...Lyn Klein Economics for Global Managers Professor Victoria Vernon Module 3 Case Study: European Union 7/3/14 The EU is facing a banking crisis. There are insolvent banks in Ireland and Spain, as well as other nations. They lent out too much money, often against real estate. There were real estate bubbles then the value of real estate fell and borrowers could not always pay back the loans. The Greek banking crisis was caused by the government spending too much and borrowing too much money. The economy collapsed causing the banks to be insolvent. Before the collapse banking was conservative. When a nation has insolvent banks belonging to the Euro zone make that problem much worse. There were silent funs on Greek banks, with capital flight; people are pulling their money out of the Greek banks and sending it elsewhere, making the Greek economy worse. The common currency zone escalates the problems. There are also capital and trade imbalances. Germany is exporting a great deal more than it imports, causing capital flows into Germany. Spain and Greece import more than they export so capital flow is out of the country. They need to become more productive at exporting, which is not always easy. In the 2000’s money flowed into periphery countries, borrowing rates were low and capital inflow brought rising standards of living. By 2010’s money was flowing out of the periphery countries and back into Northern Europe. Periphery economies were starved for investment...
Words: 8065 - Pages: 33
...1. What is the European Union? The modern-day European Union is a direct result of a determination among European politicians to prevent future violent conflicts in Europe after World War II. The original aim was to tie countries together by forging closer industrial and economic cooperation. Since then, the EU’s responsibilities have grown in response to new challenges and many more countries have joined. In 1950 French Foreign Minister Robert Schuman proposes integrating the coal and steel industries of Western Europe. This leads to the Treaty of Paris, creating the European Coal and Steel Community (ECSC). in 1951, with six members: Belgium, France, Italy, Luxembourg, the Netherlands and West Germany. 1957, The same six countries sign the Treaties of Rome, creating the European Economic Community (EEC) and the European Atomic Energy Community (EURATOM). They begin removing trade barriers between them and move towards creating a ‘common market’. In 1967, The institutions of the EEC, ECSC and EURATOM are merged to form a single set of institutions: the European Commission, European Council and European Parliament (with members selected initially by national Parliaments). In 1973, Denmark, Ireland and the United Kingdom join the European Community. The first direct elections to the European Parliament take place in 1979, with voters in each EU Member State electing the members. In 1981, Greece joins the European Community (EC). 5 years later in 1986 Portugal and Spain join...
Words: 815 - Pages: 4
...Myanmar, Philippines, Singapore, Thailand, Vietnam, Malaysia. The currencies are as followed: Brunei Darussalam- Brunei Dollar, Cambodia- Riel, Indonesia- Rupiah, Lao- Kip, Myanmar- Kyat, Philippines- Peso, Singapore- Singapore Dollar, Thailand- Bhat, Vietnam- Dong, Malaysia- Ringgit. Legislation ASEAN The Association of South East Asia Countries has 10 member countries: Brunei Darussalam, Cambodia, Indonesia, Lao, Myanmar, Philippines, Singapore, Thailand, Vietnam, Malaysia. The currencies are as followed: Brunei Darussalam- Brunei Dollar, Cambodia- Riel, Indonesia- Rupiah, Lao- Kip, Myanmar- Kyat, Philippines- Peso, Singapore- Singapore Dollar, Thailand- Bhat, Vietnam- Dong, Malaysia- Ringgit. Legislation EU The European Union has 28 member countries: Austria (1995) Belgium (1958) Bulgaria (2007) Croatia (2013) Cyprus (2004) Czech Republic (2004) Denmark (1973) Estonia (2004) Finland (1995) France (1958) Germany (1958) Greece (1981) Hungary (2004) Ireland (1973) Italy (1958) Latvia (2004) Lithuania (2004) Luxembourg (1958) Malta (2004) Netherlands (1958) Poland (2004) Portugal (1986) Romania (2007) Slovakia (2004) Slovenia (2004) Spain (1986) Sweden (1995) United Kingdom (1973) The currencies are as followed: United Kingdom -Great British pound sterling, Bulgaria- Bulgarian lev, Croatia- Croatian kun, Czech Republic- Czech koruna, Denmark- Danish krone, Hungary- Hungarian forint, Poland- Polish złoty, Romania- Romanian lau, Sweden- Swedish krona, all other...
Words: 415 - Pages: 2
...European Union and Turkey Introduction to European Union In this globalization era, the world seems to be borderless, especially in Europe. This further confirmed by the formation of the European Union, which serves as a binding substance between the countries contained in the European continent. European Union is a political and economic based union, established in 1993 after the ratification of Maastricht Treaty. The international organizations are working together to create economic and political stability among member states. During its development, the European Union may not run smoothly. The emergence of the economic problems that rocked the euro zone, then Spain and Cyprus emerged as a "burden" in these economic problems. Another emerging issue is productivity, border policy, and the exchange rate that makes this organization stability unsteady. Another issue that emerged is the exclusivity of the organization. Another issues arising from the exclusivity of membership expansion problem. Preceded by the six founding countries, EU has 28 members now, as Croatia joined on 1st July 2013. The membership number is certain to grow rapidly with the number of countries that volunteered to become a member. Regardless of all the problems it faces today, the EU is still believed to be an organization that brings positive impact to its members. States' desire to be able to join the candidate can not be separated from the success tale of the European Union, particularly in the fields...
Words: 2769 - Pages: 12
...The European Union was founded and created in 1951, after two World Wars and numerous conflicts and wars within Europe. Though it was not created as a union for all of Europe, but as a treaty signed by six European countries; Germany, France, Italy, the Netherlands, Belgium and Luxembourg and was then called the “Coal and Steel Treaty”. The Treaty would then as time went by be joined by more countries and eventually, as the situation in Europe changed, it went from “Coal and Steel Treaty” to the European Union with the power and influence it actually has today. The work of the European Union might not show in the everyday life for a typical citizen, but it is there, and does actually affect the situation, not only considering the huge amount of money that is put into the union every year. Every year, all the member countries are to put money into the union in order for it to be able to function properly, and long-time budget lasting from 2014 to 2020 has been set up with the sum of 960 billion euro1, of which a large percentage comes from the rich countries2. But the EU is not only costing the member countries money. The Union is the reason Europeans are able to move freely over European borders, the United Kingdom being the only exception, and European citizens are also allowed to move and seek for employment in other European countries. The EU is also a trade bloc, and thereby makes trading easy since no tariffs or quotas are required. Because of free trade and people being...
Words: 998 - Pages: 4
...European Union The European Union (EU) is an economic and political union of 27 member states which are located primarily in Europe. The EU traces its origins from the European Coal and Steel Community (ECSC) and the European Economic Community (EEC) formed by six countries in the 1950s. In the intervening years the EU has grown in size by the accession of new member states, and in power by the addition of policy areas to its remit. The EU operates through a hybrid system of supranational independent institutions and intergovernmental decisions negotiated by the member states. Important institutions of the EU include the European Commission, the Council of the European Union, the European Council, the Court of Justice of the European Union, and the European Central Bank. The European Parliament is elected every five years by EU citizens. The EU has developed a single market through a standardized system of laws which apply in all member states. It ensures the free movement of people, goods, services, and capital, enacts legislation in justice and home affairs, and maintains common policies on trade, agriculture, fisheries and regional development. A monetary union, the eurozone, was established in 1999 and is currently composed of seventeen member states. Through the Common Foreign and Security Policy the EU has developed a limited role in external relations and defense. Permanent diplomatic missions have been established around the world and the EU is represented at the United...
Words: 1143 - Pages: 5
...towards and inspired the European project. The historical roots of the European Union lie in the Second World War. Europeans are determined to prevent such killing and destruction ever happening agWar begins. West European nations create the Council of Europe in 1949. It is a first step towards cooperation between them, but six countries want to go further.ain. Soon after the war, Europe is split into East and West as the 40-year-long Cold 9 May 1950 — French Foreign Minister Robert Schuman presents a plan for deeper cooperation. Later, every 9 May is celebrated as 'Europe Day'. 18 April 1951:Based on the Schuman plan, six countries sign a treaty to run their heavy industries – coal and steel – under a common management. In this way, none can on its own make the weapons of war to turn against the other, as in the past. The six are Germany, France, Italy, the Netherlands, Belgium and Luxembourg. Founding Member States: Germany, France, Italy, the Netherlands, Belgium and Luxembourg. Treaty of paris: Some of the main enemies during the war were now sharing production of coal and steel, the key-resources which previously had been central to the war effort. Treaty of rome: progressive reduction of customs duties and the establishment of a customs union. It proposed to create a common market of goods, workers, services Single european act: first major revision of treaty of rome. One step futher.The SEA's signing grew from the discontent among European Community members in the...
Words: 738 - Pages: 3
...INTRODUCTION ―The Union is founded on the principles of liberty, democracy, respect for human rights and fundamental freedoms, and the rule of law, principles which are common to the Member States.‖ - Article 6, Treaty on European Union The European Union is not a federation like the United States. Nor is it simply an organization for cooperation between governments, like the United Nations. Neither is it a State intended to replace existing states, but it is much more than any other international organization. The EU is, in fact, unique. Never before have countries voluntarily agreed to set up common institutions to which they delegate some of their sovereignty so that decisions on specific matters of joint interest can be made democratically at a higher, in this case European, level. All EU decisions and procedures are based on the treaties agreed to by all EU countries, under which sovereignty is shared in specified areas. The result is a union of 27 Member States covering 1.6 million square miles with roughly half a billion people producing almost a third of the world‘s gross national product and speaking more than 23 1 languages, bound together by a desire to promote peace, democracy, prosperity, stability, and the rule of law. The EU embraces the fundamental values shared by its Member States across a multitude of cultures, languages, and traditions. The Member States agree that democracy is the best form of government. They believe in societies that encourage...
Words: 8089 - Pages: 33
...The European Union, also known as the EU, is a unique, treaty-based union that represents and manages economic and political collaboration among its member countries. The EU was created following the Second World War and was established by the Treaty of Maastricht in 1993. Before the EU was created, the first task was to establish economic cooperation so that countries that trade with one another are more likely to steer clear of conflict. The European Economic Community (EEC) was created in 1958 to merge separate national markets into a single market that would guarantee the free movement of goods, people, capital, and services. Cooperation between Belgium, France, Italy, Germany, Luxembourg, and the Netherlands began to increase and soon developed into what the EU is today as it still continues to grow. The euro was introduced, representing the consolidation of European economic integration and the successful delivery of peace, prosperity, and stability for over half a century. The union also continued to grow through their employment and social policy. With the removal of barriers, the determination to complete the single market was partnered by social legislation in order to ensure workers a certain standard of health and safety across all member states. Regardless of the growth and progress that the EU has made, they still face challenges today. The EU and US are very similar. Both are committed to promoting peace, democracy and respect for human rights, and to fighting against...
Words: 703 - Pages: 3
...Microsoft Faces Large EU Fine Summary The European Union (EU) continues on its path of not being very popular with outside countries. Recently, the EU filed a formal complaint against Microsoft Corp. for failing to keep a promise that was made three years ago. Microsoft was supposed to offer alternative web browsers in the newest version of Windows for users in Europe. This is not the first time the EU has had an issue with Microsoft, and I do not think it will be the last. Discussion The formal complaint filed against Microsoft could result in maximum fine of as much as 10% of its total annual revenue, or $7.4 billion. I think this amount is excessive for what Microsoft has done. I do not believe the EU should penalize Microsoft at all. It is far too easy for users to download an alternative web browser. The EU’s antitrust chief Joaquin Alumina said that this case is being used as a deterrent to other firms. “This is a very serious message not to infringe the commitments that had been agreed," Mr. Almunia said." Companies should be deterred from any temptations to renege on their commitments or even neglect their duties," he said. He essentially is saying that Microsoft is being used as an example of what not to do. In my opinion, this is not the case to use to prove your point. No one has been harmed by what Microsoft has done. The EU is now in negotiations with Google Inc. on ways to address concerns about its dominance of Internet search and online advertising...
Words: 391 - Pages: 2
...Tiffany Ervin BUS-D301 Prof. Brown Case discussion August 27th 2015 1. In 2004, Poland joined the European Union which gave it access to the large consumer market of western Europe. Poland was able to avoid the economic crisis by becoming a major exporter, being fiscally conservative, keeping public debt in check, not allowing it to expand during the recession as many other countries did. 2. The lessons that can be learned from the Polish during 2008-2009 are that it can benefit a country to be fiscally conservative by keeping public debt in check and not allowing expansion during a recession. Poland also got a bit lucky. A tight monetary squeeze designed to curb inflation and ease them into the EU, headed off the asset price bubble, particularly surging home prices that hurts so many other economies around the world. 3. Poland can be an attractive economy is many aspects. First, it’s known that Poland's economy has been consistently growing since the country joined the European Union in 2004. This helped Poland become a major exporter, accounting for about 40% of the EU gross domestic product. Secondly, they have a tight monetary policy which was able to keep the country afloat during the recession. However, they are some weakness within the Polish economy as well. The tax system they use is complex and archaic. Also, due to extensive regulations, it can be difficult to do business there. Poland is still completing its transition from a socialist economy...
Words: 399 - Pages: 2
...European Identity The European Community, now known as the European Union, was created in the 1950’s after the world wars. After World War II europe wrose us and decided to come together to prevent anything like that from ever happening again. Belgium, France, Germany, Italy, Luxembourg and the Netherlands came together and established the European Coal and Steel Community to control these resources in order to control the countries’ production of weapons. This made sure that no country produced weapons to start another World War. The European Community was formed to keep Germany under control and make sure another Nazi Party never formed ever again. The European Union was supposed to make peace between these countries and slowly grow over time. The goal was to make the these countries codependent of each other economically, so that it would prevent them from going to war with each other. If the countries depend on each other to keep their individual economies alive they would not be tempted to start a war. However, an identity for all these joined countries is the most idea idea to keep them united and at peace. “The European Commision introduced the concept of European identity already at the Copenhagen summit in 1973” (Pawel Karolewski). The goal was the from a European vision of the United States by making requirements that need to be met to join the Union, like like democracy and human rights laws, and also bringing the people together with programmes that have government...
Words: 1718 - Pages: 7
...Advantages of the European Union Jim Stewart MGT/448 Clark McCarrrell September 18, 2013 Advantages of the European Union The European Union or EU is a unique economic and political partnership between 28 European countries that together cover much of the European continent. The EU was borne from the aftermath of World War II. The goal was to encourage economic cooperation between countries. It was presumed that countries that were trading partners were less likely to attack each other. This was known as the European Economic Community or ECC and was created in 1958. ("Europa.eu", 2013) The ECC became the EU in 1993, when what had previously been a purely economic partnership, melded into a political partnership spawning policy, development, and environmental concerns. The EU is based on the rule of law: everything is founded on treaties, voluntarily and democratically agreed by all member countries. These agreements are binding. ("Europa.eu", 2013) There are any benefits derived from being a member of the European Union. These benefits run the gamut of economic, political, social and environmental. There are many economic advantages of being a member of the European Union. Member states cab move goods and capital from place to place inside the EU. Entrepreneurs are free to offer their services anywhere inside the EU. This is made possible because the EU operates under a unified set of economic laws...
Words: 545 - Pages: 3
...The European Union (EU) is a union of twenty-seven independent states based on the European Communities and founded to enhance political, economic and social co-operation. Formerly known as European Community (EC) or European Economic Community (EEC). All information about EU: http://en.wikipedia.org/wiki/European_Union The business implication of the EU: http://books.google.com.vn/books?id=73nQYLkj4lIC&pg=PA519&lpg=PA519&dq=eu%27s+effect+on+international+business+law&source=bl&ots=jZi4MvJL_n&sig=UZV5j9RNWCPcvCUyZin5nYd3DHU&hl=vi&ei=jHSbTI3FDo2osQPK8LzVBA&sa=X&oi=book_result&ct=result&resnum=3&ved=0CCEQ6AEwAg#v=onepage&q&f=false Page 518/ Text book: IBL and its environment. The impact of EU on international trade The European Union has had a significant influence upon international trade, especially in respect of the countries that are member states in the Union. However, it has also had an impact on global trade generally. Internally, trading between the member states within the European Union has become less restrictive, because of the laws and regulations passed. Trade barriers between member states have been virtually eliminated and strict regulations have been applied to ensure fair competition for all. It is partially resulting from these moves that countries like those in the Baltic States are clamoring to join the EU. The EU also protects its member states from unfair competition tactics that other nations might use. The economic power of the Union is such that...
Words: 1468 - Pages: 6
...disadvantages does a country experience upon joining a regional economic alliance as in the European Union? Regional Economic union: its economic agreement between countries to facilitate the movement of money (capital), products, worker and all services, this union should have the same monetary and social policies European Union: It’s economic, borders and political union between the Europe countries (twenty seven countries) that have the same policy in all the areas Advantages joining regional economic alliance: 1. Increased economic integration Economic integration: is unification the policies between regional or no regional countries by cancel some trading restriction between the union countries ,...
Words: 956 - Pages: 4
