The effect of the United Kingdom on the business environment of the EU - Essay Example

The Effect of the United Kingdom on the Business Environment of the EU The Single European Act that was enacted through the provisions of the Treatyof Rome is a key factor in the evolvement of the European Union. It created the Single Market which has been one of the greatest and most successful actions initiated by national governments in the Union. This Act was designed not only for fair trade practices but also for the purpose of mutual acceptance of qualifications, harmonizing company law, imposing taxes and levies, the support of government to industries and other aspects such as government initiatives which enhance or diminish the advantageous position of a company. This resulted in the introduction of Qualified Majority Voting in the Council of Ministers (Dedman, 1996, p93). In December 1992, the Member States agreed to ratify this legislation. However this is not final as the unification process is a continuous one. The Treaty of Rome contemplated a free market in goods and services. Nearly seventy per cent of the European GDP emanates from this free market. Critics argue that firms that were in operation in the previous Member States that had streamlined costs and standards could be slowly weakened or injured by new firms in the new Member States with substandard ethics and costs. In order to meet this eventuality the Council of Ministers has endeavoured, several times, to set up a Services Directive with a standard regulatory framework, which is under examination and has not yet been finalized (Walsh, Stephens, & Moore, 2000, p59). The United Kingdom was not only unable to accept the supremacy of the EU but it was also reluctant to abandon its sovereignty. The current position is that Tony Blair's regime also chooses to extend cooperation by way of intergovernmental arrangements. It continued this stance of ignoring the predominant role of the European Court of Justice. In the year 1997, during the Amsterdam Summit the UK government was successful in retaining its right to maintain barriers at its national boundaries (Hall & Bhatt, Policing Europe. EU Justice and Home Affairs co - operation). It had regularly interpreted the principles of free movement under the Single European Act according to its convenience and in a manner that differed from other Member States. It does not want to permit EU citizens or anyone else to travel without a passport in the UK and it upholds its right to control the travel of non - EU nationals into Britain. This opt - out position exempts the UK from implementing the provisions of the EU, which provides for less stringent passport restrictions, and from permitting immigration and granting asylum. However, the UK is bestowed with a right to opt - in to EU arrangements in the future (Hall & Bhatt, Policing Europe: EU Justice and Home Affairs co-operation). The political importance of the UK's EU policy depends upon Justice and home affairs. Two significant decisions that represent its position of keeping away from EU integration are the decision not to join the EMU and the decision to opt - out from the implementation of free - movement of goods and people. The UK's ambition is to become the most important Member State in the EU and acquire a dominant position on par with France and Germany (Hall & Bhatt, Policing Europe: EU Justice and Home Affairs co-operation). In order to fulfill its aspirations the UK will chose the opt - in option in more free - movement policies in the near future. This strategy will endow it with a major role in the formulation of the migration policies of the EU. The UK yearns to display its strong determination to obtain an increased cooperation from the police and the judiciary in order to combat organized crime. In the area of judicial cooperation the government of the UK aspires to be in a leading position in order to bring about a Union - wide judicial scope. The UK with its potentially active law - enforcement institutions and a vibrant judiciary, will create a friendly atmosphere in international cooperation. This was established while extraditing General Augusto Pinochet to Spain. With this decision Britain tried to demonstrate that it permits the judicial process to take its own course (Hall & Bhatt, Policing Europe: EU Justice and Home Affairs co-operation). It is an indisputable fact that there are some drawbacks to opting - out of free - movement arrangements. The citizens of the UK will be deprived of the right to travel passport - free to other Member States in the Union. In business activities, Britain would not become a hub for Europe as businessmen would turn away from the UK. This may cause severe economic disability. Moreover, the UK's abstention from the free - movement policy would subvert its impact in measures that include immigration and police cooperation such as the Schengen Information System. Britain would be put in an inferior position by requiring enhanced immigration control standards in the European Union (Hall & Bhatt, Policing Europe: EU Justice and Home Affairs co-operation). The probability of Britain's acquisition of a substantial immigration policy would increase in case it rules out internal border stipulations and integrate into EU rules on issue of visas and territorial borders. The government of the UK is of the opinion that the entry of foreigners to the UK should be monitored by the extant methods being implemented at harbours, airports and the Channel tunnel as they are cost - effective and sufficiently stringent. It is opposed to implementing methods of local control such as identity cards (Hall & Bhatt, Policing Europe: EU Justice and Home Affairs co-operation). Quite a few Member States have very long borders that cannot be policed effectively. Some illegal immigrants cross the border through the cold waters of the North Sea and the English Channel in small boats to escape detection. Thus the police authorities are opposed to giving up the natural geographical merits of the UK. The Home Office statistics show that forty - four million passengers entered the UK in 1998. This is expected to increase to ninety - seven million by 2006. The arrivals are increasing annually by fifty per cent, whereas inspecting staff increase by only ten percent. The government has adopted lenient measures while checking EU citizens. The immigration officials do not verify their identity cards. The UK citizens are not inconvenienced due to passport regulations and arrival in other Member States from the UK is an easy task (Hall & Bhatt, Policing Europe: EU Justice and Home Affairs co-operation). The Amsterdam treaty permits the UK to opt - in to EU immigration and asylum requirements without foregoing cross border regulations. The UK aspires to take part in the Schengen Information System because access to this potential database of offenders and immigration oriented information would fortify the border controls. The UK also aspires to extend cooperation to initiatives that control illegal immigration and help in the progression of the EU's migration strategy. It is vigorously involved in the high - level working group of diplomats and officials, which is developing a stable and consistent strategy towards states that produce the largest number of migrants. The UK's stance on the opt - in with EU's visa policy, which governs the procedure of issuing visas to long visits, employment or study in the EU, is always a subject matter of debate (Hall & Bhatt, Policing Europe: EU Justice and Home Affairs co-operation). Espousing the EU's rules in this context is totally unsuitable to the policy of maintaining an independent immigration policy. In fact, Britain already implements such visa regulations to other EU countries; therefore the adaptation of similar visa procedures would make no difference. In the case of asylum, the UK courts are not very stringent in issuing refugee status. Refugees with this status are conferred with full rights to work and welfare; therefore in this respect it will not be difficult for the UK to meet the EU's standards (Hall & Bhatt, Policing Europe: EU Justice and Home Affairs co-operation). The Amsterdam treaty imposed a distinction between the measures that were adopted by the EU as part of the original Schengen rules with regard to new measures, and borders and immigration. In order to ratify the latter, the UK and Ireland have to indicate to the Council of Ministers that they are willing to adopt them. If the UK did not indicate its approval to a specific measure to achieve a particular objective, the other Member States could go ahead without its approval. Thus this stipulation would weaken the UK's bargaining capacity (Hall & Bhatt, Policing Europe: EU Justice and Home Affairs co-operation). The Economic and Monetary Union or the EMU resulted in the Single Currency, euro on the 1st of January 1999. Countries that have adopted the euro are Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal and Spain. However, it is most unlikely that the United Kingdom will adopt the euro. The existence of a single currency promotes the functioning of the Single Market and brings about a lowering of interest rates. The euro has met with great success and has become a reserve currency of the world (ley Berry). The Euro, which was worth around 1.36 US Dollars on the 6th of May 2007, is a very stable and powerful currency (Currency exchange rates, 2007). The European Union had come into existence through the various Treaties with the main objective of allowing the Member States to implement the same laws. The European Law supersedes national laws and it binds each nation equally. The legislative process consists of the Commission proposing the laws that are enacted after consultations and amendments at the European Parliament. The Parliament has to give its assent to the laws prior to sending them for ratification by the Council of Ministers. European Law deals with several issues. Some of these issues are the relation of the Member States with the Commission, the Single Market, Human Rights and the Single Currency. Each and every Member State is treated equally and given equal status by the laws. The European Court of Justice resolves any disputes that arise between the Member States. National legislatures have to incorporate these laws in their jurisdictions by passing secondary legislation to give effect to these laws. The domestic legislation has to amend its law in case the European legislation contravenes them. Amendments are needed to accommodate provisions of European Law such as equal pay and the standard mechanism for industrial safety (Dedman, 1996, p93). The Member States that contribute to the EU's budget could get back their contribution in the shape of aid from structural funds which consist of subsidies for agriculture under the Common Agricultural Policy. They could also obtain funds under various European Union Programmes and other measures (Geyer, Mackintosh, & Lehmann, 2005, p17). The quantum of such contributions are determined through a set of formulae based on population and economic strength. In the case of Britain, its economy and agriculture differ from other Member States. Britain has to pay the same amount of contribution to the Commission as other Member State of the same size. Owing to its inability to claim large agricultural subsidies, Britain receives aids and subsidies that are much less than what other Member States receive. The British contribution to the Commission is much more than what it gets back (Geyer, Mackintosh, & Lehmann, 2005, p17). The British government during the regime of Margaret Thatcher had raised objections to this unfair situation. In addition, the relations between the UK and the EU have deteriorated and they are beginning to drift apart. Subsequently through negotiations, the Commission had agreed to give discounts to Britain on its gross contributions. This resulted in a more realistic net contribution for Britain (Dedman, 1996, p93). The Treaty of Rome, which had been ratified in 1957, laid the foundation for the development of the European Union. The treaty laid down the foundations of the European Single Market with a Single Currency, common citizenship and rights (Dedman, 1996, p93). The Rome Treaty was the first and primary summit that had been involved in the making of the Economic Community with an aim to expand the scope of the common market in the industries of coal and steel. In this manner the six countries that signed the treaty had created a common market that covers goods and services to a major extent. This association had been the engine of economic wonder. The Treaty of Rome had also designed the various institutions of the Union which later became organs of the EU. The European Commission, the Council of Ministers and the European Parliaments were the key institutions that were formed during the Treaty of Rome. The European Parliament was a representative body of the Member States. This body consists of representatives from each of the national parliaments. In its earlier stages the European Parliament had not been vested with real power. Later on it became very powerful and subsequent to 1979, members of the European Parliament were elected directly (Dedman, 1996, p93). The Treaty of Rome formed the various institutions of the EU like the European Commission, the Council of Ministers and the European Parliaments are some of the main organs of the EU. The European Parliament represents the Member States. Initially it did not have much power and comprised of nominated representatives from each of the national parliaments. Later on it was bestowed with a lot of power and consisted of elected members. The Treaty of Rome instituted the European Court of Justice to arbiter and control legal disputes between the Member States (Dedman, 1996, p93). On the 1st of January, 1999, the euro was adopted by twelve countries instead of their national currency. Some of these countries were Germany, France and Italy. On this occasion Romano Prodi, the European Commission President said that with the implementation of the euro the future of the EU had been secured. The replacement of national currency with the euro has brought about an increase in trade because of the simplification of trading procedures due to the existence of a single currency. Further, tourists find it much easier to sojourn through the EU, because of the convenience of having to deal in only one currency. The few EU Member States that have not yet implemented the euro may possibly do so in view of the immense benefits that are attendant on using a single currency (Hello, euro!, Feb 11, 2002). Margaret Thatcher stated in a 1988 Bruges Speech, that there should be an alternative to the European Union with its centralization and inexorable assimilation. Her model vests power with the individual Member States. This is radically different from the present monolithic European Union, which has its power concentrated in Brussels. Moreover, she opined that the spirit of mutual co - operation did not require a centralization of power. She cited the example of the USSR, which had commenced to delegate power to its constituent republics and stated that the EU would do well to follow this example (Thatcher, Speech to the College of Europe ("The Bruges Speech"), 1988). Furthermore, Baroness Thatcher had made adverse comments against the European Union in a debate in the House of Lords. The reason for her diatribe was that the European Court of Justice had made the national institutions subservient to the centralized institutions. As per her contention, the ECJ pursues its single minded objective of implementing a unitary European state without giving any importance to the interests of the member states. She quoted the example of the overruling of the Merchant Shipping Act 1988, in the Factortame case, by the ECJ as proof for her argument (Thatcher, European Communities (Amendment) Bill, 1993). Moreover, she accused the ECJ of being more concerned with apportioning greater powers to itself and the European Community at the cost of the United Kingdom (Thatcher, European Communities (Amendment) Bill, 1993). This clearly indicates that the citizens of the UK are sceptical of the benefits that could accrue to them by being members of the EU. Therefore, it should not come as any surprise that the UK acts in a manner that hinders the trade of the EU. The European integration can be observed by some of the important policies like the Single Market, Mutual Recognition and adoption of the euro, which signifies the use of the same currency throughout the EU. The EU consists of various Member States that are culturally different. These Member States do not want to lose their national identity; therefore, they are expressing their dissent in respect of the implementation of the EU integration policies. The United Kingdom is a critic of the policies of the EU, from the inception of the European Union. Its non - acceptance of the euro and non - implementation of some of the Directives clearly establishes the fact that it does not regard this integration as being beneficial to it. List of References Currency exchange rates. (2007, May 6). Retrieved May 6, 2007, from MSN Money: http://moneycentral.msn.com/investor/market/exchangerates.aspx Dedman, M. J. (1996, p93). The Origins and Development of the European Union, 1945-95: A History of European Integrity. Routledge. Geyer, R., Mackintosh, A., & Lehmann, K. (2005, p17). Integrating UK and European Social Policy: The Complexity of Europeanisation. London: Radcliffe Publishing. Hall, B., & Bhatt, A. (n.d.). Policing Europe. EU Justice and Home Affairs co - operation. Retrieved May 6, 2007, from http://www.cer.org.uk/pdf/p130_policing_europe.pdf Hall, B., & Bhatt, A. (n.d.). Policing Europe: EU Justice and Home Affairs co-operation. Retrieved May 6, 2007, from http://www.cer.org.uk/pdf/p130_policing_europe.pdf Hello, euro! (Feb 11, 2002). Junior Scholastic, New York , Vol.104, Iss. 12; ISSN: 00226688. P. 4. ley Berry, P. S. (n.d.). AN INTRODUCTION TO THE EUROPEAN UNION. Retrieved May 6, 2007, from citaware: http://www.citaware.org.uk/EU%20Book.pdf Thatcher, M. (1993, June 7). European Communities (Amendment) Bill. Hansard House of Lords 546/560 - 66 . Margaret Thatcher Foundation 2007. . Thatcher, M. (1988, Septermber 20). Speech to the College of Europe ("The Bruges Speech"). Retrieved May 5, 2007, from Margaret Thatcher Foundation: http://www.margaretthatcher.org/speeches/displaydocument.aspdocid=107332 Walsh, M., Stephens, P., & Moore, S. (2000, p59). Social Policy and Welfre. London: Nelson Thornes. Read More