UNIT 7 - IRELAND AND THE EUROPEAN UNION
The European Union is an international trading bloc and political alliance of European
nations designed to promote closer political, economic and social co-operation among
its member countries.
AIMS OF THE EU
♪ To create an economically prosperous, peaceful and politically stable Europe.
♪ To improve the standard of living and quality of life of its citizens.
♪ To protect common European values such as democracy, peace, tolerance and human rights.
How the aims are agreed...
o Agreeing TREATIES that set out the aims and rules of membership.
o POOLING SOVEREIGNTY by member states giving up some of their national power & agreeing to obey EU laws.
o Agreeing COMMON POLICIES that will be followed by all members.
o Establishing INSTITUTIONS such as the EU commission, Council of Ministers and Parliament that manage the
running of the Union.
o CONTRIBUTING MONEY annually towards the EU budget to implement policies and pay for the running costs of
the institutions – size is based on percentage of national tax revenues.
How EU Policies and Laws are made...
EUROPEAN PARLIAMENT
Council of
European
Union
The EU
Commission
 ROLE: Directly represents the citizens of the EU &
works with other institutions to pass EU laws.
 STRUCTURE: Directly elected by EU citizens but has
a democratic deficit, i.e. it neither initiates nor passes
legislation on its own.
 FUNCTIONS: Discusses proposed new laws and
proposed amendments; Gives approval to new
international agreements involving EU, e.g. admission
of new Member State; Approves the annual EU budget
and monitors spending; Vets members of the European
Commission.
 POWER: Shared & supervisory powers.
The EU
Parliament
COUNCIL OF THE EUROPEAN UNION/COUNCIL
OF MINISTERS
EUROPEAN COMMISSION
o ROLE: Executive and managing body of EU.
o STRUCTURE: Commissioners – see below.
o FUNCTIONS: Proposes legislation,
responsible for administration & ensures
that provisions of treaties & decisions are
properly implemented.
o POWER: Executive– only institution
that can implement new laws
(must consult with interest
groups). Answerable to EU
Parliament.
Unit
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Ireland
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European
 ROLE: Represents national governments and is the
EU’s most important decision-making body.
 STRUCTURE: Every government in EU takes turns in
charge of council for 6 months. Each council meeting
is attended by one minister from each member state.
Ireland has 7 out of 321 votes.
 FUNCTIONS: Main decision making body of the EU decide on legislation; Set objectives for the EU;
Ensure co-operation between Member States on
European issues.
 POWER: Make final decisions on legislation within EU,
in some cases in co-decision with the Parliament.
Union
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COMMISSIONERS
The European Commission is composed by 20 Commissioners of which
two are from France, Germany, Italy, Spain and the United Kingdom,
and one for each of the other member states. They are appointed
for five-year terms, in line with the European Parliament, which
approves the appointment of the Commission as a body. They are
each given a different Directorate General (DG) (an area of
responsibility such as transport, social affairs etc) they are
supposed to be completely impartial in their dealings with the EU.
OTHER IMPORTANT BODIES IN THE EU
THE COURT OF AUDITORS
EUROPEAN CENTRAL BANK
Responsible for ensuring that the EU
budget is spent properly & for the
purpose intended. Aims to improve
the efficiency of EU financial
management. Checks all EU revenue
received from EU member states &
makes sure all expenditure is lawful.
It reports to the Council of European
Union.
Responsible for managing the Euro
currency & the EU’s monetary
policy. Main goal is to maintain low
inflation and safeguard the value of
the euro.
EUROPEAN COURT OF JUSTICE
Responsible for ensuring that correct
interpretation and application of EU laws is
carried out by member countries. Judges
are appointed from each member states. If
there is a dispute over EU law,
governments, companies and individuals
cases can be brought to the European
Court of Justice for resolution.
HOW NEW EU LAWS ARE INTRODUCED...
PROPOSAL STAGE
CONSULTATION
STAGE
1.
2.
3.
4.
Proposals are made and/or legislation drafted by the European Commission
These proposals are then discussed by the European Parliament
Opinions of interested parties are sought, received and considered.
Decisions are usually made by the Council of Ministers or the European
Council
5. Legislation is implemented by the European Commission
6. Decisions/legislation can be adjudicated upon by the Court of Justice.
REDRAFTING
STAGE
EU REGULATIONS: Legally binding decisions that become effective in law
immediately. They take precedence over national laws.
APPROVAL STAGE
EU DIRECTIVES: These set out a goal to be achieved by member states and a
deadline for its achievement. However, each country is free to decide how best
to achieve the goal.
IMPLEMENTATION
STAGE
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Ireland
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EU DECISIONS: These are only binding on specifically named countries,
companies or organisations. Example: In March 2004 the EU Commission ruled
that Microsoft must supply data to rival companies to allow them to compete
with Microsoft’s Windows operating system.
the
European
Union
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Distinguish the difference between an EU Directive and Regulation...
EU DIRECTIVE
A directive is a legal instrument to implement and enforce EU law in member states. It obliges member
states to change their national laws, to allow for EU rules, within a time limit/deadline. It is binding only as to
the results to be achieved, while leaving within prescribed limits the choice of means to
be employed to the member states. Examples: Misleading Advertising Directive;
Directive on Health and Safety at Work and the Waste Electrical and Electronic
Equipment Directive.
EU REGULATION
An EU regulation is a legislative act of the EU which becomes immediately
enforceable as law in all member states simultaneously. EU institutions can enforce a
regulation throughout the EU. They take precedence over national laws. They are selfexecuting and do not require any implementing measures. Example: EU regulation
275/94 on single (sole) member private limited liability company formation etc.
ROLE OF SPECIAL INTEREST GROUPS IN EU DECISION-MAKING...
Interest groups are pressure groups who protect the interests of their members and try to influence
the decision-making of the EU. They are not part of the EU’s political framework but they use methods
such as lobbying, information campaigns and public protests in attempting to influence EU decisions.
Both IBEC and the IFA have offices in Brussels to promote and defend the interests of Irish employees
and farmers’ in Europe.
DEMOCRATIC
DEFECIT: Those
who propose &
implement EU
laws are not
elected, yet MEP’s
who are elected
have no power to
propose or reject
new laws.
OVER-REGULATION:
Too many laws is
creating a ‘nanny state’.
Too many unnecessary
regulations brought into
place in recent years.
INFLUENCE OF
POWERFUL
INTERESTS: Big
businesses employ full
time professionals to
lobby on their behalf.
Gives them greater
influence than
ordinary people on
decision making.
SLOW: The size of
the EU & the
centralisation of
power makes
decision making
slow. It can take
years for a
proposal to
become law or for
an existing one to
be changed.
CENTRALISED
DECISIONS: Argued
that too many
decisions take place in
Brussels away from
the people who are
most affected by it. In
conflict with the EU’s
aim of subsidiarity*.
*SUBSIDIARITY: decisions should be taken as close to the people who will be most affected by them. Very
difficult to achieve in the EU because of the size of it.
Unit
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Ireland
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MAIN EU POLICIES
POLICY
OBJECTIVE
Single European Market
European Union Monetary
Social
Environmental
Common Agricultural
Common Fisheries
Competition
Structural
Policy
Policy
Policy
Policy
Policy
Policy
Policy
Policy
Promotion of free trade between member states
Promotion and protection of the euro currency
Protecting worker, consumer and citizen rights
Ensuring environmental protection
Developing agriculture & rural life
Developing and protecting fishing
Promoting competition in the workplace
Promoting regional economic development
EU COMMON AGRICULTURAL POLICY (CAP)
 Promotes a fair standard of living for farmers who have always seen their
average incomes lag behind average industrial earnings.
 It stabilises agricultural markets and regulates prices so that farmers can be
assured there will not be huge fluctuations in the prices they receive for their
annual output.
 Irish agriculture benefits from money from the Structural Funds.
 Because of the CAP, the member countries of the EU are self-sufficient in most basic food products. And
society benefits in the form of a better environment.
 CAP aids the provision of safe traceable food and ensures farmers continually improve their production
standards.
 CAP preserves and restores rural infrastructure and villages, supporting Ireland’s tourism industry.
 Since Ireland joined the EU, Ireland has benefited from major funding, including more than €41 billion
from the CAP.
 The impact of the CAP on Irish agri-business is protectionist in that farm food prices are fixed at a
minimum by the EU. Marginal producers are being encouraged by financial incentives to concentrate on
more viable options.
EU COMPETITION POLICY
 It ensures that the best guarantee for the Irish consumer of getting quality goods and services is to have
a number of suppliers competing for the business, i.e. the existence of competition among suppliers.
 It ensures that Irish businesses operate on a fair basis and that customers benefit.
 It restricts Irish businesses from forming anti-competitive cartels or keeping prices artificially high or
preventing newcomers from entering the market.
 The commission has the power to control large mergers and takeovers.
 In doing business with smaller firms, large firms may not use their bargaining power to impose conditions
which would make it difficult for their supplier or customer to do business with the large firm’s
competitors. The Commission can and does fine companies for all these practices.
EU SOCIAL POLICY
This is intended to improve and harmonise working conditions, including fair wages and working conditions, and
to improve consumer rights throughout the EU. Workers benefit from improved working conditions and
consumer rights have been improved significantly as a result of EU social policy directives and the subsequent
implementation of laws like the Consumer Information Act. However, businesses make be exposed to greater
costs in order to comply with and meet these rules and regulations.
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COMMON FISHERIES POLICY (CFP)
The Common Fisheries Policy (CFP) is an EU policy just like the CAP with
common rules throughout the EU covering all aspects of the fishing
industry. The following are the main provisions:
ACCESS TO FISHING GROUNDS: Access to Irish coastal waters is
reserved for fishermen from local ports to a distance of 12 miles offshore. This prevents foreign boats from over fishing the areas. The EU is
allowed to define where fishing is banned or restricted and all EU boats must be licensed to fish.
CONSERVATION OF IRISH FISH STOCKS: This policy is designed to protect fish stocks over-fishing.
Young fish catches are reduced, the mesh size of nets is regulated and limits applied to different fishing
seasons.
MONITORING FISHING ACTIVITY: The responsibility to ensure that all rules are applied rests with each
member state (Ireland in this case). The EU provides aid to Ireland for the purchase of fishery protection
vessels and aircraft for the authorities. Skippers must keep log books of catches and fish landings at ports.
Large fines, confiscation of fishing gear/crafts are the sanctions for breach of rules.
MARKETING OF FISHERIES PRODUCT: The CFP is designed to stabilise the Irish market, guarantee
steady supply of products, provide reasonable prices for the Irish consumers and support Irish fishermen.
EU STRUCTURAL POLICIES
 These are aimed at helping less developed regions of the EU to prosper and to close
the gap that exists between them and wealthier regions.
 They are designed to increase economic development, improve the competitiveness of
industry in the regions and to increase the wealth of the region.
 Ireland has benefited from such benefits in the past (received €9 billion in structural
funds between 1994 and 2006) but now most of the aid is directed towards the
poorer regions of Eastern and Southern Europe.
 Structural funds are provided to countries mainly through the following:
 EUROPEAN REGIONAL DEVELOPMENT FUND (ERDF): Aims to reduce differences between rich and poor
regions of the EU, especially areas lagging behind in development or those in industrial decline.
 EUROPEAN SOCIAL FUND (ESF): Provides funding to train and retrain workers and increase their adaptability
to change.
 EUROPEAN COHESION FUND: Provides grants to economically poorer countries to help them compete on a
more equal basis with richer neighbours - mainly given for infrastructural and environmental improvement
projects.
EU ENVIRONMENT POLICY
This aims to ensure that economic development within the Union is ecologically
sustainable and will not be at the expense of the quality of Europe’s environment. EU
environmental policies aim to make Governments and firms responsible for their
impact on the environment through the ‘polluter pays’ principle and promotes the move
away from fossil fuels for producing energy and towards renewable sources such as wind, wave
and solar power – they also provide finance for research into renewable technologies and purchase of same.
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SINGLE EUROPEAN MARKET
This was intended to boost free trade within the Union by allowing businesses to treat the entire EU as their
home market. There are certain consequences however for businesses:
1.
FREE MOVEMENT OF GOODS: trade barriers such as tariffs, physical checks on goods at border
crossing have all been removed. Standards are being harmonised on thousands of products such as
chocolate etc.
2. FREE MOVEMENT OF CAPITAL: firms and citizens can invest their money wherever they want to
earn the greatest return. Irish interest rates move in line with those in other EU countries.
3. FREE MOVEMENT OF LABOUR: EU citizens are free to travel, live & work in any member country
without immigration or passport controls.
EUROPEAN MONETARY UNION (EMU) POLICY
This policy was designed to achieve 3 things:
 A single currency throughout the single market to replace the punt and other national currencies - this
makes it easier and cheaper to trade, and makes price comparisons throughout the EU very easy.
 A single monetary policy for all member states, implemented by an independent European Central Bank –
countries must meet guidelines before they can change to the Euro.
 Co-operation between member states on their economic and budgetary policies.
 EUROZONE is the name given to countries who have replaced their national currency with the euro.
POLICY NAME:
ADVANTAGES: (PROS)
SINGLE EUROPEAN
MARKET POLICY
(SEM)
COMMON FISHERIES
POLICY
Irish firms can sell their products to a
very large market.
Smaller Irish firms may not be able to
compete with foreign competitors.
Irish firms can expand and achieve lower
costs through economies of scale.
Ireland lacks the large scale producers
that can compete with multinationals.
Ireland can attract non EU firms to set up
business here because they can gain access
to a single market as a manufacturer based
in Ireland.
Irish companies can no longer give their
contract to Irish companies unless they
are very competitive.
Fish stocks are not depleted because they
are protected by quotas.
Regulations may make it harder and
more costly for fishermen to operate.
Grants are provided for investment in new
boats.
No need to change currencies for
individuals or companies when dealing within
the EU = savings on bank charges!
EUROPEAN MONETARY
UNION POLICY
(EMU)
Direct comparison of prices puts downward
pressure on Irish prices.
SOCIAL POLICY
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Ireland
Government loses some control over
the economy i.e. interest rates
Our main trading partner Britain is not
part of the Eurozone.
Membership of Eurozone forces the Irish
Gov to maintain economic stability.
Improved work conditions – minimum
standards of working hrs.
Unit
DISADVANTAGES: (CONS)
&
Costly for firms to afford compliance
with the laws (holiday entitlements
etc)
Greater equality of treatment for men and
women,= improvement in employment rights.
the
European
Union
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EU funding is available for environmentally
beneficial developments.
ENVIRONMENTAL POLICY
Increased costs associated with the
protection of the environment.
Increased awareness of the need to
protect the environment.
COMMON AGRICULTURAL
POLICY
Grants from the CAP for investment in
technology have allowed Irish firms to
modernise and become more efficient.
Guaranteed markets and prices have
led to an over reliance on a few
agricultural products, milk & beef.
Irish farmers have benefited from huge
financial investment from the CAP.
Overproduction has led to excessive
amounts of chemicals being used =
agricultural pollution,
Food production has been assured, even if
it is at a high cost to the EU.
COMPETITION POLICY
Ongoing pressure to reduce spending on
the CAP is affecting Irish firms.
Increased competition = more choice for
consumers, better prices and quality of
goods.
Open competition can result in the
many smaller companies having to close
and multinational firms dominating.
Regulation of mergers & takeovers prevent
new monopolies from being created.
Closures due to competition can results
in unemployment.
Market manipulation by dominant firms is
reduced.
Free competition may mean that
services will not be provided in less
profitable areas of the market which
were previously provided by monopolies.
Easier for new, smaller firms to set up and
compete in the market.
 Free access to a large market
 Attraction of direct foreign investment
 A strong international currency, the euro
 Financial supports to agriculture (through the CAP)
 Grant aid for the development of infrastructure
 Better protection of the environment
 Better rights for workers, consumers & the individuals
 Improved standards of living
 Economic growth and better control of the economy – TNC’s investing in Ireland = creating thousands of jobs.
CHECKLIST
 Identify the effects of the single market on Irish business
 Explain the purpose of the main European Union policies and directives (& their impact
on Irish business) (HL)
 Outline the role of the EU institutions
 Outline the decision making process in the EU
 Describe the role of special interest groups in the decision making process
Unit
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Ireland
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European
Union
7 |JLE/ M R Y