European Economy in Focus 2006 Edition
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1 tutor2u European Economy in Focus 2006 Edition Author: Geoff Riley (Head of Economics, Eton College) European Economy in Focus Tutor2u Page 1 of 145
2 THE EUROPEAN UNION IN FOCUS 2006 EDITION 1 INTRODUCTION TO THE ECONOMICS OF THE EU The population of the European Union The European Union in a Global Perspective Trade Patterns and Trade Blocs in the World Economy The European Union Budget The UK s Trade with the European Union 15 2 TRADE AND THE EU SINGLE MARKET Trade creation and trade diversion The Four Freedoms in the Single Market Evaluating the impact of the Single Market Price Differentials within the Single Market Inward Investment into the European Single Market Fiscal harmonization Tax dumping Suggestions for further research on the single market and fiscal harmonization 30 3 EUROPEAN MONETARY UNION Monetary Policy in the Euro Zone - The European Central Bank Joining the Euro Meeting the Convergence Criteria The Case for UK Membership of the Euro The Case against UK Participation Optimal Currency Areas Staying outside the Euro Zone retaining the freedom to choose Labour and the Euro - the 5 Economic Tests The Importance of Economic Convergence Suggestions for further reading and research on European Monetary Union 41 4 MACROECONOMIC DEVELOPMENTS IN THE EURO ZONE Short Term Economic Growth Macro performance of selected countries Unemployment Inflation and interest rates 46 European Economy in Focus Tutor2u Page 2 of 145
3 4.5 The Euro Exchange Rate The Fiscal Stability and Growth Pact Suggestions for further research on developments in the Euro Zone 54 5 LIVING STANDARDS AND POVERTY IN THE EU Defining and Measuring the Standard of Living Living Standards: The Purchasing Power Parity Adjustment European Regional Policy Instruments of regional policy Has EU Regional Policy Worked? Regional policy and infrastructure Enlargement and Regional Policy EU Regional Policy and the UK The Importance of the regional Issue 64 6 ENLARGEMENT OF THE EU The Economic Structure of the New Member States Joining the European Union Requirements for Entry Advantages of Enlargement for Accession Countries Disadvantages and Costs for Accession Countries Advantages of Enlargement for the EU Disadvantages of Enlargement for the EU European Enlargement and the Labour Migration Issue Enlargement and Tax Competition between Nations Enlargement and the Single Currency Comparative Advantage and Trade Suggestions for Further Research on EU Enlargement 84 7 UNEMPLOYMENT IN THE EUROPEAN UNION Economic and Social Costs of Unemployment Explanations for high unemployment Reforming Europe s Labour Markets Suggestions for Further Research on Unemployment in Europe 92 8 THE COMMON AGRICULTURAL POLICY Background to the CAP 93 European Economy in Focus Tutor2u Page 3 of 145
4 8.2 The Economics of Farm Support Costs of the CAP Government Failure The Environmental Costs of the CAP CAP and Developing Countries Europe and Developing Countries - Reforming the EU Sugar Regime Farm Reforms Lessons from New Zealand Reforming the CAP the Long March Costs and Benefits of CAP Reform EU Enlargement and CAP reform Winners and Losers from CAP Reform Suggestions for further reading and research on the Common Agricultural Policy EUROPEAN FISHERIES POLICY Resource depletion - the long term decline in European fish stocks The Common Fisheries Policy (CFP) EU Fisheries Reform Deals Controlling fish stocks lessons from Iceland Web Links for Further Research on the Fisheries Issue EUROPEAN ENVIRONMENT POLICY Concerns over environmental damage Europe s commitments to the Kyoto protocol The main principles and instruments of EU environmental policy Environmental taxation The polluter pays principle Difficulties with environmental taxation Pollution Regulation European Directives Pollution Emissions Trading Policies towards Waste Management Web Links for Further Research on European Environmental Issues and Policy EUROPEAN TRANSPORT POLICY The Economic Importance of Transport The main characteristics of transport The growth of demand for transport in Europe The European Aviation Industry 124 European Economy in Focus Tutor2u Page 4 of 145
5 11.5 Suggestions for further research on European Transport Policy EUROPEAN UNION COMPETITION POLICY Anti-Trust Policy - Abuses of a Dominant Market Position Anti-Competitive Practices: Market Liberalisation State Aid in Markets European Merger Policy Suggestions for further research on European Competition Policy REVISION ADVICE The Nature of a Synoptic Paper The Economist s Toolkit The AQA Exam on the Economics of the European Union Strategies for scoring high marks on the European paper 141 European Economy in Focus Tutor2u Page 5 of 145
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