The European Union & Business A2 Business Studies Unit 4

Aims and Objectives Aim: Understand how businesses are affected by the EU. Objectives: Define the EU Explain how businesses are affected by the EU Analyse the effects of EU enlargement Evaluate the impact of the Euro Zone crisis

What is the EU? LZU&feature=related LZU&feature=related An organisation of countries aimed at creating free trade and growth through economic and political stability. UK joined 1973 Did not adopt the Euro

The EU 27 countries Population of 500m Accounts for 30% of world GDP Largest exporter of goods/services GDP per capita is around 35% less than in USA and 15% less than Japan. Due to recent enlargement -Romania and Bulgaria

What does this mean for businesses? Common laws and legislation: competition policy, development, employment, trade policy, ensuring free trade takes place. No trade barriers within EU. Currency fluctuations avoided for 15 EMU countries. Opens up developing markets. Free movement of labour – reduce costs. Easier to attract foreign investment. More stable economies – encourage investment.

EU Laws and Legislation 1.Using the video, identify four areas of a business operation which have been affected by EU legislation 2.Explain why a trade union might be generally supportive of EU workplace legislation 3.What objections does the small business owner have to laws passed by Europe? studies/comments/video-case-study-eu-legislation- impact-on-business/

Benefits and Limitations of Further EU Expansion

Benefit or Limitation? Potential for easier mergers and takeovers of businesses in the EU. EU decision making will be slowed down, affecting the time taking for policy to have an effect. Eastern European countries may experience more political and economic instability than developed nations.

Benefit or Limitation? Should the EU enlarge with an unstable currency and instability in nations like Greece? Low cost imports from new countries may drive UK suppliers out of business. Immigration of new workers will swell the UK labour force – resulting in lower wages. Easier to outsource business operations to developing nations with low wage rates.

Benefit or Limitation? Access to huge new markets, allowing for potential growth driven by economies of scale. Funding to new member nations may result in higher tax rates in existing member countries.

Euro Zone Crisis ?print=true ?print=true

Euro Zone Crisis Questions: What effect may the euro zone crisis have on UK businesses; – Investing in EMU countries – With operations in EMU countries – Who rely on imports from EMU countries What effect may the crisis have on the UK economy?

Euro Zone Crisis Hits UK Companies