1. REVIEW 8.1
EUROPEAN UNION

2. The single market means –
1. No protectionist measures between member states
2. No border controls (Schengen)
3. Free movement of people
4. Recognition of qualifications
5. Making taxes and laws should all become similar.

3. The Single Market Single Market
This means the economies of the Union allow the free movement of labour and capital.
Custom Union:
This is a group of countries who have free trade between the member states but a common external barrier.
Single Currency:
A group of countries agree to adopt the same currency and to have monetary policy.

4. Advantages of Single Market:
Specialisation and economies of scale
Free movement of capital
Free movement of labour
Competition
Lower prices and higher standards of living

5. Disadvantages of Single Market
Job losses
Attract capital and jobs away from other countries
Manufacturing firms are attracted to the low labour capital
Multinational companies to drive out local firms.

6. The way the EU works
Member states make contributions based on the size of their economy, therefore Germany pays a lot and Greece pays much less. These contributions are then shared out by member states. Ireland is a good example of a country who has done well from this system.
Single Currency – Advantages:
Elimination of exchange rate risk
Price transparency
Transaction costs
Employment
Long term planning
Single Monetary policy (Through borrowing).

7. Disadvantages
One interest doesn’t fit all – Germany v Greece.
Loss of freedom over monetary policy.
Sensitivity to interest rates
Recession