European Integration - Essay Example

 European Integration Abstract The essay examines the advantages and challenges of European integration for business in the 21st century. The essay also provides a number of relevant examples of the same. Introduction The European community history, a Single European Act (SEA) as well as the single market program of 1992 were two of most vital developments. These two developments eventually helped in the formation of a single European market. In this paper, the European integration process of 21st century is viewed from the standpoint of business, since the European market was the greatest gainers by the European integration of 21st century. The European Roundtable of Industrialists or the ERT was the forum which helped in the union of number of European transnational corporations or TNC’s. It was through this European Integration Roundtable of Industrialists is that the transnational corporations tried to influence the European integration process, the nineteen eighties. It was this ERT forum from where a number of industrialists of Europe helped in the forming of agenda and the re-launching of the single market program. This also led to the development of transnational elite capitalists you brought in a number of neo-liberal concepts and ideas which eventually helped the formation of a single market program. Theoretical framework Adriaan H. Dierx(2004, p. 237) states ‘The process of European integration and the past decade has been closely associated with the single market program (now evolved into the internal market strategy) and economic and monetary union. This process has been pushed forward by highly publicized deadlines and target dates giving a first impression of abrupt change in the economic environment. In practice, however, businesses and consumers tend to anticipate such change and modify their behavior even before the formal change is made. On the other hand, often the full impact of the economic reform is felt only years after their introduction. This implies that European integration as a continuous process, one in which the speed of progress may be affected by policy initiatives such as the SMP and the EMU and which takes place in conjunction with other events influencing the behavior of economic agents and the performances of the economy, such as globalization or the ICT revolution.’ The ERT can be viewed as an elite comprising of trans-national capitalists who have neoliberal concepts and who occasionally takes part in the social struggle for dominance in the European culture. Europe is not is becoming a part of the global economy, politically and financially. Therefore the businesses in Europe are transforming to globalized and transnationalized businesses. There are basically three large economic blocks in the world: USA, Japan and Europe. This kind of development also has witnessed the growth and dominance of the European transnational corporations. This is also led to the growth of transnational capital as well as structural power. The global capital is now getting transnationalized and there is also evidence of new class of transnational players. The transnational elites have now become one of the major influences in the global economy. Especially the capitalist class in Europe is influencing political organizations which help in attracting different groups and classes, so as to create hegemony. Hegemony can be defined as a central system of practices which helped in the dominance of particular group. The European Roundtable of Industrialists can also be termed as an elitist organization which promotes hegemony. The ERT Thus helps in the formation of transnational class in Europe. In all the levels of the European political system, the social forces and the states have helped in the development of strategies which eventually helped in the relaunching of the integration process of Europe. Among the social forces, the most prominent is the transnational corporations or particularly the capitalist transnational class. The transnational class can be further divided into two groups: the social-democratic project and neoliberal project. There were the one who helped The re-launching of European business in the nineteen eighties. It was during the nineteen eighties that the neoliberal project greatly influenced the European integration process. It was also during this time that Europe was negatively affected by “Eurosclerosis”. Angelina Topan (2002, p. 64) argues ‘In the seventies and the first half of the eighties, the process of European integration came to a standstill, widely known as Eurosclerosis. Eurosclerosis refers to the stagnation, inflation and unemployment that followed to the oil crisis of 1973, when the price of oil quadrupled. As the member states preferred to tackle these problems individually instead of collectively, by pooling resources, the term as a synonym for little or no progress on European integration. Not surprisingly economic liberalization proved unpopular. Furthermore, Decision-making was aggravated by the extensive use of the veto.’ The neoliberal project believed that the integration process would bring about a change in European region by opening up the region to the globalized economy of the world. It would also help in the increase of privatization and deregulation of the European economies. That would help to bring about a freedom of the beneficial market forces from the hands of a number of restricting institutions as well as the government. The deregulatory effects as well as the gains in efficiency for the market would help in posting the European market in a supra-natural structure of social regulation, thereby protecting as well as improving the European social model. The social democratic project also succeeded in improving the internal market program, and also assisted numerous social-democrats of Europe to view European federalism as best solution to the problems of the European left during that time of globalization. A social dominance shift in Europe was also evident during the nineteen eighties. It was quite evident that neo-liberalism was having more dominance and European democracy was taking a back seat. Thus in the nineteen eighties it was clear that the transnational just capitalist order was teaming up with the European commission and a clear connection between the European capitalist elites and the European commission. This partnership was a clear indication of the emerging power of the trans-national capital in Europe. The nineteen nineties, there were a number of partnerships between top corporate executives of Europe’s best transnational corporations and the political officials of the European Commission. Historical Context of European Integration There were several factors which led to the creation of the European Roundtable of Industrialists during the nineteen seventies and the nineteen eighties. Especially in the nineteen seventies, there were a number of problems that Europe encountered. There was inflation in a large scale, the unemployment level was getting high and the growth was stagnating. There was also an external threat from countries such as USA and Japan, which was threatening to shut a number of European leading industries. Thus, there was an immediate requirement for a political initiative which was then lacking from the politicians of Europe. The year 1982, Chief Executive Officer of Volvo Pehr Gyllenhammer had a meeting with the industry commissioner of the European Commission Etienne Davignon when they discussed in length the probability of forming a group of top CEO’s of Europe who scored have a strong influence on the European economic situation as well as the industry policies of European Commission. This group would not have the sole objective of creating a very strong European lobby; it would rather have the objective of encouraging and promoting the internal European market by fostering leadership in high technology and help in the creation of jobs as well as wealth throughout Europe. This group came to be known as the European Roundtable of Industrialists and the group was officially formed on the seventh of April, 1983. In this group, seventeen of the leading CEOs of Europe were members. The group had basically six key areas which it wanted to emphasize. The areas included infrastructure, technology, jobs, the internal market, finance and the environment. A few of the major challenges faced by the European Roundtable of Industrialists during its effort of integrating European business and the 21st century included dealing with a hostile European framework which was full of uncoordinated standards, are risk and return relationship of productive investment Which was extremely unfavorable and several political, financial and legal obstacles which ended the progress of trans-national industries and transnational structures. Another one of the ERT’s challenges was to invoke the political leaders for making an outline of the European public policies, which would enable better European private investment. It was also advised to deregulate the public market especially in the areas which were technologically intensive as well as improve the common standards. This would eventually help in the betterment of the acquisition laws and European mergers. Another major objective or challenge for the European Roundtable of Industrialists was promoting a European unifying market. There was a number of speculations and plans by the European Commission to have a unified European market however the plan was only realized when European Roundtable of Industrialists persuaded the commission to adopt a unified European market. This was a great achievement for European Roundtable of Industrialists. With the implementation of the European Roundtable of Industrialists strategy, are new Europe was created which would facilitate an additional jobs and wealth creation. Hence, the European community’s regulatory framework was completely restructured. The restructure of the European business and the integration of European business led to an environment which could be called the Re-industrialization of Europe. Thus in the nineteen eighties, the ERT helped in aligning Europe with the increasingly competitive global market. It also helped to shape the way regulatory framework of the European market. . ERT and European Integration The first project by the European Roundtable of Industrialists was called the European Venture Capital Association. It was developed in 1984 and the motive was to encourage investments to Europe by transnational corporations. It also attempted to foster a close relationship between the large industrial companies in Europe and the new technologically innovative firms of Europe. This priority of the European Roundtable of Industrialists eventually helped in developing a strong technological platform on which future businesses in Europe could stand. A few of the major proposals made by European Venture Capital Association included completing the Trans European infrastructure network which was incomplete at that time, and also the development of the northern Germany rail and road links to the Scandinavian countries. The European venture capital association also proposed a high speed train network in Europe. The single market program in Europe was launched again in 1985. In Brussels, Belgium, the CEO of Philips Wisse Dekke announced his plan called Europe 1990 which has put forward in front of a number of European commission commissioners. The plan known as the Dekker Paper attempted to improve the four key areas which were opening of public procurement markets, opening up the European market in another five years and trade facilitation. The Dekker Paper made a significant role in the European integration of business and the 21st century since it succeeded to do what other European policy makers failed to do- it provided the groundwork for the unified European market. Although the Dekker paper was an initiative of Philips, it was soon embraced by ERT. Another monumental step in the integration of European business was the White Paper of European Council Commissioner Lord Cockfield. After the speech of Dekker, Jaques Delors who was the president of European commission announced that the commission would create a white paper which would encourage European companies to take their organizations beyond European borders, even if the European leaders did not encourage that. It was envisaged that a unified European market would be created by 1992. This was greeted and promoted the number of state heads of Europe which allowed it to become the Single European Act in 1985. In the following years, the Single European Act was created which allowed industries in Europe to have more autonomy in deciding future of their investment and growth plans in Europe and other countries. Single European Act was also witness to an encouraging event. That was during this time that the major transnational corporation Leaders of Europe strongly opposed a treaty decision made by the European state governments. That was during this time that the ERT organized itself and became a much larger organization, allowing it to influence the number of European states. Paul Graham Taylor (1983, p. 8) states ‘A concern with types of decision-making was the characteristic of the neo-functionalist view on the process of integration: it followed from their search for procedural consensus. Haas distinguished what he called three modes of accommodation and each of these was both an indicator of a particular level of integration and of casual elements lead to further integration. They were, first, the technique of finding the minimum common denominator: bargaining partners located in areas where positive agreement was immediately possible and struck their deal only on that basis.’ Conclusion The treaty of Maastricht and the Single European Act, along with and is number of transnational acquisitions and mergers, helped the European Commission to Increase the competitiveness in Europe’s Internal markets. The Industry leaders in respective countries of Europe began to Use their power for acquiring other businesses or merging with other businesses. In the 21st century, the implementation of integration policies of business in Europe has produced a number of strategic alliances and joint ventures. What’s more, management connections and mutual financial connections between companies in Europe have increased prodigiously. In the 21st century that is after the nineteen nineties, a number of revolutionary changes in the economic and political framework of Europe as mentioned above, has led to a stronger creation between businesses and thus has closely connected European business network. Therefore in the 21st century, large companies in Europe are able to control the representation of their interests directly, without having to depend on a umbrella organization of Europe. The integration process business in Europe will only increase, partly due to the immense contribution by the European Roundtable of Industrialists. The 21st century will also witness a number of members of the European Roundtable of Industrialists, who are linked through boards, joint ventures, and mergers. The members would be having a good relationship and the European as well as national level the political officials of respective countries, as they are already having. Some scholars believe that the challenge ahead for the European business and the 21st century is to successfully mediate the material as well as the ideological powers of the transnational companies, which would eventually help in the neoliberal transformation in the ideas and concepts pertaining to the European integration process. Bibliography Apeldoorn, van B.; Transitional class agency and European Governance: the case of theEuropean Roundtable of Industrialists; New Political Eonomy, July 2000, Vol. 5, Is. 2. Green Cowles, M; Setting the agenda for a new Europe: the ERT and EC 1992; Journal of Common Market Studies, December 1995, Vol. 33, No. 4 Nollert, M & Fielder, N; Lobbying for a Europe of big business: the European Roundtable of Industrialists; In: State building in Europe: the revitalisation of Western European integeration;Cambridge University Press, Cambridge 2000 Williams, R; Base and Superstructure in Marxist Cultural Theory; in: Contempary Literary Critism: Literary and Cultural Studies, third edition, 1994, London Dierx, Adriaan H. European Integration and The Functioning Of Product Markets .2004 Topan , Angelina .The European integration process: a historical and comparative institutional Perspective. 2002 Taylor, Paul Graham. The Limits of European Integration.1983 Read More