Economic History of a Divided Europe by Berend Ivan T.; Berend Ivan T.;

Author:Berend, Ivan T.; Berend, Ivan T.;
Language: eng
Format: epub
Publisher: Taylor & Francis Group
Published: 2020-07-15T00:00:00+00:00

The Northwest: the biggest service provider

As with to manufacturing and banking, other service sectors throughout Europe have been europeanized and now are dominated by Northwestern companies. The affected sectors included formerly national services, such as electricity. The European Community’s “Electricity Directive” of 1996 opened the common market so that companies could operate and compete in all member countries. The same happened to the natural gas market and national airlines. Several airlines merged or signed agreements of cooperation.54 One of the most important was the Air France–KLM Royal Dutch Airlines merger in 2004.

The strategy of building all-European networks spread to retail trade as well. The European Community’s “Green Paper” of 1997 already registered that “retail chains are increasingly undertaking cross-border activities.” The paper also reported that “three-quarters of the Community’s food retailing was controlled by the corporations of just three countries, Germany, France and Britain.” Intra-EU direct investments in services, it was reported in 1999, increased by more than 73 percent after the introduction of the Single Market.55

Western Europe is home to some of the world’s biggest retail companies. The French Carrefour, the German Metro and the British Tesco are the 21st-century world’s second, third, and fourth biggest retailers. The world’s 30th, Swedish IKEA, and 33rd, Belgian Delhaize Group, have joined the top retailers in building all-European networks. Carrefour, established as a discount shop in Annecy, France in 1960, started its chain-building in that country, but from the 1970s already began spreading internationally, including to the Americas and Asia. During the 1990s and 2000s its hypermarket chains and malls appeared in Spain, Greece, Italy, Turkey, Poland, Portugal, Belgium, Romania, the Czech Republic, and Slovakia. It became the number one retailer in Spain, Portugal, and Greece. By 2015, it had 6,137 stores in 29 countries with 87 percent of its sales occurring within Europe.56 TESCO started as a street stand in 1919, became a retail network after World War II in London and then a leading supermarket chain. Around the turn of the millennium, it gradually emerged as the world’s third biggest retailer with 3,146 stores in 12 countries employing 330,000 people. After the collapse of communism, it conquered the Polish, Czech, Slovak, and Hungarian markets as well.57 The German Metro Group, founded in 1996, immediately started doing business in other European countries as well. By 2000, 42 percent of its turnover originated abroad. The corporation focused on Central and Eastern Europe and established its network in Poland, Russia, Romania, Turkey, Greece, Serbia, Montenegro, and even in Ukraine and Kazakhstan. By 2004, the company employed 250,000 people in 32 countries (including Asia).58

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