THE EUROPEAN UNION Background 11 June Image by Rock Cohen. Used with permission europa.eu – official website of the EU

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 493 million people 1 and 30% of world GDP 2 11 June * 1. Source: Wikipedia 2. Source: International Monetary Fund: World Economic outlook database  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

BACKGROUND THE GROWTH OF THE EU  The EU was set up by the Treaty of Rome in 1958  Members: 11 June Germany (W.) France Italy Belgium The Netherlands Luxembourg UK Denmark Eire Greece Spain Portugal Austria Sweden Finland (1990: Reunification of Germany) * Lithuania Malta Poland Slovakia Slovenia Bulgaria Romania Cyprus Czech Republic Estonia Hungary Latvia

EU MEMBERS 11 June * 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

THE EUROPEAN UNION Single European Market 11 June Image by Dusty Davidson. Used with permission europa.eu – official website of the EU

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 11 June *

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 11 June *

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 June *

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 11 June *

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? 11 June * DTI website

EURO AREA MEMBER STATES  There are currently 18 member states in the euro area.  Austria Belgium  Cyprus Estonia  Finland France  Germany Greece  Ireland Italy  Latvia Luxembourg  Malta Netherlands  Portugal Slovakia  Slovenia Spain 11 June

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 11 June *

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 11 June * Image by Jeff Barnes. Used with permission

 Complete notes that explain the what the following are and their main purpose:  The European Commission  The Council of Ministers  The European Parliament  The European Court of Justice  The World Trade Organisation 11 June * Image by Rock Cohen. Used with permission RESEARCH TASK