Friday, 15 June 2012

European reflections: the integration, the culture and the transport sector

Today let us have some reflections on the European Union policies.

Policies that attempt to create an integrated European market have already lasted some 50 years
The obstacles for a common market can be:
  • Technician impediments, different legislation and taxations that can restrict the imports because of the overload of rules/laws. Is possible that some of the laws in one country overrule the laws of another and that could lead to a period of extreme uncertainty.
  • The problems that some countries have to the free circulation of people (base pillar of the true integration of the communitarian market) since it could provoke the displacement of the individuals for the richest regions (better conditions of life and work) thus increasing the discrepancies among countries. And in the other hand could lead to problems related with crime, terrorism, traffic and illegal immigration, subjects that still today are subject of debate.
  • The reluctance of some countries can have to abdicate of part of its sovereignty and autonomy; they could successively refuse to integrate the plans of integration until having certainties of its viability. So related to this obstacle is the feeling of having different culture, traditions and ethnicity.

How can the obstacles be remove?
  • The decision of standardization laws, but it has to come before the integration since it has to be enclosed in the Treat because the countries could use the some law-wholes to get competitive advantages and to reduce the competition. So maybe it’s not an economic measure that has to be foreseen and that can delay and put impracticable the Union market. With different laws a common market was impossible, with the increasing of the integration the standardization of the laws increases in a natural form.
  • The integration in phases, initiating in its more basic form until the economic and monetary phase, this could reduce the shocks and the confidence of the Union would not be at risk. When promoting the economic growth of countries route to cohesion it will reduce the distrusts of fierce immigration and will increase the cohesion relatively to the people.
  • It could be been seen as “smart” instead of opening the countries borders if first the Union supported the cooperation between the organizations/companies of the different countries, R&D, Networking and alliances. The integration would emerge from the markets themselves and not from decrees. Cultures differences could be diminished aswell due to a slow integration (first involving companies) and globalization effects.

It’s difficult to imagine the failure on the efforts of a common market in Europe. Probably it would be necessary agreements for imports and exports since the circulation of goods, services and people would be restrict. Possibly some countries would have protocols to diminish the taxes.
Without a European Union an adequate market would never be possible to support superior and larger companies. It would be a Europe with more economical inequalities between people, industries and countries. In extreme cases maybe Civil-Wars could happen because the countries wouldn’t have no-violence protocols and anything that could join them.
All of these could all result in deepen even more the cultural, economical and political cleavages in Europe.

Some people claim that after the common EU market and the European Monetary Integration, we would now also need a common European culture and language.
Having the same language will beneficiate the communication between people of different countries and therefore it would be easier to make further business with that more trade that can be made bringing more economic growth.
In having a similar culture companies would have to make fewer adaptations in marketing terms. The internalization of companies would be easier; they could position their products in the diverse markets bringing bigger expansion with less marketing costs. Therefore with those two variables we could predict greater profits for a company.
Finally, it’s easier the interchange of people and the agreement between them if they all have the same culture, values and the way of living. There are empirical studies proving that there is more peace and tranquility in the societies that allows social stability, without it’s difficult to have economic stability, concluding that social problems can and have a direct affect in the economy.
The most debated obstacle is the loss of national identity, in Europe the language/culture are the few remaining proofs of the individuality of the countries and people are often skeptic in loosing that since the prolonged existence of most of the European countries. Europeans still see many differences among them (ideas, beliefs, etc.) so it will be difficult to imagine them to be united as they are towards their own country.
Related to the previous we can give the example of two border countries, in Portugal is forbidden and shocking to facilitate and see bullfights to the death, but in Spain it’s in their culture so they see it as normal, if this happens in two border countries it’s impossible to imagine all the differences between distant countries. For that reason we can conclude that in Europe cultures can be extremely different and it’s difficult to perceive real efforts by the competent authorities in the integration of people, i.e. when immigrants go to live in a different country they normally try to find local communities of their own country, becoming the visible racial sorting that exists in many cities of Europe. Thus, without factual efforts of integration common culture would be an impossible task to accomplish.
Finally it’s necessary to understand that the societies have different levels of education and history also ignorance leads to prejudice becoming additional obstacles in the integration aspect. It’s hard to imagine the “English” and the “French” with their arms together singing the same national song.
A bi-cultural system could facilitate the understanding between several countries with different cognitive structures when the problem concerns to different the way of seeing the same thing. A bi-language system could obstruct misleadings or misunderstandings since if we cannot understand each others we cannot move forward and bring progress. These two topics could make the countries have additional social-economical relations.
But the problem is that one of the strongest points in EU is the variety of cultures that bring variety of ideas and different points of view, making the EU so unique. Does Europe really want to lose this?

The transport sector is one of the integrating mechanisms for building the EU.
It could equalize conditions but we need to realize that some European zones have more influence than others (i.e. Blue Banana, concentration of wealth in Centre-Europe). The more a country is apart from that concentration the less economical influence and benefits it will have. That distance can be measured by kilometers but at the same time by time. UE is trying to make improvements in the transport-systems – better and new high-ways, TGV-Trains – distance between countries can be fewer to reduce the problematic of countries distant from the centers, this is considered an attempt to make them have equal opportunities.
The time-distance factor decreases but the travel-costs will increase (someone still has to pay for the use). TGV-Trains are fast but expensively, the similar happens with auto-transports “someone still has to pay for the gasoline”.
An additional question appears: “Who will pay for the railways and motorways constructions?” Some countries are considered just as runways to get to another country, should they have to pay? If so the most probable consequence would be the construction of tollgates bringing more travel-costs for the users and more discrepancies to the countries. The transports improvements should bring countries together not only for high-income agents the ambition is reducing distance and travel-costs, if it’s too ambiguous Europe should concentrate efforts to make multiple-influential zones but another question pops: How?
Countries-integration is complex especially for the new/poor Euro-countries. EU should have the expenses of the construction (rails and routes) and facilitate in the next years the proximity by giving subsidies to the transport-systems nevertheless demanding that the things are fulfilled and that are materialize. However according to David Ricardo, subsidies have a negative consequence since the State is supporting industries that probably wouldn’t survive in a free-market, countries should specialize in goods/industries with comparative advantages because if the State gives financial support it’s wasting resources making the industries dependent of public-funds when they should be self-sustained. Countries won’t improve only with transports because if there is no productive sectors countries will have roads but nothing to carry.
Somepeople say that Russia will become an EU-member, the main problem is that Russia is one of the biggest countries in the world and it does not have a strategic vision of its place in Europe (not being implemented in practice either in foreign or domestic policy). The complex European steps suffer lack of a strategic dimension and poor administrative execution. Even tough Russia is an important partner, despite of small economy it have considerable potential for growth, it’s the largest neighbor brought even closer by enlargement and it have a large market for goods and services, there is even more interest to engage a strategic partnership since they have influence in Central Asia. But the solution of this issue depends of the EU's evolution (almost a federative state or an economic and social union with foreign and defense policies) and Russia's (development authoritarian stagnation or self-assuredly developing democracy)… but Europe will always need time to consolidate before new expansions

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Blog Editor and Owner: Luis Aparicio Fernandes (or Mikey) is a Business Expert and a Traveler based in Sydney, Australia. He is a member of The International Honor Society Beta Gamma Sigma due to his achievements in business. You can follow Luis on Google+, and LinkedIn.