Deck 13: Creating Effective Trading Blocs: What Lessons Does the European Union Provide

Question 1

Explain why EU decision-making can be a complex process.

Answer 1

Describe the Europe Union's historical development-through a series of enlargements and reigning philosophy behind maintaining a peaceful and economically prosperous continent.
Broadly describe member states' differing positions over the years towards the development of the European Project-i.e. federal state, free market 'a la carte approach', anti-federalist, cohesion transfers, etc.
Show how this can be translated into the treaty 'Europe building process'.

Question 2

Explain the different approaches to building the European Union and their impact on member states.

Answer 2

A Federal Europe is the concept that much of Europe could be unified in the manner of a federation. The idea has been common with ambitions of European unification with the term United States of Europe echoing the federal nature of the United States of America. Some academic analysts suggest that the European Union (EU) already has many characteristics of a federal system-rules applied unilaterally to member states (MSs).
'Multi-speed Europe' envisions an alternative type of European integration, where the EU countries who want a federal EU can proceed with further integration amongst themselves, while other countries may go at a slower pace. Good examples include the eurozone and the Schengen Agreement for common external border controls without inter-state frontiers, which includes some states that are not in the EU but which does not include all states that are in the EU.
Sovereignty is the exclusive right to control a government, a country, a people, or oneself, and supreme lawmaking authority. Some political forces within some member states argue for higher national sovereignty and less EU control and competencies-i.e. less EU regulation and involvement.
Critical discussions of complexity and deepening the European project (i.e. further integration) versus widening (i.e. further enlargements).

Question 3

Critically discuss the pros and cons of the 2009 Treaty of Lisbon.

Answer 3

Some positives include: greater clarity; simplification of treaties; modernization of EU institutions, streamlining decision-making.
Some negative aspects: reduced sovereignty by removal of national veto rights; less national sovereignty on issues such as migration, asylum, and criminal law.

Question 4

Briefly describe the principal EU institutions and how EU decision-making works.

Question 5

Elaborate on the differences between a customs union, a free trade area, a single market, a monetary union, an economic union, and the EU.

Question 6

'Trade diversion' in the European Union could be defined as:

A) Encouraging efficient free trade between Spain and the UK
B) The monetary costs of that activity
C) Trade created by the formation of a customs union
D) Trade diverted from a more efficient exporter to a less efficient one through the formation of a free trade agreement

Question 7

With reference to the three main EU institutions, where does the balance of power lie?

A) The European Commission
B) The Council of Ministers
C) The European Parliament
D) The European Parliament and the European Commission

Question 8

Which of the following are present in a customs union?

A) A common currency
B) No internal tariff or non-tariff barriers
C) A common external tariff
D) Factor and asset mobility

Question 9

A country operates with its own independent currency and allows this to float freely. If it were to experience trade deficits with its trading partners then it could, in the short run, allow its currency to depreciate.

Question 10

In what way would a country's entry to the eurozone (i.e. adoption of the euro as its currency) benefit that country's firms?

A) It reduces the uncertainties of exchange rate fluctuations
B) It reduces taxes paid to the Queen
C) It helps 'disguise' the short-term loss in competitiveness
D) Incomes are distributed equally across all people