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Business > the EU ch 30 > Flashcards

the EU ch 30 Flashcards

1
Q

EU institutions

A
  1. european commission
  2. european parliament
  3. council of the european union
  4. european court of auditors
  5. court of justice of the european union/ european court of justice
  6. european investment bank
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2
Q

european commission

A

responsible for the day-to-day management of the EU.
-consists of one commissioner from each member state appointed by their own govt.
-each commissioner assigned a directorate general (DG) which relates to an area of responsibility e.g. trade, agriculture
-commissioners meet once a week in brussels or strasbourg

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3
Q

functions of the european commission

A
  1. proposes new laws to european parliament + council of the EU: consults experts, interest groups + public to identify new laws needed
  2. enforces EU laws -> brings cases of breaches to the CJEU
  3. represents EU internationally -> when negotiating international trade agreements on behalf of EU
  4. formulates + monitors EU budget -> draws up annual budget for approval by EP and council of the EU. ensures its used appropriately
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4
Q

european parliament

A

only directly elected EU institution, elections every 5 years
-based in strasbourg, consists of 751 MEP
-number off seats based off population
-president elected for renewable 2.5 year term + acts as rep of EU to other EU/non-EU institutions

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5
Q

functions of the EP

A
  1. passing laws -> debates proposals by the EC, can accept, reject or amend. EP and council of EU work together to examine proposals + turn them into laws
  2. supervisory powers -> supervises work of EC. EC must submit regular reports on implementation of budget
  3. appoints president of EC and auditors to court of auditors
  4. preparation + approval of EU budget -> helps prepare budget -> agreed between EP and council of EU. monitors budget to ensure used appropriately
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6
Q

council of the european union

A

CEU + EP make up main decision making body of the EU
-consists of ministers from member states who meet regularly
-ministers can vote on behalf of their country on topics discussed
-presidency held by each member country in turn

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7
Q

functions of the council of the EU

A
  1. passes EU laws -> ‘co-decision’ with EP, negotiate + adopt laws proposed by EC
  2. agrees EU budget with EP -> usually approved in dec + starts 1 jan
  3. creates EU common policies e.g. security, defence, humanitarian aid
  4. gives EC permission to negotiate agreements on behalf of EU with non-EU countries + international orgs.
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8
Q

European court of auditors

A

responsible for ensuring that EU funds are raised + used correctly. aims to improve management of EU finances. each member state has 1 rep

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9
Q

auditor

A

independently examines financial accounts e.g. balance sheet/ cash flow forecast of an org. ensures that info contained gives true + fair view of the orgs. financial position

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10
Q

functions of the european court of auditors

A
  1. conducts audits -> ensure money collected + spent in EU is done so appropriately + gives best value of money to EU citizens
  2. publishes audit reports with findings + recs for national govts + the EC. produces annual report for EP and CEU
  3. reports suspicions of fraud/corruption to OLAF -> european anti-fraud office
  4. conducts spot checks on any individual or org. responsible for handling EU funds -> includes EU institutions, EU countries, countries that receive EU aid
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11
Q

european court of justice ECJ/CJEU

A

responsible for ensuring EU laws are applied in the same way in each EU member country
-also monitors EU countries and institutions to ensure they are abiding by EU laws

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12
Q

Functions of the ECJ

A
  1. gives advice to the courts of member countries on how to apply EU laws
  2. enforces EU laws -> can force member countries to comply. must resolve issue immediately if they breach an EU law. if second case brought they will be fined
  3. cancels EU laws if found to breach fundamental human rights. -> cases to cancel laws brought by EC, member govts or individual citizens
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13
Q

european investment bank (EIB)

A

jointly owned by member states, based in luxembourg. -> responsible for providing funding to projects that help to achieve the aims and objectives of the EU
aims to:
-improve opportunities for jobs + growth
-support climate change reduction projects
-promote EU policies globally

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14
Q

services provided by the EIB

A
  1. lends money to clients e.g. local authorities, universities for projects to increase growth + employment
  2. acts as guarantor on loans for EU projects -> encourages investment in projects
  3. offers advice + tech assistance to clients to ensure borrower gets best value for money
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15
Q

decision making process in the EU

A
  1. consultation: EC proposes laws to be introduced -> consults with interest groups, experts + citizens
  2. legislation proposal - first reading: EP and CEU review proposed laws. can accept, reject or amend
  3. legislation proposal - second reading: happens if EP + CEU can’t agree on proposal. both bodies suggest amendments. if they agree legislation is adopted
  4. conciliation committee: if agreement not reached after 2nd reading referred to conciliation committee. -> if CC cannot help EP + CEU agree, legislation not adopted
  5. third and final reading: no further amendments allowed, EP + CEU may give final draft their approval. -> law adopted + becomes EU legislation
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16
Q

problems with EU decision making

A

-slow -> very complex + slow to make decisions/react to problems
-centralised -> decisions made in belgium. do not fully consider peripheral countries
-over-regulated -> too many rules + policies, higher costs + prices for businesses + consumers
-democratic deficit -> members of EP directly elected by EU citizens, cannot make decisions by themselves in EU -> MEPs cannot propose laws + must pass or reject in conjunction with CEU

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17
Q

directive

A

law that applies to all EU member states, must be implemented within specified time limit
-each member state can choose how the directive is applied in their country

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18
Q

regulation

A

means laws introduced + enforced in same way across all EU member states
-take precedence over national laws

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19
Q

EU recommendation

A

not legally binding but give EU institutions opportunity to make views known on particular issues or concerns

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20
Q

EU decision

A

can be given to individuals, businesses + member states. can be made by CEU and EC. decisions are binding + often used for rulings on proposed business mergers

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21
Q

special interest groups

A

aim to influence the political and decision making process in the EU. greater strength in numbers + more capital and resources than individuals, more likely to be listened to. use lobbying, publicity campaigns, public protest etc.
-also consulted by EC when commission is proposing new legislation
e.g trade unions, employer orgs. (e.g. IBEC), TNCs, national govts., consumer protection bodies (e.g. CAI), environmental protection orgs. (e.g. EPA)

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22
Q

methods to influence decision making

A

-lobbying -> IG tries to influence decisions by outlining views of the group on particular issues
-establishing offices -> in brussels/strasbourg so that staff can monitor developments in EP/EC + react quickly
-publicity campaigns -> aim to increase public awareness of issue + influence decision makers e.g. petitions, events

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23
Q

CAP

A

common agricultural policy -> aims to:
-ensure high quality, safe, affordable food is available in EU
-provide decent standard of living for farmers
-protect environment + protect natural resources

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24
Q

advantages of CAP

A
  1. ensures EU countries have access to secure + stable food supply at reasonable price -> not reliant on food imports
  2. improved farm incomes -> EU system of direct payments, subsidies + market supports to ensure stable income for farmers
  3. improved farming methods -> enables farmers to make best use of land + improve yields
  4. helps protect rural environments -> farmers get higher payments if they follow eco-friendly practices
25
Q

disadvantages of CAP

A
  1. unemployment -> improved efficiency (EU grants + new machinery/practices) reduced need for farm labourers -> rural unemployment
  2. unequal distribution of funds -> large farms get higher payments
  3. loss of small farms -> unable to compete with large farms (higher payments + economies of scale)
  4. cost to taxpayer -> most expensive EU policy. taxpayers feel too much money is spent on CAP instead of healthcare etc.
26
Q

CFP

A

common fisheries policy: set of rules governing management of EU fishing fleets and conservation of fish stocks
-give people in fishing industry fair standard of living
-provide stable source of food for EU citizens
-ensure fishing is environmentally sustainable

27
Q

advantages of CFP

A
  1. protection of fish stocks -> TAC allocated to each member state. once quota reached must close fishery. rules regarding mesh size (prevent overfishing of young fish)
  2. enabled workers to get fair price for their produce + ensures consumers get high quality products
  3. helps aquaculture industry grow -> provides funding, makes the sector competitive on international markets
  4. targeted funding -> provides funds for local, low impact fishing fleets -> employment in local areas
28
Q

TAC

A

total allowable catch -> limit placed on catches of fish species e.g. cod, seabass. usually set for year/fishing season

29
Q

disadvantages of CFP

A
  1. centralised decision making -> may not take local issues into consideration
  2. decline of fish stocks despite policies
  3. food waste -> fishermen dump millions of dead fish back into sea if too small or wrong species. discarding wastes catches + reduces fish stocks
  4. policing -> not possible to ensure that fishing boats do not fish more than TAC -> overfishing
30
Q

competition policy

A

introduced to ensure EU markets remain competitive. allows consumers to benefit from greater choice, lower prices, higher quality goods/services.
-prevents businesses behaving in anti-competitive manner -> harms consumers.
EC monitors:
-mergers + takeovers
-deregulation
-companies that abuse dominant market position
-cartels
-state aid

31
Q

competition policy - mergers + takeovers

A

certain mergers + takeovers must be examined + approved by EC. may be denied if found it will have neg. effect on consumers e.g. higher prices, reduced quality

32
Q

competition policy - deregulation

A

reduces or removes state involvement in certain industries e.g. transport/ telecomms. allows priv. companies to enter market + usually leads to greater choice/lower prices
e.g. ESB had monopoly on irish energy, now many competitors e.g. energia, electric ireland

33
Q

competition policy - abuse of dominant position

A

prevents businesses pushing smaller firms out of market e.g. predatory pricing strategy

34
Q

competition policy - cartels

A

cartel - group of firms in same industry that agree to restrict market for consumers e.g. price fixing or limiting production. cartel members agree to behave in same way -> consumers pay higher prices for lower quality goods/services

35
Q

competition policy - state aid

A

does not allow EU govts. to provide state aid to businesses e.g. subsidies -> would give some companies unfair advantage over similar businesses in EU

36
Q

advantages of competition policy

A
  1. lower prices -> intense competition
  2. improved quality -> competition in market encourages higher quality
  3. greater consumer choice -> consumers can purchase goods from firms throughout europe -> greater choice + can choose best price, quality, choice etc.
  4. competition encourages development of innovative/creative products -> i.e. businesses look for gaps in the market
37
Q

disadvantages of competition policy

A
  1. small business closure -> unable to compete on price/quality -> job losses
  2. reduced expansion -> EU can deny certain mergers/acquisitions
  3. high fines for businesses found guilty of breaking competition laws
38
Q

ESM

A

european single market: views the EU as one single territory without any borders -> allows for freedom of movement of people, goods, services, capital between EU member states

39
Q

advantages of the ESM

A
  1. free trade -> between member states. EU firms protected from non-EU competition by protectionist measure e.g. tariffs/quotas
  2. free movement of capital -> can use financial services across EU e.g. foreign banks
  3. simplified documentation -> less documentation needed to move g/s across EU states -> lower cost to operate in EU
  4. improved quality -> CE mark introduced to show products meet EU health/safety regs. protects consumers from low quality/dangerous goods
40
Q

disadvantages of ESM

A
  1. govt cannot favour firms from their own country when awarding contracts to tenders e.g building school
  2. foreign competition -> large EU firms sell their goods in ireland -> difficult for small irish firms to compete -> closures + job losses
  3. free movement of labour leads to increased competition for jobs -> businesses in ireland employ foreign employees -> higher unemployment/ social welfare payments
41
Q

opportunities for irish businesses in the esm

A
  1. free movement of labour -> workers from foreign countries can come to work in ireland -> businesses have a wider range of applicants to choose from
  2. irish firms can tender for govt projects in all EU member countries –> opportunity to increase sales + profits
  3. simpler documentation for international trade -> reduced costs/time/resources
  4. economies of scale -> increased production levels -> reduce costs
42
Q

tender

A

bid by a firm or group of businesses to complete a govt contract e.g. building road. bid includes details of costs + timeline for completion

43
Q

challenges for irish businesses in the esm

A
  1. irish people freely move to work in other countries -> difficult to find suitable staff + fill vacancies
  2. govt tenders may be awarded to foreign firms -> loss of jobs + business for irish firms + money paid to foreign workers will leave irish economy
  3. critics believe there is too much bureaucracy (form filling + processes to adhere to) -> firms miss out on market opportunities
  4. competition from larger EU firms with wider product ranges/lower prices -> forced to close
44
Q

EMU

A

european monetary union -> EMU policy involves coordinating common economic, monetary, and currency policy among EU member states. all eu countries operate in the economic union, but 19 countries have adopted the euro as the common currency. (eurozone)

45
Q

advantages of EMU

A

-easy for consumers to compare prices across EU + shop around
- increased tourism as consumers don’t have to change currency in eurozone
- firms don’t have to pay currency conversion rates or deal with currency fluctuations when making payments -> reduces costs associated with foreign exchange
- ECB (european central bank) sets interest rates -> impacts inflation. helps ensure firms do not experience rapid inflation

46
Q

disadvantages of EMU

A
  • main export partners (UK, US) are not in eurozone -> if euro strengthens against these currencies irish exports are more expensive -> loss of sales
  • reduced independence as must adhere to strict rules regarding govt spending, borrowing + inflation. reduced ability of national govt to make decisions for good of the country e.g. changing interest rates
  • increased supervision following 2008 recession -> irish govt forced to make difficult economic decisions based on EU advice e.g. reducing spending
47
Q

EU social charter

A

guaranatees certain social and economic rights to all EU citizens e.g. in housing, employment, education, health. places specific emphasis on protecting rights of certain vulnerable groups e.g. elderly, children, disabled, migrants

48
Q

advantages of EU social charter

A
  1. improved pay + working conditions for EU employees -> right to healthy + safe work environment + min. 4 weeks annual holiday
  2. ESF (european social fund) est. to prevent unemployment in EU. invests in education + skills e.g. training for youth + disabled
  3. right to equal treatment in the workplace e.g. access to training, promotion, equal pay
  4. ensures EU citizens provided with medical + social assistance if they do not have the resources themselves
49
Q

disadvantages of EU social charter

A
  1. increased business costs as firms must comply with more regs. relating to pay/working conditions
  2. social welfare tourism -> some citizens may claim to be living in one country to obtain social welfare but work in another state -> increased costs for govts
50
Q

EU regional policy

A

focuses on urban/rural areas across member states. aims to encourage job creation, business competitiveness + sustainable development + to improve the quality of life of all EU citizens
delivered through
-european regional development fund (ERDF)
-cohesion fund

51
Q

ERDF

A

european regional development fund -> aims to reduce gap between wealthy + poor regions in europe. e.g. investment in high speed broadband, financial support, training for small/medium enterprises

52
Q

cohesion fund

A

aims to reduce economic + social imbalance + encourage sustainable development. applies to certain countries e.g. malta, greece

53
Q

advantages of EU regional policy

A
  1. distribution of wealth -> all member states contribute -> given to countries that need assistance most. EU wants all citizens to have same social/economic standards
  2. supports schemes that invest in education + training to prevent long term unemployment
  3. funding to small/medium enterprises encourages entrepreneurship -> creates direct employment + encourages further entrepreneurship
54
Q

disadvantages of EU regional policy

A
  1. tension -> some countries may resent contributing money
  2. complexity -> critics say its too difficult to get funding e.g. cohesion fund or ERDF -> some companies may miss out on available funds for projects
55
Q

benefits of EU membership for ireland

A

-single market -> helps with recruitment, obtaining g/s at competitive prices, allows free movement of people
-agriculture methods improved due to CAP funding -> guaranteed prices for produce, higher standard of living
- EU funding increased no. of people in 3rd level education. study schemes e.g. erasmus allow students to study in other EU universities
-free trade allows ireland to sell to larger international market
-consumers benefit from access to wider range of goods/services at lower prices. products safer due to EU safety regs.

56
Q

drawbacks of EU membership for ireland

A
  1. decision making -> some decisions benefit majority of EU states but may not be in best interests of ireland
  2. closure of small irish businesses -> unable to compete with larger/more efficient EU firms
  3. part of eurozone, ireland impacted by increase in value of euro -> irish exports more expensive
  4. Brexit -> closely linked with UK market -> tariffs + protectionism make it harder to trade
57
Q

opportunities facing the EU

A

-enlargement -> many countries want to join -> increase potential market size
-improve institutions -> known for complex procedures + slow decision making -> simplify procedures + react quicker
-EMU expansion -> would help consumers compare prices across member states + incr. tourism
- budgetary reform -> amount of money spent on agriculture often criticised -> budgetary reform to reallocate funding to other areas e.g. transport, education, employment

58
Q

challenges facing the EU

A

-countries leaving EU e.g. brexit -> reintroduction of trade barriers
-pressure on irish govt to increase corp tax rates in line with other EU countries -> would reduce competitive advantage + TNCs may locate elsewhere
-needs better common policy to deal with refugees -> individual countries not overwhelmed with migrants
-needs to commit to european climate change programme to ensure all member states work together to reduce climate change

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