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Cuza IAI

Luminia Cocr
Simona Mitocaru

Material de studiu pentru nvmntul la distan/ nvmntul cu frecven

IASI, 2013

MARKETING ........................................................................................ 5




After reading this chapter you should:
know more about the relationship buyer-supplier in terms of domestic and international
develop a good command of the specific language used in the marketing discourse
a. What do you know about international marketing?
b. How would you describe the cosmopolitan consumer behavior?
1. Read the text to answer the following :
a. What is a cosmopolitan consumer?
b. In what way do transnational business-tobusiness relationships differ from the
domestic ones?
c. How can the term cosmopolitan apply to professionals?
d. What would be the difference, if any, between cosmopolitans and tourists?
Customer expectations are assumed to be different in transnational as opposed to
domestic buyer-supplier relationships. Among others, firms purchasing in the
international market frequently report quality problems and different quality
understandings. Finding qualified foreign sources is one of the major challenges in
international sourcing. Furthermore, flexible reactions and open information sharing are
more difficult to realize in transnational business-to-business relationships. Firms
acquainted with the consequences of cultural differences, communication problems and

technological and geographical distance are likely to have lower expectations in

transnational as opposed to domestic business-to business relationships.
Buying firms in transnational buyer-supplier relationships are required to expend
higher input and are likely to have lower expectations because of cultural differences,
communication problems, and technological and geographical distance.
The continuing globalization of marketing activities has given considerable
impetus to the study of cosmopolitanism as a consumer construct. Most recent research
has focused on the normative activities of cosmopolites, as consumers who seek to
broaden their cultural horizons, by immersing themselves in a breadth of local cultural
experiences. This is true of some cosmopolites in some circumstances, but the notion of
cosmopolitan consumer is as old as commerce itself. It refers to a world citizen- a
consumer whose orientation transcends any particular culture or setting. Some authors
use the term cosmopolitanism to represent the tendency of people to orient themselves
beyond their local community. They are people who view themselves as citizens of the
nation rather than the locality; the world rather than the nation: the broader, more
heterogeneous rather than the narrower, more homogeneous geographic or cultural group.
Other authors apply the same term in an organizational context, to represent the tendency
of employees to orient themselves to a profession, rather than the specific orientation in
which they are employed. Professionals tend to be cosmopolitan if they are more inclined
to view themselves as lawyers, physicians, engineers, professors and so forth, rather than
members of a particular firm, clinic, or university.
Cosmopolitans are people who are unfettered by the biases of their home culture,
whereas locals view their home culture as ultimate reality, remaining content in their
parochial ways of life. Tourists are locals who deliberately expose themselves to other
cultures, but they do so as a curiosity, not because they view other cultures as having any
intrinsic merit or relevance to them. The cosmopolitan predilection for being unfettered
by cultural biases is an active predisposition. Tourists observe culture from an essentially
local perspective, whereas cosmopolitans seek to experience it.

Language focus
2. Read through the text again and fill in the table below with nouns in the plural
Plural formation rule
Sg. + s

Examples from the text

Examples of your own

Sg. in- s +es

Sg. in-ch +es
Sg. in sh +es
Sg. in x +es
Sg. in y +(I)es
Sg. in y + s
Sg. in f + (v)es
Sg. in f + s
Sg. in o + s
Sg. in o + es
Borrowed plurals
From French
Sg. in ee + s
From Latin
From Greek
Same form in sg. and pl.

Irregular forms
Sg. + en
Vowel change

3. Find the plural form of the following nouns and use them in sentences of your
a. criterion
b. committee
c. merchandise
d. money
e. party
f. thesis
g. phenomenon
h. company
i. crisis
j. government
k. knowledge
4. Translate into Romanian:
Thompson and Tambyah (1999) provide a theory that explains why consumers
motivation became more cosmopolitan. They argue that consumers seek social status,
or cultural capital, by acquiring cosmopolitan characteristics. Consumers with high
cultural capital cosmopolitans- tend to avoid the parochial culture of their local
surroundings in favor of new and exciting experiences, such as exotic food and music.
Naturally, consumers who aspire to high cultural capital status will seek to cultivate
these tastes. Travel plays a key role in discussions of cosmopolitanism because it is
viewed as a way of breaking free of parochial influences to achieve the sophistication
and worldly outlook implied by the exotic.
5. Write a short paragraph about the cosmopolitan consumer using both the
information from the texts above and your own view on the subject.
6. Work in groups of 4. You belong to the Marketing Department of a toy
company. You are to prepare the launch of a new product on the market.

a. Present the product to the class, considering:


its use or purpose

its size, dimension, range of colors

what it brings new to the market

its price

a slogan to go with

b. Listen carefully to your colleagues presentations. Choose one of their products and
write an article about it for a local specialized magazine.
7. Find a definition or equivalent for each word/group of words in the box


transition/ challenge/




a. draw attention to or describe favorably (goods or services) in a public medium to

promote sales
b. financial transactions, especially the buying and selling of merchandise, on a large
c. the sale of goods in relatively small quantities to the public, and usually not for resale
d. free from national limitations or prejudices
e. a passing or change from one place, state, condition, etc., to another
f. the selling of things in large quantities to be retailed by others
g. purchaser of goods or services
h. a summons to take part in a contest or a trial of strength
i. mislead purposely
j. bribe
k. a particular make of goods

8. Fill in the text with your own words/group of words; use them to write a short
paragraph on the beauty industry.
Does it matter if human beings change their bodies in more fundamental ways
than our grandparents ever dreamed of? The reasons for change go well beyond the
pursuit of beauty, of course. Not only do athletes (1)

themselves to do better at

sport: Tiger Woods recently had an operation on his eyes to allow him to judge distances
better. The sexually discontented can now (2)

their gender. But it is beauty that

dominates the remodelling business and raises the toughest questions.

The search for beauty has always seemed frivolous to some, and not just to those
of the male persuasion. Puritans who once squawked about the evils of lipstick and face
paint, now have fresh moral dilemmas to wrestle with. If the beauty business deceives
people into (3)

money uselessly or harmfully, should it be stopped from doing so?

Some fret that the preoccupation with appearance is leading to a shallower society, and to
a host of social horrors from family breakdown to eating disorders. Others (4)


beauty firms are trying to blur the line between drugs and cosmetics, or (5)


tampering with the incline of ones nose is the first step on a slippery slope to tampering
with ones genes. And of course, there are always the poor: should they be exposed to
marketing baloney that may (6). them to spend money on empty promises to stop
times hand?
Big beauty companies, experts at deception, have the money and power to (7)
.. peoples hopes and fears. The creation of giant beauty companies means not only
lower prices and cleverer innovations, but global brands whose reputations need
protection. As for the poor, sales of beauty products tend to take off when incomes rise.
Lipstick may be an indicator of economic progress. And the freedom to believe the
nonsense about (8)

of wrinkles is one of the most basic human liberties.

More difficult questions will arise when it becomes clear that some of the
promises actually come true. Good-looking people have great advantages over the ugly.
For example, they (9)

more: Research made on 11,000 British 33-year-old found

that the pay penalty for unattractiveness was around 15% for men and 11% for women.
Overweight women earned 5% less than average, especially in secretarial jobs. Good


looks in both sexes mattered especially in sales jobs, where the seller meets the buyer.
Another study of around 300 Dutch advertising firms found an association between good
looking executives, higher revenues and business success.
Not only do looks help in the job market. In both sexes, they help in the marriage
market. Studies show that handsome people are more confident. It is a cruel fact that
good looks can make you a better parent: babies are attracted to prettier people. Good
looks remove some of lifes irritations: another study found that people rated as more
attractive feel more entitled to better treatment and are less willing to be kept waiting;
then, good-looking women with a flat tyre get rescued first. And a nice face helps to get
people out of trouble: a recent University of Oslo study found that university students
awarded criminals sentences which were 20% lighter if they were told that the villains
were handsome or pretty.
If a bit of lipstick can (10)

of jail, or waxing your mustache can bring an

extra 15% in earnings, then who would not pay for successful beauty treatments?
9. Comment on the last sentence of the text in no more than 250 words.
Marketing. Many businesspeople view marketing as a way to find and
keep customers and also as an attitude towards business. Yet, it is not
so easy to define it, as it means different things to different people.
Marketing is advertising to advertising agencies, events to event
marketers, politicians to campaigners, door to door selling to







headhunting agencies. Its the bridge between people and products,

customers and companies.
Here is how the Chartered Institute of Marketing (CIMU) [United
Kingdom] defines marketing
Marketing is the management process for identifying, anticipating and

satisfying customer requirements profitably.

MARKET: The set of all actual and potential buyers of a product.
MARKETING MIX consists of four Ps product, price, promotion, and
place and represents the way in which a companys marketing
strategies are translated into action.
The keys to marketing success:

satisfy the customers

invest in company image

be proactive

design smart advertising

develop a targeted marketing strategy

10. Match the following words with the definitions given below:
supermarket, discount, product liability, account, advertiser,
exposure, infomercial, media planning, print media.
a) the result of combining commercials and information programmes;
b) the budget of an advertiser who does a large amount of business with an agency;
c) the manufacturers responsibility for any damage or harm caused by a product if such
a damage or harm can be assigned to a potential risk inherent in the product, to a
manufacturing flaw or inadequate directions for use;
d) newspapers, periodicals, magazines, free sheets, etc.
e) a person or company who pays for a product to be advertised;
f) the process during which the media that are deemed to suit an advertising campaign
best are selected;
g) a self-service store with a selling area of at least 2,000 square feet;
h) the publicity given to an organisation or product;
j) a reduction from a price made to a specific customer or class of customers


11. A. Pick up one of the products or institutions and answer the following
a soft drink
a brand of wine
a car
a resort
a bank
a laundry service
a printing house
a brand of jewelry
a perfume
a TV station
1. How is the product positioned on the market?
2. Who are the potential clients?
3. How well is the product promoted?
4. What strategy would you choose to advertise the product?

Write a short report on the outcomes of your findings.

12. Read the text below adapted after an article from Newsweek (08/21/2003), and
provide synonyms for the underlined words.

US Brands on the Run

In an annual survey conducted since 1998, Roger&Son has been looking for a connection
between the shaking reputation of America and the worldwide appeal of its top brands,
from Disney to Microsoft. It had found no such link until 2003, when a survey of 30,000
consumers in 30 countries found that those who felt an increasing alienation from
American culture were also likely to report a growing unwillingness to eat at McDonalds
or to buy Nike shoes. Most startling, 12 of the top American multinationals saw falling or
stagnant scores for brand power, a measure of how well they are known and liked,
while nine of the top 12 European and Asian multinationals saw their scores rise. Its a


warning sign, says Global Impacts managing director Tom Miller. Were seeing a
shift in the balance of brand power
B. How would you define brands? What is their role? Do you have a favourite
13. Match the terms on the left (1-10) with the appropriate definition (a-j):
1. Brand

a) A name, term, design, symbol that identifies a

sellers good or service as distinct from that of

2. Branding

other sellers.
b) A strategic management decision that determines
the place a product should occupy in a given

3. Channel of

c) People and organisations involved in moving

4. Commercial

products from producers to consumers.

d) Products not associated with a private or national

5. Generic

brand name.
e) Selling directly to the consumer in small

6. Positioning

f) Selling of goods, usually at lower prices and in

7. Promotion

quantity, to a retailer.
g) The element in the




communicates the key marketing messages to

8. Retail
9. Trademark

target audiences.
h) The legal term for brand.
i) The name used to indicate an advertising message
in the radio, broadcast television, and cable

10. Wholesale

television media.
j) The process of creating an identity for a product
using a distinctive name or symbol.

14. Complete the following dialogue with terms related to marketing and
greeting expressions:
brand (2 times)
brand manager


branded product
own-brand (products)

Lucy, let me introduce Silvio Sandrelli to you. Hes the youngest ________ (1) at

this symposium. Silvio, this is Lucy Smith, ________ (2) manager for Softco, a software
Silvio: Hello, Lucy. Nice to meet you.
Lucy: Hello, Silvio. What company do you work for?

Ive been working for Basty dog food for the whole Central and Eastern Europe
since I graduated from the Business School last year.


I know that your ______ (3) is part of an international group. How are your
products received on that market in transition?


In that region, the market for pet food is growing swiftly even if specialised
products are rather new. Yet, more and more people own dogs and cats.


What about your ________ (4)? How do you cope with ________ (5) products?


Research findings show that our brand is well known by pet owners and so our
brand ________ (6) is very positive. At present, were planning to increase brand
_________ (7) by means of TV _________ (8) and ________ (9).


In the field of IT, we have encountered some difficulties because people prefer to
buy cheap no name products.


Oh, we also have to compete with cheaper products, usually supermarkets

__________ (10) or even those _______ (11) that are not ________ (12). They
are sold as dog/cat food.



And what are your plans about it?


Theres a lot of persuasion work still to be done. We have to convince people that
theyd better pay a bit more for Basty, a ________ (13) which has an improved

15 a. Choose the correct form of the nouns in brackets:

(Business/ Businesses) and (community/communities) in the rural South have dealt with
many a (challenge/challenges) over this period of time. Traditional (source/sources) of
(job/jobs) and (income/incomes) such as (agriculture/agricultures), (forestry/forestries)
and other natural (resource/resources) (industry/industries) increasingly suffered as
(commodity/commodities) were replaced with (innovation/innovations) and new
technical (material/materials). Low- (wage/wages) manufacturing moved from New
England and the Midwest to low wage rural (area/areas) to maintain a competitive
(price/prices) (structure/structures). Low wage based manufacturing has continued a
(migration/migrations) in search of cheaper (labour/labours), now found beyond the US
borders. Even to high tech, computerised and roboticised manufacturing (plant/plants),







(industry/industries), are now found in low wage, developing (country/countries).

As Wal Mart targeted small (community/communities) to locate their paradigm
changing (retail/retails) (store/stores), local (merchant/merchants) continued to bet on the
(return/returns) of (retail/retails) to the downtown (area/areas). Thus, small-town rural





(demographic/demographics) such as more (two-wage/two-wages) (family/families) and

higher (consumer/consumers) (expectation/expectations) while, at the same time,






(corporation/corporations) with substantial price (advantage/advantages).

b. Find in the text the following types of nouns:

with the plural in es
with the plural in s


uncountable nouns
compound nouns
abstract nouns
c. Form sentences of your own with the nouns found previously.

16. The beauty market is one of the most challenging ones nowadays. In groups of
four state your opinions on the text below. You may find some of the following
expressions useful.
1. I totally agree with you..
Unfortunately, I dont see things in the
2. Thats right, this is my opinion too/ as
same way.
Im afraid Ill have to contradict you
3. I think he/she has a good point here.
I dont agree with you and Im going
4. You may say that again, Im all in
to tell you why.
favour of that.
Well, Maybe you have a point here,

Of course, it is ridiculous. What sane person would put metal rings round her neck to
stretch it like a giraffes, or lace her corset so tight that she fainted, or allow her feet to be
bound to make them tiny? How backward, how primitive. Completely different, of
course, from the woman who pays huge sums to have her breasts surgically enlarged; or
the man who takes drugs to give him an athletes torso; or the rich, modern men and
women who spend $160 billion a year on beauty products whose impact on the
appearance is sometimes, um, unproven. From diets to cosmetic surgery, women (and
increasingly, men) go to great lengths and huge costs to make themselves better looking.
And now, advances in technology allow people to change their appearance, not just for an
evening out, but for ever.
17. Fill in the blanks with the terms given below:



Direct marketing
Indirect marketing

Personal selling


It does little good to manufacture a fantastic product that will meet the needs of the
________ (1) unless there is a mechanism for __________ (2) and __________ (3) the
product and receiving payment. Those individuals and institutions involved in moving
products from producers to customers make up the channel of distribution. __________
(4), or __________ (5), are primary members of the __________ (6) who may actually
take ownership of the product and participate in its marketing. __________ (7),
__________ (8), and modes of transportation are typical channel members. Each is
capable of influencing and delivering advertising messages.
The primary strength of wholesalers is __________ (9). They do not advertise often. Yet,
regional wholesalers can use direct mail, trade papers, or __________ (10). Local
wholesalers may use newspapers or local radio. Conversely, retailers are quite good at
advertising. The __________ (11) used, the size and __________ (12) of ads will vary
from one retailer to another.
Is the channel direct or indirect? Companies that __________ (13) their products without
the use of a reseller engage in __________ (14). In __________ (15) the product is
distributed through a channel structure that includes one or more resellers.
18. A. How attentive are you at slogans? Here are some famous ones. How many
can you identify? To find out, match the slogans on the left with the brands
on the right:
1. Always___________.


2. Connecting people.


3. Designed for living, engineered to last.

Hewlitt Packard

4. Everything is possible.


5. Gut. Besser. _______


6. Just do it.



7. Keep walking.

Johnny Walker

8. Lets make things better.


9. The futures bright. The futures ________


10. The next generation network.


11. The wind in your sails.


12. We make it simple.

Old Spice

13. We move the world.


14. Winning the fight for a healthy smile.

Zapp mobile

B. Does any of these slogans remind you of an unpleasant advertisement or

commercial? What is the importance of the so-called irritation factor in
advertising? If you hate an ad do you project these feelings on the product as well?
19. Match the terms on the left (1-6) with the appropriate definition (a-f):
1. Advertising

a) Any outdoor sign that publicly promotes a product or

service, such as billboards, movie kiosks, etc.

2. Copywriting

b) Promotion of a product, service, or message by an

identified sponsor using paid-for media.

3. Jingles

c) Creative process by which written content is prepared for

advertisements or marketing material

4. Logo

d) Commercials with a message that is presented musically.

5. Outdoor

e) A distinctive mark that identifies the product, company,

or brand.

6. Slogan

f) Frequently repeated phrase that provides continuity to an

advertising campaign.


Here is the presentation of an advertising campaign launched by Eastman Kodak in
the USA in the 1920s. Taking into consideration the following points, imagine the
requirements of an ad campaign that keeps up with the new millennium. You may
use the same slogans but try to spot the differences in a nowadays Kodak campaign.


Target customers


USP (Unique Selling Proposition features that differentiate the ads)




Eastman Kodak took the responsibility for the popularisation of photography, which,
until then, had been the privilege of professionals or wealthy amateurs. As photography
was quite new to the middle class, to whom the Kodak advertising campaign appealed,
the ads also served to teach people how to use photography, and about the role it could
play in documenting their lives: the camera would be next to a baby from her first steps to
her wedding day and beyond.
The advertising campaign established Kodak as an indispensable part of family life. It
changed the camera's role from an uninvolved observer to that of personal friend, an
active participant in peoples daily life, as the "Let the children Kodak" series of ads
Although aimed at the masses, the ads featured upper class people leading, carefree lives.
With slogans like "Kodak as you go," "Take a Kodak with you," and "All outdoors
invites your Kodak," the ads stressed movement and travel. With a Kodak, the ads
implied, you too could possess the world, capture it, make it yours.
Kodak's strategy to domesticate photography prominently featured women. The ads often
depict women with family members or friends, or just women alone in the great outdoors,
with the camera as a companion. These images of independent, female photographers had
as target audience women who gained power in society and created an identity outside
the sphere of the home.
Kodak's focus on the casual and everyday uses of the camera functioned internationally
to bring photography to millions of people.


After reading this chapter you should:
know more about banking in your country and abroad
familiarize yourselves with different monetary policies
learn and practise your vocabulary and specific structures used in the language of
banking and finance
a. Name at least three types of financial institutions that you know of and speak about
their role in a countrys economy
b. What services do banks usually provide for customers?
c. How has the Romanian banking system changed in the last 4-5 years?
d. What do you understand by the monetary policy of a country/government? Give
1. Read the text to check some of your answers from the previous activity and then
state if the following are true or false.
a. Banks, building societies, insurance companies, pension funds and the stock exchange
are all financial bodies.
b. Banks can lend money to people, companies and sometimes governments.
c. The four big banks of Great Britain are Lloyds, Barclays, National Westminster and
The Royal Bank of Scotland.
d. Building societies usually lend money to persons and firms to help them buy houses
and flats.
e. A lot of money accumulates in the pension funds, as well as in insurance funds.


f. Through the stock exchange people buy shares from companies and receive dividends
out of the profits.

There are many sorts of financial bodies, doing different things, including, for instance,
banks, building societies, insurance companies, pension funds and the stock-exchange.
These all have roles in the working of the economy.
Banks started by being places where people could deposit money for safety. As not
everyone wants to take their money out at the same time, banks can safely, provided they
keep some in hand, lend much of it out to businesses, to ordinary people and sometimes
to governments. Banks also help people to transfer money: by cheque instead of using
cash to pay bills. A more recent development is the issuing of cards which can be used to
obtain cash or pay bills without cheques. Soon, we may be able to get along with using
hardly any visible money at all.
At first, there were a lot of local banks, one or two in each country or county
town. Now they have been joined into four big banks (Lloyds, Barclays, National
Westminster and Midland) that cover the whole country, with some smaller ones (for
example, Royal Bank of Scotland, TSB and Coop).
There are also special banks, mainly in the City of London. The most important
are the merchant banks, which have a wide range of activities. Their main function is to
give advice to firms, especially about buying up other firms, when there are often
financial battles between companies. They also do a variety of other jobs for their
customers, like moving money abroad or helping them borrow, by selling large issues of
shares. There are also about 500 foreign banks represented in London, providing banking
services in many parts of the world and engaging in the financing of trade.
Building societies began like savings clubs, where people saved up until they had
enough to pay a deposit on a house (say 10 per cent of the cost); then the building society
would lend them the balance out of the money other members were saving up. There is
still some of that spirit, but the societies have grown and become more like banks. But
they still lend only to persons, not firms, and mostly lend only to help people buy houses


and flats (though that is changing). Until recently, they have not gone in for money
transmission, but that too is changing.
Pension funds provide income to live on after retirement. Generally, people have
to contribute to them while they are still working. There is a compulsory government
scheme under which contributions are paid to the government for a state pension. But
often the firm people work for has its own pension scheme, and employees can use thateither instead of the state scheme or as well. The largest of these private schemes are
those of the big public utilities (railways, post office, coal mines), but there are also
numerous private firms with schemes. There is also the possibility of taking out a
personal pension plan, the contributions to which are allowed against income tax.
Since people contribute all their working lives, and only draw out at the end, a lot
of money accumulates in these funds. Until it is needed, it can be lent out; this produces
an income, which increases the pensions at the end of the day. Usually, pension fund
managers lend money by buying shares in companies. Together with insurance
companies, pension funds now own well over half of British industry. In addition,
pension funds have bought land and offices, which are then rented out to produce income
for funds.
Insurance companies provide insurance for houses against fire or burglary; or cars
against accidents; or people against getting ill or dying. The companies provide a contract
undertaking to pay compensation for loss or damage, injury or death in return for a
payment in advance made regularly. The premiums are based on the principle of pooling
the risks, which means that the burden of the contributions to those contributing is less
onerous than the loss which is insured would be to the individual, so each gets something
from it. The net result is that the individual contributes regularly, but claims something
back only occasionally, if ever. Hence, here too a lot of money accumulates. As with
pension funds, this is used to buy long-term assets, such as company securities and
governments bonds. Some of the insurance companies are now very large.
The stock exchange is an institution which makes lending to companies easier.
One way to lend money is for an individual to lend it to someone known to him or her.
But such loans or debts are not transferable. Another way is for a company to issue shares


or loans which individuals may buy. The stock exchange provide a way of making such
shares or loans easily saleable, so that a promise to pay can be turned into cash.
One example of loans to the government, which issues promises to pay back the
total eventually, and to pay interest each year meanwhile. These promises are in units of a
convenient size, say 5 or 50 or 100, and all are the same, so that everyone knows
what they are when they buy or sell them. Also everyone knows that (in this respect at
least) most governments in normal times can be trusted to do what they promise to do.
The result is that the units are readily saleable. Such government stocks are traded on
the stock exchange. Prices go up and down according to the state of the market, but in
general all are tradeable on any day at a price anyone can find out.
Businesses can borrow in the same way through fixed-interest loans, usually
called debentures. Another way is not to have the same fixed interest every year
promised in advance, but a return that varies according to how much profit the firm
makes. The individual buys in effect a part of a company (a share), and receives a
payment out of the profits, called a dividend. These shares can also be bought and sold
on the stock exchange. How easy they are to sell depends on how well known the firm is.
(Many of these shares are bought up by pension funds and insurance companies since
they have so much money to invest.)
2. Make a summary of the text in no more than 150 words.

2. The paragraphs of the following text have been mixed up. Put them in the right
order and then find a title for the whole text.

Paragraph 1
As time went on, the Bank of England came to be the place where the ordinary
banks kept their reserves, or from whom they could borrow reserves if they ran short. To
be able to provide the banks with reserves when needed, the bank kept a central reserve


of gold. When this central reserve was drawn on heavily, the Bank raised the rate of
interest it charged the other banks when they borrowed. This discouraged them from
borrowing too much, and drew in gold from abroad, thus protecting its own reserve of
gold. The other banks took to charging their own customers the same rate of interest plus
a margin, and varying their own rate with the banks rate (which came to be called Bank
Rate). The bank thus became the body that fixed interest rates- at least short-term rates,
up to six months or a year- inside the country. This had an influence on how much the
ordinary banks lent.
Paragraph 2
The Bank of England is one of the oldest central banks, and what it now does
grew out of its history. It was founded in 1694 to lend money to the new Dutch King
William, who needed money to fight a war. It was in effect a group of bankers who felt
more certain of getting their money back if they lent as a group. This illustrates the fact
that a king or government often needs the support of City bankers, and is to some extent
dependent on their goodwill and good opinion. To have an official outpost in the City can
therefore be useful to the government.
Paragraph 3
Originally the local banks each issued their banknotes. That probably made the
banking system more risky, and one of the things the Bank of England did was to keep an
eye on how well the local banks managed, principally by making sure the loans they
made were to reputable borrowers. Nowadays the Bank of England has the sole right to
issue notes in England and Wales; The Scottish and Northern Ireland banks have limited
rights. However, most money nowadays consists of bank deposits, and the banks are very
much in the business of accepting deposits and making loans out of them, so they have
lost nothing important.
3. In groups, draw a comparison between The Bank of England and Banca
Naional a Romniei ( The National Bank of Romania) in terms of:

bank reserves

rate of interest



Language focus
4. In pairs, find the questions for the following answers:
a. The last time I went to a bank was last week.
b. I wanted to open an account.
c. It was a current account.
d. Yes, I asked about that possibility, but I hope Ill never overdraw.
e. Well, they also offered to open a deposit account for me, to issue a banking card on
my name, to transfer money from my account to wherever I wanted to, to exchange
whatever currency I needed, to lend money to me and many others.
5. Go through the text again and underline all the verbs in the Past Tense Simple.
Then fill in the table below with all three basic forms of those verbs. An example
has been written for you.
Basic forms of verbs extracted from the text
Short Infinitive
Ex. grow

Past Tense

Past Participle


6. Write an article for the local paper, in which to describe the services Romanian
banks used to offer a couple of years ago in comparison with what they offer
7. In the following sentences the numerals have been mixed up. Find their right
place and then translate the sentences into Romanian.
a. After 2-nd years of courtship and then rejection by a string of suitors, the American
Stock Exchange (Amex) has finally found a mate.
b. On June 110, GTCR Golder Rauner, a Chicago investment firm, agreed to buy the
Amex for $ 2m from the NASD1.
8. Here are some phrases using numbers in payments. Match the phrases on the left
with the figures on the right.
1 We speak of a gross profit of 16%
2. The interest charges will be of $ 5.40

a. nine five seven stroke twenty four M.

b. the seventeenth of August nineteen

ninety seven
3. You will get an annual interest rate of c. sixteen per cent
4. Check the invoice No. 957/24M
5. It was on the 17th of August 1997
6. The profit is 2, 312, 000

d. five point forty

e. two point seven per cent
f. two million three hundred and twelve
thousand pounds

9. Fill in the following article with a word or group of words extracted from the
box below:

NASD= The National Association of the Securities Dealers


fell sharply against the euro/


inject liquidity into the financial system/

short term interest rates/

monetary and fiscal/


bond issues/

exchange rate/ economic recovery

The Yen
A weakening dollar is perhaps the last thing that the Bank of Japan wants. With domestic
demand anaemic, Japan perennially relies on exports and overseas production, especially
of cars and electronics, to keep its economy going. So, throughout May 2003, even as the
yen (1)

, the central bank was intervening furiously to keep it from rising too far

against the dollar.

Since May 15-th, when the yen closed at 116, having hit a 27-month high, the pressure
has eased. By June, it was back to 119, near the 120 with which the Bank of Japan seems
comfortable. In trade-weighted terms, thanks to the strengthening of the euro, the yen is
now weaker than it was when the Iraq war ended in April. Even so, the Japanese prime
minister said at the G8 summit in Evian that the yen was still too strong against the
The Bank of Japan may have helped Japans carmakers, but it is offering little solace to
the rest of the economy. With (2)
traditional measures to (3)

at zero, the central bank has relied on non. For example, it has boosted banks current account

balances with the central bank. Since March 2003, the Bank of Japan has raised its ceiling
for these balances by 50%, to 30 trillion yens ($250 billion).
The Bank of Japan also continues to buy new government (4)

at a rate of 1.2 trillion

yens per month. This has helped drive the yield on ten-year bonds down by four-tenths of
a percentage point since the start of the year, to below 0.5%. But the central bank is more
aggressive-by, say, buying some of the outstanding stocks of bonds, rather than just a
portion of new issues, or by buying (5).
If the Bank of Japan is to conquer deflation, it will have to do more. However, this does
not really seem to be the central bank s goal. Its main concern is to avoid being blamed


for any large-scale financial collapse. So its officials step in from time to time to reassure
markets, but do little more. Recently, its officials have been considering a plan to buy
asset-backed securities in an effort to prop up ailing small firms.
The Bank of Japan is not short of helpful advice from visitors to Tokyo. Some said that

manipulation was unlikely to do much good, and advised the Japanese

to set an inflation target. Others also suggested ways in which the central bank could
promote inflation and ease worries about the balance sheet. They also stressed the
importance of using (7)

policy in concert.

Japans central bankers have heard such arguments before, and ignored them. That may
be one reason why the American specialists pointed not only to Japans structural
monetary and fiscal problems, but also to its frustratingly slow pace of change. From my
side of the ocean one of the analysts said, it seems that many people are looking to the
United States to take the responsibility for leading the world into (8)

10. Read the text again to state which of the following are true and which are false:
a. Lately, Japan has been relying essentially on domestic demand. (F)
b. The yen is now weaker, just because of the euro financial evolution
c. The aggressiveness of the central bank is manifested only by buying some of the
outstanding stocks of bonds.
d. Some foreign advisors stated that the Bank of Japan should use monetary and fiscal
policy in concert.
11. In groups, discuss the following issues, considering the financial realities of your
country in comparison with those stated above about the Bank of Japan.
a. The role of the exchange rate manipulation in the financial/monetary policy of
b. What strategies would you suggest for the Romanian economic recovery?



BANKING is the business of accepting deposits and lending money. It can be
carried out by some other financial intermediaries that perform the
functions of securing deposits and making loans.
A BANK is an organisation that offers a wide range of services to do with
the handling of money. They keep money on behalf of their customers, lend
it to them, and offer them various services.
A CENTRAL BANK in a country (i.e., The Bank of England The Bank of
America, and The National Bank of Romania) is the banker for the
government, issuing money on its behalf and setting the chief interest rate
for loans; it is much involved in the countrys monetary policy.
The MONETARY POLICY is the central government policy with respect to
the quantity of money in the economy, the rate of interest and the exchange

12. Match the term/phrase (1 20) with the right definition (a t):
1. balance

a record of transactions in a
bank account
2. bank charges
a sum deducted from a bank
account, as for a cheque
3. branch
an instruction to a bank to
make regular payments
4. check(AmE)/ cheque (BrE)
bank account from which
money may be drawn at any time;
5. checkbook (AmE)/ chequebook e.
bank account on which
interest is paid;
6. credit
book containing detachable
7. credit card
(plastic) card from a bank
authorising the purchasing of goods on
8. current
checking h.
deficit in a bank account
account (Am E)
caused by withdrawing more money
than is paid in
9. debit
local office or bureau of a
10. deposit
savings j.
money in a bank account;
account (Am E)
sum added to a bank account; money
lent by a bank
11. fill in (Br E)/ to fill out(Am E)
money lent by a bank etc and

12. interest
13. loan
14. overdraft
15. pay in [paid, paid]
16. payee
17. paying-in slip
18. standing order
19. statement
20. withdraw [-drew, -drawn]

that must be repaid with interest

money paid for the use of
money lent
money paid to a bank for the
banks services etc
person to whom money is
small document recording
money that you pay in to a bank account
credits and debits in an account
to add written information to
a document to make it complete;
to deposit or put money in to
a bank account
to take money out of a bank
written order to a bank to
pay the stated sum from ones account

And now write a paragraph about a banking service or product using ten of the
terms above.
13. Read the following text and fill in the blanks with terms from the box:
checks/cheques; commercial; credit cards; financial institutions; investment;
loans; policy; rate of interest; savings; securities
Traditionally, the principal types of banking are ________(1) and central. In commercial
banking, business involves borrowing money from individuals, firms and sometimes even
governments. The banks use this money to make _______ (2), extend credit and invest in
_______(3). They earn money by borrowing at one _______(4) and lending at a higher
rate, and by charging commissions and fees for their services. These services include
______(5), ______(6), loans, personal wealth management, estate planning, etc. Anyone
who would want to start a business could apply. Central banks, on the other hand, provide
services for governments, commercial banks and other ________ (7). Usually they must
cooperate closely with national governments and often they lead or regulate the national
banking system by formulating banking _______(8). In addition to such traditional banks
there are other institutions, such as finance companies, _______(9) banks, _______(10)

banks, etc. These are often also called banks, but they usually cannot provide all the
services of commercial banks.
The banking systems in different countries have many similarities, but also differences.
The main differences seem to be in organizational details (e.g. unit banking vs. branch
banking) as well as some banking techniques, although they are becoming less noticeable
as international communication improves. Domestic or local banks are now more likely
to copy practices that have proven successful in other countries. In addition there seems
to be a trend toward banks merging with or buying out other banks, often forming large,
international banking institutions.
Other modern developments of course involve technology, e.g. e-commerce and Internetbased banking. Some banks are no longer focusing on local branches. They feel that there
will be less personal contact with customers in the future since most banking will be done
online, via the telephone or at ATM machines. Therefore they are closing branches and
reducing the number of employees involved in direct customer service. It will be
interesting to see how such developments influence the industry in general.
14. COMPREHENSION CHECK: Answer the questions on the text above:
1. What is the role of the government in both central and commercial banking?
2. What is the main business of commercial banking?
3. How does a commercial bank succeed in earning money?
4. What is the difference between traditional banks and the other financial
5. Are the banking systems similar everywhere in the world? Support your answer
with arguments.
6. What is the nowadays trend in banking? Mention some developments in banking.
7. How does technology affect local branches of international banks and their
15. Project work


You want to start a business and you need a loan from the bank. In pairs, work on
your file for the bank. You will have to include the following items:
a. feasibility plan, containing information about

business aim

business field/profile


partners (if any)


foreseen profits

b. guarantees- stable job or/and properties, real estate, endorsers.

c. references


15. Read the following article adapted from The Economist and then write a
memorandum announcing the appointment of Mr Gavin Governor as Governor
of The Bank of England.


The contest for the governorship of the Bank of England ended on
Wednesday with the appointment of Gavin Governor, Deputy Governor for
monetary policy, to replace Sir Edward King, who retires in seven months
The announcement came as Gordon Lord, the chancellor, sought to
reassure financial markets that a sharp increase in government borrowing
would not be accompanied by any relaxation in the Banks efforts to
control inflation.
Mr Governor, 54, an economist who joined the Bank in 1991, was the
candidate favoured by the City and is respected among central bankers
and economists internationally for his academic work. He helped in the
setting up the Banks inflation targeting regime and, with Sir Edward, in









established the Banks quarterly inflation reports, which analyse its price
Mr Governor is regarded as more of a eurosceptic than the other leading
candidates for the job, Sir Howard Duke and Andrew Baron. Michael
Squire, economist at Citigroup, said the selection of Mr Governor ensures
that the central bank will be able to face the upcoming policy challenges
with an experienced head.


1. What is the City? Do you know other terms to denote it?
2. What is the role of a central bank? Could you mention the most important
departments within a central bank?

3. Do you know the term denoting a central bank used in the United States?
4. Give examples of well-known financial centres.
Study the


of the Industrial and Commercial Bank of

Cumbria (ICBC):

Board of Directors

Accounting and Settlement Department

Business Development and Strategy

Administration Dpt.

Information Technology Dpt. (IT)

Auditing and Supervisory Dpt.

Credit Card Management Dpt.

Corporate Banking Dpt.

E-banking Dpt.

Credit Dpt.

Housing Finance Dpt.

Private Banking Dpt.

Human Resources Dpt.

Treasury Dpt.

Legal Dpt.

18. Describe the activity of each department using the verbs/phrases listed below,
according to the model:
to apply, to appoint, to approve, to assist, to authorise, to be accountable for, to be
concerned with, to be in charge with, to calculate, to charge, to collect, to compile, to
consist of, to control, to credit, to deal with, to debit, to deposit, to evaluate, to finance, to
grant, to instruct, to issue, to record, to recruit, to remit, to report to, to submit, to
supervise, to transfer
Model: The Board of Directors is responsible for making policy decisions and
determining the bank strategy. It appoints a CEO/Managing Director who reports
directly to the Board. It usually consists of the President/Chairman, the Directors and
the Heads of Departments.


19. Fill in the blanks with the correct preposition:

1. I hope that you agree . us this matter.
2. The board arrived the meeting time.
3. A Japanese reporter has been asking you all morning, Sir!
4. Most employees believe the success of their strike.
5. Do you think you can borrow so much money the bank?
6. Could you change a 100-euro note . 5-euro notes?
7. The reputed politician did not want to comment the newspapers headlines about
his latest escapades.
8. I wonder how the new management team will cope . the recent complaints
Union members.
9. Ive read your report but I havent really figured out what it deals .
10. Seemingly, our economic development depends financial aid from the EU.


In the 1913 United States of America, the Federal Reserve System, which
serves as the nation's central bank, was created by an act of Congress. The
System consists of a seven member Board of Governors with headquarters
in Washington, D.C., and twelve Reserve Banks located in major cities
throughout the United States.

Responsibilities: The primary responsibility is the formulation of

monetary policy, affecting the cost and availability of money and credit in
the economy. The Board of Governors sets reserve requirements and shares
the responsibility with the Reserve Banks for discount rate policy.
In addition to monetary policy responsibilities, the Federal Reserve Board
has regulatory and supervisory responsibilities over banks that are
members of the System, bank holding companies, international banking
facilities in the United States, foreign activities of member banks, and the
U.S. activities of foreign-owned banks. It plays a key role in assuring the


smooth functioning and continued development of the nation's vast payments

Governors also discuss the international monetary system with central
bankers of other countries and are in close contact with the heads of the
U.S. agencies that make foreign loans and conduct foreign financial
20. Complete the table below using previous information on central and domestic





On-line banking is a service provided by many banks and credit unions that
allows you to conduct banking transactions over the Internet using a PC,
mobile phone. You may be able to:

Access account history

Access accounts 24/7
Apply for mortgage or personal loans electronically
Live chat with customer support
Receive and pay bills on-line
Schedule on-line standing orders
Track real time stock quotes
Trade stocks and mutual funds
Transfer funds between accounts
View account balance

21. Read the following article and underline the terms and phrases referring to



The advent of the Internet and the popularity of PCs presented both an opportunity
and a challenge for the banking industry. For years, financial institutions have used
powerful computer networks to automate millions of daily transactions; today, often
the only paper record is the customers receipt at the point of sale. Now that its
customers are connected to the Internet via PCs, banks envision similar economic
advantages by adapting these same internal electronic processes to home use. Banks
view on-line banking as a powerful value-added tool to attract and retain new
customers while helping ton eliminate costly paper handling and teller transactions in
an increasingly competitive banking environment.
Mouse clicks are replacing face-to-face transactions. Web pages can look just as
good and work as well for a small community credit union as they do for some of the
worlds largest financial institutions. Some experts believe newcomers including
small, virtual banks will lead the way with new and innovative banking styles. In fact,
smaller institutions have several advantages in the on-line banking arena due to their
lower infrastructure costs. Because they are not spending as much on housing for
existing product delivery, they can offer customers better deals like: free checking
and savings accounts with higher interest rates.
Internet users seek for convenience when they go on-line to find varied information
ranging from political news to holiday gifts. 32 per cent of Internet users have now
done their banking online and 15 per cent have made a travel purchase on-line. It is
likely that convenience is not the only factor driving the popularity of e-banking.
Some customers are using the Internet to save money. One on-line bank, NetBank,
now charges $3 for each paper statement and many companies are strongly
encouraging their customers to accept electronic billing. Some corporations reward
on-line consumers with special discounts and enjoy the benefits of increased traffic
to their web sites. In both cases, the industry is educating consumers about Internet
transactions by making them pay for off-line equivalents for the same banking
Success means dealing with old issues in new ways and creating solutions that
connect tradition to innovation.



1. What was the reason for the spread of on-line banking?
2. Why is on-line banking important for banks?
3. What costs are eliminated in e-banking transactions?
4. Who are the newcomers in the banking industry? What advantages do they have?
5. What are the factors that add to the popularity of e-banking?

23. Translate into Romanian, choosing the appropriate version:

1. On December 9th, the airline said that actually it had debts of $875m that were due at
the end of the year.
a. Compania aerian a anunat pe 9 decembrie ca are de fapt datorii de 875 milioane
de dolari, scadente le sfritul anului.
b. Pe 9 decembrie, liniile aeriene au spus c n prezent aveau datorii de 875 milioane
de dolari din cauza sfritului de an.
c. Pe 9 decembrie, compania aerian a spus c la acel moment avea datorii de 875
milioane care erau datorate la sfritul anului.

2. Last year, the company lost a record of $2.1 billion; this year it is to lose even more.
a. Anul trecut compania a pierdut o nregistrare de 2.1 milioane de dolari, anul
acesta va pierde mai mult.
b. Anul trecut compania a nregistrat pierderi record n valoare de 2,1 miliarde de
dolari, iar anul acesta, cu siguran va pierde mai mult.
c. Compania a pierdut anul recut recordul de 2.1 milioane de dolari iar anul acesta
va pierde mai mult.

3. The directors had already spoken to banks about borrowing money should the airline
enter chapter 11 bankruptcy law.

a. Directorii au vorbit deja cun bnci despre mprumutul de bani dac va intra
compania aerian n capitolul 11 al legii falimentului.
b. Directorii discutasera deja cu unele bnci despre un potenial mprumut n cazul n
care compania aerian ar intra sub incidena capitolului al 11-lea din legea
c. Directorii discutaser deja cu unele bnci despre un mprumut dac cumva
compania aerian va intra sub incidena capitolului al 11-lea din legea
24. Match the phrases (1 10) to the appropriate explanations (a j):
1. Cost

a. A bank that provides

transactions via the Internet.



2. Customer service

b. A bank with branches, tellers and ATMs. Many

traditional banks now offer online banking and
online bill payment services.

3. Fund business

c. A monthly charge for online bill payment

services. Many banks offer this as a free service
to account holders.

4. Online Share Dealing

d. An individual client can submit the application

for pledge loan and obtain the result of the
application online.

5. Personal Pledge Loan

e. An Internet and telephone share dealing service

where customers buy and sell shares.

6. Traditional (Brick-andMortar) Bank

f. Clients (fund investors) can perform fund

subscription, purchase and redemption as well
as inquiry of funds-related information online.

7. Treasury bond business

g. Clients of personal treasury bond investment

can trade treasury bond online in real time.

8. Virtual (Internet) Bank

h. The customer can change his logon password,

card or customer information on-line.

9. WAP Mobile Phone

i. This is the on line banking service for the


10. Web Site Address

customers provided through mobile phones.

j. Users click on it to go to the bank's home page
on the Internet.

25. CASE STUDY: Look at the table below to choose the appropriate bank for the
following four people. Explain your choice:
Sarah Johnson, married and mother of 2 children, owns a small business. She has to pay
an important number of bills every month both for her household and business. Time is
essential for her. She intends to open an account with a bank.
William Windows, single, is a salesperson for a big software distribution company. He
travels extensively and wants an account that could take over the job of paying bills. He
is a cell phone and laptop addict. He needs unlimited access to his account and the
possibility to withdraw money from any location.
Oscar Rottenn, retired, has a bad health condition that prevents him from leaving his
house for a long period of time. He wants to put some money away. Despite his age, he is
very open-minded.
Sonny Hearst Jr., 21, is a student and a part-time waiter at the campus cafeteria. He
wants to open an account with a bank to receive his paycheck and to pay his tuition
directly from this account.


Brick-and-Mortar Banks

Interest-Bearing Accounts
Deposit /
Monthly Fee

ATM Fees
Online Bill Payment
for Other
Cost / Number of Monthly Payments
ATM Fees

Bank of

$100 /


No credits $5.95 / Unlimited payments

$100 /


No credits Free / Unlimited payments

U.S. Bank

$1,000 /


No credits $5.95 / 15 payments


Virtual Banks

$100 /


$100 /
$50 /




4 per
Free / Unlimited payments
Up to $6
$4.50 / 5 payments
per month
No credits Free / Unlimited payments


By reading this chapter you will be able to:
check your knowledge about the European Union
update your information on the EU
practise the specific vocabulary and grammatical structures for the subject of the EU
develop persuasion skills
a. What do you know about the European Union as an organization, from the economic,
social and political point of view?
b. Where is Romania in the EU context?
1. Fill in the following article taken from The Economist magazine with
words/groups of words extracted from the box below.
establish legitimacy/



democratically impaired/
constitutional convention/

referendum/ popular

When the idea of writing a formal constitution for the European Union was first

, its advocates said that the EU should be easier for its citizens to understand.

They were right. The implicit constitution lurking beneath the Unions tiers of (2)


practices is quite impenetrable even to experts in the subject- and this mystery arouses
suspicion. Another reason to write a proper constitution, governments acknowledged, was


that the Union is widely regarded as (3)

. Decisions made at the center are remote

from citizens. Lines of accountability are stretched thin. A new constitution would
address this directly, aiming both to strike a better democratic balance and to make the
channels of accountability easier to understand. All this would bring the Union closer to
its people.
On these grounds, The Economist warmly endorsed the idea of drafting a new
constitution for the EU. We await June 20-th with the keenest interest: That is when
Valery Giscard d'Estaing, representing the (4)

, will present a final proposal to

Europes leaders. Of course, whether the convention drafts a good constitution or a bad
one remains to be seen. The signs so far are discouraging, though much can change
before the debate concludes.
However, regardless of what the convention proposes, and whatever constitutional
design member-governments later adopt in the inter-governmental conference that will
decide matters, one thing follows from the reasons for embarking on this exercise in the
first place. The new constitution should be submitted to (5)

in each of the member

It may be that the new constitution will represent a bold new move in the direction
of ever closer union, as espoused in one of the EUs earlier treaties. Perhaps as we have
urged, the constitution will explicitly reject that ideal, proving instead a stable settlement
rooted in the principle of subsidiarity (the idea that decisions should be taken as closely
as possible to the people they affect). Or it may be that the new constitution will do
neither of those things, and merely condense and clarify the existing (6)

, obscured as

they are at present by the way the Union has evolved. As far as the need to (7)


the constitution is concerned, it makes no difference. So long as the idea is to say plainly
what the Union is, what it intends to be, and how it will henceforth stand in relation to its
citizens, this will be a hugely significant document-one that cries out for (8).


2.a. Write your own ideas about the text in the table below. The starting phrases
have already been introduced for you.


I totally agree with the idea that

Im afraid I dont have the same opinion


I think the author is right when he says.

I cant agree with the statement that.

By and large we have the same opinion I dont think he considered the whole

matter of.

I cant agree more with the author when In my opinion, it is out of the question to
he says..

say that..

2.b. Debate.
In groups of 3 discuss the article above, considering the following cards and

Student A
You agree with the idea of a formal constitution for the EU and think that referendums
are not necessary at this stage. You have an optimistic view on the matter, including
about the position of Romania in the context

Student B
You are quite skeptical in what the subject of the EU is concerned. You cant feel the
blessings of the matter. And besides, you prefer to stick to the national values.


Student C
You carefully observe your colleagues in their debate and evaluate their performance on a
scale from 1(the poorest) to 10(the highest), following the criteria from the table below:

Evaluation Table

Student A

Student B

Fluency in English
Accuracy in English
Logical presentation of
Persuasive qualities and
appropriate attitude of the
3. Translate the following text into Romanian:
Referendums can have their drawbacks, but if any political decision lends itself to
a vote of this kind it is a new (or newly clarified) constitutional settlement. Some
governments are already committed to holding such a vote. Many others are thinking
about it. In Britain-where, according to a recent poll, 84% of citizens would like the new
constitution to be put to a referendum-the government has brusquely repudiated the idea.
Given that the government has called 34 referendums since 1997, it seems odd to
draw the line at the biggest constitutional issue to have come before the country for
4. EU-File. Group work.
Search the Internet and other sources to find the latest issues on the EU and complete
a file for each of the following subjects:
File 1- History, Member States, Treaties


File 2- Leadership
File 3- Legislation
File 4- Case Studies concerning:
a. Germany and France
b. Portugal and Spain
c. Sweden and Finland
The origins of the EU can be tracked back to the early 1950s but its
principal founding treaty is the Treaty of Rome (1957), which established
the EEC (The European Economic Community). The EU was intended to unite
the peoples of Europe and to create a common market between its member
states. Starting with 6 member states, the EU has gradually expanded to 15
members. Further enlargement is taking place especially in order to
encompass some of the former communist countries from Eastern Europe.
Economic integration within the EU has led to the creation of the single
European market and the introduction of a single currency (euro). This large
competitive market should act as an incentive to efficiency and innovation,
prompting the reorganisation of companies, industries and markets. There
has been a wave of mergers and alliances since the late 1980s, reflecting not
only global trends but also the reshaping of the EU business environment.
The EU has a number of policies that affect the activity of business
firms, covering:







Monetary and fiscal policy

Regional and social policy




1. What have been the steps the European Union has followed since 1957?
2. What was the main purpose of the EEC?
3. How many states founded the EU? How many are there at present?
4. Which regions are taken into consideration for further enlargement?
5. What are the most remarkable accomplishments of the economic integration
so far?
6. How has the EU changed the European business environment?


6. Match the term(s) with the appropriate meaning:






A banking system consisting of the ECB and the

central banks of each EU member state;

A change made to a bill, law, constitutional
provision or regulation and also the process of making


Civil service


A plan of action, statement of ideals proposed or

adopted by a government, institution, political party,



A sum of money that must be paid as a


punishment for breaking a law or rule;

European Central Bank
Foreign currency in large quantities that is

System of Central

exchanged for another in the process of international


trade between countries;

The Council of Economics


The public administration, the body of officials


and Finance

employed by the state / international institution (UN,

IMF) to implement policy and apply the laws and



regulations made by the executive and legislature;

The whole body of laws, policies, procedures,


To issue

and treaties of the EU

To put into public circulation (money, bonds,


7. Here are the main institutions of the EU. Fill in the blanks of the chart with
the appropriate features of each institutional body, indistinctively listed on the
next page.


European Council





European Court of

1) acts as an official policy initiator

2) consists of commissioners nominated by their respective governments
3) consists of members directly elected by voters in their respective countries
4) coordinates the European System of Central Banks
5) debates important issues and oversees the work of the Commission
6) discusses major policy issues outside the normal EU policy-making
7) ensures that EU laws and policies are implemented by the appropriate national
8) has control over the issue of the euro notes and coins, foreign exchange


9) has established a number of important principles in areas such as competition

and employment law
10) has one judge from each member state
11) has powers to approve or reject the EU budget and to dismiss commissioners
12) has powers to investigate breaches of the EU law and, when necessary, to
impose fines on governments, companies or individuals for non-compliance
13) holds intergovernmental conferences every 6 months
14) includes the Foreign Affairs Council and Ecofin
15) is active in making policy proposals
16) is made up of ministers from each of the member governments, its presidency
rotating every 6 months
17) is responsible for the day to day administration of EU policies
18) is the chief decision-making body
19) is the EUs main administrative body in civil service

20) is the highest legal authority in the EU

21) its decisions form part of the acquis communautaire
22) makes policy proposals to the Council of Ministers and Parliament for
23) produces reports and amendments on draft legislation

24) promotes the general development of the EU

25) reaches decisions on matters within the EU jurisdiction which prevail over
national laws
26) requires from each member country a number of members proportional to its

27) supervises the conduct of monetary policy

In Romanian, the translation of civil servant is. funcionar public;

The translation of draft law is proiect de lege;


8. Put the following levels of integration between countries in the logical order:
a) Common Market: customs union plus the free movement of goods, services,
people, and capital
b) Customs Union: free trade area plus a common external tariff
c) Economic Union: common market plus full economic policy harmonization
d) Free Trade Area: formal tariff-free trading area between countries
e) Political Union: group of nations with shared sovereignty or complete
unification of nations.
f) Preferential Trading Agreement: reduced tariffs and special quotas allowing
preferential access to markets
9. Organize the levels above under the three headings below:

Loose Economic

Formal Economic






Use an adverbial or a conjunction to form complex sentences:

a) The EU will become bigger, better and stronger. The united Europes constitution
will be approved.
b) Few people followed the debates. They dont really feel connected to the EU.
c) It is hard for the British to abandon their currency. They feel a strong attachment to
their currency.
d) The mutual interests will become very clear. The British will adopt the euro.
e) The institutions will change. Language differences will prevent the emergence of a
single European nation.
f) The American constitution followed a period of crisis. The European constitution
might cause one.
g) A poll was taken by Eurobarometer in March and April. The poll revealed
surprising statistics about attitudes towards a common foreign policy.
h) Poland had the choice to back the US policy in Iraq. The EU complained then.
i) The UK is not willing to give up its veto power over the EUs policies. France is not
willing to give up its veto power over the EUs policies.
j) The EU has to adopt a common policy gradually. It did so with the Euro.


10. Fill in the blanks with the right term or phrase:

central bank
civil servants.
federal constitution
international currency
turned down
While the day to day details of the EU affairs can be grim, the big picture is
fascinating. The Union has embarked on a project that challenges the way politics and
economics are perceived. The euro is the first ever attempt to create a real
________(1) (though Charlemagne had similar ideas). Until the new coins and
banknotes were adopted by 12 EU countries in January 2002, a currency was
________(2) by a country and backed by national government and a __________(3).
With the euro, all that has changed. Will it lead to an economic government in Europe
with a much bigger budget and tax - ________(4) powers or will it establish a new
way of managing currencies and _________(5) policy?
Not content with reinventing monetary economics, the EU is also remodelling the
political model of the nation-state. By ________(6) the EU, European countries
accept the _______ (7) of European law over national ones. Delegates to a European
convention are now pondering a _________ (8) for the EU.
Some believe that the Union is in fact turning into a new country, a United States of
Europe, which would dramatically shift the global balance of _______(9). Others


argue that the EU attempts to preserve characteristics of the nation-state while

actually creating something new.
So if the EU is so interesting, why does it seem so dull? Partly because most of the
Unions formal day-to-day activities are technocratic: a merger to be approved or
______(10); a trade dispute to be ________(11). On the one hand, _________(12)
often argue that the Union hides big political change under the cover of mere
technical adjustments. On the other hand, _______(13) sometimes acknowledge that
an effective strategy has been to drown opposition to European federation in a mass of
technical detail, to bore people into submission. EU politicians and _________(14)
are still confronting with basic questions such as Do people yet feel European? or
Are national identities still stronger? and How far can the EU stray into the sensitive
areas of defence and internal security? But the time to answer them is yet to come.
(Adapted from the article Why Brussels isnt boring, in The Economist, September
14, 2002)
11. Assess whether the statements below are true or false:
1) The Council of the European Union or the European Council has a president
that changes every 6 months.
2) The acquis communautaire is a collection of laws, policies, procedures, and
treaties of the EU.
3) The ECB coordinates the European System of Central Banks also comprising
the central banks of all the member states.
4) The European Parliament is the highest legal authority of the EU, prevailing
over the national authority.
5) In the European Parliament the number of members from a EU country is
proportional to its population.
6) The highest level of integration between countries is the political one, while
the initial one is the Common Market.
7) 15 EU member countries implemented the single European currency in
January 2003.


8) The European member states adopted the federal constitution of the EU at the
Convention in May 2003.
9) Some assert that the EU day-to-day activities are technocratic.
10) A successful strategy to make even eurosceptics accept new important policies
was to confuse and bore them by extensive technocratic details.


The Forbidden WORD(S)

The word "federal" does not appear in the text of the Constitution
draft, in order to avoid alarming eurosceptics. It talks about
building European ties "in the community way", instead. The text
also says the peoples of Europe are determined to be united in an
ever closer fashion and to forge a common destiny.
12. Match the openings (1 10) with the endings (a j) in order to re-create the
expressions. Supply an appropriate connector when necessary (as, for, into, of,
1. to act
2. to be responsible
3. to break
4. to consist
5. to have control
6. to implement
7. to put

a. a decision
b. a policy
c. a policy initiator
d. commissioners
e. consideration
f. public circulation
g. the conduct of the monetary

8. to reach
9. to supervise

h. the day-to-day administration
i. the issue of euro-notes and

10. to take

j. the law/ a rule

INFO CELL: The EU Constitution Draft and Its Preamble


Constitution is a set of rights, powers and procedures that regulate

the relationships between public authorities in any state, and between
public authorities and the individual citizens.
Reasons for a European Constitution: - all the vast collection of
previous key treaties must be reflected in an easily understood single
document that states what the EU can and cannot do;
Key Issues: - EU is a voluntary association which does not enforce
-A person instead of a country will hold the EU presidency for twoand-a-half years
- The European Commission will still have one commissioner per
country - 25 in total when the new members join - but at any one
time only 15 will have voting rights;
- Europe attempts at a single foreign policy and eventually a single
defence policy
- It will include the EU's Charter of Fundamental Rights.
The Preamble, which is an introductory part to a document, speech,
stating its purpose, makes use of uplifting words about the value and
importance of Europe. Here is an excerpt from it:








inheritance of Europe, which, nourished first by the civilisations of

Greece and Rome, characterised by spiritual impulse always present in










Enlightenment, has embedded within the life of society its perception

of the central role of the human person and his inviolable and
inalienable rights, and of respect for law..."


13. Case Study: In groups of four, take sides with one of the positions stated in
the boxes below and discuss the pros and cons of the issue: God kept out of EU
constitution (Article adapted from Telegraph Post, May 29, 2003)

The draft EU's constitution leaves out mention of God and Europe's Christian roots,
despite strong pressure from conservatives and the Vatican, and amid fear of
alienating Islamic immigrant populations.
The preamble to the document used the words "spiritual", "religious" and "humanist"
to describe Europe's heritage going back to the Greek and Roman civilizations but it
leaves aside any reference to deity.
The question of whether to include God in the EU's first-ever constitution has been a
subject of intense debate, as its purpose is to build cohesion within the EU. All current
members are formally Christian states, but most make no reference to their Christian
roots in their respective constitutions and keep church and state separate.

Secularist countries, led by France, view pluralist Europe beyond the need to refer
to religion. They also stressed the fact that "Christian values" would make it more
difficult to accept a Muslim country such as Turkey.
In an editorial, Scandinavia's largest daily newspaper, the Swedish Aftonbladet,
argued that emphasizing Christian values would be a "huge mistake" because it
would "exclude groups and raise new walls." In addition, Terry Sanderson, vice
president of the UK's National Secular Society, pointed out that "Europe has to be
secular for it to be really unified."


Many of the 10 countries due to join next year, i.e. the Roman Catholic Poland,
wanted "Christian values" mentioned in the constitution. Likewise, the Hungarian
Monsignor Peter Erdoe states that "without Christianity, the heart of Europe would
be missing". Pope John Paul II also lobbied for "a clear reference to God and the
Christian faith to be formulated in the European constitution." Former Irish Prime
Minister John Bruton formally proposed including a mention of Christianity.

Giscard d'Estaing, a former French president and the head of the Convention on the
future of Europe, the body charged to draft the constitution, indicated the possibility
of a compromise. Religion is to be mentioned in the preamble, leaving aside God or
religious values in the main body of the text.