the european union & business a2 business studies unit 4
TRANSCRIPT
The European Union & Business
A2 Business StudiesUnit 4
Aims and Objectives
Aim:• Understand how businesses are affected by
the EU.Objectives:• Define the EU• Explain how businesses are affected by the EU• Analyse the effects of EU enlargement• Evaluate the impact of the Euro Zone crisis
What is the EU?
• http://www.youtube.com/watch?v=RE6QgoykLZU&feature=related
• An organisation of countries aimed at creating free trade and growth through economic and political stability.
• UK joined 1973
• Did not adopt the Euro
The EU• 27 countries• Population of 500m• Accounts for 30% of
world GDP• Largest exporter
of goods/services• GDP per capita is around
35% less than in USA and15% less than Japan.
• Due to recent enlargement-Romania and Bulgaria
What does this mean for businesses?
• Common laws and legislation: competition policy, development, employment, trade policy, ensuring free trade takes place.
• No trade barriers within EU.• Currency fluctuations avoided for 15 EMU countries.• Opens up developing markets.• Free movement of labour – reduce costs.• Easier to attract foreign investment.• More stable economies – encourage investment.
EU Laws and Legislation
1. Using the video, identify four areas of a business operation which have been affected by EU legislation
2. Explain why a trade union might be generally supportive of EU workplace legislation
3. What objections does the small business owner have to laws passed by Europe?
http://tutor2u.net/blog/index.php/business-studies/comments/video-case-study-eu-legislation-impact-on-business/
Benefits and Limitations of Further EU Expansion
Benefit or Limitation?
• Potential for easier mergers and takeovers of businesses in the EU.
• EU decision making will be slowed down, affecting the time taking for policy to have an effect.
• Eastern European countries may experience more political and economicinstability than developed nations.
Benefit or Limitation?
• Should the EU enlarge with an unstable currency and instability in nations like Greece?
• Low cost imports from new countries may drive UK suppliers out of business.
• Immigration of new workers will swell the UK labour force – resulting in lower wages.
• Easier to outsource business operations to developing nations with low wage rates.
Benefit or Limitation?
• Access to huge new markets, allowing for potential growth driven by economies of scale.
• Funding to new member nations may result in higher tax rates in existing member countries.
Euro Zone Crisis
• http://www.bbc.co.uk/news/business-16290598?print=true
Euro Zone Crisis
Questions:
• What effect may the euro zone crisis have on UK businesses;– Investing in EMU countries– With operations in EMU countries– Who rely on imports from EMU countries
• What effect may the crisis have on the UK economy?
Euro Zone Crisis Hits UK Companies