IntroductionEurope's various social models are rigid and protectionist and are the result of years of steady global economic growth. However, rapid changes in the global economy in the 21st century have created a multitude of threats and opportunities for the European economy. Two of the crucial policies – the single market and the monetary union – could enable the transformation of its economy to meet the challenges of globalization. In this article, we analyze the effects of these social models on European companies through the eyes of the German automobile industry and Volkswagen. We explore how some of the proposed reforms could enable these companies to respond to changing demands with speed and intensity and discuss their impact on company and sector competition. Problems related to current social models in Western EuropeCurrent social models are segmented into four geographical areas and have the following characteristics:1. Nordic countries (Denmark, Finland, Sweden, Netherlands) – Ensures both efficiency and fairness. These regions have the highest levels of social protection and universal social protection. There is massive fiscal intervention in labor markets with strong unions, leading to highly compressed wage structures. The incidence of poverty is low and employment rates are high.2. Anglo-Saxon (Ireland, United Kingdom) - Offers efficiency with low equity. These regions have weak unions with wide wage dispersion, high incidence of poverty, and high employment rates.3. Continental (Austria, Belgium, France, Germany, Luxembourg) – Ensures fairness with low efficiency. Insurance-based unemployment benefits and strong unions have resulted in an unsustainable model with negative perceptions of globalization.4. Mediterranean ...... middle of document ......success thanks to targeted social programs led by the EU alongside these reforms. As this transformation develops, the resulting industry changes will lead to greater shareholder value creation in the private sector. sector. The key success factors for measuring this will be job creation in the Eurozone and the resulting GDP growth. The precise balance between the different policy facets will depend on the situation and institutions of each country. With relaxed labor market policies, European businesses are likely to become highly productive and become an effective global melting pot for external economic actors to create opportunities to inject dynamism into the economy. The reforms listed in this document should clearly provide the catalyst needed to significantly increase the competitiveness of Western European businesses, both domestically and internationally..