WHO?  OBJECTIVESKEY WORDSEnterprise Skills ALL C Understand what the EU represents. Common currency Eurozone Enlargement Eastern European EU BRONZE Decision making Determination Independence MOST B Understand the arguments for and against EU membership. Understand the case for having a single currency. SILVER Self confidence Open minded Problem solving Communication SOME A-A* Understand the reasons for the UK’s non membership of the euro. Understand how the EU has enlarged over recent years. GOLD Reviewing performance Flexibility Forward thinking Unit 12.1 Managing the economy The role of the European Union (EU)

History of the EU 27 European nations Cooperate together on economic and political issues Began in the 1950’s as an agreement between 6 countries to engage in free trade for certain products Today the EU has developed into much more than a free-trade area, as closer links are made and cooperation takes place. Today the EU is a large organisation that contains almost 500 million people, has its own parliament and sets rules and regulations across each member country. Video: European Union - 50 years in 5 minutes!European Union - 50 years in 5 minutes!

Free trade ProtectionismSingle European market The UK membership of the EU Effects of membership of the EU Can you think of any benefits for being a member of the EU?

Effects of membership of the EU FREE TRADE One of the main attractions No tariffs (Tariffs are a tax placed on imports designed to discourage people from buying imports and to encourage people to buy the home-produced goods instead.) In the EU there is a common external tariff placed on goods coming into the EU from outside. The tariff is the same in each EU country.

Effects of membership of the EU PROTECTIONISM The common external tariff is a form of protectionism. This is where imports are discouraged so as to promote the home-produced goods instead. Protectionism can reduce choice for consumers. There is a danger that industries protected will never become efficient.

Effects of membership of the EU SINGLE EUROPEAN MARKET 1993 Incorporates free trade between EU members but also has some additional features Free movement of workers Free movement of capital Common product standards

Effects of membership of the EU UK MEMBERSHIP OF THE EU (1973) Benefits of EU membershipDrawbacks of EU membership Greater choice for consumers Competition for UK firms Larger market for business Lack of freedom on product standards Higher incomes Common agricultural policy Political influence Video: European Union, an example of success European Union, an example of success Video: No to EuropeNo to Europe

The Euro Exchange rate systems were set up in 1970’s and 1980’s as the step towards a common (single) currency Launched in 1999, it was 3 years before notes and coins were circulated. 12 countries of the EU joined the first wave, with the UK, Denmark and Sweden opting out. By 2009, there was 16 countries using the euro as their currency. Why do you think the UK is not a member of the euro?

The Euro Reasons for joining the euroReasons against joining the euro Reduced transactions costs Costs of preparation Uncompetitive exports Loss of control over interest rates Ease of price comparisons Use of exchange rise Greater economies of scale

Activity Q. Find out the latest trends from

EU Enlargement Since 2004, twelve more countries have joined the EU. Many of the new members are countries from Eastern and Central Europe Effects of expansion Cheaper labour costs Greater competition More choice for consumers The future of the EU? The EU border may shift eastwards Video:

Activity 1.What would be the effects of more countries joining the EU on the governments ability to meet its economic objectives? 2.Which countries are currently in negotiation for EU membership? objectives the government Economic growthFull employmentStable pricesBalance of payments

MEMBERSHIP There are 15 existing members of the single market including the UK FEATURES - There is free trade between member countries therefore there are no tariffs or quotas placed on imports - Each country places an identical trade barrier against imports from non- European Union countries. This is called a common external tariff - Individuals and businesses are free to move between countries. - Safety standards should be the same between each countries - A movement towards similar business laws and rules in each member country SOCIAL CHARTER Minimum standards for workers in all 15 countries. These include - Maximum hours to work in an hour - Minimum pay - Holiday rights - Maternity / Paternity leave BENEFITS OF THE SINGLE MARKET Treats the area as one large trading block almost like an individual country instead of 15 separate countries - Should encourage trade - Should help create jobs - Should improve standards of living - Avoids protectionism / trade barriers between its members - Ensures sound working conditions - Has a market of 380 million customers for firms to sell to

1.List four economic objectives of the government. 2.Name the two methods used to measure UK inflation. 3.How is the unemployment rate calculated? 4.Explain two benefits and two drawbacks of economic growth. 5.Define social cost and give three examples of negative externalities. 6.Define external benefit and give two examples. 7.State the four stages of the economic cycle. 8.Explain how indirect and direct taxes are used to collect revenue for the government. 9.Analyse the effects of an interest-rate reduction on the UK economy. 10.Analyse the effects of a rise in income taxes on consumer spending. 11.Describe how supply-side policies are used in the UK. 12.What are the benefits for the UK remaining a member of the EU? 13.Discuss the case for joining the euro. Activity You have 5 minutes to complete as many review questions as you can! When the 5 minutes is over you then have 5 minutes to find a student who can answer the question for you! Make sure you note the student who has answered the question for you You can not get the same student to answer more than one question!