Lecture 2 - EU and the single market

Question 1

What is the economic rationale behind the single market

Answer 1

wider market = more demand
higher demand = business creation
more businesses = more jobs

more products = more competition and lower prices

economies of scale: the more products the less cost for each product

better allocation of resources through freedom of movement of people and capital

Question 2

what was the significance of the single european act 1986

Answer 2

completion of the internal market
qualified majority voting system for the internal market

Question 3

what are the different stages of integration

Answer 3

Free trade area FTA
Customs union : FTA + common external trade
Single market (SM): CU+ 4 freedoms
Monetary union: SM + single currency

Question 4

what are the internal dimensions of the single market

Answer 4

• free movement of goods, services, capital, persons
  -competitive law and state aid law

Question 5

how do we create a single market

Answer 5

3 types of rules apply within the EU
1) host country model: rules of the receiving state prevails tempered by non-discrimination
2) harmonised model: uniform EU rules
3) home country model: rules of the country of origin apply

Question 6

Why is it difficult to establish a single market

Answer 6

host rules could be directly discriminatory or protective

-rules of decision making made impossible to pass legislation for harmonization

-home country rules demand high level of trust between countries and similar levels of protection

Question 7

what was the significance of the 1985 commission white paper

Answer 7

completed the single market and initiative was taken by Lord Cockfield
- it was a combo of both harmonisation when necessary and mutual recognition and non discrimination

Question 8

what are the principles of the single market

Answer 8

non discrimination
market access
some harmonization