SINGLE EUROPEAN MARKET

Impact of Single European Market on the European Automotive Industry

Impact of Single European Market on the European Automotive Industry

Overview of the European Automotive Industry

Europe's industrial sector is diversified and dynamic. There are many key industries within the European economy that forms the basis of its revenues in manufacturing sectors and plays a crucial role in the national and international economy, and the automotive industry is one such industry. The automotive industry is one of Europe's key industrial sectors that accounts for almost eight percent in the total manufacturing value addition. The industry derives its importance from the link that it has established with the national and international economy and its supply chain involving different suppliers, distributors, manufacturers, importers, authorized and non-authorized dealers. It is responsible of employing billions of employees within the European Union and hence plays a key role in the society as well as in the economy.

The vehicle industry of Europe, due to its significant role in the European Union, interacts with several of its policies for transport, energy, the internal market, the trade, research and development and the environment. While the automotive industry clearly links to the “Europe 2020” strategy for industrial competitiveness, it also upholds the principles defined by the EU with regard to climate and environment. The importance of a healthy environment cannot be ignored while states plan for their countries. Environmental stability is an essential precondition for social well being and economic progress. Therefore, while making policies, special regard and attention is given to the environmental aspects. The Environmental Policy involves practices that ensure environmental concerns are addressed in all policymaking of European sectors including the domestic industries. These policies typically demand some changes in the organizational and procedural activities that ensure a sustainable environment and an improved implementation of environmental planning. This paper intends to assess the impact of the establishment of the Single European Market on the European Automotive Industry (Joan 2003, pp. 18).

Description of the Single European Market Policy

Single European Market was proposed by Single European Market Programme in 1992, and it has severe connotations with employment and the industrial relations in the European Union. However, this served as a threat because it resulted in competition between various enterprises in the Member states that had to face varying direct and indirect labour costs. Moreover, the problem also arouse because of the difference in the system with regards to social and labour regulation. The two main things that created problems are mentioned below.

Social Dumping

Social regime competition (EuroFound 2011, pp.1)

These factors resulted in a fierce battle between the social partners in Europe with regards to the political and legal strategies that were adopted by the Single European Market. At European level, the strategy that was adopted by the trade unions was characterized as it has been dictated political-distributive logic. Dangers of the single market were recognized because of this and this led to the issue of social dumping. However, it also had positive aspects of the advantages that have ...