Tuesday 12 February 2019

The disagreement inside the EU


There are more uncertainties ahead of the European Union, despite the Brexit mess. There are three major powers in the European Union, the United Kingdom (which has not left the EU yet), Germany and France; and two of the three are in the Eurozone. However, the European Union have other voices others than these three countries'. The European Commission vetoed the merger between Siemens and Alstom, the German and French train manufacturers. Both Germany and France are unhappy about this decision made by the European Commission, and the French economy minister called this merger a creation of "European industrial champions".
France and Germany have the strongest industries in Europe and when these two countries start to cooperate with each other, including mergers, there will be much less room left for other European Union countries, because they are living in one single market. From the monopoly aspect, this merger should be blocked, because these two train manufacturers' merging will create a train manufacturer with the monopoly power. Other train manufacturers inside the EU simply do not the competitive power to compete with this giant while the train manufacturers outside the EU lose their competitiveness due to the tariffs imposed by the EU. However, from these two companies' aspects, they believe the merger is necessary and urgent. Yes, they probably have the monopoly power in the EU, but their main purpose of the merger is to strengthen their competitiveness in the global market when facing increasing competitions from other countries, especially China.
The disagreement of France and Germany with other European Union countries is that France and Germany want to cooperate with each other and strengthen themselves in order to be more competitive in the global  market but other EU countries do not want more powerful France or Germany as they are afraid of losing more European markets and benefits to France and Germany.

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