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2. european union

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  • 1. The European Union Background Image by Rock Cohen. Used with permission Press F5 on your keyboard to launch this PowerPoint presentation europa.eu – official website of the EU
  • 2. The role of the EU
    • European Union: An organisation of 27 countries which aims to increase European trade and co-operation
    • The EU is the largest market in the world economy, with around 500 million people 1 and 30% of world GDP 2
    *
    • 2006:
      • EU GDP = US$14.2 trillion (£7.3 trillion)
      • World GDP = US$47.8 trillion (£24.5 trillion)
    • 1 trillion = 1,000 billion = 1,000,000 million = 1,000,000,000,000
    1. Source: Wikipedia 2. Source: International Monetary Fund: World Economic outlook database
  • 3. Background the growth of the EU
    • The EU was set up by the Treaty of Rome in 1958
    • 27 members:
    Germany (W.) France Italy Belgium The Netherlands Luxembourg UK Denmark Eire Greece Spain Portugal Austria Sweden Finland (1990: Reunification of Germany) 1952 1973 1981 1986 1995 * Lithuania Malta Poland Slovakia Slovenia Bulgaria Romania 2004 2007 Cyprus Czech Republic Estonia Hungary Latvia
  • 4. Background task
    • On a map of Europe, shade and label the original six members and later additions, making a colour coded key like the one below
    * Click on one of the maps above or skip 1952 1973 1981 1986 1995 2004 2007
  • 5. EU members * Cyprus Spain Portugal UK Ireland France Finland Sweden Latvia Estonia Lithuania Poland Czech Rep Austria Germany Greece Italy Slovakia Belgium Denmark Hungary Netherlands Romania Bulgaria Slovenia Malta Luxembourg
  • 6. EU members * Cyprus Spain Portugal UK Ireland France Finland Sweden Latvia Estonia Lithuania Poland Czech Rep Austria Germany Greece Italy Slovakia Belgium Denmark Hungary Netherlands Romania Bulgaria Slovenia Malta Luxembourg
  • 7. The European Union Single European Market Image by Dusty Davidson. Used with permission europa.eu – official website of the EU
  • 8. Single European Market
    • In setting up a single market the idea was to make selling products anywhere in Europe as easy as selling at home
      • No tariffs and quotas
      • Common safety regulations etc.
      • No exchange rates
    *
  • 9. Advantages to business of operating within the EU
    • Free access to huge potential markets
    • Economies of scale gained from operating in a larger market
    • Protection from outside competition by a ‘Common External Tariff’
    • Competition from other EU firms provides an incentive to improve efficiency
    *
  • 10. Disadvantages to business of operating within the EU
    • The Common External Tariff has increased the cost of imports from outside the EU
    • Businesses in the EU have free access to the UK market
    • Shelter from external competition can reduce the incentive for efficiency
    *
  • 11. The European Union Social chapter Image by Rock Cohen. Used with permission europa.eu – official website of the EU
  • 12. Social Chapter (a part of the Maastricht Treaty)
    • The EU aims to improve the working conditions of EU workers
    • Main conditions:
      • Minimum wage
      • Maximum working week
      • Equal treatment for men and women
    *
  • 13. Social chapter task
    • Find out about the national minimum wage
      • How much is the minimum wage?
      • Is there a lower minimum for under 21s and under 18s?
    * DTI website
  • 14. Social chapter task
    • Make a poster to be placed in the staff restaurant of a supermarket explaining workers’ rights under the Social Chapter
    *
  • 15. The European Union Regional policy Image by Rock Cohen. Used with permission Europa.eu regional policy website
  • 16. Why regional policy? *
    • Two-thirds of the EU’s eastern European citizens live in regions with a GDP per head of less than half the EU average
    • Even amongst the older EU members, income and opportunities vary considerably
    • Unemployment rates vary greatly within EU from 2% in the Austrian Tyrol region to 26.3% in the Lubuskie region of Poland
    * * Source: Europa.eu regional policy website
  • 17. Regional Policy
    • Regional policy spending is targeted at three objectives:
      • Objective 1: Redevelops regions seriously lagging behind the EU average
      • Objective 2: Assists regions or areas affected by industrial/rural decline
      • Objective 3: Helps improve the prospects of the long-term unemployed and young people
    • Around £170bn was spent on EU regional policy between 2000 and 2006
    *
  • 18. Regional Policy
    • Funds are available (e.g. European Regional Development Fund ) to improve employment opportunities and infrastructure in poorer parts of the EU, especially on the periphery
      • e.g. Ireland, Portugal, Slovakia, Latvia etc., but also the Outer Hebrides etc.
      • The new entrants from Eastern Europe have altered the emphasis of regional policy – significantly less money will be available for the wealthier members of the EU
    * Scottish Executive website: Regional policy and Scotland
  • 19. Regional Policy group task – dominoes
    • Join the dominoes together into a chain
    • Read the article from the BBC News website
    • Discuss what the EU hopes to achieve through its regional policy
    • Have such policies been shown to work in the past?
    * BBC News: EU regions battle over spending, 17/10/05 P olicy quality goals* regional development p olicy European Commission Cohesion of life sustainable
  • 20. The European Union The euro Image by jopemoro. Used with permission Image from Wikipedia. Used with permission europa.eu – official website of the EU
  • 21. The euro
    • 16 EU members (the euro zone) have adopted the euro
    • The single currency replaced their national currencies from January 2002:
      • Austria
      • Belgium
      • Cyprus †
      • Finland
      • France
      • Germany
      • Greece
      • Ireland
    • Italy
    • Luxembourg
    • Malta †
    • Netherlands
    • Portugal
    • Slovakia §
    • Slovenia *
    • Spain
    * Europa.eu euro website * Adopted the euro on 1/1/07 † Adopted the euro on 1/1/08 § Adopted the euro on 1/1/09
  • 22. Benefits of membership of the euro
    • Reduced uncertainty – no exchange rate fluctuations make long term planning easier
    • Reduced transaction costs – no commission to pay on euro transactions
    • Economies of scale – easier for European firms to merge and conduct business
    *
  • 23. Disadvantage of the euro
    • Members lose much control over their own economies since the government’s main monetary policy tool (interest rates) is controlled by the European Central Bank
    • All countries may suffer if one gets into financial difficulties
      • Greece in 2010
    * Image by Jeff Barnes. Used with permission Q&A: Greece's economic woes, 2/5/10
  • 24. Britain and the euro
    • The Conservative party ruled out ever joining the euro in their 2010 election manifesto
    • Labour have no plans to join the euro in the near future and would only join after a referendum
    • The Liberal Democrats have a similar position to Labour, but appear to be more positive about the long term benefits of membership
    * Image from Wikipedia. Used with permission
  • 25. Britain and the euro task
    • Should Britain join the Euro?
    • Ask family members etc. and try to find opinions both for and against before drawing your own conclusions
    * Image by Rock Cohen. Used with permission
  • 26. Britain and the euro
    • The credit crunch has reignited the ‘Britain and the euro’ debate
    • Some believe that Britain should join, pointing out that the Pound has lost a third of its value against the euro
      • e.g. The Guardian: ‘Unless we are decisive Britain faces bankruptcy’, 18/1/09
    • Others argue that the euro drags members into a longer and deeper recession than they might otherwise face
      • e.g. The Telegraph: ‘Monetary union has left half of Europe trapped in depression’, 18/1/09
    * These articles are clearly beyond all but the most able GCSE students. They might prove interesting reading for teachers though, and the headlines alone are sufficient to prove that the arguments still rage
  • 27. The European Union Task: Anatolian Electronics
  • 28. European Union task
    • Anatolian Electronics make flat screen monitors. The business is located in Turkey, a country which is not a member of the EU. All raw materials are imported and many of the completed monitors are exported to EU countries.
    • The Chief Executive, Aysel, expects all her workers to put in long hours, despite low pay. Considerable use is made of temporary workers who have few employment rights. Working conditions at the factory are poor – lighting is barely adequate, and the factory is poorly ventilated.
    • Currently, demand for the monitors is at a very high level and Aysel cannot find enough skilled staff to fill all of the vacancies. Her other major worry is the high exchange rate of Turkey’s currency, the Turkish Lira (YTL). This high value against some other currencies is making her exports seem very expensive.
    • How could Anatolian Electronics be affected if Turkey joined the EU and accepted the euro? Make a list of the advantages and disadvantages they will face.
    *
    • Advantages
    • Disadvantages
  • 29. Ethical and Environmental Factors