European Business Environment - Essay Example

The Eurozone Since inauguration, the European Union has undergone economic crises. Resolutions could be seen through changes and charters within authorities and structures of the institutions. Such resolutions would be undertaken through impeding of European Union economic integration. Economic integration encompasses key steps. The preferential economic territory would lower the customs tariffs in the midst of the member countries. A free trade zone would be created to eradicate the internal customs imposed on certain commodities among the state parties.

The custom union ensured recognition of a common trade strategy, and similar tariffs applied for the third countries. The common market establishes common regulations on commodities and enhances the free movement of commodities, services, and workforce. The Economic Monetary Union (EMU) formed a common market via a universal currency unit. The union determined a common monetary policy, which depended upon coordination among the member states’ economic policies, deficit and public debt, and monetary policies (Arestis & Sawyer 2011, p. 28). The common currency unit and monetary policy establishment and the Eurozone would be independently governed by ECB (European Central Bank).

There would be implementation of harmonization of fiscal and other policies of the economy to complete the economic integration. In other words, the European Zone has basic institutional features. 1. Commercial and economic integration and inflow of financial resources. This involves the integrated and freedom in the markets. 2. Common currency, the Euro. 3. The open financial, institutionally separated markets have differential regulations and taxation. 4. The non integrated markets: the labor market’s rules remained national despite the determination of European institutional architects.

This was as a result of cultural and political factors and real constrains. For instance, there would be the rigidity of the many countries housing market. The European Union role is to endow migration freedom and equivalent rights to migrants. 5. Common fiscal parameters, which was a Maastricht criteria. The heterogeneous structures in the institution are the vital reasons of crisis within the Eurozone. It would be right to justify that the citizens of the Eurozone have had a negative response to the Euro.

After the approval, of the unit of the common currency, the prices of services and commodities skyrocketed and the Eurozone exhibited a weak performance. The Euro has caused considerably indefensible macroeconomic inequalities within the states, and the Eurozone lacks an organizational structure to undertake the crisis situation (Arestis & Sawyer 2011, p. 30). In the year 2008, the approval process of the treaty of Lisbon was still on till 2009 when it became effective. Immediately after the Lisbon treaty became enforced, a general notion got developed that it would provide the turning point for the European Union to overcome the crisis.

The treaty would be expected to optimize working methods and modernize institutions to tackle challenges effectively and efficiently (Franz & Sinn 2010, p. 102). The global financial crisis began to influence the European Union states unenthusiastically. The total public debt of Greece was almost 125 percent of its national income. These macroeconomic indicators in Greece would be explained by the Maastricht criteri