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Brexit is the combination of two words denoting "British" and "Exist". It signifies the UK's decision to leave the European market. Several reasons are noted are there that resulted in supporting Brexit. Some of the reasons include sovereignty, anti-establishment populism, influence and role of politicians and decisions taken regarding demographic cultures. It is followed by a negative impact on EU business.
Effect of Brexit on UK position
The UK has benefited from the decision of Brexit. Major benefits that it had gained are as follows: control of democracy, controlling their money transactions, freedom to regulate the country's business more proportionately and allowing a more agile way to work upon. After the Brexit Uk has taken the responsibility to restore the independence and sovereignty of the UK's status globally. Several rules and regulations are changed for serving people's priorities and democratic accountability. The prime achievements were taking control of borders and initiating free movement. The points-based immigration system has been introduced resulting in the immigration of skilled labourers from neighbouring countries (Sanabria-Díaz, 2021). Democratic control over lawmaking is also restored. The power of scrutinising and making the law has been applied. As an EU free movement, the UK has allowed the free movement of foreign criminals to the country.
After the withdrawal agreement, EU criminals are not given any protection by the UK. The UK government has fostered control over coastal areas and has brought new fisheries acts aiming to provide better opportunities to fishermen and other coastal communities such as Lerwick. It had also restored fair access to the welfare system to both the residential and immigrant populations. The global tariff regime has been reestablished such that it meets the demands of the UK economy. Administrative burdens of business are reduced, unnecessary tariffs are scraped off and tariff-free trade is expanded. UK competition and markets authority are now being responsible for taking decisions with regard to significant acquisitions and mergers. With all such amendments, UK's business policy and policies with respect to foreign direct investment are in the process of getting developed (Wolff, 2022). The position of the UK in the international market has improved in a significant way and is establishing its position.
Relationship between EU and UK after Brexit
The transition period after the UK left the EU is over, it has been now concluded that the UK has left Custom Unions and EU Single Market. Therefore the laws of the EU no longer apply to the UK. It can be further stated that the relationship between the UK and EU has been significant and is respecting other nations' rules. Necessary rules and regulations are implemented taking into consideration countries' safety and other related issues. New Rules and regulations are implemented on travelers of both EU and UK while travelling to or from any of the countries. The facilities of both the countries can be accessed in other countries along with respective documents. The rules of travelling with pets, musical instruments, purchasing cosmetics are all revised and are in favour of the common people(?ak, 2020). The agreement after Brexit states that benefits regarding employment can be retained. Workers retiring in the UK will continue to have their pensions in the UK. In some cases such as mariners, civil servants, aircrews are not eligible to access the benefits mentioned in the law.
The exporting and importing of goods in both countries have changed. The amendment has been done considering trade markets and their profitability. Based on the origin of a product, VAT, excise rules, tariffs and quotas are implemented in the product. The post Brexit agreement between the UK and EU had improved their relationship by decreasing the administrative barriers faced by investors, business travellers and service suppliers. Streamline authorisation and business disruptions are also reduced. Barriers such as economic need tests cannot be introduced as per ensure by the agreement. The intellectual property rights of the EU no longer apply to the UK. In order to ensure protection registration in individual countries is required for patents or trademarks. The relationship between Northern Ireland and Great Britain has also improved concerning the transfer of goods. (Lynch, 2020) Considering all these factors the relationship has not deteriorated and both countries have been implementing ways that will be beneficial for either country. The rules and regulations are concerning the fact that it remains fair for both countries.
UK business diverging from EU policy
The UK has set the goal to maximise the country's economy through strategic diversion from the EU rules and regulations. Though it has diverged from legislation that is being implemented by the EU, some of the legislation is still being retained. The UK has the power to change such legislation for the betterment of the country and common people. The UK has adopted a more efficient and holistic approach such that the regulation being scrutinised aligns with the interest of the UK people. The UK economy has undermined the net zero-emission policy which is impacting the regulation of business, innovation and barriers to international trade. Getting detached from the EU has opened several opportunities that will lead to changing sectors having a competitive advantage, unleashing investment and driving economic growth. The government has been taking initiatives to change all EU regulations (Freedman, 2022). Policies related to trade union consumer groups and agriculture have been changed significantly.
Public procurement rules have been changed and simplified so that the public sector can import more local goods. VAT rate implemented on tampons and sanitary products is removed. Alcohol duties previously allocated are made simpler for extending and enhancing the alcohol industry. Greater domestic tourism is enhanced by reducing passenger duty. It will have a positive impact on monetary policies and economic benefits for the country. Bureaucratic agricultural policy has been reframed so that it allows farmers to take necessary action on protecting the environment and increasing animal welfare. Financial service regulations are also reformed the aim to fulfil the financial sector with more technologically advanced approaches. Solvency II rules are reformed ensuring the safety of insurers and protecting the rights of policyholders (Cygan, 2020). Laws of the EU related to the capital market regime are analysed not be suitable for an international market. Therefore it has been deviated from delivering a fair framework opened to competitiveness in capital markets and maintaining regulatory standards.
The decision making and policy of Europe are related to several integration policies. One such policy is regional integration theory. The theory covers several aspects such as neo-functionalism, post functionalism and intergovernmentalism. The concept of intergovernmentalism states that the government is the supreme power for regional integration. The Neofunctionalism aspect deals with controlling the integration process. Interest groups, transnational cooperation are empowered through the integration process and by developing personal interests. Postfoundationalism has challenged the debate based on regional integration. These aspects generally cover the area of establishment and supranational policies (Burns, 2019). The application of theories in European integration states that these are more complementary despite being competing.
The theory of functionalism has been the prominent theory of integration.it states that in case serious issues lead to market failures that cannot be successfully solved or addressed by a single nation, then supranational organisations should take part to address it. In such cases states have to transfer sovereign power to international organisations. The theory of neo-functionalism has been reported with several limitations. It has been noted that the theory of neo-functionalism is too vague, ambiguous and incoherent in generating precise predictions for suitable empirical evaluation. The two theories of integration have been a failure. Post functionalism theory has been integrated after this according to the theory; integration can be defined as the conflictual process resulting from an incompatible belief system (european-union.europa.eu, 2012). Reconstruing jurisdiction is the form of development of a nation-state.
The literature gap that has been identified in the study is the reason behind the approval of the Brexit movement. Several reasons here that led to the Brexit decision. In this literature, the reason is not being mentioned. Further study can be conducted based on analysing the reason for Brexit. Some of the reasons ae mentioned below the first argument that has been given is the threat to British sovereignty by the EU. A Series of treaties were made that shifted the power from member states to EU bureaucracy. The UK has been burdened with several kinds of regulations. It has been informed that the EU was generally entrenching corporate interests rather than preventing radical reforms (Wolff, 2020). The anti-democratic structure of the EU has given much power to corporate elites and has prevented the British market from gaining profits. The EU has allowed immigrants.
It can be concluded from the literature review that several changes have been noted in the policy of business in the UK and EU after the Brexit movement. The literature focuses on the deviations of business strategies of the UK from the EU legislation. The UK is highly benefited from this as well as developed international relationship policies so that both the countries are benefited.
- In the pandemic situation, the whole world came to an economic standstill and impacted the economic growth of the whole world. Most devastatingly affected were the European countries such as Italy, Portugal and France. Therefore, members of the European Union work together to consolidate the healthcare system of the region so that they can be better prepared if the same situation occurs in the future. These required economic restructuring of all member countries and therefore, they concluded to proceed with an integrated model to respond to the pandemic and support the businesses (Armb, 2018). The EU is the eco-political integration of 27 European nations. It came into an existence after the Maastricht treaty was enforced in 1993. This traced its origination to the European community of coal and steel and the European economic council. It possesses some characteristics that are multifaceted and goes across political and economic integration. It stands for promoting peace in the region by upholding the values of each nation and the well-being of all the citizens of European nations. Decision making of this union follows a set of processes, which are described in the following.
- At first, heads of the member nations of the union take calls for the general decision on certain policies in the European Council. After that, this decision takes the form of a law proposed by the European Commission. This legal form is then presented in the European parliament where reviews have been made, based on the proposal and took decisions along with the Council of Ministers. The Commission then implements the decision so that all the member states follow it (Barbier-Gauchard et al. 2021). The Court of Justice of the European Union mitigated the disputes arising due to various disagreements. These are the rational systems of economic integration where all the prospects of the society have been evaluated and adapted accordingly.
- Different kinds of economic and non-economic responses have been adopted by the EU to support the Businesses operating in the region or internationally. In this regard, the role of the European council is important to discuss. Coordination efforts have been evaluated by the European Council to respond to the Covid-19 pandemic (Bennett and Vines, 2022). This took place in Brussels where the leaders discussed how to combat the business challenges that arose due to the covid-19 pandemic. They discussed the cooperation from the international parties on global health governance.
- The element of solidarity has been emphasised in the discussion including solidarity on vaccine development and its distribution. They have decided on continuous support to COVAX and also form a consolidated objective to donate 700 million doses by the middle of 2022. They also have agreed to take measures for prevention of covid-19 along with preparedness, and responses. It has been decided by the member state that these decisions must be taken under the supervision of the WHO. The European Council has also adopted a decision on negotiating an international pandemic treaty to reinvigorate the business of the region and other nations (Burns et al. 2019). These negotiations have been based on prevention of pandemic, preparedness and counter-responses to revive the businesses so that economic recovery can be speeded. This is pertinent for the world to come into negotiation to increase the aggregate demand of the whole world, which has been reduced by the pandemic. Reduction in aggregate demand also reduces the business activities in the nations and pervasive unemployment arises as a new challenge. Therefore, to overcome this situation, an integrated effort of the whole world is needed.
- EU's state aid framework has adopted several regulations in order to handle the situation of a pandemic. The framework includes five types of aids. The first aid includes direct grants, advance payments and selective tax advantages to cope with liquidity needs. The second aid is that the state has guaranteed its role in providing loans to the people in need. Public loans are subsidised by companies. It has been accompanied by favourable interest rates helping businesses to cover their investment needs and working capital. Exporting short term credit insurance is also initiated. Banks are safeguarded that provide state aid to the real economy in helping small or medium-sized companies. Micro or small companies facing financial crises are raised with financial support. Private investors are provided with incentives for affording recapitalisation measures. Several additional measures are also being taken. Tax payment deferral and suspension of social security contributions in targeted support are avoiding layoffs. Wage subsidies are provided to the employees to avoid lay-offs. Support is also being provided for enhancing the upgrading of testing facilities and construction systems so that medical necessities are provided efficiently. Members are allowed to contribute fixed costs to companies not covered within the revenue of the organisation. It has been therefore notified that the European Commission has issued several public guidelines in order to make progress in the business.
- The European Council also decided to extend the responses to the rail sector of the member states. The covid-19 pandemic negatively affected rail traffic. These measures allowed the member states some relief on infrastructural charges for rail companies along with timely refund procedures to the infrastructure contractors. This sector is important for the overall economic and business development of the member nations. The rail transportation system is the backbone of the transportation of the member states of the European Union (Cygan et al. 2020). For example, if the rail system fails to deliver the services, it will negatively impact the cost of transportation. This increased cost of transportation also increased the price of the commodity. This cost-push inflation could affect the economic growth of the countries. Therefore, the Council has adopted some flexibility in completing the rail infrastructure projects of the member states. The European Council has adopted some measures or responses to the third countries' tourists. Regional hotel and recreational companies of the European nations have been recommended to restrict the third party tourist on their premises and take adequate measures to hold them in the initial quarantine for at least 14 days. Council has also extended the information that nonessential travel into the EU has to be restricted for some time. This has been taken place by the amendments in the laws of the EU. This amendment has been initiated to respond to evolution of the pandemic, to equalise the vaccine standard of the third-party country with the standard of the EU and to enhance the vaccination and intake of booster doses (Freedman and Loutzenhiser, 2022). Therefore, some categories of people are allowed to enter the EU member states. These are; recovered or vaccinated persons, travelers for essential works in the EU, nonessential travelers from the countries allowed by the EU member states.
- European Union nations concede to respond to a new variation of the virus called Omicron. Their decision to take an emergency or temporary break on-air and other modes of travel into the EU from the Southern region of Africa has been adopted promptly (Lynch et al. 2020). This decision has been taken at the emergency and high-level meeting to coordinate the response to a new variant of the virus called Omicron pervasive in Southern Africa. This has been done based on input provided by the "European Center for Disease Prevention and Control" to take emergency breaks in all modes of transportation from these countries. This was a temporary measure to restrict the non-essential travelers entering the EU member states and was called off at a later time. These countries include Zimbabwe, Botswana, Mozambique, Namibia and others. This was due to enhanced contamination-free business activities in the European nation so that local businesses can foster a pandemic free environment. The EU responded to the economic damages incurred by the pandemic on the businesses by conceding the economic plan of Malta called the "Malta National Plan” (Sanabria-Díaz et al. 2021). This has been a recovery and resilience plan of the EU member state to curb the economic impact of the Pandemic. In this, a resilient fund has been created to support the local businesses. Malta now can enforce an agreement signed with the EU to receive 13% of total funds in pre-financing (Wolff and Ladi, 2020). With this, “Czechia and Ireland's plans” has also been approved by the European council.
- Risk of economic instability associated with the coordination efforts includes overdependence on the third party countries for economic packages for recovery. This increased the possibility of economic dependency on the other states, which is detrimental to the economic sovereignty of the member countries of the European Union. This lowers the economic prospects of each member state. That is, they can adopt individual situation-based economic and political policies to counter the pandemic but are unable to do that due to exorbitant pressure from the integrating effort of the EU. Therefore, integration of the policies of the entire member states of the EU also ingrates the economic prospects of the businesses (Wolff and Ladi, 2020). All the members have to obey the general rules constructed by the European commissioners, are unable to form their own, and if formed, must be assimilative to the general rules and regulations of the EU. This hinders the individual economic measures that could be taken based on the specific and country based situation. For example, coordinating efforts to develop the vaccines and donate the same fetches almost the same amount of funding from all the members of the EU, irrespective of their wealth or GDP growth rates.
- The risk of economic instability has also increased with the international pandemic treaty. Here, the financial resources of one county were adopted to counter the pandemic situation of European nations. For instance, "Malta National Plan and Czech and Ireland's plans” compelled the other country to support them financially before their contribution to the resilience fund to counter the pandemic. This has reduced the working capital of each country that could be used for a reinvigoration of the business of the respective countries. Therefore, a detrimental situation of economic instability has been observed in the international treaty on the pandemic. Other than that, the decision to respond to the new variants called Omicron by enforcing brakes on-air and other modes of travel (?ak and Garncarz, 2020). This has decreased the scope for economic internationalisation for which linkages between the countries have to be increased. Restriction on travelling in the European countries also reduces the foreign institutional and individual investments in the member countries. This has created economic instability by reducing the scope of economic growth because higher rates of international travel restrictions in the countries reduce the scope of development of recreational farms such as hotels, tourism, aviation and other economic entities. Therefore, all these must be taken into account before adopting any integration business decisions.
- This assignment has evaluated the construction of the EU along with an analysis of its role in making integrated business, political and economic decisions for all the members of the European Union. A brief historical background of this political and economical block has been provided to comprehend the historical issues and circumstances of the need for such integration. With this, the functioning and roles of the European Union in enhancing economic and political freedom has also been analysed in this study. In the second segment, some responses of the EU to counter the impact of the pandemic on the economy and business have also been evaluated. In this, coordination efforts adopted by the European council have also been adopted to demonstrate the malice of pandemic on the businesses of the European countries (Cygan et al. 2020). Other than that, international treaties to counter the pandemic, improvement of the rail transport of the European nations along with some regional treaties such as Malta and Czechia national plan has been evaluated. At the last, some risk elements of economic instability in the European Union. Here, responses of the European Union to counter the pandemic situation for enhancing the economic prospects of the member states have been evaluated to demonstrate the economic impacts of those preventive, restrictive and curative measures of the same.
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