European Business Environment Quiz 2

1. How has the European Union contributed to the maintenance of peace in post-war Europe?
Ans. The EU began as a small organization to promote economic cooperation. Its emphasis was
breaking down trade barriers. It has made significant progress in its first two decades. The
continued enhancement of economic ties binding members has increased the political unity of
the EU members over time. By maintaining stable currency exchange rates, reducing public and
overall government debt and controlling long-term interest rates, among other actions, EU has
contributed significantly to the maintenance of peace.
2. List two arguments that could be use in favour of the European Union. Which do your think
is the more important argument, and for what reasons?
Ans. The two arguments in the favour of EU are:
a) Export Stability to the neighbouring countries
b) Strength in Numbers
Out of the two, the second argument is more important. We live in a world of emerging
superpowers. A bigger EU will be better placed to make its voice and its values respected.
Turkey with its huge population and Ukraine as an industrial powerhouse have the potential
to provide great boost to the union.
3. List two arguments against the European Union. Which do you think is the most convincing
and why?
Ans. The two arguments against the EU are:
a) Institutional Overload
b) Further enlargement is asking for trouble
Out of these, the institutional overload is more convincing argument. With 28 members, EU
is at the brink of institutional gridlock. Any more would make efficient decision making
impossible for the union. Further, all the potential candidates would place a huge strain on
EU budgets, which the richer members of the union cannot afford to balance.
4. What do you think was the strongest argument in favour of the Lisbon treaty (2007) and
why?
Ans. The strongest argument in favour of the Lisbon Treaty is that it will legitimize EU policy.
Increased number of referendums will give policies the stamp of popular approval. Voters would
feel more attached to Europe of given a chance to shape them.
5. What do you think was strongest argument against the Lisbon Treaty and why?
Ans. The strongest argument against the treaty is that it is anti-democratic. The European Union
has 502 million citizens. Just 109,964 Irish votes prevented them getting a better functioning,
more democratically accountable EU. That was the winning margin for the no vote in the

Lisbon Treaty referendum. National referendums on EU questions are fundamentally

undemocratic by allowing tiny minorities to dictate to the majority.
6. What is the aim of the EUs single market? What four economic freedoms did the Treaty of
Rome set out for the single market?
Ans. The main aim of the EU single market is to make war in Europe impossible by developing
both a common system of law and making member states economies completely independent.
The four economic freedoms the Treaty of Rome set out were:
a.
b.
c.
d.

Free movement of goods

Free movement of capital
Free movement of services
Free movement of people

7. Outline one advantage of the Single Market and one disadvantage and explain.
Ans. One of the main advantages of the Single Market is the availability of more opportunities to
live, work and study abroad. More than 15 million EU citizens have moved to other EU countries
to work or to enjoy their retirement, benefiting from the transferability of social benefit, while
1.5 million young people have completed part of their studies in another Member State with the
help of the Erasmus programme.
One of the main disadvantages of the single market is the presence of inefficient policies. A large
percentage of EU spending goes on the Common Agricultural Policy. For many years this
distorted agricultural markets by placing minimum prices on food. This lead to higher prices for
consumers and encouraging over-supply. Reforms to CAP have reduced, but not eliminated this
wastage.
8. Each Member States takes it in turn to hold the Presidency of the Council of the European
Union. How long does each Presidency last?
Ans. Each Presidency lasts for about six months.
9. List three functions of the European Commission
Ans. The three main functions of the European Commission are:
a. To propose legislation which is then adopted by the co-legislators, the European
Parliament and the Council of Ministers.
b. To enforce European law (where necessary with the help of the Court of Justice of the
EU).
c. To manage and implement EU policies and the budget.

10. Which do you think is the most powerful EU Institution? (Give evidence for your answer)
Ans. The most powerful EU institution is the European Commission, which draws up treaties,
laws and policies. It has the right to impose its decision on the member states of the European
Union.
A perfect example of its power is its recent impact on Britain when it passed the rule that old
refrigerators cannot simply be dumped by the shops because of its impact on the environment.
They had to be properly disposed of. Britain did not have the facilities to do so. It had to take
onboard this ruling and simply store old refrigerators while facilities were built for their proper
disposal.