Is the EU Good For Business?
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The Single European Market presents various contradictions that undermine its efficiency and that need to be addressed to secure the E.U.'s long term economic viability. While the E.U. promotes a common market, it has not engendered the level of regional harmonisation expected. In particular, the recent economic crisis has shown that its role in providing a favourable environment for businesses needs to be re-assessed. This paper will first examine how the E.U. benefits businesses before analysing its weaknesses. Finally, possible improvements that could be made to stabilise the business environment will be explored.
From the Paper:"From a Neoliberal perspective as prescribed by Hayek, the European Union is an ideal structure for strengthening trade relationships and encouraging business growth (Hermann,2007; Mirowski & Plehwe,2009:434-440): The removal of all trade barriers within the EU allow free movement of people, goods and services, which in turn prevent protectionist policies from distorting the fair price of products and increase competitiveness throughout Europe. Poland is a clear demonstration of the benefits of these policies: 4 years after joining the European Union, its unemployment rate had nearly halved, and the level of Foreign Direct Investment had quadrupled to reach 12.8 billion Euros (Avery et al, 2009:31). As Foreign Direct Investment is essential for businesses to increase production and fund innovation, this is a positive sign that the EU stimulates business creation and business growth.
"The common currency, along with unified quality and safety standards, diminish administrative costs and simplify the comparison of products and services, which should in turn promote cross-border trade (Lane & Walti, 2007). Indeed, companies no longer have to adapt their product to comply with variations in national requirements within the EU, so they are able to achieve economies of scale. The benefit of this policy is illustrated by the fact that in 2011, intra-european trade was valued at 2, 804 131 million euros in 2011, which is double the amount of extra-european trade over the same period (Eurostat, 2012).
"EU competition policy creates further business opportunities: As a recognition of unsuitable conditions for perfect competition such as information asymmetry, (Khan,2007:14) which provide a breeding ground for monopolies and price-fixing, the supranational power of EU competition law is a valuable tool for securing an environment where businesses can develop whilst using resources efficiently. A more fragmented industry helps to correct market imperfections by providing greater opportunities for market entry, minimising unfair advantages and encouraging companies to innovate in order to maintain sustainable competitive advantage."
Cite this Analytical Essay:
Is the EU Good For Business? (2015, April 14) Retrieved October 18, 2019, from https://www.academon.com/analytical-essay/is-the-eu-good-for-business-154158/
"Is the EU Good For Business?" 14 April 2015. Web. 18 October. 2019. <https://www.academon.com/analytical-essay/is-the-eu-good-for-business-154158/>