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issues in international business - Essay Example
At midnight on the 1st of May 2004 the celebrations were already well underway across Europe and ten of its neighbours to the east. The occasion was worthy. Ten new countries-the Czech Republic, Estonia, Cyprus, Latvia, Lithuania, Hungary, Malta, Poland, Slovenia and Slovakia-had joined the European Union…
Political stability would be ensured by abiding by the EUs political standards. Borders would finally be opened, reducing international barriers to the flow of goods and services, and products would now have access to all European markets. Tax policy changes would be controlled and property rights would be guaranteed, allowing foreign companies to invest on their soil, bringing jobs to the masses of unemployed.
But there would be challenges ahead too. Would they be able to meet up to the standards expected of them Could they control the inflation rate Hold prices stable Grow GDP Avoid currency devaluation And minimize deficit No one had the answers, but certainly all ten of the new EU Member States were willing to try. Thus, their first step was to gather up their top economists to strategize. Optimal macroeconomic policies must be put into place as soon as possible to achieve the high standards expected as a new European nation.
Each country would have their own strategy, but macroeconomic policies, in general, are adopted to avoid major economic upheavals, with the primary example being The Great Depression. These policies are set and controlled by a nation's government and central bank and include such challenges as stabilising the business cycle, facilitating long-term growth, reducing unemployment, controlling inflation and lowering the current account deficit (Parkin 534). ...