The European Business Practice - Essay Example

The European Business Practice Introduction The European Union is currently the world’s largest market. This political-economic union currently boasts of 28 member states, majority of which are European States. Since its establishment after the aftermath of World War II, the union has been successful in its expansion and success in the political and economic scene. The integral purpose of the union is to oversee the co-operation of member states particularly in areas of trade, environment, transportation and employment. Since its establishment, the European Union has been successful in overseeing the political and economic welfare of its member states. As a result, the European Union has contributed to a plethora of changes that have shaped the European market and consequentially changed the lives of its people. Through the adoption of Freedom of movement laws and its policies in the consumer market, the union has shaped the economic, social and political aspect of its citizens. In this article, functions of the EU will be analyzed so as to comprehend the implications of EU operations to its member states. Background Information The genesis of EU dates back from 1945 to 1993. The Second World War had led to detrimental effects in the economy of European states. 20 million lives were lost during the war in Europe alone. Moreover, the region had incurred numerous capital losses. Moreover, the cold war of 1950 worsened the economic situation of the region. In 1957, the 1st European Economic Community (EEC) was established under the Roman Treaty. In 1950, the European Steel and Coal Community unified the European countries. Through the tireless efforts of the founding fathers, such as Konrad Adenaur, Joseph Bech amongst others, the European Union became a dominant political-economic party. EU Characteristics The EU obtained economic intergration through the establishment of the EMU(European Monetary Union)The EMU is a representation of the Maastriacht treaty objective shared by member states. The EMU consists of a common currency,that is the Euro,a single market that allows free movement of goods and services and an enhanced policy co-ordination. Members are expected The European Union currently made up of 28 sovereign, independent states. These states have pooled some of their “sovereignty” so as to draw strength from the size of the Union (Europa 2014). Originally the organization was majorly for economic purposes. However, over the years, the union has progressed to become a policy making organization co-ordinating a single market. All member states operate under a single currency-euro, which is currently a major world currency (Europa 2014). The EU is also the largest supplier of humanitarian aid policies in the world. Decision making in the organization is carried out by the contribution of member states. The European Parliament, the European Council, the Council and the European Commission are the institutions that make up the union. When the members negotiate and agree on an action, then the action is implemented through a treaty. Decision making in the EU takes place in three main levels. In the first level, the commission develops a proposal and presents it in parliament, this is the 1st reading. Once in parliament, the proposal is discussed with the members of parliament. If no agreement is reached in the 2nd reading, then the proposal is presented before a conciliation committee for further discussions (Europa 2014). During the third reading, the proposal is finally adopted as law. At least a half of the total number of member states that represents two thirds of the population, must vote in favour of the proposal. Member states enjoy a series of benefits. First, all member states are part of the Economic and Monetary Union. This means that policy making and decision is a matter of common concern (Europa 2014). Thereby, there is an economic relationship between member states and EU institutions. As a result, member companies get to enjoy the economic benefits of working in a group .Moreover; the establishment of a common market greatly boosts trade between member states and the rest of the world. The citizens also enjoy free labor movement across member states. There are three criteria’s that countries must have in order to become member states. First, the state should contain institutions that uphold democracy and human rights. The state is also expected to contain a functioning market economy and lastly, the country should be willing to adhere to the obligations and intent of the Union (Europa 2014). Once a member, the state complies with the EU treaty, the Copenhagen criteria and the 1993 Treaty of Maastriacht. Each member state complies with the binding laws in exchange for representation within the common EU legislature and judicial institutions (Europa 2014). Citizens of member states enjoy the benefits accrued to the adopted treaties and established laws. Trade and Freedom of Movement The first fundamental principle enjoyed by EU states is the liberty of movement of its citizens in an area of freedom, security and justice (Europa 2014). The purpose of this principle was to eradicate the case of unemployment. Moreover, the principle purposed to enhance employment, self-employment and business establishment. This principle is in line with the vision of the founding fathers who purposed to establish a unified Europe. The 1985 and 1990 Schengen Convention commenced the abolition of border controls between member countries (Europa 2014). The EU member states except UK and Ireland acquiesced to this regulation Schengen Aquis. Kupiszewski accounts that the abolition of borders was to create a security deficit and, therefore, compensatory measures in areas of Visa asylum, police and judicial co-operation and exchange of information (Kupiszewski 2003).The opportunity presented with this principle contributed to an asymmetrical movement of people. The freedom of movement principle contributed to asymmetrical migration of people. This principle restricted the right of member states to expel non-citizens of other member states. According, to Kupiszewski, each country has the right to be sovereign and to execute this sovereignty through the control of foreigners entering and leaving its territory. Inevitably, the adoption of this principle contributed to the massive inflow of foreigners between countries. Therefore, the number of immigrants became exponentially large compared to the number of emigrants in most member states. European Union and WTO www.europarl.europa.eu/ftu/pdf/en/FTU_6.2.2.pdf · PDF file Debra Johnson, Colin Turner European Business Routledge, Jan 24, 2007 - Business & Economics - 480 pages Munich, Schindler M.J (2012) Culture, Politics and Europe: en route to Culture-Related Impact Assessment Retrieved from http://www.culturalpolicies.net/.../222/en/Culture,_Politics_and_Europe-1.pdf COMPENDIUM (2014)Compendium of Cultural Policies and Trends in Europe : European culture policy database Retrieved from http://www.culturalpolicies.net/web/coe.php Michael Artis, Frederick Nixson Economics of the European Union Oxford University Press, May 17, 2007Free Movement of People within the European Union http://www.euromove.org.uk/index.php?id=10795(euromove) Dale, Hellen (2005)Challenges Facing Europe in a World of Globalization: Heritage Foundation. Lecture #914 http://www.heritage.org/research/lecture/challenges-facing-europe-in-a-world-of-globalization EU Membership Highlights Polands Migration Challenges Krystyna Iglicka, Magdalena Ziolek-Skrzypczak(2010) Migration Information Source http://www.migrationpolicy.org/article/eu-membership-highlights-polands-migration-challenges/ Barrell .Ray, FitzGerald.J., Riley Rebecca: EU enlargement and migration: Assessing the macroeconomic impacts *National Institute of Economic and Social Research, London Economic and Social Research Institute, Dublin NIESR Discussion Paper No. 292 March 2007 Klaas Knot: The Eurozone crisis – causes and solutions Speech by Mr Klaas Knot, President of the Netherlands Bank, to the Asia Society, Hong Kong, 15 October 2012. European Commission (2014)Why do we need an Innovation Union?Innovation Union.A EURO 2020 Initiative http://ec.europa.eu/research/innovation-union/index_en.cfm?pg=why-do-we-need-innovation The Need for Innovation-Based Growth in Europe(Jan Fagerberg 1999)Challenge Vol. 42, No. 5 1999, pp. 63-79Published by: M.E. Sharpe, Inc. Article Stable URL: http://www.jstor.org/stable/40721971 The Euro has caused a divergence in competitiveness. Countries who face higher labour costs cannot regain competitiveness in the usual way through depreciation. Prices become uncompetitive, leading to lower domestic demand, and high current account deficits. Since 2011, current account deficits have fallen in countries like Ireland and Spain, but it has been at the high cost of reducing domestic demand and rising unemployment. Countries are seeking to regain competitiveness through internal devaluation (lower demand, pushing down prices) But, this is much more damaging to the economy than the traditional approach of depreciating exchange ra Read More