Globalisation and its effect on the European Union Economy

Globalisation and its Effect on the European Union Economy

Globalisation in Europe

Globalisation pertains to the aggregate processes of political economic , social and environmental interdependence of various economies This means changes in the previous interaction patterns among European countries that have been limited to the confines of national regulatory and geographic boundaries . Globalisation then results to the mutual widening of the scope of international relations and the foreign players of European domestic economies . Since there are a number of different players , the level of interdependence is not uniform and depends upon

br the creation of bilateral and unilateral economic agreements between or among states . This is determined largely by the expected or potential contribution of an economy to the European Union in general to the individual member countries

A core and widely observed impact of globalisation to Europe is the fast expansion in international trade . Multinational corporations have been recognised as the primary catalysing actors of trade expansion because these companies expand their production or marketing activities in other countries to become players in domestic economies Multinational companies capitalise on high-technology and developments in transportation as tools in proliferating their business activities in various states . As more multinational corporations engaged in international trade , these considered the world economies as their markets and the playing field for new types of competitive plays . One reason for the move of multinational companies to operate across economies is to search for cheaper resources , including natural resources and labour resources to lower their overall expenditures and achieve cost competitiveness . Another reason is the search for new and bigger markets as the domestic markets become saturated by the widespread reach of products and services as well as the entry of more industry players

Succeeding discussions focus on the impact of globalisation particularly the widening or liberalisation of trade in the European Union and its effects on the aggregate EU economy , the dynamics of the single European currency , and the shifts in the labour market

Effects of Globalisation on the European Union Economy

Aggregate EU Economy

Coinciding with trade liberalisation is the establishment of the European Union to become the largest economic region in the world . In terms of the market , EU has a population of about 460 million people This means that for business firms engaged in international trade , EU constitutes a promising market worth the international investment . On a bigger scale , this means greater labour resources and more natural or raw resources to share to support the economic activities of the member economies . As a unified economy , the European Union consistently achieves increases in gross domestic product by as low as .7 percent to as high as 2 percent between 2005 to the second quarter of 2007 . In relation to the national economies of the member states , the low per capita GDP relative to the GDP of some of the strongest EU economies is explained by the divergent economic growth of the member countries . This means that there is a difference in the economic performance of...