In joining the European Union, the United Kingdom has been affected in
many different ways. We have had the advantages and the disadvantages,
the benefits and the costs.
Advantages to the EU cover many fields; there is greater
specialisation and economies of scale, for example the more efficient
a firm is in producing their product then the bigger the scale of
production leading to higher capital for them and also leading to
There would be more competition involved as the removal of trade
barriers leads to more countries being involved leading to greater
ideas and more innovation.
Trade between member states becomes quicker and cheaper as the EU is a
customs union – a single market.
No tax tariffs will be imposed due to this and so this is another
benefit of being part of the EU. This leads to cheaper prices for the
consumers of all the imported products.
Consumers will also benefit from food heath and safety standards as
all goods that are produced in the European Union must now carry,
“Best Before” dates, price indicators and a list of ingredients,
colourings and additives that they contain. British consumers need not
worry about eating imported foreign foods from the EU as they all have
pretty much the same standards.
Problems arise with the unemployment levels, as there are more
businesses in every trade the less efficient firms tend to close down
leaving the people who were employed in them unemployed.
The admin costs are likely to be high as running a trade bloc incurs
high costs and it can be quite slow as it takes time to respond to
changing economic and political events.
Combining common economic policies may be beneficial for the EU as a
whole but could be damaging for UK firms in certain situations. A
decline in customer’s demands would normally mean that the UK
government would cut interest rates to encourage customers to keep
spending. However the EU economic policy may dictate that interest
rates are kept relatively high to combat rising inflation.
One question that has also been raised is that does the UK need to be
a part of the EU, or does the EU need the UK?
Mr. Blair believes that the jobs currently resulting from trade with
the EU would be lost if we left. However, a number of studies have
found that if the UK were to leave the EU then it would have little
... middle of paper ...
costs in order to keep their customers, beneficial for the customers
but not the firms.
As lower inflation rates are common within the EU the Bank of England
may decrease the interest rates on short term loans in order to
generate investment which in turn would make it cheaper for firms to
take out loans. This way firms would benefit financially if they were
planning to take out loans to increase their firms and homeowners
would benefit from cheaper mortgages.
Multi national companies may be more willing to invest in building
firms in the UK as before they have been wary due to the fact that the
value of services and goods they provide may decrease due to the
fluctuation rates between the pound and the euro, if the UK was part
of the euro then these problems would vanish and therefore the UK may
benefit from more jobs and more business.
The removal of the two currency’s may encourage more investment as the
investors would no longer have the traditional worry about moving
their money into a currency other than their own as the currency would
be exactly the same.
Overall there would be a more efficient and streamlined business
across the euro zones.
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