EUERC

Corporate expansion

One of the central elements of the European Union has been to allow businesses to expand and become major players on the international stage. Before the EU's creation, industry in many European countries operated very much within its own national borders. This reluctance to seek out export markets inhibited growth but the EU has helped change business attitudes by creating the world's largest confederation of independent states.

The starting point was the creation of a common market which encouraged member states to trade with each other, helped by the harmonisation of government regulations, corporate law and trademark registrations and a common system of indirect taxation, customs and excise duties.

This helped companies involved in international trade and results have been dramatic. The European Union is now the largest economy in the world, with a GDP of $12,427,413m (USD) in 2005.

According to recent EU figures, economic growth in 2006 was 2.7% in the European Union and 2.5% in the euro area, driven mainly by strong domestic demand. It was the strongest growth since 2000. Unemployment dropped to 8% in the EU and 7.8% in the euro area.

To maintain this economic momentum in the face of growing global competition, EU member states signed up to the Lisbon Strategy, which aims to make the EU the world's most dynamic and competitive knowledge-based economy by 2010.

The specific objectives are economic, social and environmental renewal and sustainability based on the economic concepts of innovation and a learning economy. Practical measures include supporting companies through a system of subsidies, grants and on-the-ground support.

Many sectors have benefited, from Europe's developing aviation industry to business areas such as chemicals and environmental technologies.

As a result, EU countries are now making major inroads into emerging markets such as China, India, Africa and South America.

European firms are also doing good business in developed markets like the United States. It was a point underlined in September 2006 by Benita Ferrero-Waldner, the European Commissioner for External Relations and European Neighbourhood Policy.

While on a visit to Texas, the Austrian diplomat said: 'In 2004, Texas exports to Europe totalled more than $12bn, including chemicals, computers, and machinery. Europe is by far the largest source of foreign direct investment in Texas. In fact, European companies have more money invested in the state of Texas alone than the United States has invested in China and Japan combined.'

She added: 'The fact is that the EU is a global player, with a population of almost half a billion across 25 countries, accounting for a quarter of world income, over a fifth of world trade and some 60% of global development assistance.'