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The Economy at Work

GCSE ECONOMICS: UNIT 12

The Euro

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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)

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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

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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

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Video: Reasons for adopting the euro currency

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

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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

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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!

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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

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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

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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