The european Union in the globalization

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This Northern Range is the second world maritime façade. Outside Europe, the EU trades mainly with the other major regional power of the world (North America and Asia) but also receives important flows of energy and raw materials necessary for its industrial production and for its multiple activities. These flows come mainly from the Middle East, but also from Russia and from Africa. This maritime facade is thus, very important: the Manche and the North Sea form the busiest maritime passage of the world where the majority of the European ports operate which is an important commercial asset. [4]

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Competitive and highly developed ports

The European ports are engaged in an important competition between them, which urges them to modernize and to spread their harbor infrastructure in a wild race in developments. The international sea transport evolved over the years, indeed, quickly in quantity and in speed these last few years. The transport of raw materials and energy products (oil, gas) remain dominant and growing, which is due to the increase of the demand link to the progress of the world industrial production (development of emerging countries) and to the increase of the standards of the populations (increase of cars, mode of transportation…). On the other hand, the traffic of containers strongly increased in the last thirty years. [5]

This development is not without raising environmental problem in Europe concerning the sustainable development and the environmental protection. From an environmental point of view, the more harbor facilities extend all along the coasts, the more they threaten fragile and essential ecosystems for the oceans.

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Asset of the European Union for companies

For companies, the market is more important, the motivation is more important for selling more and this market motivates more for initiative, innovation and to set up new businesses which is a real strength for entrepreneur's. The fiscal, environmental and salary costs are reduced for the companies which relocate their production in the Eastern countries or in the Union. The customs controls are deleted, which allows to accelerate transport and to decrease the costs transports costs. Expectations on the borders are deleted thanks to the removal of border posts. Consequently, companies are incited to sell more volumes of products. The road traffic increased by 300 % from 1990 till 2000 for instance. Companies increased their production in order to be able to sell more. The productivity and the profitability increased significantly over the years.

The relocation has for objective the cost cutting. He can involve social dumping, fiscal dumping or environmental dumping, but it can also aim at a better access to raw materials (decreasing costs of transport). The intra-European relocations are mainly linked with salary and fiscal reasons. [6]

In Europe, there is several favorable regions at a financial level such as London, Ireland (many headquarters of big international companies as Facebook…), Switzerland (even if the country is not within the European Union), Luxembourg and Liechtenstein. The relocation also allows the companies to reduce the customs duties and to sell to the local population at more attractive prices than if they produced in their origin country. The relocation can allow them to benefit of lower salaries, of more important working time, of lower welfare costs, of a favorable labor law suppler and less binding.

Furthermore, he European single currency (Euro) was established to protect the European market and strengthen the cooperation between the member states of the European Union. Thanks to this single currency, the trade inside the Eurozone is encouraged and reassured, that is to say that companies of member countries can conclude contracts between them without being afraid of variations of exchange and additional costs. This single currency can be seen as a real asset for all trades and for all companies within the EU.

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Threats of the European Union for companies

The European construction will tend to penalize the smallest companies because of mergers and competition. In this case, the only exit for the company is the innovation. The margin of operation is weak if the State does not grant subsidies. The risk for the company is to see itself absorbed by a bigger one. Companies also have to be afraid of a more important competition which can put them in danger if the practiced prices by the competitors are too low with compared with their production costs.

Furthermore, States which share the same currency also share the risks of destabilization. That is why they should show themselves united in case of difficulties met by a partner.

The functioning of the Eurozone is still imperfect. So, the famous pact for stability and growth must be changed because it prevented the countries from leading a reflation policy in times of crisis and did not incite them enough to make efforts when the situation was good.

The case of Greece, which made up its public accounts, also proved that monitoring systems were not rather effective.

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Conclusion

The European Union is clearly a major actor in the globalization, all these assets allow companies to trade more easily within Europe and offers to companies many assets for internationalized themselves with incredible opening on the world and on major other actors and regions of the world which become more and more influent and vital for making great business and important partnership.

Despite of that, companies has to be constantly informed of what’s going on within the EU (as BREXIT) because this market works as a unique market, that is to say that every country of the EU are link between them. Furthermore, some countries of the EU suffer from corruption as Greece, and this corruption could be dangerous for companies.

References

- https://www.oecd.org/migration/OECD%20Migration%20Policy%20Debates%20Numero%202.pdf

- https://www.statista.com/statistics/274179/national-debt-in-eu-countries/

- https://ec.europa.eu/research/social-sciences/pdf/policy_reviews/kina26426enc.pdf

- https://www.espo.be/media/espopublications/ITMMAEconomicAnalysisoftheEuropeanPortSystem2009.pdf