One of the crucial ideas that have to be considered when acquiring a business in the EU is that both developing and developed countries are currently focusing on the idea of globalization. It means that acquiring a company within the EU is a perfect choice because it could bring an improved level of trade protectionism and a much more regulated financial market (Lewandowska et al., 2022). The existing economic environment across the EU is government-driven, so it brings additional advantages in terms of centralization and reduced influence of unconventional policies on banks and other important players. Thus, two of the key benefits achieved through acquiring a business in the EU would be transparent transactions and long-term financial security.
Another benefit of acquiring an EU-based business is the existence of moderated prices and reduced pressures related to inflation. Many local companies tend to engage in rapid recovery processes and do not face significant threats related to emerging markets (Dvouletý et al., 2021). Hence, there are numerous chances to avoid systemic debt with an EU-based business. The only particular challenge that may lead to questionable outcomes at the moment is the uncertainty that links back to the US fiscal position. Even under the condition that EU business becomes restricted, it will still be relevantly protected against the imbalances and limitations related to sovereign debt.
One of the bigger issues that have to be considered when establishing an acquisition in the EU is the lack of a banking union that would support the euro currency. It means that over time, an EU-based business could face a major debt overhang and lose the existing balance to numerous policy constraints (Mhatre et al., 2021). Thus, growth prospects are still tangible, but every business opportunity should be evaluated from a long-term standpoint in order to help the business avoid uncertainty and liquidity problems.
References
Dvouletý, O., Srhoj, S., & Pantea, S. (2021). Public SME grants and firm performance in European Union: A systematic review of empirical evidence. Small Business Economics, 57(1), 243-263. Web.
Lewandowska, M. S., Gołębiowski, T., & Rószkiewicz, M. (2022). Eco-innovation, international competitiveness and economic performance of European Union enterprises: Triangle approach. European Research Studies, 25(1), 635-646. Web.
Mhatre, P., Panchal, R., Singh, A., & Bibyan, S. (2021). A systematic literature review on the circular economy initiatives in the European Union. Sustainable Production and Consumption, 26, 187-202. Web.