Economics for Managers

Transcription

1 Economics for Managers G.M. AGIOMIRGIANAKIS VOLUME 3 European Business

2

3 To Myrona, Yanni and Manoli

4 Note The figures that have been included in this volume are used strictly for educational purposes and take the place of visual materials that would be presented during a lecture. They are provided only for personal use by students of the Hellenic Open University (HOU), and are accompanied by a reference to their source and/or the person who created them. The figures have been reproduced at a size that facilitates comprehension of the words and symbols in them, as well as their content in general. Reprinting or any other form of reproduction of this volume is prohibited. The volume is intended for the purposes of teaching and examination of HOU students. It is distributed free of charge only to those who created the teaching materials, to students enrolled at HOU, and to the relevant teaching personnel; it is not available for purchase.

5 ECONOMICS FOR MANAGERS European Business Note The Hellenic Open University is responsible for the editing of this publication and the development of the text in accordance with the Methodology of Distance Learning. The scientific accuracy and completeness of the written materials are the exclusive responsibility of the authors, scientific reviewers, and academic supervisors who undertook this project.

6 Copyright 2005 For Greece and the world HELLENIC OPEN UNIVERSITY 16, Sahtouri Str. & Ag. Andreou Str., Patras el: (2610) , / Fax: (2610) PREPARATION OF THE TEACHING MATERIAL of the Volume European Business Academic Supervisor for the Development of the Program and the Textbooks George M. Agiomirgianakis Author Scientific Reviewer George M. Agiomirgianakis Panagiotis Liargovas Supervision of the Methodology of Distance Learning Antonia-Maria Chartofilaka Language Editing Joan Stefan Artistic Layout Artemis Glarou Layout / Production Artemis Glarou Coordination of the development of the educational material and overall supervision of the publications HOU PROJECT TEAM / ISBN: In accordance with Law 2121/1993, the partial or total republishing, or reproduction by any means, of this book is prohibited without the permission of the publisher.

7 SCHOOL OF SOCIAL SCIENCES PROGRAM OF STUDIES Masters in Business Administration (MBA) MODULE Economics for Managers VOLUME 3 EUROPEAN BUSINESS PATRAS 2005

8

9 CONTENTS Preface 14 Introduction 15 CHAPTER 1 The European business environment and the steps toward European integration 19 The Scope of the Chapter...19 Learning Objectives...19 Key Words...19 Introductory Comments The European business environment Definition of European business and the business environment Political Economic Social Technological Legal Setting the scene for European Integration The integration process The stability of the divided Europe in the aftermath of World War II Changing the scene Economic integration Global institutions A brief history of the European Union

10 Synopsis Conclusions...32 Appendix...33 Bibliography...35 Recommended Reading...35 CHAPTER 2 A new Europe the way toward the European Union 37 The Scope of the Chapter...37 Learning Objectives...37 Key Words...37 Introductory Comments Toward an integrated Europe A historical review Benelux The Council of Europe The Western European Union The European Coal and Steel Community The Treaty of Rome The Merger Treaty Eurosclerosis from the 1970s to mid 1980s The Single European Act of The Treaty of Maastricht The Treaty on European Union (TEU) The Treaty of Amsterdam The main institutional bodies in the EU The Council of Ministers The European Council The European Commission The Court of Justice The Court of Auditors ECOFIN The Economic and Social Committee (ECOSOC) The Committee of the Regions

11 2.2.9 The European Central Bank The European Investment Bank EU enlargement - A historic opportunity European enlargement he way to the future...48 Synopsis Conclusions...50 Appendix...51 Bibliography...53 Recommended Reading...53 CHAPTER 3 EU competition policy 55 The Scope of the Chapter...55 Learning Objectives...55 Key Words...55 Introductory Comments Competition policy What is competition policy in the EU? What is competition? Market structure Perfect competition Monopoly Oligopoly Monopolistic competition Laws and regulations The legislation The Single European Act Article 85 (81): Restrictive practices Article 86 (82): Dominant positions Articles 90, 92, 93: State aids The new merger legislation: Regulation EC / Public procurement...63 Synopsis Conclusions

12 Appendix...64 Bibliography...66 Recommended Reading...66 CHAPTER 4 EU Social Policy 67 The Scope of the Chapter...67 Learning Objectives...67 Key Words...67 Introductory Comments What is EU Social Policy? The aims of EU Social Policy History and development of European Union Social Policy The Social Charter The changing nature of work Declining number of workers The flexible firm The Japanization of production methods Other developments in the EU labor markets The issue of minimum wage How the EU is responding to the changing nature of work...80 Synopsis Conclusions...82 Appendix...83 Bibliography...86 Recommended Reading...86 CHAPTER 5 The Single Market and the European Single Currency 87 The Scope of the Chapter...87 Learning Objectives...87 Key Words

13 Introductory Comments The need for a Single European Market Inflation in Europe Economic Integration in the EU A Single European Market (SEM): What was the need for SEM? The Single European Act (1987) The Cecchini Report (1989) The Economic and Monetary Union The European Monetary System (EMS) The Delors Report (1989) The convergence criteria The Treaty of Maastricht ( ) The Single European Currency (SEC) What is the SEC to the EU? Life in a single currency A single currency for Europe The case of Euroland The benefits of the euro The advantages and disadvantages of the EMU operating in a single currency...97 Synopsis Conclusions...99 Appendix/Answers to Activities Appendix of macroeconomic concepts Bibliography Recommended Reading CHAPTER 6 Foreign Direct Investment in the EU 113 The Scope of the Chapter Learning Objectives Key Words Introductory Comments Multinational companies and Foreign Direct Investment

14 6.1.1 Motives for undertaking FDI Alternatives to FDI The growth of FDI in the EU Theories explaining FDI Determinants of FDI in the EU Labor market conditions Real exchange rate and its variability Output in the origin and the host country Distance between the origin and the host country Cultural and language differences European Integration Government policies The size of the parent firm The importance of FDI for the EU Capital accumulation Diffusion of knowledge and Research & Development (R&D) Economic growth Unemployment Synopsis Conclusions Appendix Bibliography Recommended Reading CHAPTER 7 The case of the Central and Eastern European Countries toward the EU and the effects of the enlargement on the Union s policies 135 The Scope of the Chapter Learning Objectives Key Words Introductory Comments The applicant countries and their own state of reform

15 7.1.1 A brief history of the candidate countries toward EU membership Central and Eastern European Countries in the 21st century The accession requirements Smoothing the integration process What do the EU s current members fear from enlargement? Reforming the EU s institutions to prepare for enlargement The effects of the enlargement on the Unions s policies The economic impact of the enlargement Agriculture Economic and Monetary Union Horizontal policies Sectoral policies Justice and home affairs Synopsis Conclusions Appendix Bibliography Recommended Reading