Critically discuss how global economic trend may impact upon the future policies of the European Union. Identify ways in which this may affect leisure and tourism trends within Europe.

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BA(Hons) Tourism Business Management                                    Ken, Van Der Lely



Critically discuss how global economic trend may impact upon the future policies of the European Union.  Identify ways in which this may affect leisure and tourism trends within Europe.


Since 1980s, the world is greatly influenced by the globalisation effects.  In a global perspective, advanced economies are more likely to favour the liberalisation theory, which seems to be dominating the world’s economy.  In order to compete with other developed countries, European Union(EU) strive to enlarge and synchronise itself.  Over the past decades, the globes have witnessed the continuing evolution of the EU, which has been consolidating its integration process with the reality of the common market, such as the Amsterdam Treaty and the adoption of Economic Monetary Union(EMU).  In reality, the EU is becoming the best known and example of regional economic integration so far.  Beyond doubt, the above movement also influences the leisure and tourism trends as it is the largest global industry, such as universal McDonaldisation.  Basically there are infinite issues relating to the relationships between global economic trend, EU policies and tourism, yet due to the assignment constraints, the following discussion focuses on a few important aspects, which include: single market programme, employment and social policies, common policies and technological innovation.

        Different authors have dissimilar definitions towards global economic trend.  Pilger simply describes global economy as increasing cross-border trades() even as Floyd(2001) defines global economic trend as the freeing up of labour and capital flows.  McGiffen(2002) identifies it as changes in telecommunication, transport, in how things are made and the way that people think while Noberg(2003) suggests that the growth of world prosperity is based on capitalism.    In fact, the above definitions are all reasonable, but it is apparent that all those explanations are based on the philosophies of ‘Liberalism’.  In brief, economic liberalism’s core belief is to trade, to enter into commercial activity aimed at accumulation of wealth, to invest where and in what one wishes, are basic human rights.  Also government intervention is considered as detrimental; hence every aspect of freedom is of fundamental importance.  Moreover, liberal economic globalisation also has its own institutions: United Nations clearly plays a role in this, but the stars are the International Monetary Fund, the World Bank, and arguably the most important of all is the World Trade Organization(WTO).  

A typical liberal economic region is America, which is also the most prosperous nation enjoying the highest Gross Domestic Product(GDP) per capita(Sardar and Davies, 2003).  In light of the ideology to affluence, every state is striving to liberalise its market, even though it is contradicted to the nations’ political principles.  For instance, China shift its focus from political-oriented to economic construction of four modernizations in 1978 followed by the supports from Deng Xiao-ping(Lew et al., 2003).  Then, Soviet Union opened up its centralised economy under the leadership of Gorbachev in the Geneva Summit 1986(McIntosh et al, 1995).  Undoubtedly, EU also realises the benefits that liberal economy can bring up.  From the Treaty of Rome to the Maastricht Treaty, EU aims to promote harmonious development of economic growth and the accelerated increase of welfare and the standard of living in its Member States(Somers, 1994).  As to achieve these objectives, the community decided on ‘free and single market’(FSM) as its main instrument.


EU favours a large, free and competitive market.  FSM is expected to create improved efficiency of production, more economies of scale, and a higher level of income and employment, which is exemplified in the European Single Act 1985.  According to Somers(1994), the real community GDP would rise by an extra 5 to 7 % with 2 to 5 million additional employment under FSM.  In consequence economies of scale and competition will push the emergence of real, large European corporations, thus able to compete with America and Japan counterparts.   In order to originate a competitive market, EU reinforces liberal economic principles by advocating free movement of goods, services, people and capital.  

Even though the Treaty of Rome decrees fundamental mobility of workers, free movement of people was significantly initiated through FSM and Social Character at European Trade Union Confederation.  EU citizens are eligible to work within Member States of one’s choice with certain social rights and protections(Nicoll and Salmon, 2001).  Indeed, the Community has engaged in several policies aimed at enhancing worker mobility, such as launching comparable vocational qualifications, beginning with hotel and catering(Dearden, 1999a).  Accordingly, labour force in EU is comparatively more flexible than those in Japan or America.  Dearden(1999a) also suggested that Eastern nationals can reside in any member states and seek employment accompanied by their family through EU enlargement which can induce both positive and negative impacts.  On one hand, rural-urban migration is facilitated, which benefits the rural residents to look for jobs in stronger economies and improve their income as well as living standards.   Yet, population pressures and migration may result in surplus Eastern population absorbed into Western cities.  These populations who are generally worse educated may look for hospitality jobs in stronger western economies, since employment in tourism industry is always regarded as low skill occupations(Cooper et al., 1998 and McIntosh, 1995).  In leisure aspect, EU citizens can travel easier than before, since no visa is required.  The travel barriers within member states have weakened, thus encouraging the domestic travel in EU basis.  Furthermore, those wealthier western citizens may travel more often to the Eastern nations, starting up businesses over there, buying second home and assisting Eastern States to achieve economic growth.  Nevertheless, it may lead to inflation of land price, which reduce the local’s ability to purchase their own house(Tribe, 1999).  

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In 1991, EU started to consider working time with a view to protect the health and safety of workers with the concerns of maximum working time and paid holidays during the Social Protocol(Dearden, 1999a).  By 1993(Directive amendment in 2000), Member States shall ensure all citizens have not less than four weeks’ annual paid holidays, an average weekly working period of not more than 48 hours().  Accordingly, EU citizens are entitled with more leisure opportunities.  However, European Travel Commission reported that modern society exerts increasing pressures on people’s lives that stimulate more relaxation and leisure desires().  Tourism, with elastic demand, ...

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