Wherever you Locate in the EU, it is a Truly Integrated Market

Wherever you Locate in the EU, it is a Truly Integrated Market

The mode of doing business in the modern world has been changing at a very fast rate. Markets have developed and embraced new strategies that have enabled businesses and organizations to create a complex web of the corporate world. Most of these developments have been attributed to advancements in technology that has made it easier to share market information and enhanced communications among different markets. Trading has also been made easier than ever before, with online trading taking the centre stage. Whereas there are still challenges that are being experienced on the market, most of them have been tackled and there is an increased efficiency in the market as compared to some years back.

One of the markets on the global scene that has really grown is the European market. This market began with a few member countries and has grown into an enormous market that can only be compared to the US market in the world in terms of purchasing power. The European countries have been able to form such a sophisticated market by forming a Single European Market. This market can be defined as a market that is integrated in the systems of various countries to enable the movement of goods from one point to another in a market that is shared by different countries. Therefore, the Single Market comprises of different countries that have united with a common goal of not only eliminating trade barriers but also working towards eliminating boundaries that may become a stumbling block to proper functioning of such a market. On the other hand, there is need for unified economic policies among member countries of a single market (Armstrong and Bulmer 13).

Single European Market

The Single European Market has a history that dates back to 1986. However, prior to this year, there had already been plans that had begun way back in 1950s to harmonise the market in Europe so that a common market could be attained. Whereas the Treaty of Rome in 1957 did not capture the actual dreams that these countries accomplished years later, it formed a strong foundation for the unification of the European market years later. The 1957 treaty of Rome led to the formation of two international bodies; the European Atomic Energy Commission and the European Economic Community. These treaties were enacted at the beginning of 1958. One notable difference between the two treaties is that the European Economic Community has been revised on numerous accounts to be able to satisfy the changing needs of the European economy. However, because of the sensitivity of the nuclear energy in the European countries, the European Atomic Energy Commission has seen very little amendments (Harryvan and Harst 104).

The European Economic Commission saw the introduction of the custom union that worked towards harmonising the Custom Union of every nation that was part of this Treaty. The barriers that were posed by different tariffs as determined by different nations were dismantled and a cohesive custom union with harmonized tariffs introduced. This was to facilitate the free movement of goods among the member countries that subscribed to this treaty. There was also to be unrestricted movement of capital and people across borders to conduct their business in any area of jurisdiction that fell under the Rome Treaty without being restricted. This is what established what is commonly known as the common markets in Europe. These tariffs were to be eliminated within a period of 12 years after the signing of the 1957 Rome Treaty. However, the restriction of the flow of people and capital in different markets continued to exists and this necessitated the need for a new way of doing business by the establishment of a new act in 1987 known as the Single European Act that was to aid in establishing an actual free European market. However, there are notable achievements that were obtained under the Rome Treaty. Among them is the establishment of a common tariff of all goods that had their origin from the third world countries (Harryvan and Harst 105).

Since the Rome Treaty could not achieve all that it was purposed for, there was need for a new agreement on the European market arose and therefore plans were set to bring in a new act that would enable total movement of people, capital and goods on these markets. Therefore, in 1987, there was the formation of the Single European Act that was a major amendment of the 1957 Rome Treaty. This act was enacted under the expectations by both business and political leaders in the European nations that the act would enable them to revise the current business environment that did not envision free trade among them to an environment that was more harmonised among the member countries. This was to be achieved through revising of laws and regulations that guided the processes of business in the corporate sector among these countries into synchronise laws and regulations among these countries (Armstrong and Bulmer 14).

The credentials in this act stated that the common market in the European Union would be established by the year 1992. Therefore, the economies that were involved were supposed to ensure that they amended the laws and regulations that governed the way business was run within their jurisdiction to ensure that by the time the actual deadline approached in 1992, they would have streamlined their laws and regulations to fit the expected requirements. However, before the act could be fully ratified, there were two referendums that were carried. The first referendum was a result of the dismissal of the draft treaty by the Danish parliament while the second referendum resulted from the fact that the Irish constitution needed to be modified before the Irish state could be able to ratify the act within the boundaries of its jurisdiction. It is important to understand that time was given so that the act could be debated within the boundaries of its member countries and to give them time to ponder over the act as they prepared for a new dawn of unity in their markets and in their system of governance in business (Armstrong and Bulmer 17).

Single European Market

The enactment of the Single European Act led to the formation of the Single Market that began its operation way back in 1993. This market came in place not only to eradicate economic trade barriers that existed in the European Market but to diffuse the political boundaries that were there. This would therefore mean that people, goods and capital would move from one nation to another without any barrier whatsoever. Therefore, the European politicians time and again campaigned for a complete removal of these barriers and championed for the success of the new system as they obtained support from the business community from every part of Europe (Armstrong and Bulmer 13).

There are various advantages that are associated with a Single Market that propelled Europe to come such an agreement. To begin with, the European community expected that with the introduction of a single market, there would be an increase in the amount of goods that moved freely through the now porous borders of different countries without any restriction. Therefore, a person setting up his business in any country that subscribed to this market would be able to see the movement of his goods from one country to another with a lot of ease that had never been experienced before this enacting of policies that led to the formation of such a market.

On the other hand, since there were reduced restrictions, it was easier for the person who was beginning his business in these countries to easily obtain raw materials that were needed because of the free movement of goods. This factor contributed to the enhancement of efficiency in the modes of doing business in any of these countries. Alternatively, it was found out that since there was free movement of goods, there was an increased market for the goods and services that were offered by a particular business. As the efficiency of businesses was enhanced, there was also an increased supply of capital, especially the human capital that is necessary for the success of any business.

The Single European Market has been in operation since January 1993. This market began its operations in 1993 after it was guaranteed that every nation that was involved had been able to satisfy the requirement that were stipulated in the Single European Act. According to Cechini report (1992), the coming together of the European markets were going to enable an increase in the total output of products  and services that were offered on these markets. For example, since it was easier o obtain raw materials from other parts of Europe, industries were better placed in their work much than the way they were before. On the other hand, there was going to be increase supply of labour and technology know-how, with many companies and industries having the ability to access different types of technology that could not be accessed before the formation of this market (Harryvan and Harst 232).

Therefore, though the market was not perfect  at the time of its inception in 1993, there have been tremendous improvement that have been done to this market to transform it into a market that is  more defined and perfected than the way it was before. However, despite the Single European Market running from 1993, there are various issues that are yet to be tackled by the member countries. One of these issues is the disagreement over some factors that were considered of utmost importance to member countries. One of these is the inclusion of the energy sector in the Single Market Act. France, having a vested interest has declined on various occasions to allow for the inclusion of energy in the Single European Act. There are also other issues that are yet to be tackled because they have either been ignored by the member states or these nations have declined to discuss them because of the controversies that they carry with them. However, this has not deterred the growth of this market and there are more members that have joined to form a bigger business community in Europe and to serve as a model for other parts of the world (Armstrong and Bulmer 199).

Transposition: EU law into national law

There are tremendous changes that have been made since the introduction of the Single European Act. These changes have aimed at transforming the once independent members into a community that is united and committed to do business and share many other mutual benefits that arises because of their relationship with each other. One of the areas that have seen a lot of these changes is the law of the member countries. When coming together to deliberate on how they could form a united market, the European countries had laws that guided the way the worked under each jurisdiction. Some of these laws were similar while others varied completely from each other. However, after enacting the 1986 SEA, these countries began a journey of harmonising their laws and regulations, making them to rhyme throughout Europe (Armstrong and Bulmer 55).

The introduction of the European Union law has had a lot of effects on the national law. These laws have played a critical role in shaping the European market to be the way it is today. One way that the EU has been integrated into the national law is through transposition. The transposition of the EU law into national law must be carried out within the specified and should be done correctly as spelt out in the Directives themselves. The member states are required by the Commission to formulate excellent practices that would guarantee an on time and correct transposition. The directives that are issued are binding and these members are expected to meet the results that are required by the directives. Therefore, it must be understood that the smooth running of the internal markets is depended on the timely and correct transposition of the law. On the other hand, any mistake that is made during the transposition period in any member state can jeopardise the smooth running of the whole market and that is why the directives emphasize on correct and within time transposition. This may result in a reduction in the competitive capability of the whole European market thus reducing the benefits of the member countries (Armstrong and Bulmer 51).

Since there have been challenges that have been experienced in the past arising from the failure of members to adhere to the transposition regulations, there are various strategies that have been developed to be used to encourage the these member to be accurate and on time in their transposition process. One of these strategies is the use of punishment through penalisation of member states if it is noticed that their transposition was incorrect on the internal markets and also when it is discovered that they have infringed the proceedings of the European Commission Treaty under Article 226. In such a case, the commission may be forced to take legal action against the country involved. However, this has not deterred completely the members from failing to carrying out their responsibility of transposing these directives to their local communities (Armstrong and Bulmer 341).

As a result, there have been proposals to come up with stricter regulations that will keep these countries in check. However, in most cases, countries have been encouraged to adopted excellent practices in their internal market to make the work of the Commission easer rather than stagnating at the same place because one or two member countries failed to adhere to the normal regulations of transposing the law. Therefore, there are various proposals that have been put forward to deal with these cases. First, the embers countries are required to act on the fundamental reasons that have led to late or inaccurate transposition. Similarly, the member countries are required to lay down a structure that will enable them to adhere to various practices and procedures with regard to their local environment (Armstrong and Bulmer 288).

On the other hand, members are required to compare the relationship between transposition measures and directives. And finally, these members are required to avoid unnecessary legislation with their areas of jurisdiction that may become a stumbling block to the achievements of the transposition of the directives within their boundaries thus derailing the work of the whole commission. Therefore, as part of their faithfulness to transposing the directives, the member states are supposed to declare their observance of the community law and to categorically state every part of the directive that has been transposed in an effective way (Armstrong and Bulmer 292).

There are various examples that can be cited among the member countries and be termed as the breaking of the laws that are stipulated in the Single Market Act and the directives. One of these cases is the United Kingdom which has been caught on the wrong side of the law. There have been arguments that the United Kingdom has in the past failed to protect the privacy of its citizens when utilizing the services of the electronic communications. As a result, the United Kingdom has been dragged into court to defend itself against these charges. The law of the protection of information and data belonging to particular citizens has been laid out clearly in the European Union laws and it is the responsibility of the government to ensure that the privacy of its citizens is kept secure, especially when communicating using electronic devices. The UK case is based on the fact that it allowed one of it advertising company to track down the activities that are carried out by internet users by giving the Internet Service Providers a means of making money if they tracked down communication to certain websites.

Single European Market failures

 The Single European Market has had several failures along the way. As a stated earlier, there has been a spirit of unwillingness by the member countries to assess and deal with certain issues that have hampered the smooth running of these markets. On the other hand, the restrictions that were supposed to be removed completely have still found their way into the boundaries of the member countries. Again the United Kingdom has been a victim of imposing strict restriction upon its businessmen thus causing them to lack the competitive advantage on the market that is characterised by all forms of competition. On the other hand, there are countries that still carry strict immigration laws thus hampering the movement of people, goods and capital within their boundaries. For example, Germany has one of the favourable asylum laws in Europe. Yet, to cover the misuse of these laws, Germany has developed other laws that make it very difficult for a person from another nation to seek asylum in this nation (Armstrong and Bulmer 207).

Despite the formation of the Single European Market to deal with issues that faced the European markets, there are still some challenges that need to be tackled for this market to achieve its goals. One of the challenges of this market is the standardisation of products and their prices on the market. Most markets are yet to standardise their prices with the prices that are depicted on the international scene. Similarly, their goods are yet to be standardised leading to a lot of disparities in the market. Therefore there is no price convergence on this market with goods emanating from different nations carrying their own prices.

There are other areas that SEM is yet to get a breakthrough. One of these areas is the removal of physical boundaries in Europe. These boundaries are still maintained with every nation formulating its own laws and regulations that guide the running of the government business. The only issue that has been achieved here is the adherence to the European Union laws and regulations by the regulations that have been formulated on the local scene. For example, every European nation is expected to formulate laws and regulations that do not violate the laws and regulations that are laid down in the European Union laws. Yet this has not brought about political harmony. Instead, each country has maintained its own system of governance and its own political structures. On the other hand, the trade barriers have been minimised to a greater extend. However, there are other countries such as the United Kingdom that has kept its traders under certain market regulations, an issue that has made them to be less competitive on the European market (Armstrong and Bulmer 44).

On the other hand, the formation of the European Union as a result of the formations of the Single European Market has had considerable achievements. Among these achievements is the issue of health and safety, especially occupational health and safety. The EU has been able to harmonise its occupational health and safety among its 27 member countries and every countries is required to ensure that the standards that have been set by the EU are met at every single moment. This has guaranteed excellent health and safety of patients that is up to standard (Armstrong and Bulmer 3).

On the other hand, the European Union has been able to set up a taxation system that is more neutral with the taxation being directed at governments that are comprised in the EU. Therefore, the fiscal policy on taxation that is common is indirect taxation whereby the body that carries out the taxation processes does not incur the full cost of taxation. Therefore, this taxation is levied on goods and services on transit with the EU markets. This has empowered the EU, making it one of the strongest body organs in the whole world that is comprised of many nations. On the other hand, this has eliminated the dependency on particular member country for financial support of the EU operations.

EU Gross Domestic Product

There have been tremendous growths in the EU GDP since the enactment of the Single European Act back in 1986. This is revealed in the way the member countries’ economies have grown to make the EU among the greatest economy with a very high purchasing power. This cannot be compared to years before when trade barriers hindered the movement of goods, capital and people on the market. Before the SEA in 1986, the GDP of most countries in Europe was very low. Their growth rates were minimal and they could not be where they are today without the utilisation of the benefits that an integrated market carries with it. For example, the economic power of Spain grew by a tremendous margin from 1986 to 2008. Its GDP saw a steady rise during this period peaking only in 2008 because of the economic crisis that affected the status of the economies of different countries throughout the world. However, an analysis of this country’s GDP have rose to make it a nations among the top five with the largest GDP in the world. On the other hand, there are till signs that this economy still has opportunities of growing even more than it is at the moment (Harryvan and Harst 260).

There has also been a rise in Foreign Direct Investment that has been attributed to Single European Market. Many countries has recorded in their data that there has been an increase in the amount of Foreign Direct Investments in their respective economies since the introduction of the Single European Market. This has been associated with lessening of the trade laws and regulations in the member countries in this Europe. This has increased the overall Foreign Direct Investments in the whole of Europe and to be specific in the EU territories. This was mainly from Japanese and American firms (Harryvan and Harst 22).

As a result of this, there has been an increased competition among industries, a factor that has led to the embracing of efficiency as a way of conducing business in these economies. Without efficiency, one cannot be able to challenge the competition that arises from similar players in the market. On the other hand, there has been a creation of many job opportunities as businesses challenges each other in their quest of possess a bigger share in the market. As people are empowered economically, this has increased their GDP per capita and made most of them to live above the poverty line by a substantive margin. It important to note that this growth would not have been attained had it not been for the working together of the economies in Europe to help each other to grow (Harryvan and Harst 260).

Alternatively, it would have taken a longer period for these economies to be where they are today. Therefore, their achievements lies in the fact they have work together as a team, something that can be emulated by other economies in other parts of the world. According to Cecchini Report, there are various barriers that raise the cost of doing business in the market, thus raising the overall cost of doing business. However, the coming together of the European countries has been able to eliminate some of these barriers such as the customs levy and other charges that are incurred when business is being done on two different levels, i.e. operating in markets that have different trade laws and regulations is very expensive (Harryvan and Harst 238).

Conclusion

Is it true that wherever you are located in the EU, it is a truly integrated market? The answer to this question is contained in the journey that the united countries have taken over the years to be where they are today. While there are still several areas that are yet to be covered in the vision of the Single European Market, this market one of the most integrated markets in the world, considering that it is a market that comprises of 27 countries and have been faced by many challenges such as language and governance system barriers. The elimination of most of the trade barriers reveals how this market is integrated everywhere throughout the EU.