Economics of the European Union
- i) The Single European Act (1987) committed the member states of the EU to the creation of a single internal market. Explain the background to the SEA, the nature of the reforms involved and what these reforms were designed to achieve. (30% of total marks)
- ii) Outline some advantages to the Irish economy resulting from membership of the Single market. (20% of total marks)
Q2 Before a member-state of the EU can join the Eurozone it must first satisfy the “convergence criteria”.
- i) Explain the nature of these convergence criteria and also explain what it is they are designed to achieve. (20% of total marks)
- ii) Discuss the advantages and disadvantages to a country like Ireland resulting from membership of the Eurozone. (30% of total marks)
Outcomes being assessed:
- Evaluate the significance of EU membership to the Irish economy
- Discuss the significance of current developments within the EU.
- Discuss the key current debates in the EU and their significance for Ireland
- What were the weaknesses in the EU economy that the economic reforms in the SEA were designed to improve?
- What was the nature of the “non-tariff” barriers to trade that were impeding cross border trade in the EU
- Discuss the nature of the “four freedoms” and their impact on the EU economy
- How were the reforms meant to improve the economic performance of the EU
ii)Get some figures for the EU economy for example: population; GDP; trade figures
- Irish based firms have access to the largest market in the world in terms of GDP
- Ireland now an attractive place for FDI
- Get some EU trade figures for successful Irish companies, for example: Ryanair; Jefferson Smurfitt; CRH.
- The criteria are designed to ensure that only countries with monetary and fiscal stability should be allowed enter the Eurozone.
- There is a much greater degree of interdependence among Eurozone members. The actions of one country will have implications for others.
ii) Advantages are straight forward, disadvantages largely relate to loss of fiscal and monetary sovereignty at the national level.
- Implementing fiscal policy at the national level is constrained by the Stability and Growth Pact (now known as the Fiscal Compact). Explain how this is so.
- Member states in the Eurozone no longer have monetary sovereignty. Explain/discuss this and outline the role of the European Central Bank.
- Students might look at the experience of Ireland, Greece or Italy when discussing problems of Eurozone membership.