Considered to be one of the most advanced forms of regional economic integration, the European Union (EU) is an assemblage of 27 countries that share a common goal of mutual prosperity, cooperation and peace. There is no other such union in the world, although it in many ways serves as a model of integration that has so far has not been successfully replicated. Being part of the EU has many advantages and disadvantages for countries. The advantages include access to SEM; funds that aid in infrastructure building; and world representation by a larger entity that has more power than a small country alone. Among the disadvantages however, is having to give up a degree of sovereignty that sometimes impedes a country from making decisions outside of the EU. In return member countries can enjoy economic prosperity in the form of barrier-free trade and various coordinated activities governed by a competition policy, an internal and external trade policy, research and development policy, industrial and social policy, etc. The groupings’ position is even further strengthened through a central European bank and the adoption of a common currency, the Euro, by the majority of its members. The gradual integration of European countries has had an overall positive impact on the economic and political development of member countries, but this trend is best evidenced in the new member countries that underwent significant changes in order to join the EU. This paper will discuss the EU, in terms of its history and impact on the development of the local business environment
The EU is comprised of the following 27 member states: Austria, Belgium, Bulgaria, Cyprus, Czech Republic, Denmark, Estonia, Germany, Greece, Finland, France, Hungary, Ireland, Italy, Lithuania, Luxembourg, Malta, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, The Netherlands, and the UK. It has recognized Croatia, Serbia, Albania and several other former Soviet republics as potential candidates The EU’s mission is to:
“Provide peace, prosperity and stability for its peoples; overcome the divisions in the continent; ensure that its peoples can live in safety; promote balanced economic and social development; meet the challenges of globalization [sic] and preserve the diversity of the peoples of Europe; uphold the values that Europeans share, such as sustainable development and a sound environment, respect for human rights and the social market economy” (Pascal, Europe in 12 Lessons, p.5).
The EU is the second largest trade bloc economy in the world, having generated an estimated nominal gross domestic product (GDP) of US$16,830 billion in 2007, amounting to 31% of the world's total economic output, which makes it the largest economy in the world. It is also the largest exporter of goods, the second largest importer, and the biggest trading partner to several large countries such as India, and China. 163 of the top 500 largest corporations measured by revenue have their headquarters in the EU. As of May 2007, EU enjoys a solid economy, with unemployment at 7%, while investment was at 21.4% of GDP, inflation at 2.7% and public deficit at -0.9% of GDP (See Exhibits 1–4) (EIU). The EU operates through a hybrid system of intergovernmentalism and supranationalism. In certain areas it depends upon agreement between the member states. However, it also has supranational bodies, able to make decisions without the agreement of members. Important institutions and bodies of the EU include the European Commission, the European Parliament, the Council of the European Union, the European Council, the European Court of Justice and the European Central Bank. EU citizens elect the Parliament every five years. The EU is governed by a 6 month rotating presidency, currently located in France. The EU's member states cover a combined area of 1.7 million square miles. The total territory of the EU is larger than all...