Business
Qstn 2: Outline the abuses to competition European Union competition policy seeks to address, and analyses how effective European Union competition policy has been in practice in addressing these abuses to competition in the Single European Market.
Competition is the driving force that fosters innovation in different companies within a region therefore improving the economy and market process (Riley 2012). Promoting competition within the European Union is an impact that is felt by all consumers in the region. Competition policies fostered by this brunch of the European Union ensures dynamic innovations promoting efficiency of products, broader choice of products for consumers, and fair pricing for both the producers and consumers. In its fair sense, it protects both the consumers and producers from large conglomerates that may wish dominate the market unfairly therefore diminishing the fair growth of the market.
Abuses the European Union competition policy seeks to address
The European Union competition policy has encountered four major strongholds that restrict competition in the region. The first is antitrust and cartels. Cartels occur when similar minded companies join and conspire to fix prices, control production, and share markets as well as customers. Due to this controlled action, they hardly produce new or improved products making customers to pay premium for substandard goods. As a result, companies found guilty of such activity pay hefty fines to the European commission (European Commission 2012).
Another impending act that could seek to minimize competition in the EU market is mergers. While some mergers may lead to the growth of the economy and competition, most are formed to strengthen a certain company in the market. The commission seeks to control this kind of mergers that aim to hurt the healthy competitive nature of enterprises. However, if the merging companies show incentive to promote competitiveness and business, the union can allow this kind of business.
The European Union has found new ways to foster competition in areas that were previously dominated by the government. These include services like transport, mailing, and communication. The process known as liberalization opens this markets to the private industry thus improving the quality of services. In addition, consumers benefit from better and more affordable prices. State Aid Control is another policy used by the EU to promote completion (EU Facts 2012). The State Aid given to private and state owned businesses must be controlled in order to avoid favoritism. Since this help is given for assistance purposes, the company must be able to show restoration in its viability instead of relying on other state aid given contracts.
How the European Union has been addressing these abuses
The European Union has joined forces with numerous administrative competition commissions to ensure completion in the single market is adhered to and respected by all forums of business. As an effort to monitor these activities, the EU monitors and regulates prices. The reason behind this is to ensure that companies do not over exploit their monopoly power in overpricing commodity and services. The second regulatory effort made is monitoring the standards of customer service. A good example is the even distribution of unprofitable ventures and services like phone booths and uniform delivery of mail.
Thirdly is the opening up of new markets. The commission removes barriers created by dominating industries. It is achieved by regulating prices and liberalization. Finally, the EU acts as a surrogate competitor (European Commission 2012). They ensure that the prices, profits, and quality of products are of worldwide quality. The hefty fines and other actions prevent businesses from conducting anticompetitive behavior.
Qstn 3: In its current form, European Union Social Policy is not capable of successfully preserving the European Social Model. Critically discuss the validity of this statement.
The European union of social policy is responsible of monitoring the advancements in areas of technology, globalization, and population in the region. Employment and economic progression are also included matters monitored. The social policy also act as triggers of progression in these areas if need be. It has fostered relationships with the legal department, local authorities, unions, and other organizations concerned to fulfill their role in the region. If the European Union Social Policy conducts its functions and roles properly, they are expected to increase employment, improve working conditions, eradicate poverty, as well as improve equality in education and employment between men and women (Barroso 2012). These expectations are the European Social Models. However, the current state of the European Union Social Policy is deemed unable to fulfill the European Social Model. This proposition is made due the challenges that have been overriding the European Union for the past decade or so.
The financial crisis of the region is the root reason promoting the unsuccessful preservation of the European Social Model. The financial crisis in the region was promoted by the poor financial sector practices. Over the years, the financial institutions have made bold and determined decisions to wrestle the crisis unsuccessfully. Resources and equity are unfairly undistributed in the region thus crippling the European Union Social Policy efforts to preserve the social model (Barroso 2012).
Secondly, public debt has hindered reforms from being unsuccessfully executed in most countries in the EU. The debts that were accumulated in the effort to promote the social model only end up giving reverse results due to incomplete funding. In addition, the crippling financial situation has worsened the situation leaving many countries with little or no choice of funding their projects.
Finally, the lack of competitiveness in the region fosters little economic growth among members. Countries wish to hold on to the traditionally proven methods of success while other countries continue to prosper with innovation and technology (Cerami 2008). Doubt among legislators has also contributed to the slow growth in the social model since they have become unreliable in backing their decision. Countries in the religion accept to back their weaker neighbors in order to uplift the region as a whole ensuring complete success of the European Union Social Policy in its social model activities.
References
Barroso, J. M. D. (2012) State of the Union 2012 Address: European Commission. Retrieved from: http://europa.eu/rapid/press-release_SPEECH-12-596_en.htm
Cerami, A. (2008).Europeanization and Social Policy in Central and Eastern Europe, Européanisation. D'Ouest en Est. Coll: Paris, pp. 137-168
Riley, G. (2012) Government intervention - competition policy. Retrieved from: http://www.tutor2u.net/economics/revision-notes/a2-micro-competition-policy.html
European Commission. (2012) Competition. Retrieved from: http://ec.europa.eu/competition/index_en.html
EU Facts. (2012) competition policy. Retrieved from: http://www.civitas.org.uk/eufacts/FSECON/EC11.htm
