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European Union Case Study

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Would you seek to acquire a company within the European Union or outside of it? Why?
I will not seek to acquire a company within the European Union. The European Union is in the midst of a severe financial crisis called the Euro zone crisis. This has created several problems in the European Union. The governments have changed leading to political instability and there is a strong prospect of financial uncertainty. Earlier when there was no segregation of countries under common umbrella, the economic fragments were subject to greater competitive pressures and hurdles. The purpose for which European Union was created was driven by the need for a single market entity to face challenges in the highly competitive global business environment consisting
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not investing in EU)
By not investing in EU, my company has overcome risk that would have come along with the potential opportunity. The EU is undergoing economic hardships. While few have managed to come out of the recession, most others are still struggling.
Foreign takeover are a concern across European national governments. The general perception about being acquired by a foreign company is that the host country would take decisions that would harm their economy like downgrade acquired company 's brand, or cut down jobs. In an attempt to protect the local economic scenario government has proposed to strengthen the ability of public authorities to impose conditions on buyers when mergers are attempted (Mariniello, 2014). Whenever a foreign buyer tries for a takeover in European Union there is government intervention to protect public interest. As a result the cost of acquisition is high in European Union countries.
The Southern region of Europe is facing rising unemployment, banks are not willing to lend as a result of which fiscal conditions are worsening across the Eurozone. There is little hope that monetary policy will be able to fix Europe 's deep structural
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Exchange rate: Creditors may prefer providing credit to countries whose currencies are expected to appreciate against their own ("International financial markets", n.d). It gives them greater return than what they would get with the domestic currency. International diversification: If creditors invest only in domestic market, the risk of loss is high. However if the same investment is spread across different countries, there is lesser risk. The risk in this case becomes dependent on economic conditions of countries.
Explain why some financial institutions prefer to provide credit in financial markets outside their own
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