... If the European Union develops new technology that lowers the costs of producing goods that they export, the opportunity cost of producing decreases, and they can increase the amount of goods that they supply. As a result, the new quantity supplied would be higher than the quantity demanded, a surplus would form, and the two markets will move into equilibrium where the price level is lower and the quantity supplied is greater than before. An overall lower price of goods in the European Union will increase domestic and foreign demand for their products. Citizens in the EU will substitute more expensive foreign goods for domestic goods and the quantity demanded for domestic goods will increase. Exports for the EU will increase, as foreigners are drawn into their lower prices. Imports will decrease because citizens of the EU are buying more domestic goods than foreign goods. The balance of trade in Europe will initially increase, as net exports are increasing. Due to the increases in production technology, the net exports in Europe are increasing. Because net exports are a component of real GDP, real GDP will increase. With an increase in real GDP comes an increase for the demand for money, as businesses and companies need more money to fuel their expansion. In return, banks will begin to increase interest rates on investment, making European financial assets more attractive to investors. The increased demand for European money on account of the increase in real GDP, the increase...
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...Accession into a monetary union has implications that reach far below the surface of the requirements outlined by a simple agreement or membership criteria. While there are undeniable benefits to some member states, great sacrifices must be made before, during, and after the integration process which eventually render a nation powerless over its monetary policy. Currently, every European nation is faced with the question of whether to join European Monetary Union; however, the eagerness with which new member states join is paralleled by the resistance of several holdouts to adoption of the common currency. With the unprecedented growth rate of the Euro-zone over the past decade and the number of nations currently making the required policy adjustments, core members need to be aware of the motivating factors fueling the growth in the number of new member states. The European Union is experiencing an adverse selection scenario in which nations seeking increased stability are willing to make the sacrifices that membership entails while the redistributive effect of wealth from existing to new relatively poorer member states is an implicit benefit of the current system. When Paul Henri Spaak of Belgium, Christian Pineau of France, Joseph Luns of the Netherlands, Antonion Segni from Italy, Joseph Bech from Luxemburg, and Konrad Adenauer from the Republic of Germany signed the Treaty of Rome in 1957 creating the European Economic Community(EEC), their long-term objective was the...
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...Greece and Brazil: A Comparison of the Costs and Benefits Associated with Free Trade Policies and Restrictive Trade Policies. Introduction The countries of Greece and Brazil have experienced unique situations in both economic conditions. These situations brought about significant changes in policy, which resulted in several events having both negative and positive impacts on each country’s development, and most importantly, international trade. This paper will also examine the economic structure of both Greece and Brazil, while identifying the similarities and differences of these structures. Greece became a member of the European Union in the 1980’s and participated in the free trade environment that was and is a representation of the EU. Brazil, on the other hand, practices protectionism which also had both a negative and positive impact on the country. This paper looks at both the positive and the negative impacts of each country’s trade policies and practices. Historical Insight A Brief History of Greece Greece (The Hellenic Republic) is located on the far south of the Balkan Peninsula, and consists of over 1400 islands, the largest of which is Crete, and the capital is Athens. Greece has a population of around 11 million people as at 2013, according to the World Bank. Its GDP is 242.2, GDP growth -3.3% and inflation is -0.9% as also confirmed by the World Bank in 2013, see Table 1. Greece has a parliamentary democratic system, the main political parties are ...
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...Introduction The reorganization process of the European distribution systems which is changing from a national to an international network is still going on. The structural transformation in logistics once started with the creation of the Single European Market. Logistics providers began to create pan-European networks in line with the expansion of the European Union. The current adjustments reflect both eastern parts of Europe and the evolvement of a global distribution structure and the accession of the peripheral economies in the central. In addition to these geographic aspects, the logistics markets in European have been influenced by numerous factors dramatically in the technological, financial, and political environment (Europe Real Estate, 2012). Logistics property is targeted by international investors. The volume of total investment currently exceeds €10 billion. Logistics property helps to compensate the poor performance and diversify portfolios of other sectors. Networks of European distribution are still relying on large distribution warehouses, and growth is most likely in the further. ‘Although prime yields up to 13% for opportunistic investments in emerging clusters are rather attractive, yield compression is foreseeable in the near future’ (Europe Real Estate, 2012). In this paper, there is a case, which is talking about a central European decides to operate a privately importing and exporting logistics business in Hungary, will be analysis. The conditions which...
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...Unilateral Adoption of a currency is. It’s when a country uses the currency of another country or another monetary union without the country’s or monetary union’s official acceptance which is the case of Montenegro, more specifically “unilateral euroization” without meeting the Maastricht criteria and without getting the European Union’s approval. In 2002 when the Euro was launched as the official currency for the countries in the European Monetary Union (EMU), Montenegro started using the euro as well without any approvals. The European Central Bank and the European Union strictly forbid the unilateral use of the Euro with very few exceptions like Vatican which is religious governing state in the Italian territory. They have some basic arguments why other countries should not use the Euro. The main argument is that it would undermine the principal of equal treatment, as any physically speaking “European” country has to be a member of the European Union and then apply to be in the European Monetary Union which has the five Maastricht requirements which ensures that the specific country has stable economy, low inflation, long term low interest rates, low Government Debt, Low Government Deficit and has to peg its exchange rate to Euro for 2 years. And when Montenegro does not follow all the requirements it is not fare to all the other Central-Eastern European Countries like Hungary which still cannot meet the requirements or the Baltic countries which have pegged their currencies...
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...Frederick European Public Policy PO 886 Schneider Second essay 4612 words (excluding references) Why does the EU find it difficult to reform its policies? Answer with reference to two policy areas of your choice. UNIVERSITY OF KENT 2007-2008 There is something strange about European Union policies: they are always reformed and they always need to be reformed further. This is due to the fact that these reforms concern mainly the form and not so much the content. The seven objectives of the regional policy have been replaced by three objectives in the 2000-2006 budgetary perspective, which have themselves been converted into three principles for the 2007-2013 period but it did not leqd to any revolutionary change. The CAP has been reformed in 1984, 1988, 1992, 1999, and 2003, but the principle of protecting agriculture from market forces remained intact. Scholars, especially economists, often criticise this inertia claiming that real reforms are necessary to avoid huge economic costs and to ensure a long-term development. Why is it so difficult to reform EU policies? What are the factors encouraging these reforms and those leading to their lack? We have chosen the Common Agricultural...
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...TRANSNISTRIAN ISSUE AS A SECURITY THREAT FOR THE EUROPEAN UNION 9 4.THE FUTURE OF EU-MOLDOVA RELATIONS 12 REFERENCES: 18 ‘’You are well aware that the values on which the EU is built-freedom,democracy,respect for human rights and fundamental freedom,and the rule of law-lie precisely at the heart o the political association and economic integration process which the Eastern Partership offers and which we are pursuing with Moldova.(…) We want to create a new reality where all the citizens of Moldova, without exclusion, can enjoy all the benefits of a modern and effective political and economic system, respectful of their fundamental right’’. President Barroso. 1.HISTORICAL AND POLITICAL ACCOUNT OF EU-MOLDOVA RELATIONS 1.1.Political situation in Moldova. 1.The independence of the Republic of Moldova, which was declared in 1991, raised a great number of crucial questions for the future of the new country- problems that had to be solved without delay. One of them was them was the orientation of its foreign policy and external allies. Moldova is literally situated on the border between East and West the countries that have chosen a ‘Euro-Asian’ way (Ukraine, Russia and Belarus) and the countries of Eastern Europe that, after the revolutions of the late 1980s, made a decisive choise in favour of the aligment to European standards. After declaring independence in 1991...
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...general government; http://www.bde.es/webbde/es/estadis/infoest/a1106e.pdf ------------------------------------------------- 1. Pedro Schwartz (2013), The Welfare State as an Underlying Cause of Spain’s Debt Crisis, Cato Journal, Vol. 33, No. 2 Actually before financial crises, Spain had experienced a long period of high economics growth. At the end of 2007, the fiscal position of Spain performed excellent. According to Eurostat, it was better than in the other three largest euro area member states Spain had a consolidated total government budget surplus of 1.9 percent of GDP, the third highest after Finland (5.2 percent) and Luxembourg (3.7 percent). But in fact it produced internal and external imbalances, which is a bubble. First, real interest were close to zero or even negative and at the same time householders wage grows with inflation rate, which made them think it was a good time to buy the house, but it also made the banks think it was a good time to give the mortgages. As a result, according to Eurostat, nominal GDP was growing at 6.5 percent per...
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...The Fifth Enlargement To begin the European Union is the economic union of European countries in order to facilitate freer trade and movement of capital, goods, services, and human labor across the continent of Europe. Currently, the European Union consists of 27 countries and works/governs itself to form a single working European market. The quote “The Fifth Enlargement of the EU is now complete” the ascension of the last two (Bulgaria and Romania) of the 12 total countries of the Fifth Wave of admittance into the European Union. Firstly enlargement of the European Union diffidently has its benefits. In theory the enlargement of the European Union opens up the Union to new and profitable markets in which they can buy, sell and trade more freely. We see therefore, the benefits to the enlargement of the European Union are very similar to some of the benefits of globalization in the whole. Like-wise concerns with the EU expansion can also be seen as concerns over globalization on the whole. For example the opening of emerging markets allows for product to be produced cheaper abroad then domestically. For the more prosperous EU members this could mean the outsourcing of domestic jobs to EU members with cheaper wages and input costs. Some of the more intrinsically unique concerns regarding the EU expansion come via the form of free travel within EU borders. In the terms of the travel an EU citizen is able to go from country to country freely as they please...
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...Implications of the Ukrainian Crisis for Trade Relationships of the EU with Russia Economic Policies of the European Union Gartnar Marko | 19486522 | Marmai Martina | 19131311 | Mladenović Kosta | 19821606 | Executive Summary The aim of this research assignment is to provide an assessment of the effects on trade relationships between the EU and Russia stemming from the so-called “Ukrainian crisis.” The term points at the Russian military intervention in Ukraine, and the public response that this event generated. In particular, the analysis will regard the repercussions on Euro-Russian trade due to the Council’s diplomatic reply to the violent annexation of the Crimean peninsula by the Russian Federation. Since March 16th, when - with the unconditional support of Russia - the referendum for the independence of Crimea took place, the events in Ukraine escalated, giving rise to a number of restrictive provisions which, increasing in scope and gravity, aimed on one side to discourage military intervention by Russia, while on the other punished illegal misappropriation of Ukrainian public property. Such sanctions may not have played an important role, were it not for the current shaky state of the Russian economy. Nevertheless, that of sanctions is a two-sided sword, and the European Union, barely stepping on the road to recovery, can’t exactly afford being too picky when it comes to deciding who to do business with. The high level of interconnectedness and dependence...
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...European Union: Issues and Policies Name: Course Name: Course Instructor: Date of Submission: Executive Summary The current policies of the European Union continues to play an important role in the development of member states both in the political, economical, social, and agricultural sectors of the economy. Many succession countries are trying their lack in the otherwise difficult procedures of becoming member to the union. The union continues to offer adverse marketing fields for its members as trade free zone create and increase coverage and economic growth. The aftermath of the war that shuttered continents has led to succession countries joining the union out of free will. Succession countries by far benefit from the European union membership as the membership comes with a lot of advantages that influence economic growth for the member country. Contents Introduction 4 Succession Countries on Joining the European Monetary Union 4 CAP Reforms 8 The arguments in favor of the enlargement of the European Union 10 The Arguments against the Enlargement of the Union 11 Global Competitors 13 China and the Option to Leave the Eurozone 14 Conclusion 16 References 17 European Union: Issues and Policies Introduction The European Union is a group of 27 states primarily located in Europe with a de-facto capital in Brussels and operates using a supranational independent institutions and decisions negotiated intergovernmental by the member states. It...
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...percent limit allowed in the euro zone. But beyond the debt there is more deficit. What Greeks did when they got all this borrowed money, they gave away incredible sums to citizens, raised the wages to such an extent that it created a serious budget deficit. Inefficient Government? Corrupted mentality? Call it as you like, but it caused consequences that citizens, and not only them but the entire Europe, will have to bare for many years from now. Once the truth started to unveil, the new Government started to discover more omissions and misreports. So the banks came into the picture in the form of loan offerings to these customers and other such offerings like personal loans and credit card loans. When the news of recession hit Greece, the real...
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...PEST Analysis of Bulgaria Table of Contents PEST Analysis.............................................................................................................................................. Political Factors......................................................................................................................................... Ruling Part........................................................................................................................................... EU confrontations.................................................................................................................................. EU support............................................................................................................................................ Trading Partners................................................................................................................................... Visa Free................................................................................................................................................ Economic Factors..................................................................................................................................... Economic Growth.................................................................................................................................. Macro Economic Factors.........................................................
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...sovereign state and a member of the European Union located in southwestern Europe on the Iberian Peninsula. Its mainland is bordered to the south and east by the Mediterranean Sea except for a small land boundary with the British Overseas Territory of Gibraltar; to the north and north east by France, Andorra, and the Bay of Biscay; and to the northwest and west by the Atlantic Ocean and Portugal. Spanish territory also includes the Balearic Islands in the Mediterranean, the Canary Islands in the Atlantic Ocean off the African coast, and two autonomous cities in North Africa, Ceuta and Melilla, that border Morocco. Furthermore, the town of Llívia is a Spanish exclave situated inside French territory. With an area of 505,992 square kilometres (195,365 sq mi), it is the fourth largest country in Europe. Spain is a democracy organised in the form of a parliamentary government under a constitutional monarchy. It is a developed country with the twelfth largest economy in the world by nominal GDP, and very high living standards, including the tenth-highest quality of life index rating in the world, as of 2005. It is a member of the United Nations, NATO, OECD, and WTO. Foreign relations Main article: Foreign relations of Spain After the return of democracy following the death of Franco in 1975, Spain's foreign policy priorities were to break out of the diplomatic isolation of the Franco years and expand diplomatic relations, enter the European Community, and define security relations...
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...Spain's Economic Crisis Jim and Derek Macroeconomics 21 November 2011 Spain’s unemployment rate is at 20%, which consists of 45% among young adults 25 years old and younger. Banks keep getting bailouts from the European Central Bank, real estate values and sales have plummeted and there is a budget deficit that is spiraling out of control. There are many contributing factors as to why Spain got themselves in this amount of financial trouble. However one might ask, how did Spain get into this predicament? The history of Spain is a big factor that contributes to their economic troubles even today. Spain began its momentum towards becoming an empire after the expulsion of the Moors in 1492. King Ferdinand and Queen Isabella funded Cristobal Colon’s expedition which found the “New World”, where Spain would reap the riches of gold and silver. These riches helped Spain build up its navy for its many wars with England. This wealth also paid for more expeditions of discovery and Spain’s overall improvement in their standard of living. Like many great empires, this prosperity did not last and through financial decline this prosperity died, as did the empire. Most of Spain's civilization remained poor until after Francisco Franco, who came to power during the Spanish Civil War, died in 1975 and the exiled King Juan Carlos returned. Juan Carlos began the transition to a democratic state and ensured that Spain would prosper from a democracy and a capitalist system. Spain...
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