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Evaluate the impact that any two of the following EU policies have on Irish businesses: (i) European Monetary Union (EMU); (ii) European Union Competition Policy; (iii) European Social Charter. - Leaving Cert Business - Question 3(C) - 2014
Question 3(C)
Evaluate the impact that any two of the following EU policies have on Irish businesses: (i) European Monetary Union (EMU); (ii) European Union Competition Policy; ... show full transcript
Worked Solution & Example Answer:Evaluate the impact that any two of the following EU policies have on Irish businesses: (i) European Monetary Union (EMU); (ii) European Union Competition Policy; (iii) European Social Charter. - Leaving Cert Business - Question 3(C) - 2014
Step 1
Evaluate the impact of European Monetary Union (EMU)
Answer
The European Monetary Union (EMU) significantly impacts Irish businesses in several ways. Firstly, it reduces transaction costs due to the adoption of a single currency, the Euro, which eliminates the need for currency conversion when trading with other Eurozone countries. This boosts trade efficiency and allows businesses to better plan their financial operations.
Secondly, a stable monetary policy led by the European Central Bank (ECB) contributes to low-interest rates, which facilitates investment. Lower borrowing costs enable Irish businesses to invest in growth and expansion, ultimately promoting economic development.
Additionally, EMU enhances competitiveness by exposing Irish businesses to a broader market without currency risk, making Irish goods and services more attractive to foreign consumers.
Step 2
Evaluate the impact of European Union Competition Policy
Answer
The European Union Competition Policy plays a critical role in shaping the competitive landscape for Irish businesses. By enforcing rules that prevent anti-competitive practices, such as monopolies and collusion, the policy ensures that small and medium-sized enterprises can compete effectively with larger corporations.
Moreover, it encourages innovation and quality improvement among suppliers, giving Irish consumers better products and services. This beneficial competition can lead to lower prices in the long run.
Furthermore, the policy impacts mergers and acquisitions by scrutinizing potential monopolistic outcomes. This prevents the market from being overly concentrated, thus maintaining fair competition and consumer choice, which are vital for a healthy economy.