Will the European Union survive its current crisis of confidence? if it breaks up what will this mean for international business? please make the assignment on this topic we have got the topic separately in class and its not given in the subject outline minimum 25 refrences please.
The European Union is regarded as an economic and political partnership that makes the representation of a unique type of cooperation that exists among other countries that are sovereign. The European Union worked as the latest stage in bringing the European Countries together after the Second World War The the European Union has emerged from the binding of the treaties and the with the passage of the years the European Union has worked in harmonizing the laws and adopting the general policies on several economic, political and social issues. The member States of the European Union share among themselves a union that is based on customs and a sole market where the people, goods and the capital operate freely (Bonet & Donato, 2011). In this essay, the author will deal with the EU crisis and discuss if the European Union will survive its current crisis of confidence. It will further examine the consequences of the crisis on the international business.
The member states of the European Union work collectively to set their policy and make the collective promotion of their interests. The institutions of the European Union make the inclusion of the European Council that is composed of the statutory heads of the State of the Countries that are present in the European Union (Habermas, 2012). The decision making a process of the European Union is subject to varying considerations among the countries of the European Union (Pisani-Ferry, 2012).
The European project that includes the creation of the sole market involving the institutions of Europe that are considered as the pillars of the effort and the public good faith for making the betterment of their future (Lerbinger, 2012). The crisis manager). According to (Schimmelfennig, 2014) the primary crisis of confidence lies in the fact that the loss of trust of the public in the project of the European Union. This happened since the year of 2014 and now in the present scenario, it seems that the lack of public trust over the projects of the European Union is now rebounding in several countries (Feldstein, 2015).
According to (Ludlow, 2006) the emergence of the rationale of the Roman Treaty that was created between the six countries of the Common Market of Europe in the year of 1957 established the integration in economic terms. Such introduction of economic integration acts as a beneficial action for all the countries, which are participating in the European Union (Bridwell, 2013). At the beginning of the crisis of European Union, the people of the Europe began to make the doubt of the assumption that is made by the European Union. In between the years of 2009 and 2013, the belief of the people regarding the integration of the strength of the economy is subject to a fall of twenty-one points in the Country of France (Hall, 2012). Reports from (Feldstein, 2015) show that the strength of the economy has fallen to twenty points in the Country of Italy and fallen to sixteen points in the country of Spain (De Grauwe, & Ji, 2013). In the year of 2013, there was only twenty-three percent of economic integration, which was in positive terms for the national economy (Klose, & Weigert, 2013).
However, in the year of 2014, the strength of the integration of the European Union began to return (De Grauwe & Ji 2013). The proportion of the public that involves in making the identification in making the removal of the trade and the barriers to investment within the continent of Europe that has increased by fifteen percent points in the last year (Bergsten & Kirkegaard, 2012). In the country of Germany, the integration has strengthened the economy by sixty-three percent. The integration has increased in Poland by fifty-three percent as given in the paper (Gros & Mayer, 2010). In the majority parts of Italy, France, Spain and Greece, the integration of the economy has been subject to become weak. Hence, the damage that is done to the European Union has not yet been repaired. Hence, it can be said that the European Union is yet to be repaired.
The European Union is administered and governed by some institutions. They never correspond to the branches of traditional government that are related to the division of power (Habermas, 2012). The crises that are faced by the European Union are regarded as the Eurozone Crisis. As the 28 Member States of the European Union uses, the same currency the European Union is often referred to as the Eurozone (Ludlow, 2006). The crisis of the Eurozone emerged in the financial crisis or the crisis of debt that occurred in the Country of Greece in between 2009 and 2010 (Dawson & Witte, 2013). In the previous decade, the government of Greece has been indulged in taking money from several countries of the international market (Ludlow, 2006).
As a result, that Country has been subject to a huge crisis in the financial terms. There have been huge deficits in the budgets of Greece (Habermas, 2012). The investors in the markets of Greece began to make huge concerns regarding the financial instability of Greece and because of that in the year of 2009, the investors began to ask demand their money back or ask for higher rates of interest on the money that is lent (Ash, 2012). As a result, the concerns of the market condition of Greece spread over the entire Eurozone and lead to the slowing of the economic growth the power of strengthening the integration of the economy. The leaders of the European institutions have made a prompt response to the crisis. Reports show that (Moravcsik, 2012) to safeguard the economic crisis; there has been the grant of loan to several countries like Greece, Portugal and Ireland by the European Union. The recent crisis in the country of Greece has posed the challenge to the European Union of its project of integration (Bergsten, & Kirkegaard, 2012).
The project of the European Union that includes the creation of the sole market involving the institutions of Europe that are considered as the pillars of the effort and the public good faith for making the betterment of their future (Moravcsik et al., 2012). According to (Hall, 2012) the primary crisis of confidence lies in the fact that the loss of confidence of the public in the project of the European Union. This happened since the year of 2014 and now in the present scenario, it seems that the lack of public trust over the projects of the European Union is now rebounding in several countries (Moravcsik, et al., 2012). The decision making a process of the European Union is subject to varying considerations among the countries of the European Union (Habermas, 2012).
According to (Bridwell, 2013) there is a growing worry that some parts of EU integration for the first time in history may be reversed or stopped (Schimmelfennig, 2014) contend that in spite of the multiple crises it may happen, that it evoke some reforms that are beneficial for the EU. It is necessary to overcome the crisis of the confidence and “transform the bloc into a more effective and cohesive entity”.
If EU does not break up its confidence, it can mostly continue to function without any prominent changes in the treaty or the decision-making reforms. It will also be able to resolve the issue such as economic situation posed by Greece and increasing migratory pressures believes (Hall, 2012). It will be possible for EU to continue pursuing integration and standard policies wherever possible regardless of UK being its member (Schimmelfennig, 2014). If the EU breaks up its confidence, it will not be able to grab its possible scenarios and muddle through the situation (De Grauwe, & Ji, 2013).
(Bridwell, 2013) Has stated some of the possible scenarios in the hands of the EU. One is that it can soon become “two-speed entity” encompassing a strong integrated group of “core countries” and a group of “periphery countries” giving these groups a flexibility to select in which EU policies they want to participate. Analytical reports show that there are many members in practice with two-speed EU, having a range of initiatives such as Schengen, Eurozone, defence policy and justice and home affairs issues. (De Grauwe & Ji, 2013) suggests that the two-tier system could create ripples between “core and periphery member states”.
The other scenario includes that EU integration may be put on hold by national capitals due to sovereignty issues. According to (Klose & Weigert, 2013) “this may be most likely should reform-minded eurosceptic parties come into power in more EU countries and if the UK is successful in its bid to carve out additional EU policy exemptions”. It may happen that EU will easily expand and include aspirants in Turkey and Western Balkans, Ukraine, Georgia and other countries. EU can emerge from its crisis by maintaining its confidence, being integrated and more united. (Bergsten, & Kirkegaard, 2012) Believes that there may be some member states of EU needing the “political and economic integration” and that the outcome may be in the favour of Brexit or Grexit. This kind of integration will not encourage the EU enlargement in future.
There are many supporters (members of the Congress and successive administrations) of the EU integration. They view it as “fostering democratic allies and strong trading partners in Europe” (Feldstein, 2015). (Dawson & Witte, 2013) Stated in his paper that US intends to have a partnership with EU and supports the development of “EU defence policy”. In doing so, it enhances the NATO capabilities. There are 22 European countries belonging to both EU and NATO (Moravcsik, 2012). There is a strong, trade and investment relationship between EU and US (Klose & Weigert, 2013). It was stated by some US officials concerning that the “potentially stronger, more united EU could rival U.S. power and prestige” (Schimmelfennig, 2014). However, these views could not shape the policies of US towards EU.
Concerned with EU challenges, economic and strategic implication policymakers of US are suspecting the EU’s ability to be an effective and robust partner of US (Bridwell, 2013). It was asserted by the “Obama Administration” its “opposition to Grexit and Brexit. It is now viewing the possibilities as a huge threat to the relationships of U.S. and EU, as well as the credibility of the EU (Klose & Weigert, 2013). US worries also involve the uncertainty regarding the response of international financial market and the potential security ramifications of Greece that is economically destitute and is cut loose from EU and is probable to make close bonding with Russia (Karanikolos et al., 2013). According to (De Grauwe & Ji, 2013) many US officials believe in the reliability of EU and US relations keeping in mind its economic and political clout, the fact that U.S. and UK views tend to align on most major foreign policy issues, as well its traditional Atlanticist orientation. Also, other worries include that internal tensions and preoccupations could prevent the EU from focusing on the main U.S. priorities, which are aggression in Ukraine due to Russia, the conflicts in Syria and Iraq, risks and dangers due to Islamic State organisation and concluding the proposed U.S.-EU free trade agreement. Some researchers suggest that “politically fragile, economically weak EU could take U.S. attention and resources away from managing strategic challenges such as the rise of China and continued instability in the Middle East” (Richardson & Mazey, 2015).
Conclusively, it can be said that the European Union can survive its current crisis of confidence. It is evident from some other observers, who are contended that in spite of all these current challenges, the EU will continue its commitment to the United States in respect to close and cooperative partnerships. The author has clearly described the consequences of EU crisis on international business and possible scenarios for EU. Based on the measures that it is trying to overcome the crisis and the believe system of the partner countries it is indicated that there is the lower chance of exit of any one countries affiliated to Eurozone. Southern states are recovering but the northern ones are still in weak position. However, the debt crisis is still in its place. There are chances that the rest of the world may receive some economic shock and may spread over coming years.
References
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