The formation of the European Union (EU) was done with absolutely positive intentions to all the countries encompassed by it. The organization was created with the sole intention of ensuring that its member counties had positive economic benefits from it. This was the case to a large extent even though other sectors of the countries’ economies suffer negative effects today.
The advantages of the formation of the EU include the use of single currency in markets and the prevention of wars. It is important to note that the use of one currency in two different markets makes it possible for entrepreneurs to avoid the currency exchange rates that are most likely to favor others and undermine the economic prosperity of other businesspeople.
In other terms, the use of a common currency in different markets levels the business platform for all. The EU is vital in preventing wars in the sense that it encourages its member countries to engage in active business. For this reason, the countries are less likely to go to war if they depend on one another businesswise (Halmers, Davies, and Giorgio, 157).
The EU also plays an integral part in reducing the levels of inflation in its member countries. For instance, countries like France and Italy that had an alarming high rate of inflation in the early 80s were compelled by the EU to fix their exchange rates in order to regulate their rates of inflation. Despite the positive intentions of the EU, there are some negative impacts that came along with it.
For instance, economists indicate that the trade benefits of the EU were overestimated to an extent of making its member countries overambitious. Another problem was particularly faced by Germany. As member countries struggled to equate their economies to Germany’s, Germany suffered a high inflations rate (Eeckhou, 293).
The European Union is attributed to the loss of sovereignty of some member countries. Under normal circumstances, a government elected by the native people is supposed to work independently by formulating and implementing its own policies. However, EU member countries are forced into complying with foreign policies.
For instance, their central banks are regulated by the EU in a bid to regulate the exchange rates. This is opposed to the sovereignty a country ought to enjoy. Additionally, the EU also regulates imports, exports and their rates of its member countries. It controls their taxation especially in the ports. This too should not be the case as far as sovereignty is concerned (Halmers, Davies, and Giorgio, 198).
In my opinion, the disadvantage for the formation of the EU that is business oriented is the single market strategy. This is the strategy by the European Union where people and countries have the freedom of trading, making investments on their money and looking for employment without running into physical, technical or legal barriers.
The strategy was formulated to come up with economies of scale and perhaps allow for the creation of a Europe-wide commerce with the aim of enabling faster economic growth in the region. To some extent, this strategy has bore fruits. However, critics say that the single market strategy has not eliminated regulations.
On the contrary, it has merely created regulations that conform to the European market. For this reason, EU compels its minor member to fit into the economic regulations of major members. Moreover, a single market cannot operate properly in markets with different wealth and cultural levels (Panke, 165).
Works Cited
Panke, Diana. Small States in the European Union: Coping with Structural Disadvantages. Farnham, Surrey, England: Ashgate, 2010. Print.
Halmers, Damian, G T. Davies, and Giorgio Monti. European Union Law: Cases and Materials. Cambridge, UK: Cambridge University Press, 2010. Print.
Eeckhout, Piet. Eu External Relations Law. Oxford: Oxford Univ. Press, 2011. Print.