the European Union

Question 1

What is the European Union (EU)?

Answer 1

• A political and economic union formed in 1993 aiming to create a Single European Market with free trade, common standards, and a single currency.

Question 2

What are the key features of the Single European Market?

Answer 2

• Free trade in goods, services, and factors of production
• Common technical standards
• Common external tariff
• Harmonised taxes and fewer customs posts
• Common policies

Question 3

What are the main features of the Single Market?

Answer 3

• No tariffs or quotas between member states
• Free transfer of capital and labour
• Consistent standards
• Common external tariff on non-EU imports

Question 4

What are the advantages of the Single Market for businesses?

Answer 4

• Access to larger markets
• Economies of scale
• Free capital markets
• Greater labour access
• Future demand from growing economies

Question 5

What are the advantages of the Single Market for consumers and workers?

Answer 5

• Lower prices, higher real income
• More consumer choice
• Increased employment opportunities
• More competition and lower prices

Question 6

What are drawbacks to UK businesses from EU expansion?

Answer 6

• Increased competition
• Cheap imports
• Job losses
• Language and currency complexities
• Logistics over greater distances

Question 7

Why is the Single Market not yet complete?

Answer 7

• Protectionism
• Difficulty harmonising standards
• High compliance costs

Question 8

What is the Eurozone?

Answer 8

• The group of EU countries that have adopted the Euro as their official currency.

Question 9

Implications for UK businesses of not being in the Eurozone?

Answer 9

• Currency exchange costs
• Planning issues due to rate fluctuations
• Less attractive to EU businesses
• Price transparency issues

Question 10

Implications if the UK joined the Eurozone?

Answer 10

• Easier and cheaper EU trade
• Improved planning
• More competition
• ECB interest rate control
• High conversion costs

Question 11

What are the benefits of the UK not being an EU member?

Answer 11

• Freedom to negotiate new trade deals
• Competitive exports due to weaker pound
• Ability to impose tariffs on imports

Question 12

What are the problems for UK businesses of not being in the EU?

Answer 12

• Tariffs on UK exports
• Labour shortages
• Reduced capital movement and investment
• R&D and competitive disadvantage