European Union

European Union

1. European Commission

   • This is the only institution which can propose new laws while also enforcing them.
     • Near monopoly on proposing new laws
     • Duty of upholding the law and treaties
       • "Guardian of the Treaties"
   • It writes the EU budget and distributes any money to EU members.
   • The executive arm of the Union

2. European Central Bank

   • Central bank for the Eurozone
   • Controls monetary policy
     • Agenda to maintain price stability
   • Comprises all EU national banks
     • The bank is governed by a board of national bank governors and a President
     • The President is currently Mario Draghi

3. Single European Market

   • Trade block which is composed of a free trade area (for goods)
     • Common prices on product regulation
     • Freedom of movement of the factors of production, enterprise and services
       • The goal is that the movement of capital, labour, goods, and services between the members is as easy as within them
     • The physical, technical and fiscal barriers among the member states are removed
       • (Borders, standards and tax barriers)
   • Advantages
     • Factors of production become more efficiently allocated
     • Competitive environment
       • Innovate to create new products
     • Efficient firms can benefit from economies of scale
   • Disadvantages
     • The instability of the system
     • Over estimation of Trade benefits
     • Loss of Sovereignty
     • Deflationary tendencies

4. EU Customs Union

   • No customs are levied on goods travelling within the customs union
   • Established in 1953
   • The EU has to negotiate as a single entity in international trade deals
   • Advantages
     • Free movement of goods
     • Better bargaining power
   • Disadvantages (to the UK)
     • Domestic issues affecting one country is funded by the whole of the EU
     • London losing its influence on the world stage
     • The UK makes an annual loss in net payments

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