Every Economic System Is Based on the Relationship Among Family, Enterprise, State And

The Economy of the United Europe

Every economic system is based on the relationship among family, enterprise, State and the rest of the world. This last one is made up of the foreign countries, with which we have business relations by means of import and export. The whole of measures, that the governments of the various countries adopt during these activities, make the commercial policy.

The assumed position regarding this policy can be different: while in the past we had the protectionism, that was achieved with the presence of customs’ duties - leaving therefore the State in a closing position - nowadays we are inclined to the liberalism, originated in 18th century and consisting in the abolition of the same duties to consent a greater freedom of trade.

The passage from the protectionism to the liberalism is important to understand the evolution of the European Union, whose basic steps are the following ones:

v1951 - The Treaty of Paris (Europe of six: France, Germany, Italy, Belgium, Holland, Luxembourg; Ceca’s institution);

v1957 - The Treaty of Rome (CEE’s institution; EURATOM’s institution);

v1967 - The Treaty of Bruxelles;

v1973 - Europe of nine: with the entrance of Denmark, United Kingdom and Ireland;

v1979 – Origin of the European Monetary system;

v1981 – Europe of ten: with the entrance of Greece;

v1986 – Europe of twelve: with the entrance of Spain and Portugal (agreement of the Unique European Pact);

v1990 – Schengen’s convention: free circulation for citizens;

v1992 – The Treaty of Maastricht (European Union’s institution; creation of the economical and monetary union);

v1995 – Europe of fifteen: with the entrance of Austria, Finland and Sweden;

v1997 –The Treaty of Amsterdam (the “2000” Agenda defines Europe’s strategies and expansion in the new millennium);

v1998 – The European Central Bank is set up by Austria, Belgium, Finland, France, Greece, Ireland, Italy, Luxembourg, Netherlands, Portugal and Spain;

v1999 – The founders of the European Central Bank adopt the Euro;

v2002 – The circulation of the Euro.

Main objectives of the European Union

vEuropean nationality;

vTo create a stable cooperation opposite to the U.S.A. and the USSR;

vTo guarantee freedom, security and justice;

vTo create a unique European market;

vTo carry out common economic policies in order to develop the economy of the member nations;

vTo support the social progress;

vTo adopt the same currency: the Euro;

vTo support the professional training;

vTo make Europe count in the world.

The Community Institutions

vThe Council of the European Union;

vThe European Commission;

vThe European Parliament;

vThe Court of Justice of the European Union;

vThe European Court of Auditors;

vThe Committee of the regions;

vThe European Central Bank;

vThe European Bank for the investments.

The European citizens’ rights

vRight to move on, to travel and to work in every country of the Union;

vRight to vote and to stand for the European Parliament and the local government of the town of the European Union where one lives;

vRight to be, in a third country, under the diplomatic protection of the authority of every country, which is a member of the European Union;

vRight to make a petition to the presence of the European Parliament to express one’s own disagreement on the matter in question;

vRight to apply to the European Middleman and to the Law court in case of transgression of one’s own basic rights;

vRight to have access to the documents of the European institutions.

Basic freedom

vFree circulation of people;

vFree circulation of goods;

vFree circulation of capitals;

vFree circulation of services;

vFree circulation of workers.

The European citizenship

The European Union was made up with the purpose of creating a solid cooperation among the States, in order to make a peaceful and constructive society based not only on the economic union, by means of the introduction of the Euro, but also on the social union, that appeals to the principle of the “European citizenship”, and on the one of the free circulation of goods, services, capitals and people. Moreover, the European Union has the purpose of defending the rights and interests of the citizens of the States through the institution of a “citizenship of the Union”, aiming at reinforcing the tie between Europe and its citizens. It is to be underlined that with the term “citizen” we must consider whoever has the nationality of a memberState.

People’s free circulation

Right for each citizen of the Union to circulate and to stay freely in the territory of the member States. This right allows:

vAbolition of the controls to the borders, inside the European Community, for every European citizen;

vRight of stay up to six months for the Union’s citizens and for their families (in possession of identity card or passport);

vRight of stay for over six months if the following conditions occur:

1)to be an autonomous or subordinate worker;

2)to have enough economic resources;

3)to attend a professional course as a student;

4)to be a relative of the citizen’s of the Union, who belongs to one of the above mentioned categories.

vFree circulation for not over three months for the citizens of the third Countries (in possession of visa or stay permission);

vSpecific journey authorization for the citizens of the third countries that want to move for not over six months in the countries of the European Union.

The Entry Formality

Whoever is a citizen of a memberState of the European Union has the right to move to all the other countries without particular formalities. It is sufficient to have a valid identity card or passport. The right may be limited only for reasons of:

vPublic security;

vPublic order;

vPublic health.

If the stay does not exceed three months, it is not necessary to require a right of stay.

Free circulation of goods

It applies to the products coming from the member States and the products coming from the third countries, which are in the member States:

vRealization of the home market and consequent abolition of all the obstacles to the free circulation (elimination of customs’ duties);

vElimination of the controls starting from 01/01/1993;

vTo be entitled to damages in case of defective products;

vSpecific regulations to let safe products circulate on the market.

Free circulation of services

For the creation of a European area of services, the action of the Community has initially concerned the fields of banks, insurance and transport, expanding in a second moment to the Telecommunications and electric current.

vLiberalization of the bank sector;

vLiberalization of transport.

Free circulation of capitals

Money should freely circulate in the whole European Union.

Objectives:

vTo abolish all the restrictions to the circulation of capitals among the member States and between the memberStates and the third countries;

vTo establish the inside market favouring the other liberties of circulation;

vTo favour the economic progress allowing an optimal distribution of the capitals.

Free circulation of workers

Every citizen of a memberState has the right to move freely, with the family to the other member States, to start an industrial activity and to practise it in the same conditions of the citizens of such States.

Objectives:

vTo increase the possibilities for every community worker to find a job and to enrich his own professional experience;

vTo facilitate, through the workers’ mobility, the answers of the human resources to the demands of the employment market;

vTo develop, through the contacts with the workers of the member States, a closer and closer union of the European peoples;

vRight of transfer and stay;

vRestrictions of the right of entry and stay, owing to public order, public security or public health.

The worker’s right of stay

Every European citizen worker has the right of staying freely in the territory of the member States at fixed conditions. The worker (or a member of his family) can immediately work in a memberState, without the necessity of a working authorization, by declaring his presence in the territory of the State. In particular, in case of:

vTemporary stay for less than three months;

vStay for over three months but less than one year: it is necessary a temporary stay valid for the whole length of the working activity;

vStay for over one year: it is necessary to ask for a stay card.

The Globalization

The globalization indicates the extension and the diffusion, on a world scale, of materials. techniques and procedures. It implies the interaction of complex dynamics and it’s characterized by the extension, on planetary level, of an exclusive model of economy.

Its effects are:

vThe formation of a global financial market;

vThe rise of the impact of the new technologies for the exchange of goods and services.

The internal market

vCommon market:

The Treaty of Rome (1958) implied the liberalization of the exchanges of goods and services among the States.

vInternal market:

Starting from the 80s they have tried to create a space, without inside borders, where the free circulation of people, goods, services and capitals is insured.

vOrigin of the economic and monetary union:

With the European Law Act and the Treaty of Maastricht the Economic and Monetary Union rose and the foundations for the unique currency were laid.

vInternal market:

In 2000 the European internal market became a reality and implied :

The increase of the exchanges inside the community;

The growth of productivity;

The reduction of costs;

The abolition of the customs’ formalities;

The increase of the economic growth.

From the European Monetary System

to the unique currency

The European countries made a European system of monetary circulation called “European Monetary Snake”, based on fixed foreign exchanges among currencies.

1979 – After a period in which Europe had been characterized by a serious monetary instability, the European Monetary System was established with the objective to favour the monetary stability within Europe. Its characteristics are:

vThe introduction of a European Monetary Unity, ECU (European Calculation Unity);

vThe fixation of a change mechanism among the European currencies.

1992 – With the Treaty of Maastricht they agreed on the overcoming of the European Monetary System in favour of the adoption of a unique European currency, the Euro.

The three phases of the Euro

1° Phase (1998)

The Euro is used by eleven European countries, called “In Countries” (Finland, Ireland, Holland, Belgium, Luxembourg, France, Germany, Austria, Portugal, Italy, Spain) whom Greece will join in 2001. Great Britain, Denmark and Sweden (Out Contries) will be out.

2° Phase (Transient) 1999-2001

Fixed rates of conversion, among all the currencies and the Euro, are defined. The Euro is used as a bank currency.

3° Phase (2003)

vEmission of banknotes and coins in euro;

vWithdrawal of the national currencies;

vLoss of current money by the national currencies.

Pact of stability and growth

vSigned in Amsterdam in 1997;

vIt foresees that the “In Countries” achieve the balanced budget;

vIn case of excessive deficit budget, the countries are subjected to monetary sanctions.

With the pact of stability the countries give up an autonomous monetary policy, since this one will be determined by the European Central Bank.

The advantages of the Euro

vCompletion of the Unique Market: thanks to the euro, the free circulation of people, goods, services and capitals in Europe is easier;

vAbolition of the commissions on the foreign exchanges: since the transactions of foreign exchange among the European currencies are no more necessary, the relative commissions (that is to say those honorariums that the banks get for each transaction of foreign exchange) aren’t to be paid any more;

vStimulus to the growth and occupation: the euro is based on a solid, economic and financial scheme, that contributes to favour the productive and occupational growth;

vDevelopment of the competitiveness of the enterprises: the possibility of comparing prices stimulates the competitive effect of the enterprises, having an improvement in the products and a better productiveness, with positive effects on occupation.

Effects of the Euro on the enterprises

vContinuity of the contracts within the Union Countries;

vFormation and orientation of the subordinate staff;

vNecessity of the small enterprises to join, in order to stand the European challenge;

vConversions of the remunerations;

vNecessity to adapt the products to the new consumers and to widen the distribution;

vTransparency of the prices: possibility of comparison of the prices by the consumers;

vNecessity to decrease the costs and to improve the relation price-quality;

vIncrease of the competitiveness of the enterprises and, therefore, of the economic growth with the consequent positive effects on occupation;

vRounding of the prices.