Download UNIT 7 (ctd) THE INTERNATIONAL

UNIT 7 (ctd) THE INTERNATIONAL ENVIRONMENT.
CHAPTER 25. THE EUROPEAN UNION.
The syllabus states that students should study the following areas:
 The importance of the EU.
 An outline of the decision-making process in the main EU institutions.
 The purpose of the main EU policies and directives and their impact on Irish business.
 The role of special interest groups in this process.
As this is a very large chapter, not all of the EU policies are covered
The importance of the EU.
Definition: An organisation that fosters closer economic, social, monetary and political union between 27 European
countries.
Treaties are agreed by members. The most recent was Nice in 2000. Ireland is holding up the Lisbon Treaty
Aims:
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Peace and stability
Common values (democracy, social justice, peace, equality)
Better standard of living
To strengthen the union
To expand
Important because:
 Prevents war.
 Free market.
 Helps underdeveloped regions.
 Ensures workers rights.
 Sets standards for health and safety.
 Sets standards for the environment.
You could also give reasons why it is important to Ireland in particular.
The Decision-making Process in the main EU Institutions.
The 3 main bodies (Commission, Parliament and Council of Ministers) are inter-dependent and have a ‘tri-corner’
approach to ensure that each institution has checks on the activities of others.
1. The EU Commission. (Brussels)
Some points:
 Generates and implement policies
 Jose Manuel Barroso is the President and Charlie McCreevy the Commissioner for Competition.
 Drafts new laws including the Budget.
 Can impose fines for breaking laws that have been passed.
 It is the Civil Service for the EU (employs 15,000)
 Commissioners agree to act independently of their own countries.
 They are elected for 4-year terms.
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The Council of Ministers. (Brussels)
Most powerful. Makes the key economic and political decisions.
Provides leadership and the initiative to make things happen
Passes laws.
Controls budget.
Co-ordinates national policies.
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Unanimous agreement required for some issues (taxation).
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The European Parliament. (Strasbourg)
Represents the people directly
15 members elected from Ireland every 5 years. 732 in total.
A watchdog over the Commission and Council, it has the power to dismiss the Commission.
Amends and approves laws
Monitors the way the Budget is spent looks for fraud.
Can and has forced the resignation of the entire Commission
Can reject laws (called the ‘co-decision procedure’) but cannot draft them (‘democratic deficit’).
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The Court of Auditors.
Checks the accounts of the EU and all EU bodies.
20 members appointed by the Council for 6 years.
Completely independent.
All findings published.
Ensures that subsidies are properly spent.
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The Court of Justice.
20 judges ensure that all treaties and agreements are observed by member states.
Interprets EU law.
Adjudicates on disputes between other EU institutions and between EU members.
Acts as an industrial court on issues like equal opportunity and freedom of movement cases.
The Implementation of EU law.
 EU legislation is proposed by the Commission
 Discussed and amended by the Parliament
 Redrafted by the Commission
 Adopted by the Council of Ministers
 Principle of ‘Subsidiarity’ applies (all laws must be relevant to EU members or institutions).
 Unanimous voting needed on certain issues (accession, tax, etc.)
EU Decisions can be:
 Regulations. These are laws binding on all EU countries. Their aim is to have the same rule throughout the EU.
 Directives. They set out a result to be achieved by each country and a date to achieve it by, but each country is free to
decide how to achieve the goal.
 Decisions. These are only binding on particular countries or companies (CRH had to pay a fine of £2,800,000 for
uncompetitive behaviour).
 Recommendations
The Single European Market
Came into effect in 1993 as a result of Maastricht to ensure free trade. The main measures are:
 Free movement of goods, people, services and capital.
 Harmonisation of tax rates.
 Standardisation of products
 Cohesion fund set up to help transport and the environment
 The right of governments to award contracts to particular companies was abolished
Benefits of the SEM for Ireland
 Free access for exports makes it easier to attract foreign investment
 Opportunities to expand existing businesses
 Skilled foreign workers have come here
 Better transport network
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Irish companies can compete for government contracts abroad.
Disadvantages of SEM for Ireland
 Greater competition
 Government cannot restrict contracts to Irish companies
The Main EU Policies and their effects on Ireland.
1. Common Agricultural Policy.
Aims:
 To ensure a food supply for the EU.
 To provide stability for farmers.
 To ensure reasonable prices.
 To protect against cheap imports.
Problems with overproduction has led to:
 Levies and quotas.
 Retirement schemes.
 REPS.
 Reductions in price supports (intervention prices).
The New Common Agricultural Policy
1st Jan 2005
 Intervention price supports removed.
 Subsidies ‘decoupled’ from production levels. Helps stop overproduction of goods the market doesn’t need..
 Money is now given to farmers on the basis of environmental considerations and animal welfare. It is called ‘single
farm payment’.
 No restrictions on what farmers can produce. Farmers now are entrepreneurs and market driven.
 Farmers who have enough land and who are entrepreneurs, will stay. Others will sell up.
2. Economic and Monetary union.
Three main points.
(i) The establishment of a common currency (Euro)
 This creates stability in trade between members.
 Saves currency conversion costs.
 Deters speculation.
 At present 12 countries are members
(ii) The creation of a single monetary policy.
 The European Central Bank controls the money supply.
 This has led to stable prices.
 It restricts Ireland’s ability to control domestic inflation.
(iii) The establishment of close co-ordination between the member states of their budgetary and economic policies.
 Differing taxes could mean some businesses would be at a disadvantage.
 It helps cohesion (making sure that areas are not left behind).
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Common Competition Policy.
Monitors alliances, mergers and take-overs to ensure that business growth is in the interest of competition, consumers
and employees. (Early 1990s Irish Distillers prevented from taking over Cooley Distillery.
Prevents formation of cartels.
It watches governments that might subsidise businesses in financial difficulty.
Ryanair complained about Aer Lingus restricting competition.
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Common Fisheries Policy.
Steady supply.
Reasonable income.
Prevent over-fishing. A quota for certain types of fish. Net sizes.
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Structural Funds
Designed to help poorer regions of the EU to catch up.
Ireland has done very well in the past. Money for infrastructure.
There are 4 types of these funds. An example is the European Social Fund which is designed to help employment by
providing training (FAS)
6.
European Social Charter
 Fair wages and good standard of working conditions.
 Equal treatment
 Right to collective bargaining
 Protection of children
 Reasonable living standards for the elderly
The Role of Special Interest Groups and How to Influence EU Decisions.
Some Irish special interest groups that might want to influence EU decisions:
 IFA
 ICTU
 IBEC (Irish Business and Employers Confereration.
 National Consumers Association.
How they Influence
1. Lobby MEPs and ministers.
2. Set up offices in Brussels or Strasbourg to keep up to date and to lobby.
3. Engage PR companies to generate public pressure.
4. Organise demonstrations.