1. Reviewing performance
Unit 12.1 Managing the economy The role of the European Union (EU)
WHO? 
OBJECTIVES
KEY WORDS
Enterprise 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

2. What do you know about the EU?
Starter
What do you know about the EU?
Video: What is the EU?

3. 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!

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

5. 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.

6. 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.

7. 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

8. Activity
In pairs can you think of any arguments for and against The EU?

9. Effects of membership of the EU
UK MEMBERSHIP OF THE EU (1973)
Video: No to Europe
Benefits of EU membership
Drawbacks 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

10. Activity
Eurozone in crisis - interactive guide

11. Activity
Analyse the possible effects of the expansion of the EU in 2004 on the UK economy

12. Why do you think the UK is not a member of 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?

13. The Euro Reasons for joining the euro Reasons 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

14. Activity
Q. Looking at the diagram above, explain the likely effect on the UK economy of the change since 2007.

16. EU Enlargement Since 2004, twelve more countries have joined the EU.
Video:
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

18. objectives the government
Activity
objectives the government
Economic growth
Full employment
Stable prices
Balance of payments
What would be the effects of more countries joining the EU on the governments ability to meet its economic objectives?
Which countries are currently in negotiation for EU membership?

19. Connections
Ask a student to suggest a word. You say a word that is related. (E.G. if the word is ‘football’ you might say ‘goal’. ) The next student says a word connected with the previous word. (E.G. ‘goal’, ‘net’ and so on.) Players take turns. They are allowed thinking time, but can be challenged by any other player to explain the connection between their word and the previous word.

20. 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

21. You have 5 minutes to complete as many review questions as you can!
Activity
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!
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!
List four economic objectives of the government.
Name the two methods used to measure UK inflation.
How is the unemployment rate calculated?
Explain two benefits and two drawbacks of economic growth.
Define social cost and give three examples of negative externalities.
Define external benefit and give two examples.
State the four stages of the economic cycle.
Explain how indirect and direct taxes are used to collect revenue for the government.
Analyse the effects of an interest-rate reduction on the UK economy.
Analyse the effects of a rise in income taxes on consumer spending.
Describe how supply-side policies are used in the UK.
What are the benefits for the UK remaining a member of the EU?
Discuss the case for joining the euro.

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