Presentation on International business environment of Europe

1. INTRODUCTION
Europe is the sixth largest continent in size
and the third largest in population. It consists
of 50 countries.
It is bordered by Mediterranean sea to the
south, Atlantic ocean to the west, Arctic
ocean to the north and Asia to the east.
It has area of 10,180,000 km2.
Population density of 72.9/km2
It has single Currency ,i.e. euro
Russia is by far largest by both area and
population while Vatican city is the smallest.
The climate of Europe varies from subtropical
to polar.
It has been home to some of the earth’s
greatest civilisation and also to the birth of
democracy.

2. To promote greater cooperation and further
integrate their economies and, Europeans sought to
minimize the variability of their exchange rates
In 1979, the European Monetary System (EMS) linked
EU member currencies to the Deutschemark in a
fixed-rate regime
In 1992 Maastricht Treaty, EU members agreed to
create a common currency (the euro) managed by a
single authority, the European Central Bank (ECB)
History Of Europe

3. Geopolitics is a method of studying Foreign
Policy to understand, explain and predict
international political behavior through
the study of the relationship
among politics and geography
demography, and economics, especially w
ith respect to the foreign policy of a nation
.
Geopolitics Of Europe

4. Geopolitics of srategic
location
Geographical proximities
Regionalism
Demographic dimension

5. Recent case is of Ukraine- Russia unrest.
• Until recently, the greatest risks to European stability
were internal. The euro-zone debt crisis triggered
tensions between and within member states that at
various times looked likely to lead to serious social unrest
and even a breakup of the currency union.
• Instead, the most pressing threats to European stability
are now external.
• The shooting down of Malaysia Airlines Flight 17 with
298 people on board has dramatically raised the stakes in
the war between the government of Ukraine and the pro-
Russia separatists in the Donetsk region on the EU's
eastern border. If Russian involvement is proved, calls for
a far tougher European response than has so far been
contemplated will surely be impossible to resist

6. History Of European Union
European integration:
● Initiated in Western Europe in aftermath of World War II.
●context marked by political
and economic reconstruction, beginning of Cold War.
 Three Communities created in 1950s:
●European Coal
and Steel Community (ECSC), ●European Atomic Energy
Community (Euratom) and
● European Economic
Community (EEC), with six member states.
 From 6 (1951) founding members to 28(2015) members
Founding members are Belguim ,France ,Italy ,Luxembourg , Germany and the
Netherland

8. Working Of EU
Three main institutions are responsible for
the day-to-day running of the
European union.
The European Commission:
To propose new EU laws;
To manage and implement EU policies
and the budget
The council for european
union.
 To conclude international agreements
between the EU and other countries
 To coordinate cooperation between
national courts and police forces in
criminal matters.
The European Parliament:
▪To pass EU laws, jointly with the Council, in
many policy areas;
▪To approve or reject the budget proposed
by the Council.

9.  Benign environment gave way to the Great Recession
in 2008 which shook confidence in lending to the
periphery
 As their debts mounted, foreign banks became
doubtful that peripheral countries could repay, which
forced interest rates higher—a vicious circle
 Crisis followed with the economic turmoil in PIIGS
countries.
 P – Portugal
 I – Ireland
 I – Italy
 G – Greece
 S - Spain
European Sovereign Debt Crisis

10.  Failure of PIIGS nation in repayment of Public Debt.
 Dominance by strong countries in European trade
TRILLEMA
Democracy – Sovereignty – Globalization
Possible Causes of Crisis

11.  European Free Trade Association – EFTA
 European Economic Area – EEA
 EFTAs Free Trade Agreements
 Bilateral Free Trade Agreements
 Termination of Agreements
 Issues that require specific attention in the
negotiations
11
VARIOUS TYPES OF AGREEMENT

12. First generation EFTA Free Trade Agreements (FTAs)
establish a free trade area between the partner
countries by:
providing for free trade in industrial goods, including fish and
other marine products;
liberalising trade in processed agricultural products;
including trade disciplines; and
establishing rules on customs and origin matters.
Trade in basic agricultural products is covered by bilateral
agreements between the individual EFTA States and the
partner country, which form part of the instruments
establishing the free trade area.
12
What is in an EFTA Free Trade Agreement?

13.  Second generation elements:
 Intellectual Property Rights
 Services
 Investment
 Government Procurement
13
What is in an EFTA Free Trade Agreement? (2)

14. EUROPE & INDIA
The EU and India are committed to
further increase their trade flows in
both goods and services as well as
bilateral investment and access to
public procurement through the Free
Trade Agreement negotiations that
were launched in 2007

15.  India is an important trade partner for the EU and an
emerging global economic power. The country
combines a sizable and growing market of more than
1 billion people.
 The value of EU-India trade grew from €28.6 billion in
2003 to €72.7 billion in 2013.
 EU investment stock in India grew substantially
reaching €41.8 billion in 2012.
 Trade in commercial services quadrupled in the past
decade, increasing from €5.2billion in 2002 to €22.7
billion in 2012.
Trade picture

16. European
Industries

17. AUTOMOTIVE
 The report states that
almost 34 percent of
vehicles in the world are
manufactured in Europe.
 The EU has a share of 7.6
percent in the
manufacturing sector. Its
automotive industry offers
direct employment to more
than two million people.
 The big names in the
European automotive
industry are Volkswagen,
Mercedes-Benz, Aston
Martin, BMW, Ferrari,
Jaguar and Lamborghini.
AEROSPACE
France and the UK are the
leading employment
providers in the aerospace
industry. Spanning over 4
million employees, a
majority of them are
absorbed in aircraft
technology, while the
remaining employees are
recruited in space and
missile programs.

18. Chemicals
European industry is a global
leader in the production of
chemicals. It comprises 27
percent of the world's total
production, with Germany as
its leader, followed by France,
Italy and the UK. Small to
medium sized companies
dominate the production of
chemicals.
 Major chemical products
include:
 petrochemicals
 polymers
 fine chemicals
Defense
The European defense
industry generates
employment for 770,000
people.
 The defense industry
includes:
 space
 aeronautics
 electronics
 military vehicles
 ships
 armory

19. Biotechnology
European industry is known
to be generating annual
revenue of $23.3 billion. The
EU 2005 report reveals that
almost 20 percent of the
medicines and 50 percent of
the drugs come from the
biotech industry. Pioneers
in the biotechnology
industry are the MEDICON
Valley and the Munich
region.
Food
European industry
dominates the food
industry as its largest
importer and second largest
exporter in the world. Its
most popular destination is
the US, followed by Japan,
Switzerland and Russia.
European industry faces the
challenge of tackling
scarcity of skilled
employees so that it
continues to sustain its
share in global trade.

20. Country Imports Exports Total
EU 1798 1683 3481
US 1817 1203 3020
China 1415 1594 3009
Japan 689 621 1311
Biggest importer and exporter

21. Destination of EU exports: % of EU exports:
United states 16.5
Switzerland 10
China(excl. Hong Kong) 8.5
Russia 7
Destination of EU exports

22. Origin of EU imports % of EU Imports
China 16.5
Russia 12.5
Switzerland 11.5
United states 5.5
Origin of EU Imports

23. Problems Faced By European Exporters?
 Import tariffs and quotas
 Discriminatory regulations and standards
How EU addresses these problems?
 EU addresses these problems with the help of
TWO main instruments
 {A}: the market access Partnership
 {B}: the market access Database

24. 1: the EUROPEAN COMMISSION monitors and assists
affected EU industries.
2: closely monitors the development of trade defense
investigations initiated by non-EU countries
3: EU publishes statistics concerning ongoing
investigations & measures in force
4: advices & assists EU national authorities
5: promotes discipline & seeks to make non-EU
countries comply with their WTO obligations.
EU trade defense POLICY

25. 0 20 40 60 80 100
INDIA
CHINA
USA
TURKEY
BRAZIL
PAKISTAN
Series 3
Series 2
Series 1
Trade defense measures against EU

26.  EU IMPORTS tariffs are lowest in the world
 The most open to developing countries
 2/3 of EU imports are raw materials
FACTS about EU imports

27.  The European Central Bank (ECB) is the central bank for
the euro and administers monetary policy of the Eurozone.
 It consists of 19 EU member states and is one of the largest
currency areas in the world.
 The capital stock of the bank is owned by the central banks of all
28 EU member states.
Banking in Europe

28. Major Banks in Europe
Ireland
 Bank of Ireland
 Allied Irish Banks
 Danske Bank
 Ulster Bank
Spain
 Bankia
 BBVA
 Caixabank
 Santander
UK
 Barclays
 HSBC
 Lloyds Banking Group
 Royal Bank of
Scotland Group

29.  The environmental problems in Europe are complicated
owing to the complexities resulting from the industrial
Revolution. Various problems that are related with
environment are:
 HARMFUL CHEMICALS: In Europe, the chemical industries,
which contribute to the pollution are growing at an ever-
increasing pace and are cause of concern.
 AIR POLLUTION:World’s largest and most industrialised
countries are in Europe. Country with the worst air pollution
is UK.Word smog was first used in 1905 to describe air in
London.40% of greenhouse gases and 70% of total air
pollutants are generated by thr vehicles.
Environmental issues

30. ACID RAINS : the problem of acid rain has
affected most of the European nations and
Greece is among the worst hit . It has caused
destructions of crop , damaged the ancient
monuments ,affected the lakes. 25% of total
forest cover in Austria is damaged due to acid
rains.
ENDANGERED SPECIES : According to a report
by the International Union for Conservation of
Nature and Natural Resources(IUCN),in a
period of just 4 years(from 2002 to 2006),5
species of mammals,7 fish species,8 bird
species,22 invertebrate species have become
endangered.

31. Human Rights Of Europe
• The Government Signatory Hereto, being
members of the Council of Europe , considering
the universal declaration of human rights
proclaimed by the General Assembly of the United
Nations 10th Dec, 1948.Have agreed as follows:-
• Article 1- Obligation to respect human rights
• SECTION –I Right and freedoms
• Article 2- Right to life
• Article 3 –Prohibition of torture
• Article4- Prohibition of slavery &forced labour
• Article5- Right to liberty & security
• Article 6- Right to a fair trail
& so on….

32. Labor Laws
Labour Law mediates the relationship
between workers ,employers, trade unions
& the government . Collectively labour laws
relates to the tripartite relationship
between employee , employer and union .
Individual labour law concerns employees’
right at work and through the contract for
work .
Employment standards are social norms for
the minimum acceptable conditions under
which employees or contractor are allowed
to work.

33. THANK YOU
Prepared By: Midhat Rehman
Rakhshanda Parveen
Chhaya Singh
Mahek Tahoor
Anshul Aggarwal