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what is the EU?
political and economic grouping
27 members
given up sovereignty in exchange for political, business, economic and monetary memberships
worlds biggest free trade area
the single market
founded in 1993
market is made up of 500m people
20% of global GDP
main features of a single market
no barriers to trade
no internal tariffs/quotas
free transfers of resources
consistent standards
common external tariffs on imports
benefits to workers
can move in the market for work
safety standards and employment law are maintained
higher real income
benefits to consumers
standards are the same on all products
reduced prices as tariffs are reduced
more choice
access to providers
why is the EU not a 'complete single market?
barriers to trade
protection of industries
problems with harmonisation of srandards
cost implications
benefits of EU membership
comparitive advantage
higher economic well being
increased FDI
floating exchange rate
is determined by supply and demand
fixed exchange rates
fixed at a certain level by the countries central bank and maintained by the central banks intervention in the foreign exchange market
benefits of joining the euro
currency fluctuations don’t effect imports and exports in the EU
inflation is constant
drawbacks of joining the euro
no control over the printing of money
no control of monatary policy
benefits to UK businesses of leaving the EU
expand into new markets
imports from outside the EU are cheaper
loss of red tape
drawbacks to UK businesses of leaving the EU
loose out on exchange rates
loss of customers
more risk with exchange rates
supply chain issues
new legislation
loss of grants and subsides
restructuring and insolvency
EU laws on insolvency are designed to co ordinate cases across EU countries, to stop those involved from ‘shopping’ around
financial services
because of the size and influence, UK has previously led the financial sector, alligned with EU rules, its likely to remain but in a different form
those operating outside the EEA will usually have a branch in that area