key concepts nov 1 Flashcards
What are the two major elements of the European union?
Free movement of people and goods
How do tariffs work in the EU?
All have a common tariff, and cannot place tariff on eachother
How many countries are in the EU?
27
Why was the EU created?
To stop civil wars in Europe and the EU has accomplished this.
Who was one of the fathers of the EU?
John Monet
When was the idea of a EU constitution introduced and why did it not work?
2005, France and Netherlands rejected it
What happened in 2008-9 in the EU?
Financial crisis that hurt countries in the eurozone.
What is the difference between Monetary, fiscal, and political unions?
Monetary means they use the same currency, fiscal means they share taxes and budgets, political means the union of different political branches
What type of union is the eurozone?
It is strictly a monetary union
What are examples of countries in the EU but not in the eurozone?
Bulgaria, Czech Republic, Romania
What are the three criteria to joining the eurozone?
- Inflation has to be below 1.5%
- Deficit below 3.5 of GDP
- Debt ratio to GDP 60%
What are the disadvantages to the eurozone?
Cannot control countries if they decide to implement bad economic policies
What happened in 2008-9?
Greece lied about their data to get into the eurozone and tanked the euro.
What does contagion refer to?
The fear that crisis will spread to other countries… when something happens in a neighboring system it spills over to yours.
Give an example of contagion.
In 2008-9 when Greece lied their way into the eurozone, Ireland and Portugal suffered as well.
What affected the stock markets in 2015?
The financial crisis, because if Greece exited the eurozone it would have a domino affect of countries leaving the eurozone.