Changing Business Environment

Introduction

It will be right to conclude that the emergence of European Union (EU) was the result of Second World War. The Second World War is regarded as the main event that influenced the world to enter into a new era. The war badly affected the world economy particularly of the main members of ‘The Axis’ and ‘The Allies’.

After the most deadly war, rebuilding of infrastructure, improving the economy and developing coalition among the war opponent countries to avoid any further conflicts, was the major concern of global leaders. Concern over regional disparities became an important socio-economic policy initiative following the World War II (Dudek, 2005). United States and Soviet Union became the super powers whereas the Britain which had been dominating the economies of many countries in the region and had established its colonies even in the subcontinent pulled off focusing mainly on rebuilding its own infrastructure and improving its economy. The globe was split into a western bloc and eastern bloc dominated by USA and USSR simultaneously.

Countries mainly European established an organization ‘United Nations’ with major tasks to wash off the effects of war and develop measures for peace and collaboration among the global countries, promoting mutual trade. The UN was formed in reaction to a surge of enthusiasm after World War II for a world organization able to keep the peace (Hunt & Colander, 2010). Thus a forward step for improving the economies and eliminating the risk of any future war.

EU is the final version of a series of cooperation measures among the European countries to develop political stability, motivate economic growth and resolving issues among the members of EU. After its successful operations, now the EU is expanding its authority by providing membership to many former communist countries of central and Eastern Europe. The idea behind inducting the former communist regions into the UN group was to provide political, technical and financial aid to these isolated regions. On the same hand also to be benefitted with the natural resources of the same regions. The UN system provided a forum for discussions, exchange of experience, and participation by the communist countries in its technical cooperation work and operational activities (Jolly, 2004).

 

The Emergence of European Union:

The road leading to the formation of European Union, started in 1952 when six nations Germany, Belgium, France, Italy, Luxembourg and The Netherlands entered into an agreement forming European and Steel Community (ECSC). The objective of these agreements was the production of energy and steel (Stajano, 2009). The same two industries in the member countries of ECSC were managed and monitored by one single authority. Later on proceeding for further cooperation in other sectors like trade, resources, capital, people and atomic technology, two new agreements were signed by the same members, mutually agreeing upon sharing of technologies, man power and ensuring the use of nuclear energy for serene purposes. This involved the six countries giving up some of their decision-making powers to European Economic Community (EEC) in relation to a number of areas of the economy (Needham & Dransfield, 2000). The forming of EEC was based on four main points, mainly to minimize the production costs, business progress, enhanced level of competition and technology sharing leading to new innovations. By 1981 more countries namely UK, Ireland, Denmark, Greece, Spain and Portugal joined the EC.

Finally, with new modifications EU came into existence in 1993, also called as the Maastricht Treaty. The European Union (EU) is founded on the European Communities (EC) supplemented by new forms of co-operation agreed by the member states in Maastricht in 1993, and amended in the Amsterdam Treaty in 1999 and in the Treaty of Nice ratified in 2003 (Muller & Klingemann, 2004).

 

Expansion of EU:

The European Union, created in 1993, is an alliance of 15 European countries whose organizational purpose is to integrate Europe politically and economically, to create a common foreign and domestic security policy, and to ensure European cooperation in domestic affairs and justice (Boothe, 2007). EU operations were mainly focused on two points, enhanced economic cooperation and much stronger political ties among the member countries. In 1997, in a meeting attended by the EU members, new modifications were made in the Maastricht Treaty; amendments were made in EU’s foreign policy further strengthening the European parliament.

Thus, according to new amended policies EU can now further offer its membership to countries in the eastern bloc. It was named as Amsterdam Treaty. The Amsterdam Treaty was supposed to deal with the adjustments to the institutional and decision making systems by thoroughly overhauling the arrangements that were still recognizably based on those that had been created for ‘the Founding six’ in the 1950s (Nugent, 2006). As Schengen agreement was also signed by the EU member countries, it was decided to make it a part of European Union Law. The Amsterdam Treaty was formulated to incorporate the Schengen Agreement, the focal point of the same agreement was the abolishing of the international borders between the countries in the Schengen area. The Treaty of Amsterdam also incorporated the Shengen acquis, meaning the original agreement and convention, and all the measures adopted on their basis, into the Treaties system (Francesca, 2013).

It was opposed by UK and Ireland, and this leaded to the formulation of another modified agreement ‘Nice Treaty’, in 2000. New reforms were made enhancing the authority of EU to induct new members with an expansion towards Eastern Europe. The voting system among the EU’s Council of ministers was increased and a number of policies were added. The effectiveness of ‘Nice Treaty’, paved the way for many former communist regions to become the member of EU.