An Analysis of the EU Economy and Retailing Industry Dynamics

This report provides a comprehensive overview of the European Union's economy, exploring its structure, policies, and impact on various sectors, particularly the retail industry. It examines the historical context of the EU, including the formation of the European Single Market and the Maastricht Treaty, and analyzes key economic indicators such as GDP, employment rates, and the role of the European Central Bank. The report delves into the retail sector, highlighting the rise of online shopping, the challenges faced by consumers, and the measures taken by the EU to address these issues. It also discusses the importance of renewable energy, the impact of legislation on textiles and clothing, and the application of economic theories to trade and policy-making. The report concludes by emphasizing the need for the EU to adapt to changing economic landscapes and make strategic decisions to foster growth and stability in the retail industry and the broader economy. This report is a valuable resource for students seeking insights into the complexities of the EU economy and its implications for businesses and consumers.

EU Economy

Table of Contents
INTRODUCTION...........................................................................................................................1
REFERENCES..............................................................................................................................15
Books and Journals...................................................................................................................15

INTRODUCTION
European Union is a combination of 28 different countries those who operates their
functioning in a united economic and political block way. In the structure of European Union
nineteen countries use Euro as their official currency. Main motive to form EU is to end warfare
in between European countries that was stated with World War 2 and emerged as a single
European political entity (Blomsma and Brennan, 2017). The European Single Market
offer freedoms in free flow movement of services, money, services and goods. Origin of
European Union was began with the coal and steel community in which there were only six
members those are, Luxembourg, France, Belgium, Italy and Netherlands and become
community of European Economic in the year 1957 within the Treaty of Rome. Just after the
formation EU early focus was in removal of customs barriers and on agricultural policy. In the
year 1973 EU expanded by adding Ireland, Greece, Spain and Denmark in its member list which
emerged its power by raising EU gross domestic product. European Central Bank and EU faced
lot of struggle as its growth and debts ratios were drastically collapsing in Spain, Portugal,
Ireland and Greece. Both Ireland and Greece got financial bailout in the year 2009 accompanied
with Portugal who received its bailout in 2011. In order to overcome this situation EU rotates
multiple rounds so to decrease interest rate and various economic stimulus but all these attempts
failed to solve the raised issues and problems. As after the Crises situation moved towards
stagnation government of U.K announced a referendum whether to remain as a part of EU
structure on 23 June 2016. In this present report, impact of EU decisions on retailing industry has
been effectively mentioned.
European Union framed a treaty which is formally known as Maastricht Treaty. This
treaty is a international agreement which is responsible to create European Union. This treat was
duly signed by leaders of 12 different nation including Italy, France, Netherlands, Belgium,
Greece, Spain, Luxembourg West Germany and Portugal (Bonviu, 2014). The Maastricht
Treaty was then forced from 1 November 1993. This treaty impacted several areas, in which one
the major area was citizenship. In this citizens got the right of citizenship of member state and
enable them to run for
parliament elections in European Union irrespective of their nationality. Along with this,
economy policy is one of the areas which have been impacted by this treaty. For this European
Economic and Monetary Union (EMU) effectively combined their functions and work in a
1

cohesive economic system with other members of Union states to initiate euro adopting as a
national currency. In EU structure there is an arrangement in between different types of
European countries which is done in a system named European Monetary System. In this, there
is a link of currencies in between various European countries as to stabilize exchange rates.
Main motive of European Monetary System is to brace inflation rate while measuring and
stopping wider fluctuations in exchange rates within the economic structure of European
countries (Crippa and et. al, 2016).
EU economy operates their functions as a single market having 28 different countries, EU
is one of the largest world trading power. EU economic policy mainly focuses on creating
various job opportunities while increasing market growth. In order to strengthen its market
stability EU focuses on utilizing its financial resources in a smarter way as to remove any kind of
obstacles in investment policies. Along with this, EU economic policy effectively targeted an
area to provide proper visibility and appropriate technological assistance as to make investments
in new projects. EU economy is much bigger than economy of US in in the context of overall
amount to goods and services produced (De Lucia and Bartlett, 2014). As per the data
report published in the year 2017 it has been observed that, EU GDP was about €15.3 trillion
with having 64% total trade done. European Union holds 6.9% of total world's population and
are third largest international trade global players. By the year 2016 EU countries bagged second
position in terms of global exports and imports of goods which amount their overall rate of
exports to 15.6%. Employment rate in
European Union is taking on a basis of estimated proportion of working age population which
indicates labour market trend. Global economic crises and turbulence in Euro zone impacted
employment rate by raising it over next few years.
2

Unemployment rate In European Union extracted in a percentage base by taking overall
number of individuals being unemployed in labour force. Mentioned below there is a chart that
shows overall rate of unemployment within EU countries (Ebell and Warren, 2016).
3

In context with Retail industry in EU economy, Online shopping is one of the most
popular way which steadfastly growing its roots by becoming leading mode of product and
services buying and selling way for young internet users(Enste, 2018). As technology is
taking important place in every individual life young internet users mostly prefer online
shopping mode to buy products like, medicine, food, groceries, films, telecom services,
electronic equipments, tickets, clothes etc. . There is a chart that showcases those products and
services that are most popular online bought product.
4

There are several problems encountered by internet users while making purchase through
the medium of online shopping. For this it is important for EU governance structure to form a
strong legislative system in order to manage and control internet tariff rates in order to resolve e-
buyers problems and issues while ordering any products and services (Gregson and et. al,
2015). Mentioned below there is a graph that shows numerous problems that usually takes
place when conducting online purchases:
5

In order to resolve this issues and problems EU can improve its governance structure by making
directive decision. Countries within EU structure by taking advantages of regulatory decisions in
relation with, tariff and transportation can further strengthen its productivity of relating industry.
As per according to the graph, it has been seen that 10 % population of EU countries suffered
from slow speed of delivery (Gruber, Hätönen and Koutroumpis, 2014). For this it is
important for countries performing their functions within EU structure to strengthen its
transportation system. As effective and smooth transport system plays a key essential role for
both EU businesses and public. Authoritative bodies of EU are required to frame efficient
transport policy as to not only maximise companies productivity but also to ensure safe and clean
travelling environment throughout Europe.
6

There are three charts mentioned below that shows fragmentation of inland transport system in
which trains, trolleybuses, coaches and buses are included of each and every EU country. Along
with these rates of air passenger transportation rates and sea passenger transport rates are
included.
7

8

Countries within EU governance can include usage of renewable energy in their business
operations as to lower down the level of wastage while ensuring healthy living environment for
individuals. European Union by creating more democratic strategies in related to use renewable
energy sources can potentially save their necessary investments (Haas and et. al, 2015). In
context with retailing industry, it is important for those business organisations to utilize
renewable sources like, hydro power, solar power, tidal power, bio fuels, wind power,
geothermal waste as to benefits population within EU by lowering down emissions of
greenhouses gas. In addition with this, renewable source of energy benefits retail industry to
strengthen their production and manufacturing functions by having lower level dependency on
various fossil fuels such as oils and gas. Mentioned below there is chart depicts raise in the
margin of utilization of renewable energy sources by countries in EU
9

Retail sector is considered as largest sector in economy of EU with around 3.6 million people are
working within this sector. This sector is altering dynamically with enhancement of multi-
channel retailing and e-commerce (Haughton, 2014). This has lead organisations to perform
effectively. This is the major reason Commission is assisting EU countries and different
operators to tackle challenges by acknowledging accumulation of certain restrictions within retail
sector. Moreover, there are certain areas in which EU countries can make significant
improvements. This includes facilitating retail establishment. It is necessary for retailers to set
up their own new shop within market by which they can surrogate innovation and productivity.
EU countries can decline risk of public policy interests like security of customers and
environment and town & country planning, this can be attained by enhancing conformity with
services directive. Furthermore, local, regional and national authorities are inspired to eliminate
undue burdens, devising procedures of retail establishment transparent, shorter and simpler.
Decreasing restrictions associated with everyday operations of shop. This will create burden
on businesses and their productivity will be affected, this is the explanation why Commission has
determined practices on sales discounts and promotions, opening hours of shop, specific retail
10

taxes, contractual practices related with modern retail and purchasing products from other EU
countries. Their aim is to make sure that supply chain is efficient and fair. Moreover, there are
fewer restrictions for pursuing justified policies for public objectives. Adoption of new
approaches for promoting vitality of city centres. Commission have published guide for
raising modernisation and re vitalise within smaller retail sectors. This guide will provide public
authorities with feasible practical suggestions related with how small retailers can embrace
changes in technology and meet those challenges within future (Heinrich, 2015). These
solutions are determined by feasible examples from real life which are collected from different
practices which are carried out within EU; they can be transferred to local setting. This guide
will also illustrate different success stories from EU countries by which they can create
inspiration among retailers.
Furthermore, Retail Restrictiveness Indicator (RRI) provides retailers with snapshot of
state of play of retail sector within countries of EU. This aids to determine best practices in areas
of possible reforms (Kirchherr, and et. al, 2018). It is a changing monitoring tool for
measuring efforts of EU countries for reducing restrictions related with retail and its impact on
market performance reforms which comprises of prices, productivity, innovation and its impact
on other sectors. Commission will monitor evolution of economic trends and regulatory
frameworks with respect to priority setting for enforcement policies and certain reforms within
EU countries.
Textiles and Clothing legislation law aligned by EU for all the member countries. As per
according to this law each and every member of European Union comes under in the law of
Textile Regulation (EU). In this law, retailing company is required to put a label of
No1007/2011 on fibre along with this marking is required to done on the composition of fibre of
a textile product. EU regulated this law in order to safe guard customers interest and remove any
kind of potential hindrances as to perform business functions in proper way in international
market.
In order to improve sustainability EU by taking advantages of economic theory in their
economic system can effectively understand trade agreements in order to proceed efficiently in
future (Laing and et. al, 2014). It is necessary for countries in European Union to properly
review economic theory in order to evaluate and monitor trade surplus as use them in effective
way for expanding nation treasure. This will benefit EU to have wide and powerful navy and
11

army. It is important for EU to provide more democratic structure even to small countries in
European Union in order to effectively promote exports and point appropriate restrictions on
imports. With the help of mercantilist theory nations within EU can effectively ensure export
surplus by exporting finished products and importing raw material in order to maximise domestic
employment. On the other hand, there is a criticism on traditional economic theory which is
utilizing by EU (Lieder and Rashid, 2016). As per according to this theory, there are three
factors that helps in shaping the products and services which is produced by an economy, those
three factors are, beliefs, customs and traditions. There are mainly three types of fundamental
assumptions predicted by traditional economic theory that include, people choices tend to be
consistent and individuals only upgrade their opinions after they receive new information. This
theory relatively faced a huge criticism as this, it mainly used by rural and farm based economic
system. Along with this in traditional economic theory individuals are mainly vulnerable to make
changes in nature, particularly in weather. Along with this people are also undefeatable to
market. This affect trade in both manner including, static effects and dynamic effects. For this,
European Union is required to shifts its governance culture form traditional and command
governance to more democratic and liberal structure. This will aid retailing industry to form their
social policy making in more open and flexible way. This move of lenient flexible approaches
provides great effectiveness in areas like European Employment Strategy (EES). This will
benefit them to conduct their trade with free manner while ensuring high profitability. In addition
with this, countries within EU by using multidisciplinary approach can effectively reach to
solutions that will be based to understanding of new and complex situations (McCann and
Ortega-Argilés, 2014).
Multidisciplinary approach consists of two or more than academic discipline or an area of
study in order to solve a problem in a redefine way and reach to solutions by taking decisions
outside the normal boundaries. Counties within EU structure by taking advantage of
multidisciplinary approach can effectively focus on different types of perspectives in order to
exemplify an issue or a theme. EU governance structure by adopting Multidisciplinary approach
can overview and study same topic or issue from different point of views in order to bring cross
disciplinary in between cross countries. In relation with retail industry, presently industries
within EU is facing major challenges such as labour problems, seeking new market, investing in
new and advanced technology and building smooth relationship in between retailers and
12

manufactures. Currently, EU is facing criticism in relating sector as in this major problem of
retailing includes, unpredictability of customers, over-saturation of market within EU, loss of
consumers to regional shopping centres and difficulty in retaining well qualified sales personnel.
Poor rate of economic growth and situations like economic crises lead countries within EU to
face reduction of resources extension (Mourre, Astarita and Princen, 2014). For this it is
important for EU to effectively facilitate communication in between retailers and manufactures
in order to support mutual coordination among them. Along with this EU can aid manufacturers
and retailers in a technical way as to encourage them to conduct different types of innovative and
advanced research and development. This will benefit retail industry to get expert solution for a
problem or an issue and enable technological advancement in retailing sector. This will not only
benefit retailing industry to grow their business but also facilitate fast phase economic stability of
countries within EU structure.
With the use of multidisciplinary model EU can initiate a helping gesture for retailing
industry. Multidisciplinary model benefits EU to analyse a single issue or problem from various
ways. With help of this model, EU can make large and economic strong countries to sponsor
small countries retailing industry products and services as to expand these industries overall
growth and advancements (Pratt, Nathan and Rincon-Aznar, 2015). In addition with
this, EU can establish small business development centres for small and developing countries in
large and developed countries. This will foster smooth relationships among countries within
European Union and raise economic stability of EU. With the help of digitalisation, strong
computerized global network of trading can be established which will benefit manufacturers
within retailing industry to find new markets in order to sell their products and services. Along
with this, it is important for EU to form an effective plan in which regular inputs from retailers
and manufactures will continue to take as to make further improvements and effectively maintain
growth rates. EU can take valuable suggestions for needs and facilitate networking among them.
In addition with this, it is important to implement liberal and democratic legislations. It will
benefit them, to understand actual requirement of retailers and manufacturers. It is important for
EU to heard grievances and issues of small members’ countries and provides them quarterly
newsletters, educational programmes as this will help them to find different types of new market
(Tosun, Wetzel and Zapryanova, 2014).
13

In order to foster trade and raise growth rate of European Union, a recent EU current
policy initiates that offer wide range of effectiveness to retailing industry. Recently, European
Union strategically frames a European Policy Cooperation (ET 2020 framework). It is a scaffold
for countries within EU which provides education and training to member states. It is a
formative and strategic forum which allows EU member states to effectively exchange their best
practices and take knowledge from each other (Blomsma and Brennan, 2017). Along
with this in order to help small retailers EU authorities effectively embraces modernisation of
technology which will aid small retailers to accomplish their future challenges. In addition with
this, EU has amended their marketing law and in this they offer wide range of best practices and
support to retailing industry including small retailers. This can be properly understood with a
case study, in a recent reform in Finland, EU fully liberalised opening hours of shops. Along
with this, EU amends their law of retail establishment law. In this retailing industries and shops
are allowed to select most optimal location of their choice without taking any kind of grant
related to product and assortment and shop format. This will significantly put positive impact on
healthy compition and on rate of employment. EU has given this liberalisation to retailing
industry as to encourage them and decreasing their difficulties to compete with e-commerce
stores. Along with this with the help of strong networking system EU framed a retailing strategy
in which they encourage and guide small retailers to take advantage of digital media and
marketing websites to offer their products and services to different countries of European Union.
This will significantly foster fast phased growth for retailing industry including small retailers
and strengthen economic stability of European Union (Bonviu, 2014).
14

REFERENCES
Books and Journals
Blomsma, F. and Brennan, G., 2017. The emergence of circular economy: A
new framing around prolonging resource productivity. Journal of
Industrial Ecology. 21(3). pp.603-614.
Bonviu, F., 2014. The European economy: From a linear to a circular
economy. Romanian J. Eur. Aff..14 p.78.
Crippa, M. and et. al, 2016. EU effect: Exporting emission standards for
vehicles through the global market economy.Journal of environmental
management. 183. pp.959-971.
De Lucia, C. and Bartlett, M., 2014. Implementing a biofuel economy in the
EU: Lessons from the SUSTOIL project and future perspectives for
next generation biofuels. Renewable and Sustainable Energy Reviews.
29. pp.22-30.
Ebell, M. and Warren, J., 2016. The long-term economic impact of leaving the
EU. National Institute Economic Review. 236(1). pp.121-138.
Enste, D. H., 2018. The shadow economy in OECD and EU accession
countries–empirical evidence for the influence of institutions,
liberalization, taxation and regulation. In Size, Causes and
Consequences of the Underground Economy (pp. 135-150).
Routledge.
Gregson, N. and et. al, 2015. Interrogating the circular economy: the moral
economy of resource recovery in the EU. Economy and Society. 44(2).
pp.218-243.
Gruber, H., Hätönen, J. and Koutroumpis, P., 2014. Broadband access in the
EU: An assessment of future economic benefits. Telecommunications
Policy. 38(11). pp.1046-1058.
Haas, W. and et. al, 2015. How circular is the global economy?: An
assessment of material flows, waste production, and recycling in the
European Union and the world in 2005. Journal of Industrial Ecology.
19(5). pp.765-777.
Haughton, T., 2014. Money, margins and the motors of politics: The EU and
the development of party politics in Central and Eastern Europe.
JCMS: Journal of Common Market Studies. 52(1). pp.71-87.
Heinrich, M., 2015. EU governance in crisis: A cultural political economy
perspective on European crisis management 2007–2014.Comparative
European Politics. 13(6). pp.682-706.
Kirchherr, J. and et. al, 2018. Barriers to the circular economy: evidence from
the European Union (EU). Ecological Economics. 150. pp.264-272.
Laing, T. and et. al, 2014. The effects and side‐effects of the EU emissions
trading scheme. Wiley Interdisciplinary Reviews: Climate Change.
5(4). pp.509-519.
15

Lieder, M. and Rashid, A., 2016. Towards circular economy implementation: a
comprehensive review in context of manufacturing industry. Journal
of cleaner production. 115. pp.36-51.
McCann, P. and Ortega-Argilés, O., 2014. The role of the smart specialisation
agenda in a reformed EU cohesion policy. Scienze Regionali.
Mourre, G., Astarita, C. and Princen, S., 2014. Adjusting the budget balance
for the business cycle: the EU methodology(No. 536). Directorate
General Economic and Financial Affairs (DG ECFIN), European
Commission.
Pratt, A. C., Nathan, M. and Rincon-Aznar, A., 2015. Creative economy
employment in the EU and the UK: a comparative analysis.
Tosun, J., Wetzel, A. and Zapryanova, G., 2014. The EU in crisis: Advancing
the debate.
16