European Economic Integration – 110451-0992 – 2014European Economic Integration – 110451-0992 – 2014

Prof. Dr. Günter S. Heiduk

World Economy Research Institute

Warsaw School of Economics – SGHPhone +48 (22) 564 9373; gheidu@sgh.waw.plOffice hours: Friday, 12:00 – 13:00, or by appointment via e-mail/phoneWebsite: http://kolegia.sgh.waw.pl/pl/KGS/struktura/IGSKGS/struktura/ZBGPAW/Strony/default.aspx

I. Introduction

Fr 02 - 28 09:50 - 11:30 A8 I. Introduction

Fr 03 - 07 09:50 - 11:30 A8 II. Theories of Econ. Int.

Fr 03 - 14 09:50 - 11:30 A8 III. EU: Deepening + Widening

Fr 03 – 21      

Fr 03 - 28 09:50 - 11:30 A8 IV. EU’s budget

Fr 04 - 04 09:50 - 11:30 A8 V. Common Trade Policy (1)

Fr 04 - 11 09:50 – 11:30 A8 V. Common Trade Policy (2)

Fr 04 - 18     Easter break

Fr 04 - 25 09:50 – 11:30 A8 VI. Common Agricultural Policy

Fr 05 - 02     May holiday

Fr 05 - 09      

Fr 05 - 16 09:50 – 11:30 A8 VII. Cohesion Policy

Fr 05 – 23      

Fr 05 - 30 09:50 – 11:30 A8 VIII. EMU

Fr 06 - 06 09:50 – 11:30 A8 IX. EU’s Sovereign Debt Crisis

Fr 06 - 13 09:50 – 11:30 A8 Paper presentations

06 – XX     Exam: - Essay

Timetable

X. Europe 2020 Dr. Marta MackiewiczA8 09:50 – 11:30

EU-China Economic Relations*09:50 – 11:30 A8

* Mgr Agnieszka McCaleb

European Union awarded 2012 Nobel Peace Prize

Thorbjorn Jagland, the chairman of the Norwegian Nobel Committee, announced the winner of the peace prize on October 12 in Oslo

Share of World GDP

Source: Eurostat online data code (nama_gdp_c) and the United Nations Statistics Division (National Accounts Main Aggregates Database)

EU-2725.8%

5

Integration = Globalisation?

Integration = Regionalisation?

Integration = Regionalism?

Integration = Multilaterisation?

Integration = Multilateralising regionalism?

------------------------------------------------

Europe defined by geography, culture, institution?

Understanding “Integration“ – Searching for “Europe“

6

-Exports

- Imports“Far distanceintegration“ byinternationaltrade flows =Globalisation?

7

-Exports

- Imports“Far distanceintegration“ byinternationaltrade flows =Globalisation?

:: European Union (EU)  African Union (AU)  Union of South American Nations (UNASUR)  Caribbean Community (CARICOM)  Central American Integration System (SICA)  Arab League (AL)  European Free Trade Association (EFTA)  Eurasian Economic Community (EAEC)  Association of Southeast Asian Nations (ASEAN)  Central European Free Trade Agreement (CEFTA)  North American Free Trade Agreement (NAFTA)  South Asian Association for Regional Cooperation (SAARC)  Pacific Islands Forum (PIF)

Trade Blocs

9Regionalism = Institutionalized regional integration ASEAN, EU, Mercosur, NAFTA

10

Regionalism: Spaghetti bowl’ RTAs in the Western Hemisphere

Centeno, M and Cooke, A (2006). Introduction to the Data from GKG Project. Princeton University.

Global, inter-regional, intra-regional trade

Europe‘s intra- and inter-regional exports , 2012 (in %)

EU68,6

North America7,7

South and Central America

1,9

CIS3,8

Africa

3,3

MiddleEast

3,3Asia

10,1

Source: WTO, International Trade Statistics

Merchandise Trade of Selected Regional Trade Agreements, 2012

Most of the international trade takes place within major economic blocs, notably for the EU (European Union) and NAFTA (North American Free-Trade Agreement), where 63% and 49% of their respective trade concerns member nations. While trade relations between advanced economies are linked to the emergence of economic blocks, trade relations between developing countries is often related to unilateral agreements between specific partners (particularly for former colonies). This attribute is however becoming marginal with the emergence of trade agreements involving developing countries such as Mercosur and ASEAN (Association of Southeast Asian Nations). Still, these integration agreements have a limited cohesion. For instance, only 26% of ASEAN's trade is internal.

0

2000

4000

6000

8000

10000

12000

14000

EU-27 NAFTA ASEAN MERCOSUR

Total Trade (USD billion)

Share of Intra- and Extra-Regional Exports (in %)

Source: WTO, International Trade Statistics 2013, Appendix Table A3.

14

Where are the borders of Europe?

EUROPEAN UNION

DIVERSITY IN UNITY

?

UNITY IN DIVERSITY15

16

The European Union: 503.5 million people (1st Jan. 2012) – 28 member states

EUROPE AT NIGHT

Source: Courtasy: DMSP and NASA, www.nasa.gov

18

Symbolic descriptionAgainst the background of blue sky, twelve golden stars form a circle, representing the union of the peoples of Europe. The number of stars is fixed, twelve being the symbol of perfection and unity.The flag therefore remains unchanged regardless of EU enlargements.

19

Founding fathers

New ideas for lasting peace and prosperity…

Konrad Adenauer

Robert Schuman

Winston Churchill

Alcide de Gaspari

Jean Monnet

20

Multilingualism: 24 official languages

Hrvatski

Working languages: English, French, German

With a permanent staff of around 1 750 linguists and 600 support staff, the European Commission has one of the largest translation services in the world. The Commission's interpretation service employs 600 staff interpreters, a pool of 3,000 freelance interpreters and 250 support staff.

21

Eight enlargements1952 1973 1981 1986

19901995 2004 2007

Eight +1 enlargements 1952-2013

Ninth enlargement: Croatia on July 1, 2013

Ninth enlargement 1st July 2013 and current official and potential candidates

23

The treaties – basis for democratic cooperation built on law

1952The European Steel and Coal

Community

1958The treaties of Rome:

The European Economic CommunityThe European Atomic Energy Community

(EURATOM)

1987The European Single Act: the

Single Market

1993Treaty of European Union

– Maastricht

1999Treaty of Amsterdam

2003Treaty of Nice

2007Treaty of Lisbon (signed)

1 Dec. 2009 into force

24

The Lisbon treaty - taking Europe into the 21st century

The Treaty will make the European Union:

More efficient Simpler processes, full-time president for the Council, etc.

More democratic Stronger role for the European Parliament and national parliaments, "Citizens initiative", Charter of Fundamental Rights, etc.

More transparent Clarifies who does what, greater public access to documents and meetings, etc.

More united on High Representative for Foreign Policy, etc. the world stage

More secure New possibilities to fight climate change and terrorism, secure energy supplies, etc.

Signed in December 2007 – entered into force on 1st December 2009.

25

How rich is the EU compared to the rest of the world?

0

10000

20000

30000

40000

50000

60000

70000

80000

90000

2000 2005 2010

EULuxembourgGermanyRomaniaUSAJapan

GDP per capita (PPP), Selected Countries/Regions, 2000, 2005, 2010, 2012, US$

Source: IMF.

26

GDP per capita in Purchasing Power Standards, 2012

Index where the average of the 27 EU-countries is 100

EUROSTAT, Annual National Accounts, t_nama_gdp, te00114

27

EU‘s greatest achievements

Customs Union - Abolishing internal tariffs

- Establishing a common external tariff

Single Market - Four freedoms of movement: Goods

ServicesPeopleCapital

Monetary Union - European Monetary System (EMS) - Euro

Enlargement - Economic and political stability in Europe

28

EU‘s greatest challenges: Widening versus deepening

2015 ?

20... ?

2007

2004

Deepening:Lessons fromthe Euro crisis?

Widening

29

Future Enlargements?

Acceding country: Croatia 1st July 2013

Potential candidates: Albania, Bosnia and Herzogovina, Kosovo, Serbia

Candidate countries: Island, Macedonia, Montenegro, Turkey

30

The Western Balkan countries on the Road to the European Union

Components of the Stabilisation and Association Process (SAP):

Stabilisation and Association Agreements: A far-reaching contractual relationship between the EU and each Western Balkan country, entailing mutual rights and obligations. Such an association has high political value. It is based on the gradual implementation of a free trade area and reforms designed to achieve the adoption of EU standards with the aim of moving closer to the EU.

EU Financial Assistance: Humanitarian and emergency assistance, rebuilding infrastructure, and fostering reconciliation, developing government institutions and legislation, approximation with European norms and eventually harmonisation with EU acquis (EU law), reinforcing democracy and the rule of law, human rights,operation of a free market economy, sustainable economic recovery, promoting social development and structural reform, promoting regional co-operation betweenthe Western Balkan countries

Autonomous Trade Measures: Duty-free access to the EU market for practically all products originating from the region

31

GDP PPP per capita, EU-27 = 100

Basic Indicators of Exports + Imports

Widening results in declining average GDP/capita

Agreements in the Euro-MED Area, 2008

33

Schengen Agreement: Imperfect mobility for persons

Bulgaria, Cyprus, Romania are not yet fully-fledged members of the Schengen area.

Characterizing the European Union: Diversity in Unity versus Unity in Diversity?

Source: Schlecker-Fischer, A. (2010): Unity in Diversity? Working Paper Series “Global Governance and Democracy“, WP 05, Universität Luzern.

EU-15, 2003

Characterizing the European Union: Diversity in Unity versus Unity in Diversity?

EU-27, 2009

Cited: Schlecker-Fischer, A. (2010), p 23, 27.

Dual Idenfication Across Groups of Member States (percentages)

Source: Schlecker-Fischer, A. (2010), p .30.

38

Geographical

Political

Cultural

Economical

Boundaries versus Borders

Geographical

Political

Cultural

Economical

Institutional/legal

Transactional

39

Europe: Diversity Europe: Diversity in Unity ? in Unity ?

Europe: Diversity Europe: Diversity in Unity ? in Unity ?

40

National identities: language, history and culture of a country

41

42

The Impact of Enlargement

43

Discipline perspective: Diversity in law, economics, politics, history

Language

History, Culture

Politics

€

Economics

§Law

Spread of wealth: Differences in GDP/capita

Euro Area – Non-Euro Area

3 Official languages – 23 languages – 27 member states

Linguistic distances, linguistic homogeneity, linguistic convergence

“Hard“ law = National law - “Soft“ law = European law?

National borders versus “federal vision“

National citizenship versus “pluralistic citizenship“

“Europe” is a movable set of myths and images, both positive and negative, embedded in national histories and vernacular literature.” William Wallace (2002), Where Does Europe End? Dilemmas of Inclusion and Exclusion

In: Zielonka, J. (ed.), Europe Unbound…, p. 79.

45

Europe: Unity Europe: Unity in diversity ?in diversity ?

““In varietate In varietate concordia” concordia”

Europe: Unity Europe: Unity in diversity ?in diversity ?

““In varietate In varietate concordia” concordia”

46

European identity?Institutions and integration process in Europe

EnlargementHungary

Poland

Slovakia

...

InstitutionsCommission CouncilParliament ECB .... ...

47

”Economics might be universal, but economies are not. The market economy is a theoretical construct, whose substance can only be found in real, live market economies, which are distinctive and contextually defined.”

Understand interactionas well as distances

&display methodological

openness Educate economiststo be aware of the non-economic!

48

Conceptualizing EuropeA) An institutional approach Levels of institutions

Horizontal and verticalinterdependencies, distances, interactions

Europe

Worldwest east

Economy

Culture

Nation states

Law

Technology

B) A dynamic approachEvolution of Europe‘s economy, cultures, nations, law, technologies (e.g., by using a socio-dynamic method)

49

Summary: European studies without borders!

Study Europe• by integrating internal and external views!• from the point of view of and through the

collaboration of different disciplines!• by acknowledging unity in diversity and

diversity in unity!• by successfully tearing down ideological

borders and claims of dominance!

Nothing is possible without men, nothing is sustainable

without institutions!

Nothing is possible without men, nothing is sustainable

without institutions!

Jean Monnet –

The intellectual father of the European Union 50

51