Business in Europe: EU History and Economy

Questions and Answers

What was established by the Maastricht Treaty in 1992?

European Atomic Energy Community

European Economic Community

European Coal and Steel Community

European Union (correct)

Which country was not one of the founding members of the EU?

Spain (correct)

Belgium

Italy

France

What is the total number of EU Member States currently?

The Schengen area comprises ___ European countries with abolished border controls.

27 Signup and view all the answers

The EU is a super-state that replaces existing states.

False Signup and view all the answers

Match the following EU institutions with their main roles:

European Commission = Executive body responsible for EU policies European Parliament = Legislative body Council of the European Union = Negotiates and adopts EU legislation European Council = Defines overall political direction Signup and view all the answers

What is the aim of the European Union?

To ensure peace, democracy, political stability, freedom, and economic prosperity. Signup and view all the answers

Which treaty streamlined the EU's institutional system in 2003?

Treaty of Nice Signup and view all the answers

Which country did the EU reportedly have a Brexit agreement with in February 2020?

United Kingdom Signup and view all the answers

What are the three main institutions involved in EU law-making?

The European Commission, The European Parliament, The Council of the European Union. Signup and view all the answers

The EU has 24 official languages.

True Signup and view all the answers

Which of the following is not an EU policy area under shared competences?

Customs Union Signup and view all the answers

The principle of subsidiarity allows the EU to legislate when Member States can achieve objectives better at the Union level.

True Signup and view all the answers

What is the difference between primary and secondary law in the EU?

Primary law consists of treaties that establish EU objectives, while secondary law includes regulations and directives derived from those treaties. Signup and view all the answers

What is the ordinary legislative procedure in the EU?

It is a process that gives equal weight to the European Parliament and the Council of the European Union in law-making. Signup and view all the answers

Which EU treaty introduced the co-decision procedure?

Maastricht Treaty Signup and view all the answers

Which of the following is NOT a freedom in the European Single Market?

Free movement of information Signup and view all the answers

What is the main goal of the Digital Services Act?

To create a safer online space by making digital companies accountable for the content on their platforms. Signup and view all the answers

Which concept ensures that products legally marketed in one EU country are accepted in others?

Mutual Recognition Signup and view all the answers

What effect did the single market have on intra-EU trade from 1992 to 2006?

Intra-EU trade increased by 9%. Signup and view all the answers

Who is the EU Commissioner for the Internal Market?

Thierry Breton. Signup and view all the answers

When did the United Kingdom withdraw from the EU?

31 January 2020 Signup and view all the answers

What was the percentage of votes in favor of leaving the EU during the Brexit referendum?

51.9% Signup and view all the answers

On what date did the EU-UK Withdrawal Agreement enter into force?

1 February 2020 Signup and view all the answers

What are some areas covered by the EU-UK Trade and Cooperation Agreement?

Trade in goods and services, digital trade, intellectual property, public procurement, aviation, and road transport Signup and view all the answers

Which statement is true regarding customs for UK products imported into the EU?

Different VAT rules apply to UK products in the EU Signup and view all the answers

The right to return goods or cancel a service bought online within ______ days is part of the EU consumer rights.

14 Signup and view all the answers

The UK is the only country to have left the EU.

True Signup and view all the answers

What principle dictates that those responsible for environmental damage should pay to cover the costs?

Polluter Pays principle Signup and view all the answers

When will the new General Product Safety Regulation apply?

13 December 2024 Signup and view all the answers

What is REACH regulation focused on?

Registration, Evaluation, Authorisation and restriction of Chemicals Signup and view all the answers

What does the acronym CSRD stand for in EU corporate regulation?

Corporate Sustainability Reporting Directive Signup and view all the answers

Which of the following are determinants of culture? (Select all that apply)

Religion Signup and view all the answers

What does Geert Hofstede's dimension of Power Distance measure?

The degree to which a less powerful person accepts inequality in power. Signup and view all the answers

National culture can impact leadership styles.

True Signup and view all the answers

In a high power distance society, members seek more __________ from their superiors.

guidance Signup and view all the answers

What does the dimension of Uncertainty Avoidance measure?

The extent to which members are made uneasy when faced with unstructured situations. Signup and view all the answers

In a masculine society, male members are expected to care for non-materialistic needs.

False Signup and view all the answers

Match the following stereotypical European management styles with their corresponding countries:

British = Pragmatic Management French = Centralized Management Italian = Dependent Management Swedish = Participative Management German = Professional Management Signup and view all the answers

What is the difference between the Anglo-Saxon model and the Rhineland model regarding labor market flexibility?

Anglo-Saxon model has a highly flexible labor market, while Rhineland model has low degrees of flexibility. Signup and view all the answers

Which country was historically the EU's largest trading partner before being overtaken by China?

United States Signup and view all the answers

There is no free trade agreement between the EU and the US.

True Signup and view all the answers

What does TTIP stand for?

Transatlantic Trade and Investment Partnership Signup and view all the answers

When were the TTIP negotiations formally closed?

2019 Signup and view all the answers

What year was the EU-US Trade and Technology Council (TTC) launched?

2021 Signup and view all the answers

Name one of the areas of cooperation under the EU-US Trade and Technology Council.

Strengthening semiconductor supply chains Signup and view all the answers

What is the EU competition policy primarily aimed at?

Preventing monopolies Signup and view all the answers

The European Commission primarily handles EU competition policy.

True Signup and view all the answers

What constitutes a European Company (SE)?

A type of public limited-liability company registered under EU corporate law. Signup and view all the answers

What is one of the main advantages of a European Company?

Easier operation across multiple EU countries Signup and view all the answers

How many European Companies have been established, approximately?

More than 3000 Signup and view all the answers

Which of the following is NOT a component of complete economic integration?

A national monetary policy Signup and view all the answers

The European Central Bank is primarily responsible for EU fiscal policy.

False Signup and view all the answers

What is the primary objective of the European Central Bank?

Price stability Signup and view all the answers

EMU stands for __________.

European Monetary Union Signup and view all the answers

What year was the euro introduced for commercial and financial transactions?

1999 Signup and view all the answers

How many countries are expected to adopt the euro in the coming years?

Five countries Signup and view all the answers

Sweden is legally obligated to adopt the euro with a set target date.

False Signup and view all the answers

Which is NOT a benefit of the EMU?

Increases economic sovereignty Signup and view all the answers

Match the fiscal policy type with its definition:

Expansionary fiscal policy = Increased government spending to stimulate the economy Contractionary fiscal policy = Increased tax rates and reduced government spending Signup and view all the answers

What is a structural deficit?

A budget deficit resulting from a fundamental imbalance in receipts and expenditures Signup and view all the answers

What is the limit for national budget deficit to not exceed, according to the Stability and Growth Pact?

3% of GDP Signup and view all the answers

Which crisis is linked to the European debt crisis?

Global financial crisis of 2008 Signup and view all the answers

Trade policy is an exclusive competence of the __________.

EU Signup and view all the answers

Which country is NOT one of the EU's main trading partners?

India Signup and view all the answers

Study Notes

History of the EU

The EU comprises 27 Member States, focusing on economic and political integration.
Established in 1992 with the Maastricht Treaty; roots trace back to the 1951 European Coal and Steel Community.
Created in response to devastation post-World War II to promote peace, democracy, political stability, and economic prosperity.
Key initial goal: Pool coal and steel production to prevent conflict between France and Germany, articulated in the Schuman Declaration (1950).

Founding Members

Original countries: France, West Germany, Italy, Belgium, the Netherlands, Luxembourg.

Major Milestones

1951: Treaty of Paris established the European Coal and Steel Community.
1957: Treaties of Rome created the European Economic Community (EEC) and Euratom.
1973: Denmark, Ireland, and the UK joined the EU.
1986: Spain and Portugal accession.
1992: Maastricht Treaty founded the EU and expanded cooperative areas.
2007: Treaty of Lisbon reformed EU institutions to enhance global effectiveness.

EU Today

27 Member States, with 20 in the eurozone.
Over 27 Schengen Area countries enabling passport-free travel.
Shares fundamental values: liberty, democracy, human rights, and rule of law.
The EU operates as the largest single market and a global model for peace and cooperation.
Committed to economic unity while embracing cultural and legal diversity.

EU Values

Guided by the principle "United in diversity" to balance unity and varying nations' characteristics.
Fundamental rights include human dignity, freedom, democracy, equality, rule of law, and respect for human rights.

EU Economy

GDP: 3rd largest globally at $15.9 trillion, after the US and China.
Intra-EU trade (2021): $6.8 trillion, outpacing extra-EU trade ($4.3 trillion).
Challenges include economic slowbalization, geopolitical tensions, trade conflicts, and reliance on third countries for essential resources, highlighted during the COVID-19 pandemic and the Ukraine conflict.

EU Institutions

Four main institutions:
- European Commission (executive; proposes legislation)
- European Parliament (legislative; co-legislates with the Council)
- Council of the European Union (legislative; negotiates and adopts legislation)
- European Council (strategic; sets political direction).

Key Figures

Ursula von der Leyen: President of the European Commission.
Roberta Metsola: President of the European Parliament.
Charles Michel: President of the European Council.
Joseph Borell: EU High Representative for Foreign Affairs.

European Commission

Represents EU common interests and manages policies and budgets.
Organized into Directorates-General (DGs) for policy areas; employs around 32,000 personnel.

European Parliament

Composed of 705 MEPs; the largest transnational election globally, held every five years.
Political groups include the European People’s Party, Socialists and Democrats, and others, reflecting a spectrum from left to right.

Council of the European Union

Key decision-making body, shares legislative power with the Parliament.
Rotating presidency every six months, enabling tailored leadership on various topics.

European Council

Comprised of heads of state, defines EU political priorities, meets quarterly.
Chaired by an elected president, focusing on strategic directions rather than legislating.

Additional Institutions

European Central Bank: Manages euro and monetary policy (Christine Lagarde).
EU Court of Justice: Interprets EU law (Koen Lenaerts).
European Court of Auditors: Ensures financial accountability (Tony Murphy).### Law Making in the EU
Three main institutions involved:
- European Commission: Represents the EU's overall interests.
- European Parliament: Represents EU citizens.
- Council of the European Union: Represents EU governments.
Advisory bodies include the Committee of the Regions and the Economic and Social Committee.

EU Decision Making

Policy Areas categorized into:
- Exclusive Competences: Customs union, competition rules, monetary policy, trade agreements.
- Shared Competences: Single market, employment, agriculture, environment.
- Supporting Competences: Public health, culture, education, civil protection.

Subsidiarity and Proportionality

Subsidiarity: EU legislates only when actions cannot be achieved by Member States alone.
Proportionality:
- Measures must be suitable and necessary to achieve desired outcomes.
- No excessive burden should be imposed on individuals.

Primary vs Secondary Law

Primary Law: The treaties that form the basis of EU law, setting EU objectives and rules for institutions.
Secondary Law: Regulations, directives, decisions, recommendations, and opinions stemming from the treaties.

Types of EU Legal Acts

Regulations: Legally binding across all EU countries upon entering into force; no national transposition required.
Directives: Require national measures for achieving specific objectives; countries must transpose into national law.

Ordinary Legislative Procedure

Joint Decision-Making: Equal weight for the European Parliament and Council in most areas.
Established Procedures:
- Co-decision procedure initiated by Maastricht Treaty and renamed in Lisbon Treaty.
- Proposals undergo first and second readings; disagreements may lead to the establishment of a conciliation committee.

European Single Market

Comprises 31 countries with 450 million consumers, including 27 EU member states and EEA countries.
Four Freedoms: Free movement of goods, services, people, and capital.
Aims for economic integration, regulation harmonization, and a level playing field among member states.

History of the European Single Market

Key Dates:
- 1951: Treaty of Paris established ECSC.
- 1957: Treaty of Rome created EEC and customs union.
- 1993: Fully established single market for goods; services market remains incomplete.
- 2022: Introduction of Digital Services Act & Digital Markets Act.

Free Movement of People

Established by the Treaty of Maastricht.
Allows travel, residence, and work throughout EU countries under specified conditions.

Free Movement of Goods

Mutual Recognition: Member states must allow goods legally produced in one state to circulate freely in others.
Harmonization: Adoption of EU-wide standards to facilitate trade and protect consumer rights.

EU Customs Union

Abolished customs barriers in 1968, enabling free cross-border trade.
Comprises 27 EU countries and Monaco; differentiates tariffs for non-EU countries.

Benefits and Achievements of the Single Market

Enhances competition, lowers prices, increases choices for consumers.
Contributed to a 2.2% GDP increase from 1992 to 2006.
Increased intra-EU trade by 9% and created millions of jobs.

EU's Global Position

Third-largest economy globally, largest trader of manufactured goods.
Benefited from increased trade after the establishment of the single market.

Digital Services Act and Digital Markets Act

Strengthens rules for online platforms, obligating them to combat illegal content and ensure transparency.
Very large platforms face stricter regulations to enhance user protection.

Brexit

UK withdrew from the EU on January 31, 2020.
Referendum: Held on June 23, 2016, resulted in 51.9% favoring withdrawal.
Establishes new agreements outlining trade, cooperation, and customs regulations post-membership.

EU-UK Agreements

Withdrawal Agreement: Organized orderly UK exit, including the Protocol on Ireland and Northern Ireland.
Trade and Cooperation Agreement: Facilitates trade while recognizing that integration cannot match previous EU membership.

Customs Regulations Post-Brexit

UK treated as a non-EU country regarding customs, requiring declarations and complying with safety regulations.
No tariffs on UK-origin products entering the EU; EU products imported into the UK face new customs controls.

Online Shopping Charges

New customs processes may introduce additional charges for UK online purchases, impacting consumer costs and experiences.### Brexit: Implications for Trade
Goods delivered from non-EU countries into the EU incur VAT, similarly to EU purchases.
Excise duty applies to tobacco and alcohol products ordered from the UK.
Customs duties are applicable for goods valued over 150 euros that aren't manufactured in the UK.

Pros and Cons of Brexit for the UK

Enhanced control over foreign affairs and greater national sovereignty.
Potential to establish new trade deals, such as with the US.
Detriments include loss of benefits from being part of a larger union and diminished capacity to tackle security threats, which are better addressed within the EU context.

Economic Importance of the UK to the EU (2019)

UK’s net contribution to the EU approximated £9 billion annually, equivalent to £173 million weekly.
The EU was the UK’s primary trading partner:
- UK exports to the EU totaled £294 billion, 43% of total exports.
- EU imports to the UK amounted to £374 billion, 52% of total imports.
Exports to the EU constituted 9% of the British GDP.
The EU is responsible for 2.3 million jobs in the UK.

EU Consumer and Environmental Policies

European Single Market: Four Freedoms

Facilitates movement of goods, services, people, and capital across member state borders.

Harmonization of Product Legislation

Establishes EU-wide legally binding standards to facilitate trade and protect consumers and the environment.

EU Consumer Policy Overview

Led by various commissioners focusing on internal markets, equality, consumer rights, and health.
The European Consumer Organization (BEUC) emphasizes safety, consumer rights education, and enforcement of consumer protections.

Key EU Consumer Rights

Right to truthful advertising and fair contracts.
14-day right of withdrawal for online purchases.
Two-year legal guarantee for defective goods.
Assistance from European Consumer Centres across all member states.

General Product Safety Regulation

Set to replace the existing directive on December 13, 2024, covering all non-food products.
Ensures only safe products are sold in the market and aligns with specific sector regulations.

Safe Use of Chemicals

REACH regulation mandates safety compliance for chemicals entering the market.
Manufacturers must ensure safe chemical distribution and comply with environmental standards.

EU Environmental Policy

Polluter Pays Principle

Mandates that those causing environmental damage bear the costs associated with pollution prevention and remediation.

Extended Producer Responsibility (EPR)

Requires producers to contribute towards waste treatment costs, applicable in various sectors like electronics and packaging.

Circular Economy Action Plan

Encompasses strategies for sustainable consumption, waste prevention, and product design to enhance resource efficiency.

EU Emissions Trading System

Targets greenhouse gas emissions from around 10,000 energy-intensive installations.
Introduces Carbon Adjustment Border Mechanism to curb competitive disadvantages against non-EU producers.

Fiscal and Monetary Policy

Stages of Economic Integration

Complete integration involves a single market, a unified trade policy, a common monetary policy, and harmonized fiscal policies.

EU Monetary Policy

Managed by the European Central Bank, focusing on price stability and interest rates.
The Stability and Growth Pact aids in maintaining national fiscal discipline to support monetary policy.

Economic and Monetary Union (EMU)

EMU involves coordinating policies and achieving convergence before adopting the euro.
The euro was introduced in 1999 for transactions, with physical currency released in 2002.

Eurozone Highlights

Comprises 20 EU countries meeting specific economic criteria.
Denmark opted out, while Sweden is legally obliged but lacks a specific timeline for adoption.

Economic Impacts of EMU

Benefits include reduced transaction costs and improved price transparency.
Risks involve economic sovereignty loss and asymmetric shocks affecting member states differently.

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Description

This quiz explores the history and economic integration of the European Union (EU), covering its establishment in 1992 and its roots tracing back to the European Coal and Steel Community in 1951. Dive into the significance of the EU in fostering peace and democracy in a post-WWII Europe.