European Business Environment Essay
European Business Environment
This paper focuses on the enlargement of the European Union (EU) and its effects on external and internal relations. Taking into account the analysis and forecast presented before enlargement, it shows the real consequences of the development. The most essential consequences, as well as problems in part of decision-making and administration in the EU, social consequences of the enlargement, as well as the result of the possible economic enlargement of the on both existing member countries and new entrant countries.
In taking into account the future of the European Union and the perception of regional European, the study specify that for the first time in many decades the EU has the opportunity to strengthen the global role of the society and reunify the continent supported by a common democratic standards and rules, a collapse in the process of European integration would mainly perhaps mean the gradual marginalization of Europe as a foremost actor of international associations.
The collapse of the Soviet Union and the fall of the bipolar order greatly affected the development of European integration. One of the main basic challenges was the disappearance of the Eastern Bloc, as the threat of the Soviet hostility served for many years as a amalgamate aspect for the Western community (Baun, 2004). The next challenge was the unification of Germany, as it was obvious for most of European countries that the prospect role and position of the united German state would be stronger and further important than that of Cold War-era Western Germany. At the same illustration, the European Union, formally established by the Treaty of Maastricht on 1 November 1993, had to respond to broader problems about its international target and the future shape.
It was apparent that the European Union possibly could not have opened its door to nation that was unwary or unable to prove the good organization of their democratic governance. Additionally, the setback for the EU was that planed to outlook for the relationship served as encouragement for the new democratic organization in East-Central Europe to carry on their complex and socially troublesome reforms, the flourishing results of which became significant for the strength of the whole continent.
The solution was the Copenhagen condition, explained at the summit of the European Council in Copenhagen in 1993. The rules placed general necessities for starting effective democratic organizations, respect for individual and minority human rights, and suitable instruments for promised market economy (Lindner, 2003).Upon meeting the requirement, the first candidates was capable of open the accession talks in 1998. Ten new members that united the European Union on 1 May 2004 completed these consultations in 2002.
Jointly with the growth in 2004, the EU-15 developed into EU-25; after Bulgarian and Romanian accession on 1 January 2007, the coming together became the EU-27. The growth from 15 to 27 member states was the biggest in the history of European incorporation process growing the number of the EU population from about 380 to 485 million. The new states members were medium-sized and small countries, though; each of the new associate has achieved the same rights as existing members of the EU.
The enlargement of Eastern has been the major difficulties in the history of European integration, not simply because of the number of new states member joining the European Union at the same time, but mainly because of differences in the level of the gross national product (GNP) involving the old and the new members states of the EU. An evaluation of GNP per capita confirms that the richest new members state have not go beyond 40% of the standard EU-15 level and much bigger asymmetry is opened by the evaluation with the wealthiest states members of the old union (Miles, 2004).
In reality, earlier enlargement rounds, like the one in 1973, to comprise the Ireland, Denmark and United Kingdom the one in 1995, to include Austria, Finland, and Sweden, was accessions of states similar in economic improvement and wealth.
Merely the membership of Spain and Greece in 1981 and Portugal in 1986 caught up the enlargements of countries, which were much not as good as at the moment of their accession than the standard member of the society. This led to a question of harmony between the poorer members and the rich, and needed additional financial contribution of the wealthiest member states to sustain political and economic transformation in the new member countries. Although the old member countries reacted with hesitation, they finally agreed to such assistance, being aware that it would support democratic transformation on the Continent and support to eliminate intimidation of instability for the whole society, while contributing to formation of the common European marketplace.
Nevertheless the Eastern enlargement twenty years later on was incomparable in its unevenness of economic potentials and the interns of GNP per capita involving the old and the new members still with the Southern growth of the European Community (EC) in the mid-1980s (Nugent, 2004). This irregularity of enlargement collectively with fears in Western Europe about social cost, problems of intra-union administration as well as the continuing crises of EU characteristics have compounded the face of the Eastern enlargement years after the enlargement, these concern continue to distress the integration development, consequently it is worth focusing on a few of them.
Even ahead of agreement, it was obvious that the Eastern enlargement from 15 to 28 members would force management and decision-making processes in the European Union, as well as the possible to paralyze or at least make difficult the mechanisms formed in the EU-15. Predicting the enlargement, the old members attempted to organize the internal decision-making systems to incorporate the new members.
The Amsterdam and Nice Treaties broaden the scope of verdict to be taken supported on Qualified Majority Voting (QMV), as an alternative of harmony, and the Nice Treaty formed a specific majority system (Schmitter, 2004). It established each of the 27 members an exact number of votes gleaming its demographical potential. The major members of the EU France, Germany, Italy and the UK, were awarded 29 votes each, and the smallest states: Luxembourg 3 and Malta 4 votes, correspondingly. Poland, as the largest new member, was given 27 votes, the equivalent to the number as Spain. However, the rule of the accord has remained at as the foundation of all decision-making in the EU, particularly when it comes to critical political decisions. Even so, the caution of Taylor remained applicable as the effectiveness of decision-making in the distended European Union needed further internal amendment.
The response was Treaty making a Constitution for Europe signed in Rome on 29 October 2004. The new agreement went comparatively far in its application, yet Netherlands and the France rejected the European Constitution in referendums and the last effort to improve the internal utility of the EU was the Lisbon Treaty signed on 13 December 2007.
The Lisbon Treaty is in actual fact a series of provisions originally presented in the European Constitution. It has make things easier for the EU’s legal procedures and has established the European Union a legal personality, as well as helping harmonization of the EU’s policies establishing the posts of the EU President and Foreign Minister. It reflects the objections of some members who strained the principal independence of the member states, resultant in the cut of most references that could advocate for the character of the European Union as a (super-) state, counting the initial names of the new EU council. As an effect, the new EU Foreign Minister has lastly become the High Representative of the Union for Foreign Affairs and Security Policy. However, the prospect of the treaty had been vague for almost two years, as its implementation required confirmation in all member states.
After the optimistic result of the second Irish referendum on 2 October 2009, the president of the Czech Republic, the Polish president, Vaclav Klaus and Lech Kaczynski, finally decided to sign the Treaty. This permitted the Lisbon Treaty to come in into force on 1 December 2009 (Nugent, 2004a).
The approach of the citizens in the new member states towards European incorporation has generally been optimistic. For instance, the effects of the agreement referendum in Poland demonstrated support for the association at 77%. After enlargement, assistance in Poland is still at a high level of about 70% (Preston, 1997).
The Office of the Committee for European Integration, Warsaw 2009 all together, still, enlargement provoked serious worries among Western EU member countries. The forecast of the enlargement were a basis of anxiety among the populace in the old, wealthier counties members of the EU, as well as the fears of joblessness and huge immigration of employees from the much poorer states of East-Central Europe. Piotr M. Kaczynski specified that the new states were better organized for enlargement as they projected changes and were required to plan for membership. The older members and their societies only experienced the test of the Eastern enlargement on the day of new members’ agreement (Nugent, 2004b). This resulted in the distribution of fears and slogans about the “Polish nurse” or “Polish plumber” frightening for employment chances for local Western Europeans.
Few in Western Europe left devoid of the benefits of the Eastern enlargement for stabilization, democratization, and union of the continent. Yet the Westerners worried that Eastern enlargement would establish the questions of decision-making, management, asymmetry in economic potentials and as well as raise the requirement for a broader process of structuring mutual consideration between the two share equally of Europe divided for almost 50 years by the “Iron Curtain.” (Hagemann, Sara/De, Julia 2007) Still, there were numerous forecasts concerning the migration prospective. Some of them projected that the immigration from the new states would differ from 6% to even 30% of their total populace (105 million), but those more practical showed that the migration would be approximately 3-5% or yet only 2% in the longer time, taking return migration into consideration (Nugent, 2004b).
In actuality, the Eastern enlargement has only in part established the fears of Western European civilization and its social effects have been less serious than projected. At the same time, it has established most of the scholars’ forecasts.
In agreement with the data obtainable by Euro stat for the end of 2008, the total digit of the immigrants from the new states members has been approximately 1.7 million (Guérot, 2005).This does not comprise session seasonal personnel, the number of which could be expected as an additional few hundred thousand with a propensity to sluggish down for the reason that of the current world economic disaster.
The most frequent immigrants were Poles (Poland being the most crowded new member state) and Romanians operating mostly in the Ireland, Spain, and United Kingdom. Polish specialist have projected that the actual number of Poles operating in the old member countries of the EU has been at the level of 1–1.12 million (out of entirety 38 million of populace) with a possible of additional 0.6 million of seasonal recruits (Stacey, and Berthold 2003). These numbers may seem considerable, but it would be difficult to treat them as a massive influx of workers from the East.
All in all, the trouble of migration from the new state member cannot be overlooked and will go on to play an important role in the opinion of euro-skeptics, but it emerge to be much less grave than originally estimated. This is accurate mainly in the situation of the current world economic catastrophe and increasing social protests adjacent to the foreign employment force in the UK and other principal states of the European Union. It may perhaps also persuade the old members to formulate informal efforts at protectionism, although the regulations of the free movement of industry and capital within the European particular market.
One of the areas of debate before enlargement was the cost of the process. Yet it seems that the Eastern enlargement of the European Union has not been overly expensive, especially in comparison to the benefits. Several authors have concluded that in the longer term the enlargement would have small but positive growth effects on the whole EU, although lower in the case of the old members and higher with regard to new member states, with forecasts of an additional overall EU growth by 0.5 to 0.7%. However, it is clear that the main benefits of the enlargement are political ones, namely the opportunity to reunify the Continent and in this context, the costs of the enlargement were indeed low (estimated for the financial framework 2004-2006 at 40.16 billion euro, or 1.08% of EU GNP) (Faber, 2009).
Though, looking at the differences in economic prospective and wealth-level involving the old states and new states members, it seems not possible to expect that their convergence would be attained in the short or even medium time. This implies a tough need for aiding funds from the richest states of the European Union for the improvement of the new state members. Therefore, the dilemma of financial unity between the poorest and the richest in the EU will turn into much more grave for the future of the Union than whichever time before, still after the Southern enlargement in the 1980s (Falkner, 1996).
The narrow financial wealth at the Union’s disposal has led to discussion in the EU about its financial point of view. The member states take up two differing positions. France and Germany, as the leading donors, have grown hesitant to increase their assistance to the common EU budget. The financial discussions for the period 2007-2013 incorporated the demand of the major net-contributors to edge the EU resources to 1% of the Community’s GNP. The ultimate resolution accepted a maximum of 1.045%, but the indecision of the richest members to wrap the additional expenditure of the enlarged EU was understandable.
The new state members, conversely, joined the EU with the hope of financial support and harmony. Knowing that their active growth depend on the kindness of the richest states of the EU, the new state fear that, the imposing idea of harmony might crash with the exaction economic interests of the main EU members. Such a distribution of the EU members into the center of the most urbanized and wealthiest nations and East-Central Europe as an edge could intimidate European integration.
Yet even though the limited economic resources exist in the EU budget, the supporting of the new members states has been reasonable so far. Poland, for instance, as the largest recipient, is getting a net-assistance of €60 billion in the episode of 2007-2013, mostly in the form of structural and solidity funds. However, the most important concern is to keep this level of the help in the next financial agenda (2014-2020). This will be the main issue of the future discussion.
The wealthiest and strongest states of the EU have well thought-out reducing some forms of support to new member’s states and support spending that would center more on new technologies, competitiveness, and innovation of the EU in the global economy. Even if it is apparent that the EU requires being more successful on the global prospect, it is evident that the financial capital available in the upcoming EU budget for innovation and new technologies would most possibly help the wealthiest state of the Union. The new states with their much poorer economies and less innovative will not be capable to struggle for this money.
The new East-Central European members projected full-fledged contribution in the decision-making method of the EU, as well as value for their opinion, despite their imperfect economic potentials. But the political discussion just after the Eastern extension, which led into the new suggestion of the European Constitution and the Lisbon Treaty, were challenging for the new members states and tackle them with the perception of the new form of the European Union only a few months following their agreement.
These circumstances were most difficult for Poland the largest country in the group of new states, however a medium-size state members in the EU with its ambition of playing an active political task in the European Union. In the case of Poland, which was to lower some of its recognized position in the EU exacted in the number of votes in a number of Union institutions, it was hard to clarify to people why the regulations of the membership must be altered so quickly after the agreement.
Examining the first epoch after the Eastern extension, Piotr M. Kaczynski sustains that the economic outcome of the growth have been clearly constructive. The new state members improved quickly and much earlier than expected. Though, he finds that the political aspect of the enlargement is harder to review. After a first period of compliance, the new state members, particularly Czech Republic and the Poland, became more self-confident in the EU, which resulted to some quarrel between the administration of these nations and EU system. Equally Czech Republic and the Poland mainly reacted to the thoughts coming from the Western part of the EU. Their political program, if any, were typically poorly set and cast off (Steunenberg, 2002a).
Later, after the enlargement, Poland and all new members comprehend more visibly that it is not only the amount of votes that make a decision their place and ability to pressure decision-making procedures in the EU. They have attained convenient experience and become more familiar with the actual political device, including the regulations of effective alliance building and cooperation. Dirk Leuffen has explained it as a progression of “socialization” in which the new state members learn how to deal with the informal and formal rules and standards in the EU. From his perspective point of view, this socialization should be well thought-out as a medium-term development ( Dirk 2010).
The skill gained; during the five years following the enlargement appear to back up that the time of socialization will be shorter relatively than longer. The current Polish-Swedish suggestion of Eastern Partnership (Steunenberg, 2002b), to reinforce collaboration with several Eastern neighbors of the inflamed European Union, helped by the other members of the EU, demonstrate that new states can efficiently take part to flourishing program, or at slightly be significant partners of doing well initiatives offered together with some old states members. As consequence, the succession of the new states from East-Central Europe has not been as “detrimental” to the EU administration as it was at times recommended in Western Europe earlier than the enlargement.
In conclusions, the effects of the Eastern enlargement on external and internal relations of the European Union have not been as “tragic” as it was occasionally feared prior to enlargement. The addition from 15 to 28 member nations, as well as the significant economic unevenness between old state and new state member have shaped some administration problems for the EU, but they have not busted it.
The European Union ought to now focus on amplification of its present instruments and institutions. The new states have rapidly learned the Union’s regulations and procedures and to place political conciliation before majority of votes. Thus, the agreement code has retained its center value in the EU. The significance of the incorporation process is the vision of a new regional individuality based on resolution among the European countries. The Eastern enlargement has opened the way to a real unification of the continent. After the occurrence of two World Wars on its region, it behooves Europe not to lose this opportunity. Thus, harmony between the old states and new members remains the subject to a flourishing future of the society.
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