IntroductionThe various European social models are rigid and protectionist and are the result of years of constant global economic growth. However, rapid changes in the global economy in the twenty-first century have created a multitude of threats and opportunities for the European economy. Two of the crucial policies – the single market and monetary union – could enable the transformation of its economy to meet the challenges of globalisation. In this article we analyze the effects of these social models on European companies through the eyes of the German automotive industry and Volkswagen. We will explore how some of the proposed reforms could enable these companies to respond to changes in demand with speed and intensity, and discuss their impact on business and industry competition. Problems with current social models in Western Europe Current social models are segmented into four geographical areas and have the following characteristics:1. Nordic (Denmark, Finland, Sweden, Netherlands) – Offers efficiency and fairness. These regions have the highest levels of social protection and universal welfare. There is extensive fiscal intervention in labor markets with strong unions leading to highly compressed wage structures. There is a low incidence of poverty with high employment rates.2. Anglo-Saxon (Ireland, UK) - Offers efficiency with little equityThese regions have weak unions with wide wage dispersion, high incidence of poverty and high employment rates.3. Continental (Austria, Belgium, France, Germany, Luxembourg) – Offers fairness with little efficiency. Insurance-based unemployment benefits coupled with strong unions have led to an unsustainable model with a negative perception of globalization.4. Mediterranean… half of the document… success thanks to targeted EU-led social programs in conjunction with these reforms. As this transformation unfolds, the resulting industry changes will lead to improved shareholder value creation in the private sector. sector. The key success factors to measure this outcome will be the creation of jobs in the Eurozone and the resulting GDP growth. The exact balance between the different political aspects will depend on the circumstances and institutions of individual countries. With relaxed labor market policies, European companies are set to become highly productive and develop into an efficient global melting pot that allows economic outsiders to create opportunities to inject dynamism into the economy. The reforms listed in this document should provide the catalyst needed to dramatically increase the competitiveness of Western European businesses both domestically and internationally..