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European Union Multinational Enterprises and the eurozone


European Union

The European Union (EU) is a supranational and intergovernmental union of 27 states. It was founded in 1992 by the Maastricht Treaty. The EU is the 5th stage (now in the economic and monetary union phase) of a continuous open process of economic integration. Considered as a single entity, the European Union has the largest economy in the world; it has grown by about 2.8% per year so far this century. In 2006 it was estimated that 3.5 million jobs created in the euro area.

Multinational Enterprises

Multinational Corporations are considered stateless organizations to enforce the process of globalization and lead to the creation of a universal culture (which may be to take advantage of the EU ). The multinationals above the traditions of a particular nation-state and its culture. This would actually make the MNC national identity useless, because they are considered stateless. When working within Europe, it is considered a Euro company it its origin. Multinationals are seen as inter-organizational networks that enable the transfer of knowledge and best practices across national and functional boundaries. It is believed in MNEs, functional structures are transformed into networking relationships that are less centralized and not only coordinated from the head office. They are also said that the changes in the external environment (i.e., the market) to turn on.

Despite much criticism of multinational companies, they have made an unparalleled contribution to the development of Eastern Europe in the last 15 years. They have opportunities to the young, improved working conditions, rescued from poverty communities, rehabilitated corrupt banking systems and laid a modern telecommunications network. Their export-driven economic growth; their presence has strengthened civil society. The effect has not always been positive, but their strength and dynamism, if used effectively, can help defeat poverty elsewhere.

The Eurozone

The Eurozone is a subset of the European Union, the Member States that have adopted the euro, creating a currency union. Monetary policy is controlled by the European Central Bank. The introduction of a common currency in a given region in general economic benefits as well as economic costs. A common currency eliminates the ability to adjust prices between different economic regions by means of changes in the exchange rate. Previously countries were able to adjust the prices in order to negate any economic shock. However, freedom of assumed movement of workers, so that people are capable of different areas within a region that has suffered from the economic recession to a more preferred. Also, a single currency reduces the transaction costs of buying and selling goods because there is no need to exchange the currency. Multinational companies (or euro company for that matter, which is essentially a European multinational company), operating in a range of different currencies, would significantly decrease the cost of managing the income and general costs would be drastically reduced view . Currency risks and the cost of the ambiguity of these risks are also considered a major cost of multinational companies; This is eliminated with the introduction of a common currency. Finally, the European Central Bank can focus on the main objectives; to check prices and to control inflation, as the central bank generally has no political influence.


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