EUROPE Economics November 12, 2013

DAILY WARM-UP: POLDERS

EUROPEAN ECONOMIES

 Throughout Europe, people still remain proud of their individual national identities, but they are also beginning to identify with the region as a whole.  Believe it or not, ENGLISH is actually the language they share in the business world…a Dutchman who works with French and Italian businessmen isn’t going to learn French and Italian—they are all going to learn English and work in that language.

CHANGING ECONOMIES  Europe’s economies are diverse and changing!  Europe is one of the world’s major manufacturing and trading regions.  European Union (Also known as EU) unites much of Europe into one GIANT trading community. This means that they actually enjoy a GREATER VOLUME of trade than any single country in the WORLD!

EUROPEAN UNION (EU)  Came from a need: Europe wanted to be united after the devastation of WWII. Western Europe struggled to rebuild their ruined economies.   1950: France wanted to closer links among Europe’s coal and steel industries.  1990s: Finally most of Europe finally decided they would like to reach this goal.

EUROPEAN UNION (EU)  1992: Representatives (from various European governments) met in Maastricht, the Netherlands, and they signed the MAASTRICHT TREATY.  This treaty set up the European Union (EU).  The EU aimed to make Europe’s economies competitive with those of the rest of the world by getting rid of restrictions on the movement of ….across borders  Goods  Services  People

EUROPEAN UNION (EU)  It also paved the way for a SINGLE European currency, a central bank, and a common foreign policy—the EURO.  EU continues to work toward the goal of a stronger single economy, and they are even extending membership to include a number of additional countries, mainly in eastern Europe.

EASTERN EUROPE  For 40 years after WWII, communist governments under the Soviet Union ran eastern Europe’s command economies.  Communist=Command Economies  Government planners made decisions on what goods were produced and how to produce them  Industries employed many workers & managers  Factories lacked modern technology  Since 1989, Eastern Europe economies are moving from command economies to market economies

EASTERN EUROPE  Transition from Command to Market has many obstacles  Outdated Equipment  Inefficient production methods  Lack of modern, skilled training for many workers  Lack of energy conservation measures  must be adopted to reduce pollution  Have to remarket their image—trying to seek and attract investments and financial aid from Western Europe and other parts of the world.  Costly and Difficult

INDUSTRY  Industrial Revolution made Europe the birthplace of modern industry.  Europe has both heavy and light industry.  Heavy: Manufacture of machinery and industrial equipment  Heavy: UK, France, and Germany are leaders in manufacturing due to their vast mineral deposits.  Light: For countries lacking industrial raw materials, such as the Netherlands and Denmark, they make textiles and process food.  Service & Technology Industries  60% of workers in WESTERN EUROPE, work in the tertiary sector, otherwise known as the Service Industry.  International banking, insurance, tourism, and high- technology

AGRICULTURE  Europe has very fertile farmland, but the population of farmers varies from country to country. In the more developed Western Europe there are not a lot of farmers, however, in Eastern Europe there are more primary sector workers.  Farming Techniques  Mixed Farming: raising several kinds of crops and livestock on the same farm  Farm Cooperatives: Organizations where farmers share in growing and selling products, reduce cost and increase profits  Collective Farms: Government owned, receive wages plus a share of products and profits.  State Farms: Not sharing in the profits, but getting a wage like a factory worker*outdated equipment and lack of incentive make low crop yields*  Agricultural Issues  Genetically Modified Foods: foods with genes altered to make them grow bigger, faster, or be resistant to pests.  Organic Farming: Using natural substances instead of fertilizers and chemicals to increase crop yields.

TRANSPORTATION & COMMUNICATION  Railways & Highways,  Highways, railroads, waterways, and airline routes is among the best in the world.  High speed trains—more economical than airline travel, can use daily, less expensive, also cause less damage to the environment  Bicycles and Motorcycles are popular forms of transportation  Seaports & Waterways  Long coastline=long tradition with shipping and bustling ports  Europe has more than ½ of world’s international shipping  Europe has many navigable rivers and human built canals.  Communication Links  Bring information and programming to Europe.  Eurovision: network links most of W. Europe  Intervision: network links most of E. Europe  High quality telephone service is not available in E. Europe

ENVIRONMENT  Pollution  Acid Rain  Air Pollution  Global Warming—burning of fossil fuels has led to raised amounts of carbon dioxide in the atmosphere (Greenhouse Effect)  Water Pollution  Eastern Europe: When Communism ended in E. Europe, there was rapid industrialization so it quickly polluted air and rivers, destroyed acres of forest, and covered, decaying buildings with soot.  Future Solution: The EU and European governments continue to develop ways to protect the environment. To be accepted into the EU, eastern European countries have to meet EU environmental standards.