Principle Economics

Essay by anousia March 2012

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Rivalry accompanies every branches of market. Competition is a significant stimulus on our economic world and it accelerate industry growth. Competition is a tool which influence on price, quality and product availability. Furthermore, stimulate enforce new solutions, cause a willingness posses by producer new clients and trying keep good reputations through fulfill anticipation purchases. Thanks this customer have a whole range selection. The European Union want to create common market concerning on the principles of free movement of goods, free market economy and free competition, giving priority to the effective sharing of resources. The EU has already implemented law regulations which help in shaping undistorted competition in the internal market and strengthening the competitiveness of industry. This short paper reveals how the European Union impose four policy to aim protecting a fair rivalry so that all members of the EU can feel safety.

The paper will be started with state aid policy, then cartels and mergers will be introduced. The last issue which will be risen is liberalization. This short paper quote the most important principles underlying the European Union competition policy.

2.State aid

First goal that is banned by the law in the EU is state aid. There are such instance where governments want to support and favor selected own country enterprises. Giving some extra source of money or exempt from taxation is illegal. These situations always effect increase of unjust income hence procurement more market share which is precisely associated with the rapprochement monopoly. The EU prohibit such a situation because it disrupt spontaneously formation of competition.


Another issue that the EU is to eliminate cartels. Cartel is a collusion countries or companies that have a decisive influence in the same or similar industries, aiming at...