Economics and Urban Geography of Europe

*Europe has a larger economy than any other continent in the world.  Europe as a whole produces $16 trillion dollars worth of goods each year.

*Europe’s most productive country is Germany, which is also the 3rd most productive country in the world, behind the USA and Japan (5th if adjusted for purchasing power parity, behind the USA, PROC, Japan, and India).  Its nominal GDP is $2.9 trillion a year.  Germany is also the world’s #1 exporter of manufactured goods—mostly advanced machinery, such as automobiles, and high-tech equipment.

*The UK is second in Europe (4th worldwide), with $2.29 trillion, France is 3rd (5th) with $2.21 trillion, Italy is 4th (6th), with $1.8 trillion, and Spain is fifth (8th) with $1.1 trillion (although it is lower than Russia if adjusted for purchasing power parity).

*The microstates of Europe tend to make their money from sales of postage stamps, from tourism, and especially as tax havens or as free ports, in which goods are sold without duties (taxes and tariffs).  The Vatican, of course, is supported by the donations of the worldwide Catholic Church.

*Europe is still a centre of manufacturing, and its traditional manufacturing nations are in Western Europe:  Britain, northern France, Benelux, western Germany, Switzerland, northern Italy.  However, the high cost of labour and many environmental and business restrictions in Western Europe have led many companies to begin moving to Eastern Europe or out of the continent altogether.  This has kept unemployment relatively high in much of Europe, despite the continent’s overall high GDP.

*Agriculture remains important in Europe, partly because it has been carefully maintained by the CAP and other government subsidies.  This is expensive, however:  the CAP takes up 40% of all the EU’s government expenditures.  Today, more Europeans are employed in agriculture than in any other single industry, although the number varies widely by nationality:  2% of British people are employed in agriculture, whereas 50% of Albanians are.  Many of these farmers still work on small family farms of about 30 acres.

*Services are important in Europe, too, especially in tourism, and 60% of all Europeans work in some sort of service industry (compared to 75% in Anglo-America). 

*Much of Europe’s economy is based around its cities, most of which are hundreds or (usually) thousands of years old.

*Europe’s cities are different from those in America, particularly in their inner cities, in that they were never designed for automobiles, so things tend to be smaller, closer together, and easier to access by foot.  Although many cities do have a largely un-lived-in Central Business District and growing suburbs, many still have vibrant downtowns and real neighbourhoods.

*Paris, thanks to Napoleon III, is an exception to the tendency of old European city centres to have narrow, crowded streets—it has wide boulevards to make it hard for revolutionaries to set up barricades.

*The most populous metropolitan area in Europe is Moscow (#15 worldwide) with about 13,600,000 people.  Second is London (#18) with 11,850,000; third is Paris (#24) with 11,570,000 (although the Rhine-Ruhr area of Germany has many cities that have nearly become a megalopolis with a slightly higher population than the Paris Area); fourth is Istanbul with 11,332,000, which we will study later, when we look at the Middle East, fifth is the Milan area, with 6,500,000, sixth is Madrid with 5,600,000, and seventh is Saint Petersburg with 5,550,000.

*Many of Europe’s nations have Primate City Syndrome:  Paris, with a regional population of 11.57 million contains at least one in every six citizens of France.  London is also a primate city, as are Prague, Budapest, Vienna, and many others.

*In most cases, the primate city is the capital city, because the national governments wanted to put as much power in their own hands as possible.  Some places have avoided this, however, notably the Netherlands, which have long named Amsterdam as their capital, while keeping most government offices in The Hague (so it could not compete with any of the major cities).

*Germany and Italy do not suffer from Primate City syndrome (Rome is not even Italy’s biggest city), nor does Spain or Poland.  This has a great deal to do, especially in the case of Italy and Poland, with the histories of these countries, which experienced long periods of time in which they were not unified nation-states.

*The European Union does not have a capital, but most of its major government offices are in Brussels, capital of Belgium, and this is often treated as the capital of the EU.

This page last updated 4 October, 2005.