European Union: Issues and Policies - Dissertation Example

This has its own advantages and disadvantages. The main advantage of such a scenario is that the world economies will always seek t look after each other because if one fails, they all fail. The biggest disadvantage is that if one fails, they all fail. This in effect creates a mirror effect as the one advantage it possesses is also its one disadvantage. It is against this backdrop that this paper seeks to compare these different markets with a view to establishing whether the emerging world markets would threaten the economic competitiveness of the existing European Union market.

This paper seeks to provide an analysis of the emerging world markets vis a vis the current existing markets. It singles out the two biggest emerging markets in China and India while analyzing the existing Euro Zone market. The paper seeks to provide a basis on which the argument that the emerging markets are greatly affecting the existing markets. The European Union Market The Euro Zone Crisis is a debt crisis that is currently being experienced by European countries that came together under one currency and market.

This structure ensured that they would develop pone currency without different tax rules as you went across these countries. These countries are now not able to repay their own debts without the existence of third parties. They need other governments and corporations to bail them out. This is not an overnight occurrence but is the product of years of suspect financial banking by countries in the European Union. These countries came together in 1992 to sign the Maastricht Treaty enabling themselves to limit their spending and debt amount levels.

This would have seemed to be a splendid idea but its implementation led to ramifications that are seeing countries grapple with the option of declaring bankruptcy (Research). These countries took it upon themselves to sidestep the Treaty by devising ways and means of borrowing intelligently from other governments without securing their loan amounts. They sought to provide security for their intended sums by selling off their rights to receiving future sums of money. This in effect meant that they had secured their current debt at the parlance of a future debt.

To further muddy up the logistics of this situation, they took loans aimed at reducing their current loans while offsetting them through the selling off of their rights to receive future income. This in the short term allowed governments to raise funds without disavowing the deficit targets under the treaty but in effect provided an avenue for the said governments to ignore their internationally agreed standards (Management, 2012). All this came to fore in 2009 when fears of a debt crisis developed in different sovereign countries.

This was brought about by a variety of unrelated incidents all gearing towards the collapse of the economy. Some of these were the collapse of the property market, government bailouts, downgrading of government debt by some countries and the collapse of future portended economic bubbles. The Euro Zone one monetary union policy hampered the ability of the European Union countries to respond because they were all suffering the same consequences (Baskin, 2005). These different scenarios created fear in investors.

The European