Ever since the formal emergence of the European Union as a trading bloc across Europe a number of benefits are associated to the membership of the European Union. One of the core benefits that are associated to the membership of European Union is the flexibility and liberal trade policies across the bloc. The European Community that initiated as a trading alliance to safeguard the mutual interest among the five European Countries is now the paragon of trading alliance of about twenty seven European Countries. Many European countries are still a contestant and potential candidates to become a full fledge member of the European Union Zone or precisely the European Union. For example, Turkey has long been a potential candidate to become a full fledge member of the European Union, but the question of it becoming a full member is still a subject of a long debate with many aspects that supports either the joining or the detrainment of turkey from the European Union. Many factors contribute to the controversy that forms the mainstream of the disagreement and Turkey's implied withdrawal from the full membership of the European Union. No matter how easy or difficult it is to get the membership of the European Union; the fact that persists from long is that the membership of the European Union or the Euro gives an ultimate strength to the financial and the worldly standing of a country. Apart from this the membership to trading blocs and alliances also serves the purpose of reducing the country's risk of standing alone in the intense and fluctuating markets of the world. The paper shall focus on the impact on the business activities of the country that has just become the full member of the Euro or the European Union. The country under consideration is the Republic of Serbia (Haughton, 2007).
Serbia is located at the junction of the central and the southeastern Europe. Serbia is regarded as a non-coastal region of Europe that covers the Carpathian Basin in the southern part and the Balkans in its central part. Serbia can be regarded as an important European country due to is neighboring countries, as it shares its northern border with Hungary, and its eastern border with Romania and Bulgaria, similarly it shares its western border with Bosnia and Herzegovina, and Montenegro. Apart from its immediate neighbors Albania and Kosovo are included and regarded as the undecided portion of Serbia. Belgrade is the capital city of Serbia and is one the largest cities of the Southeast Europe (Bieber, 2003).
Serbia is regarded as a developed and economically stable European country, whose economy relies mainly on the telecommunication, effective transportation, energy and tourism. Hence the republic of Serbia is rich demographically, geographically and with respect to arts, culture as well as education (Tulmets, 2005).
The accession of Serbia in European Union
The formal inclusion of the republic of Serbia in the European Union that yielded full membership to Serbia within the formal framework of European Union is known as the process of accession. The process of accession in to the European Union is usually a sequential one and the consent of all the twenty seven states is bounded to be a part of it, if not all at least the maximum proportion should approve the entry of the new member state.
As per the stated facts and information Serbia put forth an official memo to get EU membership on December 22, 2009 ("uki", 2006).
Irrespective of the consequences and the political hindrances the European Union rehabilitated its trade agreements with Serbia as of December 7, 2009, another political advancement was observed on December 19, 2009 when the Schengen Countries eliminated the specified visa requirements for the Serbian first class citizens. On the other hand if one considers the Papandreou plan Agenda 2014 proposed by the Serbian Government the fact comes to vivid light that the government was of the opinion to attain the accession of the European Union by the year 2014 (Schimmelfennig, 2005).
If one glances back to the history than on the 7th of November 2007 initiated a program with the joint participation of the European Union, this program was named as Stabilization and Association Agreement (SAA). This treaty was actually a trial version of what was expected from the long run coalition between the union and Serbia this act or treaty was mainly devised to facilitate Serbia to adapt into the personality of the European Union and at the same time the basic issues such as crimes were catered to a final resolution so that there can be no hindrance for Syria while applying for the full membership in the European Union (Sedelmeier, 2005).
The Impact on Business Activities after Joining European Union
From the business analyst point-of-view there are many reasons that can be regarded as the basic factors that tilted in the Serbian economy and financial standing after it joined European Union on its full membership (Nathalie, 2004). Trade has been the mainstream of the European trading bloc and at large the only factor that tied up the knot among the European nations in the Paris treaty. For a country like Serbia that has just attained the membership of the European Union the euro membership will yield them many profitable earnings after this accession a few of them are discussed below.
The debt financing
Direct positive impact on investments
Profitable currency conversion
Strength of Euro
Influence of Europe
Wide area works and interest rates
The European superiority
By joining the European Union Serbia gained an edge for its customers that were initially under the fold of dollars. The point of argument elevates with the aspect that euro is the recognized and benevolent currency of the European Union, it has been for this reason that by joining European Union Serbia got a chance to expand its business activities in euro a currency powerful than dollar, and as a consequence the euro stands firm against dollar in the strong and much larger market of Europe. With the advancement in the size the markets empower the customer with complementary as well as substitute goods. So for a highly dense populated region of Serbia as the customers after joining European Union were not just the customers of Serbian markets but were rater the customer of the entire European market (Dvorsky, 2004).
The cost of debt that is the interest automatically reduced once Serbia joined the European Union as a full member. In the Euro zone the rate of interest that is the cost of debt for individual, small and medium business is lesser than as compared to the rate of dollars, which Serbia has to use before its accession to the European Union.
With the formal accession in to the European Union the monetary empowerment was an ultimate outcome for Serbia. By the monetary empowerment it is meant that by adapting a fixed currency standard Serbia got a real control over its economic environment. This also generates a new avenue for the independent investors as well as the small and medium sized businesses. By controlling the economic environment of Serbia it is implied that business activities will now boost after the accession of Serbia in the European Union, this is mainly because the interest rates and the exchange rates will be held in the control of the alliance itself (Pridham, 2006).
Direct Positive Impact on Investments
By becoming the full member of the European Union rather the Euro Zone the businesses of Serbia will now be in a position to invest more and more owing to the fact that there are reduced chances of random exchange rate fluctuations. As a matter of common perception the rate of the foreign direct investment is observed to be at a higher rate and it is anticipated that the time is approaching when the Britain will also become the member of Euro zone, but this will result in plunge of the investments at large. The stance of Serbia has been powerful enough to cater this random fluctuation. As the factor of exchange rate remains inevitably the enigma.
The euro zone operates in a far more predictable setting as compared to the other business domains of the world. It has therefore been predicted that with the formal entry of Serbia in the European Union the fact can be claimed that the Serbian market is now operating in a subtle and to a great extent in a risk free market.
Profitable Currency Conversion
As it has been mentioned that one of the basic economic breeder of the Serbia is the tourism industry, so the fact automatically elevates that by adapting the euro zone Serbia will enjoy higher returns on the currency exchange by the tourists and this additional return will be used to enhance the same industry.