PART 1 Question 3 – 2008 – People in Business / Business Environment

Part 1

Domestic/International Environment

Question 3 – 2008

(A) Discuss the impact of the Single European Market (SEM) on Irish Businesses.

The impact of the Single European Market (SEM) on Irish business can be discussed by showing the opportunities andchallenges that itpresents.

Opportunities:

1.  Irish businesses have access to a larger European Union market. Free trade in a bigger trading bloc gives Irish business a larger market in which to sell its products. Therefore, an increase in sales volume is a possibility when entering the SEM.

2.  Irish business can benefit from economies of scale if production increases to keep up with greater sales.

3.  Irish firms can take advantage of lower production costs by locating part of their operations in the new member states.

4.  Migration of workers from the new countries to Ireland has increased the labour supply for Irish business.

Challenges:

1.  Irish business may have difficulty surviving against competition from firms in the new member states where production costs are lower.

2.  There is a risk that skilled workers will move to the new EU countries where there may be more opportunities.

3.  Irish business may suffer if multinational companies relocate to lower cost economies within the EU.

4.  Irish business will have to adapt to new languages and customs if they wish to trade in the new countries. They will have to invest in additional staff training

(B) Explain the functions of any two of the following European institutions.

(i)  The European Parliament.

(ii)  The Council of Ministers.

(iii)  The European Commission.

(i) The European Parliament:

The European Parliament is important for Ireland as it gives Irish citizens a voice in the EU. Irish citizens elect Members of the European Parliament (MEPs), who represent Irish interests in European decision-making.

This input is important as the European Parliament performs the following functions:

1.  The Parliament must be consulted and its views taken into account before any new laws or budgets are passed.

2.  The Parliament has the power to adopt or reject the annual EU budget.

3.  The Parliament monitors the way in which the budget is spent and ensures that everything is above board, i.e. no fraud.

4.  The European Parliament appoints the European Commission, which proposes and enforces EU legislation.

Having an input in the European Parliament through MEPs is important for Ireland, as its decisions have a direct impact on economic and social policy in Ireland.

(B) Cont/….(iii) The European Commission:

The European Commission is the institution responsible for ensuring that the measures in the Treaties are carried out. It has a central role within the EU, planning its policies and ensuring they are implemented in all member states.

The European Commission has a number of functions such as:

1.  Providing political leadership to ensure that policy-making moves ahead at the speed it should.

2.  Demonstrating a commitment to forward thinking and being progressive in all ways to promote the future of the EU.

3.  Implementing any agreed policies of the EU.

4.  Negotiating any external agreements with other countries on behalf of the EU.

5.  Ensuring that any existing EU laws are enforced.

6.  Bringing forward proposals for new EU legislation.

7.  Managing the EU Budget.

(C) (i) In the context of the European Union (EU) distinguish between a Directive and a Regulation.

Both a Directive and a Regulation are ways to implement any new EU rules or laws within the EU.

Directive:

A directive is a legislative act of the European Union that requires each member state to achieve a particular goal, without dictating the means of achieving that result. There will be a deadline for the achievement of these goals; however, each government is free to implement the directive in the way it thinks best.

Directives are only binding on the member states to which they are addressed, which can be just one member state or a group of them.

Regulation:

A regulation is a legislative act of the European Union that becomes immediately enforceable as a law in all member states simultaneously. It will take precedence over any national laws.

Directives and Regulations can be distinguished by the fact that regulations are self-executing and don’t require any implementing measures.

(i) Choose one example of either and describe its purpose.

An example of an EU directive is the Waste Electrical and Electronic Equipment (WEEE), which became effective in August 2005. This requires member states, including Ireland, to improve the way we manage our electrical and electronic waste, and also encourages manufacturers to develop more environmentally friendly products. A key part of this is to make the manufacturers, producers and importers of electronic and electrical equipment responsible for meeting the costs associated with the collection, recovery and treatment of WEEE.

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