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Europe is bigger than the US

Jun 30, 2015, 22:21 IST

As a single country, the US is the biggest economy in the world.

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But given its close ties, you could easily argue that the countries of the European Union make for one big economy. Indeed, you would be arguing that it's the world's largest economy.

With Greece's probable default worrying European markets, maintain economic calm on the continent is even more important than many people realize. Joseph P. Quinlan, chief market strategist for US Trust, made this fact abundantly clear in a note that laid out just how important the EU's economy is to the world.

The adjusted GDP of the 28 EU member nations is bigger than both China and the US, the traditional list of world's economic super powers.

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"In nominal U.S. dollar terms, the European Union (plus Norway, Switzerland, Iceland) accounted for 25.4% of world output in 2014 according to data from the International Monetary Fund. That was greater than America's share (22.5%) and well in excess of China's-13.4%," said Quinlan.

The EU consumer is also on top.

The EU, plus periphery nations, accounted for 28.5% of all consumer spending in 2014, according to Quinlan, above both the 26.6% spent by US consumers and the 15.6% spent by the emerging economies of the Brazil, Russia, India and China combined. This attracts global companies to the region.

"Gaining access to wealthy consumers is among the primary reasons that US companies venture overseas, and hence the continued attraction of Europe to US firms," wrote Quinlan.

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So while Greece has little direct impact on the US, stabilizing the massive EU economy should still be a huge concern for Americans and the rest of the world.

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