INTRODUCTION will also explain the four fundamental freedoms that

INTRODUCTION

With this report I will analyse the
European Union internal market that was created to improve the economic growth
of the European Union. I will also explain the four fundamental freedoms that
were laid down during the Maastricht treaty, defining how it works and the
restrictions that comes with the freedoms. In addition, I will touch on the EU
tourism policy and how the four freedoms have helped the tourism growth in
European countries.

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THE EUROPEAN UNION INTERNAL MARKET

In 1992 the European Internal
Market was formed through the Maastricht treaty. The purpose of it creation was
to preserve and enhance the economic activity of the European Union through the
free movement of inputs and outputs among the European countries and to also
create opportunities and boost economic growth. Therefore, we can define the
European Union internal market as a single market that allows the free movement
of capital, goods, services and labour. It gives people the freedom to work,
live, study and travel freely with the European Union countries. The market
includes the 28 EU member states, but through agreement such as the European
Economic Area and bilateral treaties, countries such as Iceland, Lichtenstein,
Norway and Switzerland are involved in the single market. Also, post-soviet
countries like Moldova, Ukraine and Georgia have access to the single market in
certain areas.

The goal of the internal market is
to rouse competition and trade, improve efficiency, increase value, and help
cut prices. To achieve these goals costs of businesses were reduced by removing
internal charges and standardising regulation, but due to poor decision making,
it proved problematic to make progress.

There are four fundamental
principles that uphold the European Union and its internal market. The four
freedoms were first laid down during the Maastricht treaty in 1992 and were
reformed during the Lisbon treaty in 2007. With the four freedoms, European
citizen can freely move among themselves.  In the following paragraphs I will explain in
debt the four freedoms how it works and the restrictions it imposes.

THE FOUR FREEDOMS

 During the Rome treaty in
1957 the principal of the free movement
of goods was established. But it became effective with the Maastricht
treaty. The free movement of goods opens doors for producers of the Member
States and offers a wide variety of goods for consumers. Once a product has
been produced and placed on the market in a Member State it can be traded in
the whole EU. With the free movement of goods, countries of the European
Economic Community (EEC), remove customs barriers between each other and apply
common customs policy towards third countries. Thus, traders do not have to pay
duty to export product to other EU countries. Although customs tariffs were
abolished, other barriers made it difficult for a free movement of goods. To
eliminate these barriers harmonization directives were appointed and they have
the job of converging national regulations. To properly define the phrase free
movement of goods we would say that countries of the EU must not enforce any
kind of duties on goods produced in the EU when crossing borders and neither
goods produced in the third country once imported to the EU. Because of the
single market, EU Member States negotiate jointly in the frame of the World
Trade Organization (WTO), where the regulations of the international trade are
laid down. However, decision-makers must take into consideration that customs
duties do not only reduce competitiveness, but it also reduces other kinds of
measures. i.e. if a country enforces limitations on the importable amount of a
certain product, or on the quantity of the ingredient, or on the label, they
also hinder free movement. Consequently, any charge that has an equal outcome
on trade or quantitative restrictions on imports are similarly forbidden, any
discrimination must be justified by non-economic considerations, like public
morality, policy, security or order and environmental protection of cultural
heritage and intellectual property.

The second freedom that was
established is the free movement of
capital. This freedom was established because at the beginning of the
European it was said that financial crisis was caused by capital flows. Thus,
free movement of capital was liberalised only to favour the free movement of
goods. The Council Directive presented a complete freedom for capital movements
only when the idea of Monetary Union became an objective. However, under the
safeguard clause, countries could take certain restrictive measures when
capital movements could disrupt monetary policy. The Maastricht treaty
consolidated the freedom by asserting the prohibition of any kind of constraint
on capital transactions and payments between the Member States and between the
member states third countries. Therefore, to define what free movements of
capital, we will say it is a supplementary element of the other three freedoms.
It contributes to the introduction and consolidation of the European currency
and the European Monetary Union. It allows a better distribution of resources
within the EU, enables trade across borders, favours workers mobility, and
makes it easier for businesses to raise the money they need to start and grow.
With this European citizen have access to benefits services such as loans,
insurances and securities and can conduct numerous financial operations. It is
also beneficial for the government as the can borrow on lower rates.

The third freedom I will be
touching on is the free movement of workers.
it is one of the fundamental
principals in the European law. It enables European Union citizens the right to
enter and circulate within the territory of another EU country without complications.
The EU citizen has the right to equal treatment to national workers regarding
working and employment conditions, social and tax benefits. It gives
opportunities to workers and makes the labour markets more flexible. At its
initial development, the free movement of workers was quite successful because
the European Union countries were less and the participating countries at that
time had similar economies. However, as the European Union expanded it brought
by certain debates. The debate was roused because the expansion of the European
Union led to a large number of migrants from low-income European countries to high-income
countries. This phenomenon shows that the law imposed has benefited the newer
Member states. Even though the idea behind the free movement of workers is
purely economic it creates many tensions in the social realm. Social issues
such as transfer of pensions, the entitlement of migrant workers to
unemployment’s, social security and other benefits. These issues are dealt with
under the economic rubric of the free movement of workers which generates an unbalanced
situation between the economic and social view of the free movement of workers.

The free movement of services can be divided into two types: the
freedom to provide services to Member States and the freedom to be able to
establish a business between the Member States. Thus, it allows professionals
who are legally in a Member State to continue their economic activity in
another Member State. Self-employed people can also offer and provide services
in another Member State. The freedom to provide services refers to all the
services that bring by remuneration. Restrictions on the freedom to provide
services within the EU is prohibited in respect of nationals of the member
states who are established in a different Member State to the end user of the
services. However, despite the enforcement of the law regarding the free
movement of services, in comparison to the other freedoms, there hasn’t been a
smooth realization due to national barriers. To solve this problem service directives
were appointed to limit the barriers that hinder the trade of services. Though,
these barriers do not relate to the service itself. The barriers may range from
different rules regarding authorisations, employment and qualifications.

EFFECT OF THE EUROPEAN INTERNAL
MARKET ON TOURISM

Tourism is among the main resources
in the European Union community. It aids in the progress, social development
and services in the European countries. The goal is to uphold Europe as a top
destination while ensuring that the tourism sector influences the development
and employment in the EU countries as an exercise of good practice. With the
laws that were laid down during the Lisbon treaty, the EU can fund, manage and
boost the of the Member States. For example, since EU citizen does not need a
visa while travelling to other European Countries, this practice opens doors to
travel around the European Union zone without having to face
restrictions. 

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