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56541. 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 (CEPS)
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

56542. Outsourcing and Inequality

Author:
Paul Brenton, Bob Anderton, and Eva Oscarsson
Publication Date:
10-2002
Content Type:
Working Paper
Institution:
Centre for European Policy Studies (CEPS)
Abstract:
This paper brings together and analyses the results of empirical analyses which, in contrast to most other studies, find that trade has been a significant cause of labour market inequality in various industrialised countries. The approach is based upon the concept of outsourcing – whereby the low-skill parts of the production chain are 'outsourced' to low-wage countries. A distinguishing feature of the empirical work is the use of highly detailed trade data, which allow imports from high- and low-wage countries to be separately identified at the industry level. Using cost minimisation framework, we show that imports from low-wage countries have made a significant contribution to the decline in the wage-bill share and/or relative employment of less-skilled workers in the UK, the USA, Sweden and Italy. We also show how the country-specific characteristics of outsourcing can lead to quite different inequality outcomes in different countries. In line with other studies, we also find that technology has played an important role in causing the increase in inequality in many countries. However, there is also some evidence that some of the rapid increase in the application of new technologies in recent decades has been trade-induced through mechanisms such as 'defensive innovation'.
Topic:
Economics, Industrial Policy, International Trade and Finance, and Science and Technology
Political Geography:
United States and United Kingdom

56543. Who Needs Foreign Banks?

Author:
Daniel Gros
Publication Date:
09-2002
Content Type:
Working Paper
Institution:
Centre for European Policy Studies (CEPS)
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

56544. 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 (CEPS)
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

56545. 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 (CEPS)
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

56546. The Reform of EU Development Policy

Author:
Carlos Santiso
Publication Date:
03-2002
Content Type:
Working Paper
Institution:
Centre for European Policy Studies (CEPS)
Abstract:
Improving external relations and the management of development aid is a key component of the current reform of the European Union (EU). In the course of the 1990s, the promotion of democracy, the strengthening of good governance and enhancing the rule of law progressively became both an objective and a condition for the EU development assistance with developing countries. Achieving these sometimes-contradictory goals in practice is a permanent challenge. This paper reviews the EU's policies and strategies aimed at preventing conflict and responding to the crises of governance. It explores the difficult combination of democracy assistance and governance conditionality and its applicability to the prevention of democratic erosion in developing countries. While the EU mainly relies on a positive approach of support and inducement, it has also introduced, since 1995, provisions to suspend aid in the event of a sudden and persistent interruption of the democratisation process. The suspension mechanism enshrined in the cooperation agreement between the EU and ACP countries has made political dialogue the main strategic tool for achieving these varied purposes. Mainstreaming political dialogue into the cooperation forces the EC to focus more explicitly and more rigorously on issues of power, politics and democracy than it has done in the past.
Topic:
Democratization
Political Geography:
Europe and North America

56547. Russia's Security Policy EU-Russian Relations

Author:
Angela Stent, Dmitri V. Trenin, Stephan de Spiegeleire, and François Heisbourg
Publication Date:
03-2002
Content Type:
Working Paper
Institution:
Centre for European Policy Studies (CEPS)
Abstract:
At the beginning of the 21st century, the central issue of European security is how, not whether, to integrate Russia within Euro-Atlantic institutions. The conditions are now right to move ahead towards that ambitious goal.
Topic:
Security, Defense Policy, NATO, and Terrorism
Political Geography:
Russia and Europe

56548. Kyoto Flexible Mechanisms: Opportunities and Barriers for Industry and Financial Institutions

Author:
Josef Janssen
Publication Date:
03-2002
Content Type:
Working Paper
Institution:
Centre for European Policy Studies (CEPS)
Abstract:
The Kyoto Protocol established global markets for greenhouse gas emissions reductions and permits. Such emerging markets will offer challenging opportunities to a wide variety of different players in industry and commerce. By means of the market-based Flexible Mechanisms Joint Implementation, Clean Development Mechanism and International Emissions Trading it will be possible to trade emissions permits globally. This chapter explores opportunities of the Flexible Mechanisms for industry, including the financial sector. Moreover, it identifies possible barriers to their realisation. This analysis is preceded by a discussion of the possible seize of global markets for emissions permits. In addition, this chapter examines key features of the Flexible Mechanisms that are relevant from an industry perspective.
Topic:
Environment and Industrial Policy
Political Geography:
Europe

56549. 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 (CEPS)
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

56550. Consumer Credit Rates in the Eurozone: Evidence on the Emergence of a Single Retail Banking Market

Author:
Stefanie Kleimeier and Harald Sander
Publication Date:
01-2002
Content Type:
Working Paper
Institution:
Centre for European Policy Studies (CEPS)
Abstract:
This study provides new evidence on the emergence of a single eurozone retail banking market with particular reference to consumer credit. Given the heterogeneous nature of consumer credit products in the eurozone, the authors reject the earlier proposition of the Cecchini study, which equates banking market integration with identical interest rates throughout the eurozone. The present study advocates the use of the co-integration methodology, which allows us to investigate integration in the presence of country-specific credit rates. The empirical results indicate only very limited evidence of an integrated retail banking market prior to 1 January 1999, pointing to the limited effectiveness of the single market cum Second Banking Directive in particular in integrating consumer credit markets.
Topic:
Economics and Political Economy
Political Geography:
Europe