The EU Single Market Programme and Monetary Union Essay

The EU adept securities industry computer programme and Monetary Union - Essay ExampleThis case has been of much interest in economics and one of the concepts that were studied is the hold-up problem.In more precise terms, the hold up problem is a term used in economics to describe a situation where two parties ( such as a supplier and a manufacturer) may be able to work most efficiently by cooperating, but refrain from doing so referable to concerns that they may give the other party increased bargaining power, and thereby reduce their own profits1.In the case of the European Union (EU), it was previously expected that the regional integrating would be beset by problems with regards to policy formulation and implementation. The EU is composed of countries that have been in unvaried race towards domination in economic and military terms. Germany and France, for example, have been known to apply stringent protectionist policies with regards to their industries to retard that t heir economy go forth be robust and competitive. If only to emphasize the point that there are impertinent interests among the EU atom states, it will be mentioned that both of the world wars started in the European theatre. However, the implementation of unity Market Programme and the Monetary Union seems to defy our idea that it is inevitable that hold up problems pop off in the European Union policies except in the case of UK opting out of the single bills.The Single Market Programme ... was based on the following premises 1) the increase in the size of the market due to regional integration results to larger scale investing that would not have been profitable in member states national markets and 2) regional integration is can lead to an increased economic growth rate and distant direct investment2. The EU monetary union is an agreement of its member countries to share a single currency among them - the Euro. This currency is currently used by Austria, Belgium, Finland, F rance, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal, and Spain. Monaco, San Marino, and the Vatican City are licensed to issue and use the euro3.With such diversity and differing interests of the member nations, how did such a venture succeeded in achieving its goals In the first place, how did it become realizable that such an agreement was made What are the factors that held stalemates/hold up problems from occurring These questions must be answered as this subject is interested in determining if holdup problems are indeed inevitable in negotiations.Chapter 1 Benefits and ConcessionsThe divulge to a successful negotiation is that all stakeholders benefit from the agreement without too many concessions. That is, the number of benefits that the stakeholder is entitle to generally determines the willingness of the stakeholder to come to terms. As Putnam puts it, the larger the win sets, the greater will the probability that an agreement will be reached4. Note that number of benefits is a function of the number of concessions made.In the Single Market Programme and Monetary union, what was offered as benefits for all the member state was the increase in foreign direct investment and other improvements in the economy. Mechanisms were placed such that