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European markets

The European Union has brought prosperity to the European market. The E.U made special arrangements and treaties between countries that they could never go against each other. There was peace everywhere which resulted in prosperity in European markets. For example France, Italy, Belgium, Luxemburg and Germany signed a treaty in the year 1951 to club all their coal and steel markets.  In the year 1957, a very important treaty called the Treaty of Rome was signed to form The European Economic Community, commonly known as the ECC. This laid a foundation for a common market for all the European Union countries.  The ECC made many reforms in the European markets. It eliminated all the tariffs or duties on the imported goods.  This single market soon became a realism practice after the European Union Single European act in 1986. The European commission and The Council of Ministers are responsible for the major decisions taken for the European markets. These bodies update the policies on a regular basis and regulate all the market strategy. The common market also produced thousands of jobs for the natives of Europe.  It also formulated a citizen’s agenda to promote economic integration.

This single European market also provides certain freedom to the member states.  The chief liberty involves the freedom of goods. The European Union states that a nation’s main responsibility is take care of its citizens and their needs. Therefore, the proposal for removing the national barrier for the free movement of goods between E.U countries was detached. This lead to the freedom of goods: only in exceptional cases, like the vehicles, chemicals, cosmetics, footwear, textile, toys, gas appliances, pharmaceutical products and all the construction material. The European Union only regulates the higher risk product sectors.  All the lower risk segments are managed by the local bodies.  The main function of The European Union is to harmonize the trade process in European markets.  The European Commission monitors the movement of goods in both harmonized and non harmonized markets.

Other than providing a single market for goods, The E.U provides single market for services as well. This allows one member nation to provide services to another member nation, where it is not even customary.  These services include financial services, broadcasting, telecommunication and other services.  The single market depends on services, goods, capital and people. And the European Union Commission makes sure that there is a healthy business environment so that The European markets can compete at their best with the global markets.

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Euro money

The Euro was established and came into practice with the sole aim of giving the Dollar a tough time as the universal currency. But, as speculated, it hasn’t helped the European economy much; rather, according to surreys and news reports, growth rate of many European nations was just a meager 1.4% in the last fiscal year. In fact, many countries in the European Union are facing recession under inflationary pressures as well as pressures of rising food and oil prices worldwide.

Spain, Germany and Britain are well on their course to recession, which happens when the growth falls for two consecutive years, this might happen to other large economies of the European Union as well, considering the catastrophic effect that mortgage and sub-prime crisis has had on the developed economies of the European Union.

Speaking of Germany, both the customers and the sellers have kept a tight control over their purses- a situation known as “purse string tightening”.  On the bigger prospective, Germany still has a robust economy, good employment rate and strong exports, even with a small growth rate of 1.8%. Netherlands and Poland, though much smaller than Germany and Britain in terms of economy, have been able to stand the test of these financial blows rather well and are growing at rates far better than the average Euro zone averages.

Inflation has much to do with the rising financial crisis, which is attributed to rising oil and food prices. Jaun Claude Trichet, President of the European Central Bank further warns that inflation is not going to cool down in the near future. He remarks that inflation may come down slightly in 2009, allowing the economy to stabilize a bit, but the markets and investors, and therefore the whole economy will be watchful and volatile for a longer than expected period.

The only option seen by most economists under the present prospective is to cut the interest rates to give the economy a boost, but Mr. Trichet dismissed this proposal because this would lead to a further aggravation of inflation according to him, and the Union Bank’s main aim is to control and stabilize prices rather than push the growth as of right now.

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