SECTION 1 MANAGING THE ECONOMY The Economy at Work GCSE ECONOMICS: UNIT 12 The Euro

SECTION 1MANAGING THE

ECONOMY

The Economy at Work

GCSE ECONOMICS: UNIT 12

The Euro

SECTION 1MANAGING THE

ECONOMYEuropean Union: Recap

Benefits• Tariff-free trade• Higher incomes from greater trade• Free movement for citizens within EU• Larger market for business and

consumers (more choice)

SECTION 1MANAGING THE

ECONOMYEuropean Union: Recap

Costs of membership• Richer states have to pay for the

development of poorer states • More EU competition• Payment for Common Agricultural Policy

(CAP)• Influx of people from new EU countries• More regulations from Europe on

business

SECTION 1MANAGING THE

ECONOMY

The Single European Currency: Background

• The single European currency (the euro) was planned for many years before it was launched in 1999

• 12 countries of the EU joined the first wave, with the UK, Denmark and Sweden opting out

• By January 2009 there were 16 countries (the ‘eurozone’) using the euro as their currency

Mini-task: Find out which countries have adopted the euro as their national currency

SECTION 1MANAGING THE

ECONOMY

Video: Reasons for adopting the euro currency

• Watch the video and make notes on the benefits for countries adopting the euro

SECTION 1MANAGING THE

ECONOMY

The euro: it’s not all good news…

• Whilst there are benefits to a country of adopting the euro as their currency, a number of drawbacks exist

• Switching to the euro would involve huge financial costs e.g. training staff and the population on the new currency

• The country would lose the power to set Monetary Policy (money supply and interest rates) and use Exchange rates to meets its own government objectives

SECTION 1MANAGING THE

ECONOMYShould the UK join the Euro…

• The UK government has promised that the general public will be given a vote on joining the euro but until then we remain out of the eurozone

• What specific arguments are there for and against The UK joining the euro?….let us see!

SECTION 1MANAGING THE

ECONOMYOver to you…

1. Using the notes you have made and the resources you have available write a letter to David Cameron expressing your views on the benefits and drawbacks to the UK of joining the eurozone

2. Use the letter template in the Student Shared Area

SECTION 1MANAGING THE

ECONOMYEU Enlargement…

• In your presentations before the new year you looked at the 5 countries awaiting accession to The European Union

• In pairs explain the effect EU Enlargement would have on the UK economy and the Governments main economic objectives

SECTION 1MANAGING THE

ECONOMYIt’s time to reflect…

• Over the past few weeks of lessons we have looked in detail at Government Policies at home and in Europe– Fiscal Policy– Monetary Policy– Supply-side policies– Joining the EU & the eurozone

• Produce a mini-mind map illustrating the key points about each these government policies