WHO?

OBJECTIVES KEY WORDS Enterprise Skills

ALLC

• Understand what the EU represents. Common currency

Eurozone

Enlargement

Eastern European

EU

BRONZE

Decision makingDeterminationIndependence

MOSTB

• Understand the arguments for and against EU membership.

• Understand the case for having a single currency.

SILVER

Self confidenceOpen minded

Problem solvingCommunication

SOMEA-A*

• Understand the reasons for the UK’s non membership of the euro.

• Understand how the EU has enlarged over recent years.

GOLD

Reviewing performanceFlexibility

Forward thinking

Unit 12.1 Managing the economy

12.1.5 The role of the European Union (EU)

Starter

What do you know about the EU?

Video: What is the EU?

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!

Free trade Protectionism Single European market

The UK membership

of the EU

Effects of membership of the EU

Can you think of any benefits for being a member of the

EU?

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.

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.

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 capitalCommon product standards

Activity

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

Effects of membership of the EUUK MEMBERSHIP OF THE EU (1973)

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 1957 - 2009

Video: No to Europe

Activity

Eurozone in crisis - interactive guide

Activity

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

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?

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

Activity

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

EU Enlargement

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

Video: http://news.bbc.co.uk/player/nol/newsid_6220000/newsid_6221900/6221971.stm?bw=bb&mp=wm&news=1&ms3=6&ms_javascript=true&nol_storyid=6221971&bbcws=2

Activity

1. What would be the effects of more countries joining the EU on the governments ability to meet its economic objectives?

2. Which countries are currently in negotiation for EU membership?

objectives the government

Economic growth Full employment Stable prices Balance of payments

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.

MEMBERSHIPThere 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 CHARTERMinimum 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 MARKETTreats 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

1. List four economic objectives of the government.2. Name the two methods used to measure UK inflation.3. How is the unemployment rate calculated? 4. Explain two benefits and two drawbacks of economic growth.5. Define social cost and give three examples of negative externalities.6. Define external benefit and give two examples.7. State the four stages of the economic cycle.8. Explain how indirect and direct taxes are used to collect revenue for the government.9. Analyse the effects of an interest-rate reduction on the UK economy.10. Analyse the effects of a rise in income taxes on consumer spending.11. Describe how supply-side policies are used in the UK.12. What are the benefits for the UK remaining a member of the EU?13. Discuss the case for joining the euro.

Activity

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!

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!

1 2 3 4

5 6 7 8

9 10 11 12

13