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11. The Enlargement Challenge: Can Monetary Union be Made to Work in an EU of 25 Members?

Author:
Barry Eichengreen
Publication Date:
02-2002
Content Type:
Working Paper
Institution:
Institute of European Studies
Abstract:
This lecture considers how Europe's monetary union will evolve in the next five to ten years. It concentrates on what is likely to be the most important change in that period, namely, the increasing number and heterogeneity of participating states. By 2006, less than four years from now, it is virtually certain that EMU will be enlarged to include a number of Eastern European countries that have not yet been admitted to the EU itself. These new members will differ sharply from the incumbents in terms of their economic structures, their per capita incomes, and their growth rates. The analysis focuses on the implications of this momentous change for the structure, organization and operation of EMU.
Topic:
Economics and Political Economy
Political Geography:
Europe

12. Europarliament and Environmental Leglislation: The Case of Chemicals

Author:
George Tsebelis and Anastassios Kalandrakis
Publication Date:
07-1998
Content Type:
Working Paper
Institution:
Institute of European Studies
Abstract:
The paper studies the impact of the EP on legislation on chemical pollutants introduced under the Cooperation procedure. A series of formal and informal analyses have predicted from significant impact of the EP, to limited impact (only in the second round) to no impact at all. Through the analysis of Parliamentary debates as well as Commission and Parliamentary committee documents, we are able to assess the significance of different amendments, as well as the degree to which they were introduced in the final decision of the Council. Our analysis indicates first that less than 30% of EP amendments are insignificant, while 15% are important or very important; second, that the probability of acceptance of an amendment is the same regardless of its significance. Further analysis indicates two sources of bias of aggregate EP statistics: several amendments are complementary (deal with the same issue in different places of the legal document), and a series of amendments that are rejected as inadmissible because they violate the legal basis of the document or the germainess requirement) are included in subsequent pieces of legislation. We calculate the effect of these biases in our sample, and find that official statistics underestimate Parliamentary influence by more that 6 percentage points (49% instead of 56% in our sample). Finally, we compare a series of observed strategic behaviors of different actors (rapporteurs, committees, floor, Commission) to different expectations generated by the literature.
Topic:
Environment, Industrial Policy, and Political Economy
Political Geography:
Europe

13. Mixed Signals

Author:
Peter A. Hall and Robert J. Franzese Jr.
Publication Date:
09-1997
Content Type:
Working Paper
Institution:
Institute of European Studies
Abstract:
Plans for European Monetary Union are based on the conventional postulate that increasing the independence of the central bank can reduce inflation without any real economic effects. However, the theoretical and empirical bases for this claim rest on models of the economy that make unrealistic information assumptions and omit institutional variables other than the central bank. When the signaling problems between the central bank or other actors in the political economy are considered, we find that the character of wage bargaining conditions the impact of central bank independence by rendering the signals between the bank and the bargainers more or less effective. Greater independence can reduce inflation without major employment effects where bargaining is coordinated, but it brings higher levels of unemployment where bargaining is uncoordinated. Thus, currency unions like the EMU may require higher levels of unemployment to control inflation than their proponents envisage; they will have costs as well as benefits, costs which will be distributed unevenly among and within the member nations based on the changes induced in the status of the bank and of wage coordination.
Topic:
Economics, Government, International Trade and Finance, and Political Economy
Political Geography:
Europe