MANAGING THE ECONOMY:
The Role of the European Union (EU)
What you need to know...
- You should understand the significance of the EU as a Single European Market with a single European currency.
- You should know the potential benefits and drawbacks of the UK joining the Euro.
- A detailed knowledge of the European Commission and European Central Bank is not required.
- You should have an appreciation of the potential impact on the UK economy of EU enlargement.
The European Union (EU)
- The European Union (EU) consists of 28 member countries, united for economic and political cooperation
- The EU consists of a number of features;
- Free trade area: member countries are able to trade freely with each other, without having to pay tariffs (taxes) when importing and exporting goods and services;
- Protectionism: an external tariff is placed on non-EU goods coming into the EU, raising the price of these goods and services to discourage people from buying them; this protects domestic firms from cheaper foreign competition.This action by the EU means that domestic consumers have less choice and domestic firms have little incentive to cut costs and become more efficient
- Single European Market: the EU allows for the free movement of workers, where getting a job in another EU country should be just as easy as getting a job in your own country; there is also the free movement of capital, where money can be transferred easily from one member country to another; finally there are common product standards, where all goods within the EU conform to the same health and safety standards
The benefits & drawbacks of EU membership
- There are both benefits and drawbacks of EU membership
- Look at the images opposite for an analysis of EU membership (click to enlarge)
The European Union (EU): Is the UK better off in or out?
- Whilst in the past debate focused on whether the UK should join the Euro, recently politicians and voters have queried whether the UK is better off withdrawing from the European Union; indeed David Cameron has promised voters a referendum on British membership of the EU if the Conservatives win the next general election
- The arguments for and against British membership of the EU are summarised by the BBC (click here)
- Here is a selection of news pieces and discussion videos on the issues of UK's membership in the EU
The Euro: Benefits and Drawbacks
- Whilst it seems very unlikely that the UK would consider adopting the European Single Currency (Euro) it's important that you understand the benefits and drawbacks of doing so
- Look at the images below for a summary of the reasons for and against the UK adopting the Euro as its currency
- Economics Online provides some useful advantages and disadvantages of the UK joining the Euro and becoming part of the Eurozone
The impact of EU Enlargement on he UK economy
- The EU will continue to grow as an increasing number of countries express interest in membership; indeed Croatia will become the 28th EU member country on 1st July 2013.
- These interested countries can be divided into candidate countries and potential candidate countries (click here for a list of interested countries).
-A thorough evaluation of EU Enlargement and its impact on the UK can be found here (read it!)
- A streamed presentation of the issues can be found here
- Here are some links to video resources on prospects for further enlargement of the European Union single market