The European Union

Amity Global Business School - Bangalore

Presented By, Santhosh G.K Divya Mohit Tharani Raja A.P 5/5/12 Jack

The European Union

Click to edit Master subtitle style Geography

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Introduction

Europe is traditionally reckoned as one of

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Boundaries
Europe's eastern frontier is delineated by the Ural Mountains in Russia. The south-east boundary with Asia is not universally defined. Most commonly the Ural or, alternatively, the Emba River serve as possible boundaries. The boundary continues to the Caspian Sea on to the Black Sea and the Sea of Marmara conclude the Asian boundary. The Mediterranean Sea to the south separates Europe from Africa. The western boundary is the Atlantic Ocean; Iceland. The mainland Europe, is generally included in Europe for cultural reasons.

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Climate
London has a milder climate. London winters are warmer and summers are cooler than those in the middle of North America. . London is on an island in the Atlantic Ocean. Currents in the Atlantic affect the climate of London and much of Western Europe. Air blowing over Western Europe from off the North Atlantic Drift usually keeps winter temperatures warmer. In summer, ocean breezes cool those parts of Western Europe near the coast. Ocean currents have less effect on places farther from the coast. Berlin, a city in Germany, is located at about the same latitude as London, but Berlin is farther from the ocean. As a result, Berlin winters are somewhat cooler.
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Climate

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Population
Europe is the second smallest continent, it ranks second to Asia in population. Western Europe is a crowded continent. France has a population density of 263 persons per square mile. Germany has a population density of 5/5/12 571 per square mile. The small
Although

Population

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The European Union

Click to edit Master subtitle style Economy

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Economy of the E.U

Operating as a single market, the EU is a major world trading power. A monetary union, theeurozone, uses a single currency, the Euro, comprising 27 member states. The EU is seeking to sustain economic growth by investing in transport, energy and research while minimising the impact of further economic development on the environment. GDP(nominal)2010 (IMF )estimate-Total$16,242 trillion-Per capita$32,537

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 Trade: With

just 7% of the worlds population, the EU's trade with the rest of the world accounts for around 20% of global exports and imports. The EU is the worlds biggest exporter and the second-biggest importer. Around two thirds of EU countries total trade is done with other EU countries. The United States is the EUs most important trading partner, followed by China. In 2005, the EU accounted for 18.1% of world exports and 18.9% of imports. Employment: Over the past 50 years, employment in agriculture and industry has fallen, while more
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Real GDP growth

Inflation

GDP composition by sector

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 Tackling

the crisis together The EU has taken a coordinated response to the current financial and economic crisis since it began in October 2008. National governments, the European Central Bank (ECB) and the Commission have been working together to protect savings, maintain a flow of affordable credit for businesses and households and put in place a better financial governance system worldwide. The aim is not just to restore stability, but to create the conditions for a re-launch of growth and job creation. So far, EU governments have pumped more than 2 trillion into the rescue effort. EU leaders coordinated interventions, supporting 5/5/12 banks and allowing guarantees for lending. The

 Financial

supervision TheEuropean System of Financial Supervisors is an institutional architecture of the EU's framework of financial supervision composed by three authorities: the European Banking Authority, theEuropean Insurance and Occupational Pensions Authority and the European Securities and Markets Authority. To complement this framework, there is also a European Systemic Risk Boardunder the responsibility of theECB. The aim of this financial control system is to ensure the economic stability of the EU.
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The European Union

Click to edit Master subtitle style Legal framework

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Legal framework
The

primary legislation, or treaties, are effectively the constitutional law of the European Union. They are created by governments from all EU Member States acting by consensus. They lay down the basic policies of the Union, establish its institutional structure, legislative procedures, and the powers of the Union.

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The application of E.U law

Direct

effect European Union law which can be directly enforced by courts in member states is said to havedirect effect. European treaty articles, regulations and decisions can have direct effect, but only if they are sufficiently clear and unconditional, and there may be no scope for member states to exercise discretion in implementation.
Supremacy

doctrine TheEuropean Court of Justiceheld that in situations where there is a conflict between the 5/5/12 laws of member states and European Union

General principles of E.U law

Proportionality

The legal concept ofproportionalityis recognised one of the general principles of European Union law by the European Court of Justicesince the 1950s. It states that "the individual should not have his freedom of action limited beyond the degree necessary in the public interest". Legal certainty The concept of legal certainty is recognised one of the general principles of European Union law by theEuropean Court of Justicesince the 1960s. It means that the law must be certain, in 5/5/12 that it is clear and precise, and its legal

rights "Respect for fundamental rights form an integral part of the general principles of law protected by the Court of Justice. The protection of such rights, whilst inspired by the constitutional traditions common to the member states, must be ensured within the framework of the structure and objectives of the Community." The Charter of Fundamental Rights None of the original treaties establishing the European Union mention protection for fundamental rights. It was not envisaged for European Union measures, that is legislative and administrative actions by European Union institutions, to be subject to human rights. At the 5/5/12 time the only concern was that member states

Fundamental

The European Union

Click to edit Master subtitle style Politics

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European Union: Politics

Thepolitics

of Europedeals with the continually evolvingpoliticswithin the continent. It is a topic far more detailed than other continents due to a number of factors including the long history of nation states in the region as well as the modern day trend towards increased political unity amongst the European states. The current politics of Europe can be traced back to historical eventswithin the continent. Likewisegeography,economyandculture have contributed to the current political make-up of Europe. Modern European politics 5/5/12

Modern political climate

Despite

vastly improved relations between Russia and the Western European states since the end of the cold war, recently tensions have risen over the spread of " Western" organizations, particularly the EU and NATO, eastwards into former USSR states.

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GUAM Organization for Democracy and Economic Development

GUAM

Organization for Democracy and Economic is a regional organization of fourCIS states:Georgia,Ukraine,Azerbaijan, and Moldova. The group was created as a way of countering the influence ofRussiain the area, and it has received backing and encouragement from theUnited States. Though at one point it was generally considered to have stagnated, recent developments have caused speculation on the possible revival of the organization.
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Commonwealth of Independent States

TheCommonwealth

of Independent States (CIS) is aconfederationconsisting of 12 of the 15 states of the formerSoviet Union, (the exceptions being the threeBaltic states ). Although the CIS has few supranational powers, it is more than a purely symbolic organization and possesses coordinating powers in the realm of trade, finance, lawmaking and security. The most significant issue for the CIS is the establishment of a full-fledged free trade zone / economic union between the member states, launched in
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The European Union

Click to edit Master Culture subtitle style

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E.U culture

Theculture ofEuropemight better be described as a series of overlapping cultures. Whether it is a question of North as opposed to South; West as opposed to East; Orthodoxismas opposed toProtestantismas opposed toCatholicism; many have claimed to identify cultural fault lines across the continent. There are many cultural innovationsand movements, often at odds with each other, such as Christian proselytism orHumanism. Thus the question of "common culture" or "common values" is far more complex than it seems to be. 5/5/12

 The

foundation of European culture was laid by theGreeks, strengthened by theRomans , stabilized byChristianity, reformed and modernized by the fifteenth-century RenaissanceandReformationand globalized by successive European empires between the sixteenth and twentieth centuries. Thus the European Culture developed into a very complex phenomenon of wider range of philosophy, Christian and secularhumanism, rational way of life and logical thinking developed through a long age of change and formation with the experiments of enlightenment,naturalism,romanticism, science,democracy, andsocialism. 5/5/12

Features of European culture

Individualism

is most important Work comes first Social life Large number of population over large geographical area Tradition is not as important Unity among diversity Strict environmental laws

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Europe
Business Click to edit Master subtitle style

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Export and Import

After currency standardization $1.952 trillion in 2007

Ranked first across the globe in terms of export volumes. Trade fell in 2009 by EUR billion 577.4 to EUR billion 2 294.1 Exports fell by 16% to EUR billion 1 094.4

Imports fell by 23% to EUR billion 1 199.7 Exports in Jan 2010 was 81.6 bn

Imports fell by more than exports, leading overall 5/5/12 reduction tradedeficitof over EUR 150 billion, almost

Exports
The main commodities exported are: Machinery Motor vehicles Aircraft Plastics Pharmaceuticals and other chemicals Fuels Iron and steel Nonferrous metals Woodpulp and paper products Textiles Meat

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Imports
The main commodities imported were: Machinery Vehicles Aircraft Plastics Crude oil Chemicals Textiles Metals Foodstuffs Clothing

Germany remains the largest player in terms of European trade, while the UK remains a financial hub for most activities in Europe.
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International Trade

International trade amounts to 3,764 billion USD as per 2001 Trade deficit for January 2010 extra-EU27 was a 22.5 bn euro deficit, compared with -28.0 bn in January 2009

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Euro crisis
Companies

most prone to be effected

TATA STEEL Earns 60% of its revenue Sluggish demand: increase of procurement cost

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 Hindalco After

take over of Novelis 32% of its consolidated revenues from euro 12 facilities and 1 recycling plant

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Manufacturing
Before economic crisis, it contributed some 17.1% of GDP and accounted for some 22 million jobs (2007). Click to edit Master subtitle style

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EU exports have expanded by 4.7% p.a. over 2000-2008, substantially faster than the growth of industrial production. Despite intensified international competition, the European trade performance has held up notably well compared to the US and the Japanese performance. In some sectors, and despite the appearance of new major global players such as China, the EU increased its share of world exports between 1996 and 2006, notably in chemicals, pharmaceuticals, and motor vehicles. In other sectors, the EU has better resisted the challenge of China than the US and Japan, particularly in metal products and electrical machinery.
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 The

process of globalisation has exposed numerous much more to exchange-rate volatility,

subsectors

especially for those industries that mainly compete on costs as opposed to quality or service.

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Significant issues for industry today

The need to benefit from the opportunities of new international markets and respond to intensified global competition; the key role of the Single Market and better regulation; the importance of technology and innovation and in particular of key new technologies and ICT;

The need to improve energy and resource efficiency and to make the transition to a low carbon economy; the importance of the supply of raw materials; the need to manage restructuring and ensure adequate access to finance;

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The shortage of adequate skills in the workforce and the need to ensure skill transitions from professions with declining demands to emerging ones; The increased role of business services; The importance of a favourable entrepreneurial and business environment, especially for SMEs; The need to respond to the emerging societal challenges such as demographic change and the requirements of improved health and security measures.

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Impact of the crisis on output and capacity utilisation employment has also been serious with a The impact on manufacturing

decline in the number of jobs by some 9.9% in the fourth quarter 2009 compared to the peak of employment in the third quarter of 2008.

The output of the technology-intensive investment goods, such as mechanical and electrical engineering and ICT, has fallen substantially as a consequence of the downturn with output initially falling some 2030% below its peak

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According to surveys, capacity usage in these industries in the fourth quarter of 2009 was some 10-20% below average capacity utilization rates. The situation of the automotive sector is somewhat special. The sector initially faced a 40% collapse in output, before the implementation at national level of

scrapping schemes helped stabilize consumer demand. Output however is still some 25% below its peak and there is evidence of serious overcapacity

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Single market

The creation of the single market and the corresponding increase in trade and general economic activity transformed the EU into a major trading power. The EU is trying to sustain economic growth by investing in transport, energy and research, while also seeking to minimise the environmental impact of further economic development.

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Access to finance

The availability of mezzanine financing for SMEs has suffered, in many cases, due to its heavy reliance on securitisation. Sectors characterised by long delays between the start and the completion of work, such as shipbuilding, aeronautics or the construction sector suffered from malfunctioning financial markets. The sharp fall in demand coupled with longer payment delays on receivables and an increase in enterprise insolvencies have only made matters worse for companies' liquidity situation. Member State governments and central banks intervened forcefully in late 2008 and 2009 to stem the fall in lending.

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Euro area loans to non-financial enterprises have contracted over the last year by some 2.5%, with (February2010). short-term credit contracting by 12.5%

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Performance

The EU's strong overall performance is due to an upgrading of the quality of its exports, combined with the ability of EU companies to sell products at premium prices because of quality, branding and related services, i.e. its focus on producing products with high value-added. EU trade in this production segment represents 30% of world market for these products (as much as USA and Japan combined) and half of EU exports.

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Investemnts

The EU is the world's biggest investor and the principal host of foreign direct investment. When intra-EU stocks are excluded, the EU owned 36% and hosted 29% of world investment stocks in 2008.9At the end of 2006, cumulative EU FDI stock in the rest of the world is valued at 3.3 trillion, whilst cumulative FDI by the rest of the world in the EU was 2.4 trillion.10 Industry sectors in Europe differ greatly in their degree of internationalisation.

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Within manufacturing, the petroleum, chemical, rubber and plastic products, metal products, motor vehicles, and other transport equipment represent the highest concentration of outward stocks. The EU is a net investor in all manufacturing industries except in textiles and woodworking sectors11. However, in business services inward investments exceed EU investment in the rest of the world.

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R&D and Innovation

Investment in research and innovation is crucial to European industrys ability to remain globally competitive. The 2009 "EU Industrial R&D Investment Scoreboard" analyses information on the top 1000 EU companies and the top 1000 non-EU companies ranked by their investments in research and development (R&D). The Scoreboard shows that corporate investment in R&D continued to grow in 2008 albeit at a lower pace than in the previous year.

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In the EU 49% of the R&D investment takes place in medium-high R&Dintensity sectors (mainly automobiles and parts, electronic and electrical equipment, chemicals, aerospace and defence).

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