8217; firms will be operating in a highly dynamic, challenging and ever-expanding marketplace. Inevitably, this will stimulate the EMU to become a highly competitive economic community. Currently, intra-community trade accounts 60% of member states international exchanges, a figure which is likely to grow with the success of the EMU (de Silguy, 1997). It is foreseeable that initially ‘Euroland’ firms may suffer under the pressure of such intense competition, however long run efficiency gains are likely to develop amongst EMU firms ensuring their longevity (Salvatore, 1998:283). The development of the EMU and the subsequent removal of exchange rate, trade and administrative barriers, will enourage firms to seek strategic alliances and join ventures (Harris, 1999:84). Moreover, it is expected the union of firms could facilitate the sharing of intellectual property, research and development, capital and labour techniques, creating greater operational efficiency and improving both the firms competitiveness within the ‘Eurozone’ and international markets (Antweller, 2001). It was a common held opinion amongst European business leaders, that political and economic integration was necessary to ensure to ability of European firms to compete with multinational US and Japanese companies (Barber, 1999). It has been argued the key to challenging the economic strength of the Japan, and US is the realization of strong domestic competition (Salmon, 2000). The removal of barriers between ‘Euroland’ nations will allow domestic competition to intensify, which will cause the development of firms who possess the ability to compete successfully in international trade (Europa Quest (3), 2001). The full integration of the Euro into the EMU as a medium of exchange, will also eliminate foreign exchange risk firm engaged in international trade are exposed to. Firms trading within “Euroland’ will no longer have to f...
