Globalization of world economy

Globalization is understood as increasing internationalization of ideas, science, communication and technology that must be distinguished from economic globalization. The latter means the process of integration of markets, great changes in trade and finance and the establishment of the global economy.

The main aim of economic globalization is to change the world into one dynamic market which has uniform characteristics in different countries. Globalization should lead to a free mobility of capital as well as to privatization of the economy and a sharp reduction in government budgets. Besides, globalization means wide advertising of new consumer products all over the world, low taxes

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for producers both domestic and foreign and similar life-styles¹ for people of different nationalities.

First steps towards globalization in Europe were made by the establishment of the Common Market in 1993 and the introduction of the “euro” as the new single currency for Europe on January 1,1999. Since that time the euro has been used in foreign trade transactions by the countries which joined the euro-zone². Euro banknotes were introduced in circulation in 12 member-countries of the European Union on January 1, 2002.

Some countries of Central and Eastern Europe have recently joined the

European Union, such as Lithuania and Poland while others are planning to do it

in the near future. However, in order to transform the former planned economies

into really mixed economies³ countries of Eastern Europe must increase sharply

the levels of productivity and competitiveness of their economies. Special

adjustments should be made in agriculture, tax system and in the system of social security⁴.

Economists think that the single currency will increase trade integration as well as labour mobility in the euro-zone. The introduction of the new currency and participation of different countries in integrated European financial markets should reduce any risks in business transactions and lead to more efficient European finance, promote European political as well as economic integration.

Globalization at a business level means that a company has decided to participate in the global economy and it is going to establish its subsidiaries in foreign markets. However, a company will have to adjust its products or services to the consumers' requirements in a foreign country. Nowadays any company may do e-business using the Internet services. In order to attract consumers it is important to advertise new goods and services both in national and international markets. Advertising of popular goods and services is often done in such international languages as English, German, French, and Spanish.

Пояснения к тексту

1. similar life-style – похожий образ жизни

2. euro-zone – страны, где используется денежная единица “евро”; зона “евро”

3. a mixed economy – смешанная экономика (сочетает элементы командной и свободной рыночной экономики)

3. social security – социальное обеспечение

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Answer the questions:

1. What does globalization mean?

1. What are the main characteristics of “economic globalization?”

1. What are the aims of economic globalization?

1. What are the main steps of globalization in Europe?

1. What is the euro?

1. When and where was the euro introduced?

1. Is the euro used in all European countries?

8. What problems should the former Eastern European countries cope with nowadays?

9. What benefits can the single European currency ensure?

10. What does globalization mean in business?

10. What is important in e-business?