| What are the Reasons against Entry to the EMU? | -Price Stability is a Major Aim of the ECB. The Inflation Targets are Less Flexible than the UK. Slower Growth thus may be having to be the Result
-Problems uncovered after the Global Financial Crisis. The Euro is a bit Broken
-A large Amount of Structural Unemployment within the Eurozone, alongside a Widening Divergence in Trade Balances between the Eurozone. This suggests Problems in Competitiveness between Member States, as well as overall Systemic Problems within the Eurozone |
| What are the Reasons against Entry to the EMU? | -Price Stability is a Major Aim of the ECB. The Inflation Targets are Less Flexible than the UK. Slower Growth thus may be having to be the Result
-Problems uncovered after the Global Financial Crisis. The Euro is a bit Broken
-A large Amount of Structural Unemployment within the Eurozone, alongside a Widening Divergence in Trade Balances between the Eurozone. This suggests Problems in Competitiveness between Member States, as well as overall Systemic Problems within the Eurozone |
| What are the 2 Main Institutions within the EU for Economics? | -The European Commission: One Commissioner from each Member Nation. Allocates EU Funding, Manages Budgets, and Proposes Laws
-The European Central Bank: Manages the Euro and tries to make Prices Stable. Sets Interest Rates to control Inflation, issues Euro Banknotes and also manages the Foreign Currency Reserves to maintain the Euro's Exchange Rate |
| What type of Trading Block is the EU? | -The EU allows Free Trade between Members and Common External Tariffs. The EU is a Customs Union
-Single European market (SEM) was made in 1993. This allows the Free Trade of Goods and Services, alongside Free Mobility of Labour, Capital and Currency |
| For Existing Members, what are the Advantages for Future Enlargements? | -Increased Trade and Market Access: Because new Nations enter, there are Greater Opportunities for Trade and Investment. Existing Members benefit from Larger Markets (Econ of Scale) and Export Opportunities
-Migration from the New Member States will go to the Old Member States, increasing Aggregate Supply and bringing in new Skilled Workers. |
| For Existing Members, what are the Disadvantages for Future Enlargement? | -More Competition for Jobs + Labour Markets. Workers from the new Member States can move wherever they want, which can put Downward Pressure on Wages and Job Opportunities in existing Member States
-The EU has Funds and Programs which aim to Support Economic development and Convergence among Members. With new, perhaps Poorer nations, there may be Increased Demands for Funds, leading to a Diversion of Resources away from Existing Members / Higher Contributions.
-More Competition from newer member states may drive Domestic Firms out of Business |
| For New Member States, what are the Benefits for Joining the EU? | -Access to Single Market. The breakdown of Trade Barriers and Tariffs allows the Free Movement of Goods, Services, Capital, and Labour which can bring about a Huge Common Market for Exporters, and more competition to drive Innovation and Productivity
-FDI may start to Flood in, as joining the EU signals Economic and Political Stability. FDI can bring about Advanced Technology and Enhance the Domestic Competitiveness Industry.
-Citizens of the New Member States can go wherever in the EU to work and get Higher Wages. This can lead to Remittances being sent back to the Home Nation |
| For New Member States, what are the Drawbacks of Joining the EU? | -Removing Trade Barriers can expose Domestic Industries to a Fierce Environment, which may lead to Domestic Unemployment
-Brain Drain may occur, as those who move away from the New Member States are usually those on Higher Incomes that can move away to a more Richer nation.
-Complying with EU Laws may lead to Increased Costs for Firms as they have to Comply with certain Standards, as well as the Government being in Conflict as they may think this isn't the Right Path |
| What is the EMU? | -The European Economic and Monetary Union. This Involves
-Common Monetary Policy, dealt with by the ECB
-Member States Coordinating Fiscal and Economic Policies
-Member States using a Common Currency - The Euro |
| Are all Members part of the EMU? | -The UK was a Member of the EU, but not the Member of the Single Currency Area - the Eurozone
-Members joining the EMU had to meet Convergence Criteria. This involves keeping the Budget deficit, Exchange Rate, and Interest Rates close to Specific Levels. |
| What are the Reasons for Entry to the EMU? | -FDI into Eurozone Nations may have Increased. If the UK joined the Eurozone, it would have been a Bigger Market with Lower Transaction Costs. Not Joining may lose some Inward FDI
-Potential with Less Transaction Costs that could lead to Greater Trade and thus Higher Growth and Employment
-Still Fiscal Policies available for Governments to use to Manage the UK Economy, but they still would have to be in line with EU policies, such as Budget Deficit |
| What are the Reasons against Entry to the EMU? | -Price Stability is a Major Aim of the ECB. The Inflation Targets are Less Flexible than the UK. Slower Growth thus may be having to be the Result
-Problems uncovered after the Global Financial Crisis. The Euro is a bit Broken
-A large Amount of Structural Unemployment within the Eurozone, alongside a Widening Divergence in Trade Balances between the Eurozone. This suggests Problems in Competitiveness between Member States, as well as overall Systemic Problems within the Eurozone |
