Regional Trade Aggrement (EU) (chap 7)

Question 1

European Union (bodies)

Answer 1

1. European Commission
2. Council of Ministers (European Council)
3. European Parlament
4. European Court of Justice

Question 2

Deepening (EU term)

Answer 2

Closer economics integration

Ex:monetary system

Question 3

Widening (EU term)

Answer 3

Expanding membership

Question 4

Single European Act (SEA)

Answer 4

1. Elimination of physical barriers (passport and customs control) - the Schengen Agreement
2. Eliminations of technical barriers
3. Elimination of fiscal barriers

Question 5

what previous name had the EU?

Answer 5

The European Economic Community (EEC)

• Before the EEC, it was name the European Common Market
• Before, it was the European Coal and Steel Community (ECSC)

Question 6

what was the propose of the European Coal and Steel Community (ECSC) ?

Answer 6

the propose was to gave access to the German’ coal and steel resources to the other European countries.

Question 7

history of the creation of the European Coal and Steel Community (ECSC):

Answer 7

After WW2 the Ruhr valley(Germany) had massive reserve of coal that was needed to the restoration of neighbouring countries (allied occupation ).

• Robert Schuman (the French foreign minister) propose a compromise , to share the industries in the area (pooling), and Germany got back the sovereign of the valley

Question 8

what member had the European Coal and Steel Community (ECSC)?

Answer 8

• france
• West germany
• italy
• the Benelux countries (Belgium, Netherlands , Luxembourg)

Question 9

what consequence had the success of the European Coal and Steel Community (ECSC)?

Answer 9

• the success of the European Coal and Steel Community (ECSC) lead to proposals for a fuller economic association

Question 10

what was the Treaty of Rome (1957)?

Answer 10

The creation of EEC (European economic commonwealth) and Eurtotom by the six members of the ECSC

Question 11

what opposing views had co-existed in the European Union ?

Answer 11

1. Promotion of a loose association, a free trade area

2. “Functionalism” ( a. version of USA, United States of Europe)

Question 12

what the treaty of Rome incorporate? (main)

Answer 12

The principal of Subsidiary:

• the EU had the authority over international level issues such as labour, competition, regional policy, monetary and economic union, research and technology.

Question 13

in what consist the European commission?

Answer 13

• administer the treaties, EU budget, rules on conflict between countries
• 28 members (1 for country)
• member appointed by national governments
• a president is appointed and allocates responsibility to others member

Question 14

in what consist the European Council (council of minister)?

Answer 14

• Set policies
• the heads of government meet
• decide the most important issues
• qualified maturity is 74% (260 out 352)
• # of votes per country varies according to population

Question 15

What is the propose of the European Parliament?

Answer 15

1. question members of the council and commission
2. it can veto the EU budget
3. can pass the vote of no confidence on the commission as a whole

Question 16

at what period there was more “deepening” in the EU?

Answer 16

50’s-70’s (first wave)
80’s stagnation - Euroclerosis
90’s Europhoria (second wave)

Question 17

what happens in the second wave of deepening in the EU?

Answer 17

1. The Single European act (1987)

2. The Maastricht Treaty (1991)

Question 18

what was the Delors Report ?

Answer 18

report that propose 300 amendments to the Treaty of Rome

279 were included

Question 19

What benefits had the Single European Act (SEA)?

Answer 19

• reduced cost from customs and passport check (by eliminating them)
• allowed economies of scale (firms selling to all EU market)
• increased competitiveness as everyone compete in a same market

Question 20

what was the Maastricht Treaty 1991?

Answer 20

1. A social charter, minimum standard for social programs
2. A common defence and security policy
3. common currency

Question 21

Conditions of the Optimal Currency Area ? (EU)

Answer 21

1. The business cycles sound be closely synchronized

2. There should be free mobility of labour and capital

Question 22

what criteria were needed before the adoption a common currency? (EU)

Answer 22

1. Stable exchange rate, low inflation
2. Harmonization of long-term interest rates
3. Reduction of the government deficit/ GDP ratio
4. Reduction of government debt/GDP ratio

Question 23

pro and con of Monetary Union?

Answer 23

benefits :
- eliminates cost of conversion ( 0.5% EU GDP)

cost:

• force centrals banks to adopts “One size fits all” policies
• sometimes the business cycles weren’t synchronize
• not complete mobility of labour (language)

Question 24

widening : what new countries incorporate?

Answer 24

1957 - six original member (rich)
1973 : United kingdom, Ireland , Denmark (rich)
1982-1995: six more (poor)
2004-2007:12 more (poor)

Question 25

what challenge have the EU?

Answer 25

1. The Sovereign Debt Crisis

2. Bretix

Question 26

Possibles solutions to the Sovereign Debt Crisis?

Answer 26

1. Introduction of the eurobonds
   - help deficit countries by reducing interest rate
   - increase the interest rate for surplus countries
2. Splitting the eurozone into two currencies
   - germany and close ones could leave and created a new Mark Zone
   - the remaining members then could depreciate the euro

Question 27

Fundamentals problems in the Sovereign Debt Crisis(EU):

Answer 27

1. The Eurozone was never an optimal currency area
2. all the adjustment has been imposed on deficit countries
   - north , under consume
   - south, over consume

Question 28

Problems discussed in the Sovereign Debt Crisis (minor problems):

Answer 28

1. Economist do not agree that balance budget rule is “sensible” - to hard on the people
2. how credible are the rules and actions after violation of the rules (especially by a large country)

Question 29

alternative models after the Britain leave the EU?

Answer 29

1. Norway option
2. Canadian option
3. WTO option

Question 30

what is the WTO option in Bretix?

Answer 30

• Not having special relationship with the EU,
• same protection as other member of the World Trade Organization

-common external tariff

Question 31

what is the Canadian option in Bretix?

Answer 31

• free trade with the EU, except free movement of labour

- no cover financial service (40% British trade with EU)

Question 32

what is the Norway option in Bretix?

Answer 32

• part of the EEA ( European economic market)
• full access to the EU markets but as an observer does not have a voice in the regulations
• least disruption, still with free movement of labor
  hard to see an improvement

Question 33

what issues expose the referendum previous Bretix?

Answer 33

1. immigration
2. desicion making from London to Brussels
3. General resentment agains globalization

Question 34

economic cost of Bretix ?

Answer 34

1. decrease in exports
2. decrease in foreign investment
3. posible decline in the status of London (financial sector)

Question 35

what position the supporters of “deepening” about Bretix?

Answer 35

some feel that could be good:

1. U.K opposed to closer integration
2. the fall of the status of London(financial sector) may benefits other countries in EU