The European Union

Economics Exam Questions

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2007 2005 2001 2000 1996

Q Q Q Q Q

7 7 5 5 7

P P P P P

21 35 59 66 89

Enlargement Euro Euro Euro Exchange Rates

What is the European Union?

It is a trading bloc of 27 countries who have come together to have; Free trade (Single European Market) Economic co-operation & political co-operation

What are the aims of the EU?

Free trade: No customs/import duties between member countries. Free movement of capital(money) & labour(workers). Common currency: Only used by 16 member states at present.

What are the benefits of EU membership to Ireland?

EU grants which have helped develop our country. Single European Market: Larger market for selling our exports. TNCs set up here to have access to EU market as Ireland is the only english speaking country using the euro. CAP & CFP have improved primary industries.

EU Institutions
1. 2. 3.

4.
5.

The The The The The

European Commission European Parliament Council of The European Union European Court of Auditors Court of Justice

The European Commission

Drafts proposals for new laws. Enforces new laws. Manages the EU budget. Acts in the best interests of the EU.

European Parliament

13 MEPs directly elected by EU citizens. Debates new laws. Aproves the EU budget. Supervises the EU. Suffers from a democratic deficit. Even though elected does not actually pass the laws.

Council of the European Union

Made up of ministers from each member state. Depending of topic being discussed. Eg. Finance, Agriculture etc. Main decision making body of EU. Set objectives of EU Decide on legislation.

Decision making process of the EU

1. The EU commission thinks of ideas. 2. The EU Parliament debates it and sends amendments back to 3. The EU Commission, which amends the idea and sends it to 4. The EU Parliament & Council of the EU, who have the final say.

Regulation

An EU law that superseeds national law of member states. Must be implemented immediately. Eg. Single Member Co.

EU Directive

A law that all EU member states must obey. National laws must be changes first. Given a deadline to implement new law. Eg. WEEE Waste Electrical & Electronic Equipment.

EU Decision

Applies to only one country, business of citizen who must obey it immediately.

Role of special interest groups

Lobby MEPs Citizens may phone, write, e-mail MEPs.

Petition the EU Parliament. Get people to sign a letter to pressurise MEPs.

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Lobby the EU Commission Interest groups meet with commissioners make them aware of problems before they even think of new ideas. Set up an office in Brussels Eg. IFA & IBEC to be close to EU Comm

EU Court of Auditors

It is made up of one member from each country. Ensures the EU budget is managed properly. It check that money is spent legally and not wasted. It writes a report of findings.

EU Court of Justice

Made up of one judge form each country. Advises member states on EU laws. Ensures that EU laws are obeyed.(GA) Can stike down EU laws that break treaties or negatively affects citizens.

EU Policies

Major programs designed to help specific categories of people in the EU. Common Agriculture Policy - Farmers Common Fisheries Policy - Fishermen EU Social Charter Workers Competition Policy - Consumers Single European Market Business Economic & Monetary Union Common currency

Common Agriculture Policy

Established to give all farmers a decent stantard of living. Free Market for farmers selling within EU trading bloc. Tariffs imposed on farm produce from non EU countries. Single Payment Scheme given to farmers who obey food safety & environmental standards.

Common Fisheries Policy

Established to give fishermen a decent standard of living & conserve fish stocks.

Grants given to buy boats and marketing. Quotas on amount of fish that can be caught. Limits on the size of holes in nets.

EU Social Charter

Its aim is to improve working and living conditions for all EU citizens.

It gives workers the following rights: Freedom of movement: To work & live in any EU country. Fair wage: Minimum wage makes it more expensive for businesses.

Continued.

? hour maximum working week. 4 weeks paid holidays. Employees must be kept informed about finances of the business & consulted about decisions that affect their jobs.

Competition Policy

Is a set of rules to ensure fair competition between businesses in the EU.

It aims to ensure that consumers get quality products at fair prices.

Continued.

Cartels that fix prices are illegal. Businesses cannot abuse their dominant postion. Eg. HB giving fridges to shops that sell only their ice-ceam.

Continued.

State owned companies can no longer enjoy a monopoly position. Eg. VHI competition from BUPA. RTE competition form TV3.

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Prohibits mergers & takeovers that would reduce competition. Eg. Ryanair not allowed to takeover Aerlingus. EU Commission would not give it the go ahead.

Single European Market

EU is the worlds largest free trade area. No barriers to trade within EU trading bloc. There is free movement of goods, people and money.

Significance of SEM for Ireland

Larger Market Irish firms can export more Economies of scale Increased sales More profits

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No Trade Barriers No customs or border checks Less delays, quicker transportation Less documentation

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TNCs Attracted to only english speaking country in EU They bring with them latest technology & skills They employ over 100,00 Irish people

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Free movement of capital Easier for foreigners to invest in Irish banks & companies Entrepreneurs have more access to finance

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Government contracts Irish firms can bid for government contracts in any EU coountry Irish firms can increase sales & profits

Challenges of SEM for Ireland

Increased competition Foreign companies can come to Ireland and take business from Irish firms Eg. Boots, BT, Sky.

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Government contracts The Irish government must give contracts to the applicant with the lowest quote even if they are not Irish

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Free movement of capital Irish people can move their money to other countries If other countries offer higher interest rates then there will be less money in Ireland for investment

EMU

Economic & Monetary Union

What is the Eurozone?

The 16 countries within the EU which have the Euro as their currency. AKA Euroland.

Advantages of the Euro

No need to convert currency when trading with these countries, save money. Easier to compare prices. More employment due to US companies setting up in Ireland to have access to EU. ECB sets the interest rate low at the moment.

Disadvantages of the Euro

Ireland has no control over its interest rates.

UK did not join major trading partner.

Increased competition as consumers can compare prices easily.

Members of Euroland

Austria Belgium Cyprus Estonia Finland France Germany Greece Ireland

Italy Luxemburg Malta Netherlands(Holland) Portugal Slovakia Slovenia Spain

The other 10 EU member states.

Bulgaria: Czech Rep: Czech Crown Denmark: Krone Hungary: Forint Latvia: Lats

Lithuania: Litas Poland: Zloty Romania: Sweden: Krona United Kingdom Pound Sterling

Rules for converting currency

Converting Euro to foreign: Going abroad on holiday!!!(SMILE) Multiply by the sell rate.

Converting foreign to Euro: Coming back from holiday. (BRON/SAD) Divide buy the buy rate.