Policy areas Flashcards
What are some of the policy areas we have covered in the semester?
The SEM, competetion, environmental, trade, labour market, monetary/banking union
Does the EU have a common fiscal policy?
No.
Does the EU have a common monetary policy?
Yes.
Are there barriers to trade within the EU?
No.
Explain the EU Emissions Trading Scheme (ETS).
There is an overall cap for how much industries in the EU are allowed to pollute. The companies are given qoutas, and can sell them on auction if they don’t use them all themselves.
What is competition policy?
An instrument to create a unified and open common market, hereby furthering European integration
What does EU competition policy prohibit?
The treaty of Rome prohibits cartels, abuse of dominant market position, some forms of state aid and public undertakings. Outside of ToR: anticompetitive/merger controls.
Is monopoly illegal?
No.
Describe the ‘competition effect’.
Efficiency gains due to cost-cutting and improved productivity - When combined with pressure of foreign competition, it will result in price cuts and consumer gains.
Describe the ‘innovation effect’.
Free trade or competition pushes firms to innovate, engage, technical updates, etc.
What is the critique of the free trade model?
No comparative advantages.
Production will be located where labour and environmental costs are lowest.
Free trade thereby puts a downward pressure on social, environmental, and public health standards.
Explain ‘standards lowering competition’.
Free trade will result in ‘standards lowering competition’ -> a ‘race-to-the-bottom’ of labour (wages), environmental and public health standards.
What is an environmental externality?
Influence from production or consumption of a service or good, resulting in a cost or benefit for a third party.
What are ‘regional blocs’?
Free traders are divided over whether regionalism is a ‘building block’ or a ‘Stumbling block’ to free global trade. Much depends on the level of barriers to trade between the region and non-member states (J.Viner).
What is the ‘most favored nation’?
A non-discrimination principle.
