Conference Paper

Much as the great competitive gains were placed in the euro before its introduction, the euro‐zone market performance has been not all that impressive as expected on account of the structural rigidities and global financial conditions. At the same time euro has its impact on global economy, international capital markets and the prospects of emerging market world. Further its impact on firms in emerging markets and their financial and business strategy has been enormous. And it makes imperative to study the Euro‐zone market dynamics in the context of the current global financial crisis. Accordingly this paper is divided into five sections. The first section gives an account of European integration and its impact on Emerging markets such as India and its business and industry. The second section is an attempt to analyze the possible implications to foreign trade, investment flows and growth prospects. The third section examines the impact of the European integration and macroeconomic policies pursued by EU on emerging markets, and how that impact may evolve in the future. The fourth section examines the mega‐implications of the European integration and macroeconomic policies pursued by EU to global economy, equity and bond markets in Europe and the rest of the world. More importantly, the paper also critically examines the progress made by the union towards true market integration and its resilience in a situation such as the current financial crisis and the regional down‐turn, apart from providing summary and concluding remarks.