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UNIT 1
● 27 countries in the EU
● Last year the UK left because of the Brexit.
OBJECTIVES OF THE EU:
– To consolidate peace and prevent new wars in Europe.
– To compete collectively agains the superpowers.
ORIGINS OF THE EU:
– After the II World War (1939-1945). The USA and the Soviet Union became
superpowers, much stronger than the European countries.
– European countries decided to create a continent-wide organization and promoting
cooperation among themselves.
1950: 9th of May Robert Schuman presents a proposal about a united Europe.
1951: “The six” decided to combine some of their energy resources. They called it European
Community of Coal and Steel (ECSC).
1957: They sign the Treaty of Rome. It constitutes the European Economic Community
(EEC) and the European Community of Atomic Energy (Euratom).
1973: Denmark, Ireland and the UK are included in the EEC
1986: Spain and Portugal join the EEC.
1992: They sign the Treaty of Maastricht. It establishes the EU creation, it is not called EEC
anymore
2002: The euro starts to be used in most of the EU members.
2004: A European Constitution was written. The result was the Treaty of Lisbon (2009).

COUNCIL:
– Pass laws and approve budgets (together with the Parliament)
– Sign international agreements.
– Develop the Common Foreign and Security Policy
– Coordinate cooperation between the national courts and police in criminal matters
(including border control and asylum)
PARLIAMENT
– Legislative body of the EU.
– Represent the EU citizens. (Elected by universal suffrage every 5 years)
– Maximum of 705 members, divided into political groups not states.
– FUNCTIONS: make laws, supervision and budgetary responsibilities

– Headquarters: Strasbourg, Brussels and Luxembourg.
COMMISSION
– Executive body of the EU.
– 27 commissioners (one per member state)
– Headquarters: Brussels
– FUNCTIONS:
-Represent the EU in international forums.
-”Guardian of the treaties”: Applies regulations and directives adopted
CRITERIA TO ENTER IN THE EU: ENLARGEMENT
-Include and apply EU law in its legal system
-Have stable institutions which guarantee democracy, the rule of law, human rights
and the protection of minorities
-Have a functioning market economy.

WHAT IS SCHENGEN AREA:
Schengen Area, means an area where 26 European countries abolished their
internal borders, for the free and unrestricted movement of people, in harmony with
common rules for the control of extra borders.
– No police and custom checks at borders.
– Controls strengthened at EU external borders.
– Cooperation between police from diff countries.
– You can buy or bring back any goods for personal use when you travel
between Eu countries.
UNIT 2:
WHAT IS GLOBALIZATION?
– It refers to the process of increasing interdependence of the world’s
economies and societies.
CHARACTERISTICS OF THE GLOBALIZATION OF THE ECONOMY
– Huge expansion of international trade.
– Business concentration > Companies merge (mix) to be more competitive.
– Global organization of production > Companies distribute phases of
production among different locations to save money. This is called
“outsourcing” (descentralització).
– Large multinational companies. > They have international dimension and
huge resources, so they have influence over governments and economic
institutions.
GLOBALIZATION FACTORS

– Information society > New information and communication technologies
make possible to organize global production and move capital from one place
to another in seconds.
– Cheaper and improved transport > Facilities the flow of goods and people.
– Liberalization policies implemented by governments:
– Deregulation (liberalització) of financial markets: Facilitates movement of
capital between countries.
– Elimination of custom duties and other obstacles to the import: Of
goods and other services. A product can be sold freely almost all over the
world.
– Collapse of the communist bloc: Former communist: Countries adopted the
capitalist system and opened their borders to investments and products from
other countries. All countries now form a single global market EXCEPT Cuba
and North Korea.
EFFECTS OF GLOBALIZATION
POSITIVE:
– Increase of global wealth (riqueza).
– Strong growth and economic development in some countries. For example,
China and India.
– Social progress. Especially in health and education
NEGATIVE:
However, all these positive effects have not been distributed equality:
– Developed countries and some developing countries have benefited more,
Poorer countries are being marginalized in the global economy.
– Inequalities within countries have increased. In general, cities have benefited,
but not rural areas.
– States are less able to control their economy because more and more
decisions affecting the economy are now made outside borders.
INTERNATIONAL ECONOMIC INSTITUTIONS:
WORLD BANK:
– objective: To reduce poverty and improve the standard of living in the world.
INTERNATIONAL MONETARY FUND (IMF)
– Objective: To promote international monetary cooperation.
WORLD TRADE ORGANISATION
– Objective: To ensure the international trade is smooth, free and fair.

WORLD’S MAJOR ECONOMIC POWERS

– Groups of countries that control most of the world’s economic production and
trade. Consequently, their decisions greatly influence world economy, and as
a result, they are considered ECONOMIC POWERS.
TYPES:
– Traditional powers: USA, Japan and the EU.
– emerging powers: Brazil, Russia, India and China (BRIC)
– Regional powers: Australia, the “Asian Tigers” (Taiwan, Singapore, Hong
Kong and south Korea), South Africa and Persian Gulf oil producers.
TRADITIONAL ECONOMIC POWERS
USA:
-World leaders companies
-Entrepreneurial investments are highly valued in US society.
-Investments in research.
-Quality university education = highly skilled labour force.
-Access to large amounts of natural resources and energy.
-Attracks foreign investments.
-Dollar = world’s most important currency
JAPAN:
weak points:
-Ageing population= High social costs.
-Scarce natural and energy resources = dependence on imports.
positive things:
– Strong points of the Japanese economy:
-Varied industry. (relatonship is very good)
-Robotics
-Exports of manufactured products. (Excellent Price- quality relationship)
-Businesses are present on all continents (Toyota, Fujitsu, Panasonic).
Equal distribution of wealth. Low unemployment rate, around 5%.

Why EU is it number one in volume of trade?
– 27 countries
– Because of the location
It is the number one in volume of trade because it is located in the middle, therefore
it is the one that can buy or sell the most.