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EUROPEAN UNION

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ART IS BY : balaclava, avatar.
IRL NAME : ems, the next supreme


MessageDim 11 Juin - 18:00


13.    Describe the three main elements of the EU as an economic unit.

SINGLE MARKET
= three elements:
* free internal movement of capital, goods, services and labour
* common external tariff
* competition policy; against monopolies and national preference

= why is it good?
* enhances competition and generates economies of scale, in turn leading to efficiency gains
* favours the centre against the periphery

FINANCE : ECO AND MONETARY UNION
= common currency (euro)
* not all member states pariticipate
* centralized eu responsability for currency policy (european central bank)
* common criteria for inflation, interst rates, government deficit and gov debt

= what are the consequences?
*makes trade cheaper and more calculable
* states adopting euro lose power over their economies :
- member states have no independent monetary policy (interest rates), cannot control the exchange rate
- fiscal policy constrained through the stability and growth pact (budget deficit of 3, debt of 60% of GDP

MARKET CORRECTING AND CUSHIONING POLICIES;
= agricultural subsidies compensate produces for costs of liberalization (40  % of eu budget)
= cohesion funds for reducing regional inequality, compensating for costs of integration for poorer countries (1/3 of eu budget)
= environmental and social regulation
- eg. gender equality, gmos


14.    What are the major strengths and weaknesses of the European Union?


15.    Briefly describe the economic situation of Central-Eastern Europe within the European Union.

Historically semi-periphery
= lagging economic development
= after industrial revolution resource providers, lower industrialization (except Czech lands)
= communist legacies
* poor marketing skills
* over-reliance on industrialization
* unsustainable social models
* culture of dependence

EU accession (2004, 2007, 2013)
= convergence or continuing semi-peripheral status?
= modest improvement in GDP per capita
= still large divergence in economic output
= poorest regions of the EU are in CEE
= dependence on global value chains
= few local economic actors
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