er growth in the
industrial sector as entrepreneurs are unable to use land as
collateral for loans. Drought struck again late in 2002, leading to
a 2% decline in GDP in 2003. Normal weather patterns late in 2003
helped agricultural and GDP growth recover in 2004.

Europa Island
no economic activity

European Union
Domestically, the European Union attempts to lower
trade barriers, adopt a common currency, and move toward convergence
of living standards. Internationally, the EU aims to bolster
Europe's trade position and its political and economic power.
Because of the great differences in per capita income (from $10,000
to $28,000) and historic national animosities, the European
Community faces difficulties in devising and enforcing common
policies. For example, both Germany and France since 2003 have
flouted the member states' treaty obligation to prevent their
national budgets from running more than a 3% deficit. In 2004, the
EU admitted 10 central and eastern European countries that are, in
general, less advanced technologically and economically than the
existing 15. Twelve EU member states introduced the euro as their
common currency on 1 January 1999. The UK, Sweden, and Denmark do
not now participate; the 10 new member states may choose to adopt
the euro when they meet the EU's fiscal and monetary criteria and
the member states so agree.

Falkland Islands (Islas Malvinas)
The economy was formerly based on
agriculture, mainly sheep farming, but today fishing contributes the
bulk of economic activity. In 1987 the government began selling
fishing licenses to foreign trawlers operating within the Falklands
exclusive fishing zone. These license fees total more than $40
million per year, which goes to support the island's health,
education, and welfare system. Squid accounts for 75% of the fish
taken. Dairy farming supports domestic consumption; crops furnish
winter fodder. Exports feature shipments of high-grade wool to the
UK and the sale of postage stamps and coins. The islands are now
self-financing except for defense. The British Geological Survey
announced a 200-mile oil exploration zone around the islands in
1993, and early seismic surveys suggest substantial reserves capable
of producing 500,000 barrels per day; to date no exploitable site
has been identified. An agreement between Argentina and the UK in
1995 seeks to defuse licens