European Union

Question 1

When did the UK join the European Union?

Answer 1

1973

Question 2

When was the Euro created?

Answer 2

1999

Question 3

What are the EU community institutions?

Answer 3

• European Commission, this is the civil service of the EU
• Council of Ministers from different countries make decisions on policy
• European Council. Meets twice a year to make decisions which fundamentally alter EU policy
• European Parliament directly elected body of 626 members
• The Court OF Justice. Is based in Luxembourg

Question 4

What was the Act called which created the Single Market?

Answer 4

Single European Act 1986

Question 5

When was the Single European act?

Answer 5

1986

Question 6

What is the Single Market?

Answer 6

• This occurs when the member countries act as a single economic area with the free movement of labour and capital

Question 7

What does the Single Market involve”?

Answer 7

• No Tariffs on trade between member states
• Elimination of border controls
• Free movement of People
• Mutual recognition of qualifications
• Harmonization of taxes and other industrial and economic laws

Question 8

What is the Monetary Union of the EU?

Answer 8

Monetary Union is a single market plus

• A common currency
• No internal exchange Rates
• Common monetary policy

Question 9

Obstacles to completing the Single Market.

Answer 9

• Customs Formalities
• Different Tax Rates, especially on Alcohol and tobacco
• State Subsidies to domestic industries, or tax breaks to encourage inward investment. This creates unfair competition within the EU
• Different regulations added to the cost of business
• Different currencies (until the Euro was launched)
• Until 1994 there were restrictions on the movement of capital, but these controls have been abolished and gradual liberalization has been made on other aspects of financial services.

Question 10

Benefits of the Single Market?

Answer 10

• Trade Creation. Exploitation of comparative adv allows lower prices and costs. Leading to higher output and more employment
• Reduction in the direct costs of barriers
• Economies of scale from specialization
• Greater competition
• Free movement of labour increases labour market flexibility and opportunities

Question 11

Costs of a Single Market?

Answer 11

• Structural Change due to increased specialization
• Adverse Regional multiplier effects. The creation of a single market tends to attract capital and jobs away from the outer areas to the centre.
• Development of Monopoly/ Oligopoly power
• Trade Diversion. If external barriers remain high countries could lose out

Question 12

What is the EU competition policy?

Answer 12

It has the power to examine mergers to see whether they are in the public interest.

Question 13

What are some of the benefits of Mergers?

Answer 13

• Economies of Scale

- Greater International Competition

Question 14

What negative effect can a marge cause?

Answer 14

• higher prices

- unfair competition.

Question 15

What does the Social Charter aim to do?

Answer 15

Give greater protection to workers in the EU such as:

• Free movement of labour
• Min wages
• Max working week

Question 16

What are some of the criticisms of the EU?

Answer 16

• Agricultural subsidies inefficient
• Bureaucracy
• Lack of democracy
• Euro has led to widespread unemployment across Europe