and an ocean but is dry and rough. The Netherlands is below sea level, while Estonia is often frozen. Andorra has nothing but one road and some great mountain bike trails.

How can these countries unify in a concerted, cohesive, and harmonious economic manner, without any of them making any sacrifices?

There are clearly some gains to be had by sharing common resources, but each country requires different types of access, control and free market mechanisms, meaning that the great European integration experiment is not likely to progress that much further than it already has.

Understanding the geography and its implication on trade and resource allocation helps us to understand natural constraints and advantages that economies experience.

Although the US has major issues in its financial system, its abundant natural advantages mean that it should pull through ultimately in pretty good shape.

China absolutely must maintain its high growth rates in order to keep the country in tact with Beijing at the center. More mega projects and more non-performing loans are a certainty.

Russia has such formidable challenges across its vast, infertile and riverless lands that it must maintain a strong military and intelligence posture, even as its economy teeters.

And Europe is just too diverse to let one power dictate its plan for recovery, meaning that it will always need to balance itself between unified thinking on the one hand and self-serving nationalist policies on the other.

Njorn Borgisky, EconomyWatch.com

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