Lesson 6: European Union

September 8, 2022

Review:

• Quiz 01 Results
• World War II
• 20th Century Europe

Presentation:

• European Union
  • Established formally in 1993 under the Maastricht Treaty
  • Political and Economic union with 28 current member states
  • Internal market enabling free movement of people, goods, services and capital
  • Monetary union with common currency: Euro (€)
  • European Union (EU) Explained (6 min)
• Sovereign Debt Crisis
  • Circa 2010-2014
  • 2008 US Mortgage/Financial Crisis = Catalyst
    • Explained in The Big Short (recommended), Too Big to Fail, and Inside Job
    • Or…here’s a short version (warning: Rated R for language)
  • Crisis in a nutshell
    • Some EU countries (starting in Greece) used easy credit to borrow too much
    • Foreign Banks/Investors panic, demand higher interest rates
    • Higher interest rates made the debt problem worse
    • EU bailout of Greece and imposed austerity
    • Fear of contagion to Italy, Spain, Portugal, Ireland
  • How Germany Became Europe’s Richest Country (2012, 9 min)
  • Highlights a structural flaw in the EU
    • Centralized monetary policy
    • Decentralized fiscal policy
  • Begins the momentum toward Brexit
• EU vs US Economy
  • Are EU members socialist countries?
  • What is socialism?
  • How do American’s view capitalism vs socialism?
  • How do US tax rates compare to European tax rates?

Assignment:

• Watch European Debt Crisis Documentary (Wall Street Journal, 23 min)
• Watch Understanding the Financial Crisis in Greece (2015, 7 min)
• Prepare for Quiz 02
  • Map of Europe
  • WWII, EU