Question

What prompted the countries of Europe to start moving toward greater economic integration? What was the ultimate goal, and how successful has the effort been?

Answer 1

International economic cooperation takes years to come into effect. It has several phases, including:

establishment of a free trade area

creation of a customs union

development of a common market

achieving an economic union

For example, countries that share a free trade area allow for the free flow of goods, services, capital and labor. When several regions share a common market, there are no restrictions on immigration and cross-border investment. An economic union is characterized by uniform monetary, taxation and governmental policies. Economic integration in all its forms aims to ensure peace and security among member countries, while protecting their shared interests from external threats. At the same time, it facilitates the exchange of goods and increases labor mobility.

Advantages of Economic Cooperation

For businesses, international economic cooperation opens up new opportunities. Companies can hire foreign workers more easily, access funds from internal sources and trade goods at lower costs. Additionally, setting up your business in another member state is a lot easier and less expensive. You may be able to register the business in a member state with lower taxes and more affordable workforce compared to your home country. Once you take this step, you can expand your reach and grow revenue.

Consumers benefit from economic integration, as well. They can travel without the need for a visa or passport, relocate to other state countries and more easily find work abroad. For instance, EU citizens travel within the European Union using their national ID cards instead of passports. They can also apply to jobs in higher-paying EU countries without having to obtain visa sponsorship. This translates into lower costs for both employees and employers.

Another major advantage of economic integration is its ability to increase peace and security. Member states benefit from greater political cooperation, which results in more stability and peaceful conflict resolution. Moreover, they can borrow and raise funds directly in the international capital market, which allows for faster economic growth.