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411. EU Accession and the Euro: Close Together or Far Apart?

Author:
Peter B. Kenen and Ellen E. Meade
Publication Date:
10-2003
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
In May 2004, ten countries are due to join the European Union. They are therefore obliged to join the European Monetary Union (EMU) and adopt the euro as their national currency. Most of them, moreover, have been eager to do that. None of them sought an opt-out of the sort that Britain and Denmark obtained in 1991, when the Maastricht Treaty was drafted. Membership in EMU is not automatic, however, because the accession countries must first satisfy the preconditions contained in the Maastricht Treaty. Although those preconditions are rigorous, and some of the accession countries are still far from meeting them, most of those countries have indicated that they want to enter EMU at the earliest possible date.
Topic:
Economics and International Trade and Finance
Political Geography:
Britain, Europe, and Denmark

412. The International Finance Facility: The UK HM Treasury-DFID Proposal to Increase External Finance to Developing Countries

Author:
George Mavrotas
Publication Date:
12-2003
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
The paper discusses the International Finance Facility (IFF), a joint HM Treasury-DFID proposal to increase development aid substantially for the Millennium Development Goals to be achieved by 2015. The main conclusion of the paper is that the proposed IFF is a promising, forward-looking and creative proposal for it implies a substantial increase in fresh, predictable and stable aid as well as a robust financial structure. However, there are a number of concerns about potential shortcomings of the proposal, namely its underlying assumptions about continuous commitment on behalf of the donor community towards the implementation of the IFF during the life of the Facility and most importantly its heavy reliance on political coordination among donor countries participating in the proposed scheme. Potential absorptive capacity constraints in IFF aid-recipient countries may be also relevant. Achieving its huge political task as well as alleviating the crucial constraints regarding its successful implementation seem to be the main challenges this innovative proposal needs to deal with in the near future.
Topic:
Development, International Cooperation, and International Trade and Finance
Political Geography:
United Kingdom and Europe

413. The Dog that Would Never Bite? The Past and Future of the Stability and Growth Pact

Author:
Martin Heipertz and Amy Verdun
Publication Date:
11-2003
Content Type:
Working Paper
Institution:
Max Planck Institute for the Study of Societies
Abstract:
This paper analyses the underlying reasons for the creation of the Stability and Growth Pact (SGP) and its subsequent development in recent years. The paper examines the economic and political factors behind it, including the role of economic ideas, experts, politicians, institutional arrangements in the Maastricht Treaty, domestic politics, and the exceptional position of Germany in the realm of monetary integration in the EU. It concludes that a set of commonly held beliefs together with a corresponding power-political constellation explain the creation of the SGP.
Topic:
International Political Economy, International Trade and Finance, and Treaties and Agreements
Political Geography:
Europe and Germany

414. Stabilizing Postwar Europe: Aligning Domestic and International Goals

Author:
Armin Schäfer
Publication Date:
07-2003
Content Type:
Working Paper
Institution:
Max Planck Institute for the Study of Societies
Abstract:
This paper looks at the historical developments that led to the Schuman Plan in 1950, which today is seen as a starting signal for the European integration process. It argues that this announcement by the French foreign minister constituted a genuine change of strategy that can only be understood in the light of the preceding historical chain of events. The first steps of European integration were part of a search for suitable institutions capable of dealing with Europe's economic and political problems, which also involved the Bretton Woods institutions, Marshall Aid and the OEEC, and, finally, the ECSC. These organizations' respective fate depended on the strategies of key states, which in turn were driven by domestic concerns. Aligning their interests took several steps and was only completed when all three organizations existed in parallel. Throughout this process, all states had to abandon their preferred course of action and learn to settle for second best.
Topic:
Civil Society, Economics, Government, and International Trade and Finance
Political Geography:
Europe

415. A Comparative Study of Business Lobbying in the European Parliament, the European Commission and the Council of Ministers

Author:
Pieter Bouwen
Publication Date:
04-2003
Content Type:
Working Paper
Institution:
Max Planck Institute for the Study of Societies
Abstract:
The aim of this paper is to empirically test a theory of access that investigates the logic behind the apparent ad hoc lobbying behavior of business interests in the EU multi-level system. First, I propose the theoretical framework that attempts to explain the access of different organizational forms of business interest representation (companies, associations and consultants) to the European Commission, the European Parliament and the Council of Ministers. The degree of access to these institutions is explained in terms of a theory of supply and demand of access goods. Access goods concern information that is crucial in the EU policy-making process. In return for access to an EU institution, business interests have to provide the access good(s) demanded by that institution. I then derive a number of specific hypotheses about the access of the aforementioned organizational forms. These hypotheses are analyzed in an extensive empirical study of the EU financial services sector. On the basis of 126 exploratory and semi-structured interviews the hypotheses are checked across the three EU institutions.
Topic:
Economics, Human Welfare, and International Trade and Finance
Political Geography:
Europe

416. The Economic Impact of Enlargement on the European Economy: Problems and Perspectives

Author:
Paul Brenton
Publication Date:
10-2002
Content Type:
Working Paper
Institution:
Centre for European Policy Studies
Abstract:
Much of the attention on the economic aspects of the forthcoming enlargement of the EU have concentrated upon the high-profile issues which are linked to the level of relative economic development in the acceding countries; the perceived threat of large-scale migration and the budgetary costs arising from implementation of EU agricultural and regional policies. This paper briefly discusses that these are not insurmountable problems and stresses that the main difficulties from the next enlargement may arise from the effective inclusion of the acceding countries into the Single Market, the microeconomic hub of the EU. We discuss that the process of regulatory harmonisation will become more difficult in an EU of 25 or more members, which entails greater emphasis on the principle of mutual recognition as the main tool for ensuring freedom of movement of goods and services. However, mutual recognition has its limits and is likely to be less effective the more diverse the countries involved.
Topic:
Economics and International Trade and Finance
Political Geography:
Europe

417. Who Needs Foreign Banks?

Author:
Daniel Gros
Publication Date:
09-2002
Content Type:
Working Paper
Institution:
Centre for European Policy Studies
Abstract:
This paper shows that countries with weak banking system and fiscal institutions, might benefit from the presence of foreign banks, which can constitute a commitment and transparency device. Foreign banks can also reduce the probability of self-fulfilling speculative attacks. A strong presence of foreign banks can make a currency peg feasible in the first place by rendering it more resistant to speculative attacks. The European experience is instructive in this respect. In all of the candidate countries from Central and Eastern Europe (CEEC) the banking system is now dominated by foreign banks. This is now taken for granted, but it is unusual if one looks at the existing EU-15 members, where foreign banks play a marginal role in even the smallest economies.
Topic:
Economics and International Trade and Finance
Political Geography:
Europe

418. Interdependent Growth in the EU: The Role of Trade

Author:
María Garcia-Vega and José A. Herce
Publication Date:
08-2002
Content Type:
Working Paper
Institution:
Centre for European Policy Studies
Abstract:
After properly modelling growth externalities and using spatial econometric techniques we investigate whether economic integration promotes interdependent growth among countries. We conclude that this has been indeed the case for advanced OECD countries and that, for those countries belonging to the EU, through successive enlargements, the effect has been even stronger. More precisely, if every (trade) partner of a given country experiences an extra growth of 1 percentage point, this economy will profit from an extra 0.5 point, and if this country belongs to the EU it will have an additional increase of its rate of growth of 0.2 points. Both figures can be interpreted as growth externalities with the latter suggesting that an integration process like the one followed by the EU has an (positive) effect on growth.
Topic:
Economics and International Trade and Finance
Political Geography:
Europe

419. Making EU Trade Agreements Work: The Role of Rules of Origin

Author:
Paul Brenton and Miriam Manchin
Publication Date:
03-2002
Content Type:
Working Paper
Institution:
Centre for European Policy Studies
Abstract:
A key element of the EU's free trade and preferential trade agreements is the extent to which they deliver improved market access and so contribute to the EUs foreign policy objectives towards developing countries and neighbouring countries in Europe, including the countries of the Balkans. Previous preferential trade schemes have been ineffective in delivering improved access to the EU market. The main reason for this is probably the very restrictive rules of origin that the EU imposes, coupled with the costs of proving consistency with these rules. If the EU wants the 'Everything but Arms' agreement and free trade agreements with countries in the Balkans to generate substantial improvements in access to the EU market for products from these countries then it will have to reconsider the current rules of origin and implement less restrictive rules backed upon by a careful safeguards policy.
Topic:
Foreign Policy, Economics, Government, Human Rights, International Trade and Finance, Migration, and Political Economy
Political Geography:
Europe and Balkans

420. The Development of European Citizenship and its Relevance to the Integration of Refugees

Author:
Joanna Apap
Publication Date:
01-2002
Content Type:
Working Paper
Institution:
Centre for European Policy Studies
Abstract:
Achieving an integrated Europe involves political and social unity as much as economic integration. Thus, the issue of European citizenship is central to the debate about European integration. Union citizenship needs to be distinguished from national citizen ship. Every citizen of the Union enjoys a first circle of nationality rights within a member state and a second circle of new rights enjoyed in any member state of the EU. The presence of immigrants in Europe also raises wider questions for government policy in the field of citizenship. There are various issues that arise in the European context with respect to the boundaries of citizenship. One of the main questions in this regard is the extent to which the division between European Union citizens and third country nationals will continue to prevail.
Topic:
Economics, Government, Human Rights, International Trade and Finance, Migration, and Political Economy
Political Geography:
Europe