Question One: Evaluate why it is so difficult to complete the Single European Market.
The Single European market has been a vision since the early 90s. Europe has gotten as far as creating a single currency for all the European unions, however uniting the market poses much difficulty. Over twenty years ago, Europe was warned about the great economic impact a failed market could bring. Protectionism is something that is hindering the European nations from merging into a single market1. If there are financial constraints on the banking establishment across the borders, not a lot of countries would want to participate. For a free market to become a reality, all banks must adhere to universal banking. However, this is seen as more of a competition of banks and countries. Distortions among banks and competitors should be eliminated and there should be harmonizing laws established in banking. The future of a single market will really depend on the trade policies as well as free capital movement. Although, it is seen that governments are leaning more towards protectionism. Another issue is the representation of power. Most European countries are used to being under monarch rule. Unlike the United States, they are not under one bigger power (like a president). They still have their own cultural values and beliefs. Individually, the European countries are doing fairly well economically and unless an established treaty is arranged which benefits all of them mutually, a single market will be difficult to complete in Europe. Many countries still fear foreign takeover. The first step is to steer away from any thoughts of protectionism.
Question two: The only viable solution to the problem of social dumping is a genuine fiscal union between European Union member states. Critically discuss the validity of this statement.
Social dumping is a term used in employment and labor. This is when countries use employers from other nations because the cost of labor is less, thereby increasing their profit. This is a negative term since it does no good for any of the countries that are involved. The business itself earns more profit. However, the employees are exploited, the country’s local labor force loses work and the country that provides workers lose skilled laborers. This can also be a term for goods that does not meet competing country’s standards. With a genuine fiscal union between European Union member states, such quality control tests and standards will be made equal for all. Therefore, there will be no underdog country when it comes to goods and services. However, the solution to the problem is not that simple; even though this might seem to alleviate the negativity around social dumping. There are still a lot of implications this uniting might bring. In national systems, there are a number of labor codes and standards, these are different for each country. All countries have direct and indirect costs for labor. Competitive advantage should be scrutinized among all the countries in terms of labor and social standards. Just because labor costs less, does not necessarily make it better, there are other factors to be considered. Highly trained and skilled laborers bring on better standards and can bring extra to the table2. Those with high labor standards and a sound transport infrastructure as well as skilled workers might be forced to lower their standards in order to meet competing countries. This will pose as a threat to them in terms of their quality output and quality workers.
Bibliography
Kelemen, R.D. & Menon, Anand. You thought we’ve got a EU single market? Think again!.
Europe’s World, 2007. Web. Retrieved from
http://www.europesworld.org/NewEnglish/Home_old/Article/tabid/191/ArticleType/Arti
cleView/ArticleID/21167/YouthoughtwevegotanEUsinglemarketThinkagain.aspx
