European Union Business Policy, Business Strategy and Trade - Coursework Example

European Union Business Policy, Business Strategy and Trade Student Name Tutor Course Name Date European Union Business Policy, Business Strategy and Trade Introduction European Union is assumed as a driving force for the global growth; it has impacts on the daily activities of the human beings and business. This union is the biggest global player in the international investment and trade however, it is recently challenged by the rapid changes in the activities of the world thus it has to struggle hard to improve and maintain its leading position. In November 2010, the European Commission renewed a Trade Strategy which focused on the removal of the barriers through the achievement of the ongoing bilateral and multilateral trade deals and coming up with the new ways of working with the partners of Union. The strategy also aims for the encouragement of exports, diversification of economic and economic structures of the market. The trade agendas of the European Union focus mostly on the process of opening markets of the European companies and the efforts to ensure that all the companies are accessed to the necessary raw materials. During the meeting between the European and Canadian negotiators, the trade minister Peter Van Loan said that their focus is on the issues which they thought would be a bit difficult and likely to have negative impacts in the performance of the companies. The Europeans are keen on the activities which will enable them head off the policies of protectionists in Canada to make it easier in supplying the manufactured services and products. The common competition policy is important in the attainment and maintenance of single market whose essence is the possibility of the undertakings for the competition of the equal market terms of all companies in the state (Wozniak, p134-154). The European Union although the world’s largest and richest parts of the world, there are some large internal disparities of the income and the opportunities among its regions or member states. The competition policies are therefore set together with the regional policies for the assurance of effective business strategies and marketing of the available. Through the regional policy the European Union transfers of resources from the affluent to the poor areas of the region. The study below specializes on the regional and competition policies which have recently been used or proposed in the developments and issues in the appropriate policy and has had impacts in the strategy and operations of the company. It analyses the two types of policies and their application in the last three years and their appropriate in the strategies and operations of the organizations with the European Union. Regional policy The regional policy is tool of financial solidarity and a strong cohesion and economic integration force. The solidarity is essential as it works to bring the tangible benefits to the citizens and various regions which are less privileged compared to the others. The cohesion force explains the principle through which all the individuals and regions benefits from by reducing the gaps of the incomes and wealth among them. There are some noticeable differences between the prosperity levels existing between and within all the countries of European Union. The regions which are considered to be the most prosperous in reference to the GDP per capita (wellbeing standard of measurement) are all the nations in the urban region. These include: Brussels, London and Hamburg. The gap between the wealthiest and the poorest nation is very wide; for example, Luxembourg is considered to be around seven times richer than the Romania or Bulgaria; the newest members of European Union. The regional policy in the European Union was created to state the aims of improving the economic status of the regions or states in the Union. It is considered to be very essential in the formulation of the budget of European Union for the purpose of getting rid of the territorial, economic and social disparities across the nations. This policy is geared towards the enabling the efforts to make the regions more competitive by fostering the efforts for economic growth and creation of new job opportunities thus disadvantaged regions can improve their economic status. The policy also focuses on a variety of challenges which have the possibilities of challenging the economic activities, for example, globalization, energy supply and climate change. The regional policy of the European Union covers all the regions of European although they are under differing categories based on their economic status thus some are considered to be more victorious than the others. The current regional policy formulated for 2007-2013 funding period has set up three main objectives to be achieved: regional competitiveness and employment, convergence and European territorial cooperation. These replaced the three objectives in the previous period 2000-2006 which were referred to as objectives 1, 2 & 3 and seemed to be less effective (Archer, p56-67). Convergence is considered as the largest portion of the regional policy funding which is dedicated the regions under this objective. These are the poorest regions of Europe whose GDP (gross domestic product) per capita is less than 75% of the European average. For example, East Germany, Southern Italy, Portugal and Greece are some of the nations which are considered to be poor in the region. After the addition of the new member countries in 2004 and 2007 the average GDP of European Union has reduced thus the old member countries which were eligible for funding in the convergence objective are above 75% entrance. These nations now entitled to the "phasing out" support until 2013. The projects which are funded in this objective include: helping businesses, improvement of the infrastructures, modernization of the waste and water treatment facilities and improvement of the use of technology (Watts, p 89). Regional competitiveness and employment objective is responsible for all the regions of European which are overlooked by the convergence objective. 16% of the European Union’s regional policy is dedicated to this objective which aims at creating more job opportunities through the promotion of the competitiveness and improvement of the regions which seem fit for businesses and investments. Some of the considered projects included support of research centers, universities, provision of training, and creation of job opportunities. The objective of European territorial cooperation aims at reducing the perception of the borders within Europe inside and outside the countries. This is done through the improvement of the regional cooperation thus the countries do not show any different between the boundaries. The objective is concern about three types of cooperation: transnational, interregional and cross-border. It is considered in 2.5% of the European Union’s budget of regional policy (Bachtler & Turok, p245-267). The causes of inequality The regional inequality addressed by the regional policy has various causes, both internal and external factors. The longstanding issues as a result of geographical differences and remoteness in some parts of the region which are not experienced are the main causes of the inequality between the regions. This is because of the economic activities taking place thus determining the amount of finances made. The social and cultural activities are also causing the inequalities between the regions. In some regions people are involved in activities which have more impacts on the economic status of the area, for example, people in the economically victorious nations like Luxembourg concentrates mainly in the commercial activities while others like Romania and Bulgaria have few investments (Bache, p76-82). The social inequality is evidenced in the differences in the social classes of the residents of the regions as a result of social deprivation. Thus the children from the poor regions attend poor quality schools, experiences of joblessness and inadequate infrastructures. The economic systems of these regions are not well developed since the finances are not enough to facilitate the development of the economic programs. Sources of finances According to the nature of the assistance and the type of the beneficiaries at hand the finances of European Union comes from three sources: The European Social Fund (ESF) is responsible for the support of the vocational training programs and some part-time employment and job creation programs thus improving the living standards of the affected regions therefore, reducing the gap between poor and rich areas. The European Regional Development Fund (ERDF) is set aside for the programs concerning the infrastructures, innovation and investments. This money as well as ESF is for the poorest regions across the European Union. The Cohesion Fund is for the coverage of the environmental and transport projects as well as development of the renewable energy which are essential in the enhancement of economic projects. This is mostly preferred for the nations whose standards of living is below 90% of the average of the European Union The burden of regional spending is set aside for the regions whose GDP is below 75% compared to the average of the Union and helps in the improvement of the infrastructures for the development of the economic activities as well as the potential of the workers or the residents. This means that although all the nations in the Union requires some support for innovation and research, job training and other forms of sustainable development the level at which the support is initiated is dependent on the advancement and the economic status of the region thus the less advantaged are accorded more support than the others. Some amount is also reserved for the projects which are cross-border and the inter-regional (Cini, p 297). Growth and Job creation The regional policy merges with the commonly agenda of European Union known as Lisbon for the development of jobs and growth. This is made possible by making nations and regions a bit favorable for the investments through the improvement of their accessibility and provision of quality services and preservation of the potential of environment. Encouragement of the innovation, entrepreneurship and the knowledge of economy through the development of the information and communication technologies are essential for the creation of the more and advanced working opportunities through the attraction of people into employment and enlarging people’s knowledge on human capital investments ( Funck & Lodovico, p 167-187). Regional policy and investment in people The European Union makes use of the population of its countries to strategize and restructure its spending of the regions. In the period between 2007 to 2013the regional spending accounts for 36% of the entire budget of European Union. This means spending of more than seven years for nearly €350 billion. This is focused on the cohesion policy merged together with the three objectives: competitiveness, convergence and cooperation. The central and the Eastern European members are given the first priority together with the regions of the Union which are considered to have special needs. For example, all the nations which have joined the Union since 2004 are expected to be given 51% of the total spending of the region in the period between 2007 and 2013although they are a minor population of the whole region. The aim is to boost the performance or the economic status of these nations to be equal or close to those of the victorious or the stable nations. The objective is achieved in practical terms through the implementation of various financial operations which would have a positive impact economic status of the affected regions or through the cohesion and structural funds. The European regional policy for the period between 2007 and 2013 is considered to the second largest item in the budget which is allocated €348 billion (Jones, p234). The Competition policy works together with the regional policy since it entails the operations of the commercial organizations in various parts of the region and how they relate with each other. The control of the competition policy by European Union gives its authority to rule on the takeovers, mergers and control of the state aid. This policy is important in the application of the rules to ensure that the companies compete with each other and innovate or offer good prices to their consumers. The European commission is in charge of Europe as whole; it is keen on the companies to ensure that the businesses do not club together in sharing the market. The Union is powerful in the efforts to control the competition between the companies and the decisions made are well felt by the citizens of all the nations. It is able to develop the regulations of competition policy as part of its leadership. This policy has success in the process of imposing the vision of the open market on the states which are members of the Union. The policy was developed in the Treaty of Rome offering variety of powers to sense and prevent the activities which are likely to stop the competition between the firms. In 2004 the powers of the European Union were changed with the intention of changing the critics that it was so unaccountable for the search of the competition laws. The newly formed rules empowered the commission to investigate more on the ways that the Europeans violated competition (Richardson, p 164-175). The Commission is allowed by the Treaty Rome to investigate the process of prices fixing, ways through which the dominant companies abuse the position of the market and the agreements put in place to fix the market shares, limitation of production or technical development. It also allows the interference against government systems which attempts to support uncompetitive companies with the aid of the state. This policy is run by Directorate General for competition, a body which part of the Union and works alongside the European Court of Justice (ECJ) in the process of investigating the likely breaches of competition law and prosecution of the companies which do not attain the set standards. The policy aims at imposing fines to the companies which do not comply with the set market regulations. Some of the governments in the Union do not comply with these rules, for example, French in the name of fighting or protecting their national champions or the companies which are seen to be more important or having much impact in their economic status (Kahn, p58-68). The motor vehicle companies are an example of well performing sectors in the victorious nations and having much impact on the economic status of the place and the living standards of the individuals. The competitive policy comes in through monitoring of the market, advocacy of the competition and enforcement of the individual cases in the mergers, state aids and anti-trust fields. The common competition policy is necessary in the attainment and achievement of single markets; the importance of these markets is the possibility of the operations for the competition on the equal terms on the markets of all the states which are members of the Union. It ensures that the competitive operations of the companies, businesses and firms and offers protection for the interests of the consumers through the processes of enabling them get good and services in the most appropriate terms. It prevents the practices which are termed as being anti-competitive on the areas of the organization which are likely to strangle off the competitive operations brought about by the completion of the single market (Staab, p 94). Like the other policies in European Union, this policy also has goals and objectives which all the members should comply with. In regards to the state aid, the policy state that the less privileged regions should be favored compared to the others so as to solve the issue of inequality or the gap between the rich and poor nations. The competitive policy enhances the business activities, wide distribution of knowledge to reach all the nations, ensuring good and fair deals between the parties involved in the marketing process and well-organized economic restructuring all through the internal markets. This policy has impacts in the economic performance of Europe by monitoring the operations of the commercial organizations; it acts as a major constituent of rational and incorporated policy to promote the competitiveness in the European industries with the intention of attaining the Lisbon strategy (Tuna, p 167-157). There is need for the rules of common competition which are essential in preserving a uniform level of all the companies, firms and businesses in the internal market. This may go against the national interests and all the governments are forced to comply with them with the intention of getting a neutral and respected controller who is above the interest of any nation hence the achievement of equality. Under the control of the Court of Justice which ensures that justice is granted everywhere, the commission formulates the European law concerning competition for the provision of the framework and orientates the national laws. Most of the European nations work hard to ensure that they outweigh the others in terms of the economic status as well as political and social aspects. The competitive policy of the European Union ensures that although each of the commercial undertakings works hard to improve their individual performance they ensure that the poor regions and the badly performing organizations are helped to improve their performance (Wishlade, p123-154). Under the rules of the European Union, it is illegal for any business to fix or hike prices or curve up their markets. The big companies in the particular markets are not supposed to merge power so as to get in the position of controlling the market and those in the dominant position may not abuse power to grip out the competitors. In case the large companies like the pharmaceuticals or motor vehicles plan to merge they have to seek approval from the European Commission. The commission may allow the companies to create a monopoly under special circumstances like if they need expensive infrastructures. However these monopolies should assure the commission that they will treat the other companies fairly. Conclusion European Union is an economic and political union which consists of 27 member state located in Europe. It has some policies which ensure that all its goals and objectives are achieved. These policies set some rules and regulations to govern the member state. Regional policy is the most essential in the management of the Union since it ensures that there is equality among the nations especially economically wise. The poorer nations are empowered by expanding their economic activities as well as creating more jobs to lift the standards of living of the residents. The aid entitled to the member states is based on their position compared to the European average percentage of the per capita. The states whose GDP is less than 75% of the average are entitle more aids than those whose GDP is more. Works cited Archer, C. The European Union: Volume 21 of Routledge Global institutions, (21) 15: 56-67, 2008. Bachtler, J. & Turok, I. Coherence of Eu Regional Policy: Contrasting Perspectives on the Structural Funds: Regional Development and Public Policyseries, (16) 17, 2007: 245- 267. Bache, I. The politics of European Union regional policy: multi-level governance or flexible gatekeeping? Volume 3 of Contemporary European studies, (3)2; 2006, 76-82. Cini, M. European Union politics, Oxford: Oxford University Press, 2007. Funck, B. & Lodovico, P. European integration, regional policy, and growth, New York: World Bank Publications, 2003. Jones, R. The politics and economics of the European Union: an introductory text, Camberley: Edward Elgar Publishing, 2007. Kahn, P. The European Union, New York: InfoBase Publishing, 2008. Richardson, J. European Union: power and policy-making, New York: Routledge, 2006. Staab, A. The European Union explained: institutions, actors, global impact, Indiana: Indiana University Press, 2008 Tuna, B. The political economy of European Union competition policy: a case study of the telecommunications industry, New York: Routledge, 2008. Wishlade, F. Regional state aid and competition policy in the European Union Volume 43 of European monographs, (43)2, 2003: 123-154. Wozniak, J. Conditional leadership: the European Commission and European regional policy, New York: Lexington Books, 2006. Watts, D. The European Union, Edinburgh: Edinburgh University Press, 2008. Read More