Complete Economic Integration - Political Integration

Political Integration

Political integration is required because for an economic union to be most effective it is necessary for all provinces to be at the same stage of the economic cycle. Although provinces is a narrow description as within a specific geographic area there is a much greater amount of mini-economies, all in different stages of the economic cycle; it is in theory possible for a single town to be in recession/boom whilst another is experiencing the opposite. In a practical sense it is best for as many of these economic microcosms to be at the same stage of the economic cycle as possible as it results in government policy having its effectiveness maximized, whether it be through the employment of fiscal or monetary policy.

To achieve economic harmonization requires increasing central control to pursue an economic area wide policy of inflation combatance and stability promotion. Though this is often viewed as a loss of provincial political sovereignty it is necessary to remove disparities and thus unfair advantages with certain firms across the economic area to provide the best conditions possible for the promotion of competition and therefore economic efficiency.