Establishment of a Common European Economic Area
as a Factor of Russia's Sustainable Growth
Ivan Samson
RECEP director
Espace Europe Institute
University Pierre Mendes France, Grenoble
http://www.upmf-grenoble.fr/espace-europe/
ivan.samson@upmf-grenoble.fr
Abstract
The idea of integration between the European Union and Russia within a "Common European
Economic Area" is now at the top of the agenda in the dialogue between the EU and Russia.
This confirms the fact that the EU considers Russia as a strategic partner. What this Common
European Economic Area (CEEA) could be remains largely to be defined. This paper aims to
argue that the CEEA is not only a positive development for the economic growth of Russia,
but that it is a condition for the country’s sustainable growth and productivity increase. The
paper then discusses the options for defining the CEEA in the most relevant way for Russia
and the main conditions for succeeding in this strategy.
JEL classification: E22, F130, F150, F210, F430, O11

Russian-European Centre for Economic Policy, Moscow ( www.recep.org ).
The opinions expressed here are those of the author and not those of RECEP or of any institution of the
European Union. The author benefited from the comments of Alain Laurent and from talks with Xavier Greffe,
Attila Soos, Eric Brunat, Xavier Richer and Mathilde Maurel. His responsibility remains entire.
1
1 - The growing popularity of the CEEA idea
"A stable, democratic and prosperous Russia, firmly anchored in a united Europe free of new
dividing lines, is essential to lasting peace on the continent". This aim, expressed on June 4,
1999, in the Common Strategy of the European Union on Russia, has three economic
dimensions: support of Russia's efforts to achieve WTO membership, the future establishment
of an EU-RF free-trade area and creation of the Common European Economic Area. This
latter aim has been increasingly reiterated by the new leaders of Russia and the EU, Vladimir
Putin and Romano Prodi, laying the foundations of a strategic partnership between the EU and
Russia1.
The Paris Summit of October 30, 2000, however, did not mention the CEEA idea: "Our
shared objective is to maximise the potential of EU enlargement in order to boost exchanges
between an enlarged European Union and Russia and between Russia and the applicant
countries. The dialogue already under way with Russia on this matter will be continued in the
appropriate PCA bodies". The general reference to the Partnership and Cooperation
Agreement (PCA), signed 1994 and starting to work December 1997, remained the rule.
The seventh Summit held under the PCA took place in Moscow, on May 17, 2001. It
expressed "the desire of the Parties to address questions that arise in this context, including
the movement of people, goods and services between the enlarged EU and Russia". The
CEEA is mentioned as an aim: "We agree to establish a joint high-level group within the
framework of the PCA to elaborate the concept of a common European economic space".
The eight Summit, held in Brussels on October 3, 2001, displayed a stronger emphasis on the
CEEA issue. MM. Putin and Prodi decided "to boost the drive towards closer economic
cooperation between Russia and the EU". They agreed "to develop a concept which could
form the basis for our medium- and long-term economic strategy. In this connection, we
reaffirm the importance we attach to the creation of a Common European Economic Area".
Moreover, they agreed on the profile and tasks of the High-Level Group, whose creation had
been decided upon at the previous Summit: "The task of the High-Level Group is to elaborate
a concept for a closer economic relationship between Russia and the EU, based on the wider
goal of bringing the EU and Russia closer together. The High-Level Group will consider the
opportunities offered by greater economic integration and legislative approximation and
assess options for further work.(...) The High-Level Group will define the core elements which
will need to be put in place in order to create a Common European Economic Area.". The
first deadline for this task is October 2003. A new momentum is thus given to EU-RF
dialogue. The reasons for this speeding-up and intensification are, on the one hand, the
decision of the EU to integrate 10 candidate countries (including 8 in Central and Eastern
Europe – the CEECs) no later than 2004, and on the other hand, the consequences of the
events of September 11, 2001. The EU and Russia are, increasingly, becoming historic and
natural partners.
1
For a discussion on the idea of a strategic partnership, see Emerson, Vahl and Whyte (2001) and Vahl (2001)..
2
In December 2001, the EU Commission adopted the “Country Strategy Paper 2002-2006” for the
Russian Federation.2 The strategy reiterates once more the importance of the PCA and stresses the
EU’s important strategic and economic interest in Russia’s development, inter alia, as a bridge
between the EU and Asia. As far as trade and economic relations are concerned, the EU strategy
considers: “Russia’s WTO accession on regular commercial terms highly desirable”. The main
EU concern is its unbalanced trade structure, dependency on energy imports from Russia and the
removal of access restrictions to Russian markets.
At the ninth Summit in Moscow, May 29, 2002, and in order to have better access for Russian
goods and services to the EU market, Russia obtained the promise of imminent recognition as
a market economy, as defined in trade legislation which allows to reduce anti-dumping
investigations and charges. Russia also wishes to keep the existing trade preferences, like the
EU’s General System of Preferences (GSP) and wants the EU to abolish its quotas on Russian
steel exports. During the EU-Russia summit, the two partners reaffirmed the importance they
attach “to the creation of a Common European Economic Area [EEA]; we are pleased to have
reached an agreement on the terms of reference of the High-Level Group” ... “to elaborate a
concept for a closer economic relationship between Russia and the EU, based on the wider
goal of bringing the EU and Russia closer together. The [group] will consider the
opportunities offered by greater economic integration and legislative approximation, [...
and.] identify means and mechanisms to achieve common objectives and consider the timescale for implementation.”3
It was indicated that the creation of the CEEA will take place within the framework of the
Partnership and Cooperation Agreement of 1997 and will use its mechanisms. However, the
new impulse in the EU’s opening towards transition countries, given by Romano Prodi, and
the new impulse in Russia’s economic reform process, given by Vladimir Putin, has turned
the integration of Russia within the CEEA into an objective in itself. As a matter of fact, the
joint-committees working on PCA implementation were focused on technical discussions, in
which progress had been slow. The Summits had declared the intention "to make more
effective use of the conciliation procedures of the PCA". What was missing was a strong
political spirit, based on the belief that things would change in the near future. The idea of the
CEEA has injected this spirit, because it relies upon the understanding of a strategic joint
destiny of the EU and Russia, and on a much deeper mutual opening up and integration, as we
will see hereafter. Currently, attitudes towards such an integration are becoming increasingly
positive both in the EU and in Russia.
2 - What experiences could the Common European Economic Area rely
on?/
The European Economic Area, as a concept, is an ad-hoc approach to economic integration
which is much stronger and deeper than a free-trade agreement. It can be considered as the
strongest form of economic integration with the EU short of accession and, in some cases, as
one possible way to accession. The CEEA concept should be located somewhere on the scale
of all the possible forms of integration with the EU. It is most appropriately placed between
2
See http://europa.eu.int/comm/external_relations/russia/csp/index.htm.
Report to the EU-Russia Summit of 29 May 2002 of the High-Level Group on the common European economic
space.
3
3
forms of partnership and full membership. There are four main types of partnership between
the EU and third countries:

2.1 Commercial Agreements, which are at the bottom of the pyramid: they create a freetrade zone for industrial goods. Such free-trade agreements include several (possibly
many) restrictions on sensitive products. Food products and services are often excluded,
totally or partially, from the agreement. Such agreements exist between the EU and the
other main OECD developed countries. Such a free-trade zone was to be set up under the
"Common Strategy of the EU on Russia".

2.2 Cooperation Agreements include preferential, but not unrestricted, commercial
access to the EU market, and beneficiaries are granted EU technical and financial
assistance. One particular example of this type of partnership is the successive Lomé
Conventions, which link the EU to the ACP countries (70 former European colonies in
Africa, the Caribbean and the Pacific). Preferential commercial access is granted through
the SGP (system of general preferences), by which duty-free access to the EU market is
given to ACP industrial goods within quota limits. Quantities exported above the ceiling
are subject to tariffs, according to the MFN rule. Financial and technical assistance has
been granted through financial mechanisms to support export revenues of some raw
materials (the so-called SYSMIN and STABEX schemes). Note that although ACP
countries benefit from the SGP, EU exports are not granted preferential access to ACP
markets: they are subject to tariffs in the same way as exports from third countries.
Agreements signed between Eastern European countries and the EU between 1988 and
1990 are another example. But these have now been replaced by a third type of
partnership – association agreements.

2.3 Association Agreements represent a rather high form of integration with the EU.
They include wide commercial preferences in the trade of goods and services, leading to
free trade after a transitory period. They plan a process of approximation of laws aiming at
ensuring implementation of the four fundamental freedoms, although only the free
circulation of goods is itself an objective of association agreements. Association
agreements are sometimes asymmetric to the benefit of an EU partner for a limited period.
For instance, at the beginning of the enforcement of association agreements with CEECs,
the EU granted duty-free access to its market in most fields immediately, while CEECs
were allowed to phase out their tariffs via annual reductions over five years. Food
products are considered separately because commercial rules of the Common Agricultural
Policy apply. Association agreements also include institutional cooperation (political
dialogue, cultural cooperation, common decision-making institutions, jurisdictional
bodies). European agreements concerning Eastern European candidates to EU accession
are the best-known examples of such agreements, also called Europe Agreements, which
were followed by the pre-accession process.

2.4 Partnership and Cooperation Agreements were set-up by the EU with most of the
CIS countries. Such agreements came into force on December 1, 1997 for Russia, March
1, 1998 for Ukraine and July 1, 1999 for the other CIS countries (the exceptions are
Belarus and Turkmenistan, with whom the PCAs have been signed but are not yet in
force, and Mongolia, with whom there is only a Trade and Cooperation Agreement, signed
in 1993). PCAs offer the prospect of closer cooperation with the EU for non-candidate
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countries and aim to prevent possible crowding-out effects after the EU enlargement
incorporating the CEE countries. The content of such agreements is "to promote trade and
investment and harmonious economic relations between the Parties" and "to create the
necessary conditions for the future establishment of a free-trade area between the EU and
Russia, covering substantially all trade in goods between them, as well as conditions for
bringing about freedom of establishment of companies, of cross-border trade in services
and of capital movements" (Art. 1). Moreover, "each Party shall provide for freedom of
transit through its territory of goods originating in the customs territory or destined for
the customs territory of the other Party" (Art. 12), which is important for Kaliningrad, for
example. In addition, PCAs include several dispositions concerning the removal of
obstacles to competition by enterprises or State aid (Art. 53), the protection of industrial
and intellectual property rights (Art. 54), and the approximation of laws in several sectors.
The field for law approximation is very broad, but not very binding. Emphasis is also
placed on mutual investment activities. The philosophy of such an agreement is to create
the conditions for a free-trade area, with the further prospect of developing free movement
of services and capital. The sides grant each other most-favoured-nation status in trade and
the absence of discriminations concerning goods, labour conditions and the establishment
of companies. This regime is much less open than that offered by association agreements.
However, the PCA with Russia is oriented towards the Copenhagen criteria, with special
emphasis on political dialogue, including twice-yearly summits.
The concept of the Common European Economic Area should be located between various
forms of partnership and EU membership. This means that the CEEA is a stronger and deeper
form of approximation than PCA agreements and may even include some criteria of EU
membership, but not all. The point now is to make these elements more precise.

2.5 The European Economic Area of 1992 between the EEC and EFTA
The first step is to rely on the experience of 1992: the institutional precedent is the EEA
agreement of 1992 between the then-EEC and EFTA. On January 17, 1989, Jacques Delors
expressed the idea of a global and structured agreement of the 12 members of the EEC with
the 7 members of EFTA (Austria, Finland, Iceland, Liechtenstein, Norway, Sweden and
Switzerland). This agreement was signed in Porto on May 2, 1992. It created a European
Internal Market representing 95% of the economies of the 19 parties, 380 million consumers
and 40% of world trade. The aim of the EEA was to set-up a legal framework for economic
interdependency between the EEC and EFTA: 60% of EFTA exports and more than 50% of
its IDE went to the EEC. Bilateral free-trade agreements had already eliminated tariff barriers
and quantitative restrictions in industrial goods since 1973. After the Luxemburg statement of
1984, an ad-hoc cooperation added to the trade links. But there was still a discrepancy
between the rapid rhythm of EEC directives and the slow pace of EFTA-EEC cooperation.
The aim of the EEA was thus to set-up an "homogenous European economic area" (Art. 1),
binding EFTA countries to the EEC collectively (and no longer individually), and eliminating
any discrimination by nationality (Art. 4). The agreement led to the integration by the EFTA 7
of 80% of the legislation on the Internal Market, i.e. 1500 documents.
There are four dimensions to the EEA of 1992:
1 – Trade facilitation by implementation of the "four fundamental freedoms".
5
The EEA set up in 1992 by the EEC and EFTA includes the acquis communautaire related to
the free circulation of goods, persons, services and capital (12 000 pages) through its transfer
into the national laws of the EFTA states;
2 – Non-distorted competition.
Like the Treaty of Rome, the EEA agreement sets up rules ensuring fair competition within
the EEA. The rules aim to combat concerted decisions and practices, abuse of dominant
position, concentration that creates or strengthens a dominant position, and state subsidies that
distort competition. The control of these principles is entrusted, according to a specific
sharing of competencies, to the Commission, or to an EFTA supervisory authority;
3 – The deepening and broadening of cooperation: it includes the strengthening of existing
cooperation and the extension of cooperation to new areas, such as social policy, protection of
consumers (EFTA will adopt EC rules for price labelling, misleading advertising, consumer
credit), corporate law (for extension to EFTA after the transition period of the European
Grouping of Economic Interests);
4 – Institutional and jurisdictional structure.
a – The structure of the association:
The agreement sets up: an EEA Board (composed of members of the EC Council and
Commission and a member of the government of each EFTA state) which lays down
overall political orientations; a joint-EEA Committee, which ensures proper functioning
of the agreement; a sub-committee of MPs, economic and social partners, etc.
b – The jurisdictional structure:
This was a very difficult issue because of the asymmetry of the partners in 1992: EFTA
was a very flexible international organisation, whereas the EEC was already a very
strongly integrated organisation with limitation of competencies and sovereignty
transfers. It did not prove possible to set up an EEA Court, as initially planned.
The following were excluded from the EEA between the EEC and EFTA, in order to ensure
quicker implementation:
- Common Agricultural Policy (CAP) and common policy on fishing;
- Common Trade Policy (CTP) and the common tariff with third countries;
- Harmonisation of direct and indirect fiscal regimes.
However, even in these areas, the EFTA 7 had sooner or later to adjust their laws to those of
their EEC neighbours’ laws in order to maintain fruitful trade relations.
Is the 1992 concept of EEA a good basis for the CEEA between the EU and Russia? On one
hand, EEA integration is clearly far from accession. EU membership requires full acceptance
of the acquis communautaire. Applicant countries cannot take some parts and reject other
parts of the acquis. By contrast, the extent to which the acquis must be adopted by extra-EU
EEA members is subject to negotiation, except for the part of the acquis concerning the Single
Market. EEA members outside the EU have no say in future elaborations of EU legislation.
EU membership makes it compulsory to contribute to the EU budget but, on the other hand,
makes each EU country eligible to subsidies in the framework of EU structural policies,
regional policy and the CAP (about 75% of EU budget expenses, although the EU intends to
exclude the CEECs from the major part of CAP payments). These financial aspects are totally
6
absent from EEA-like agreements. Similarly, EU applicants are supposed to take on the
obligations of political, economic and monetary union. This is now part of the acquis. EEA
members outside the EU have no such commitments.
A closer association between the EU and Russia will have spill-over effects or will impose
requirements in such fields as taxation of goods and services, environmental protection
schemes, or hygiene standards concerning food products in order to protect consumers. For
example, the Polish negotiators on Poland’s accession to the EU regard it as absolutely
necessary that local producers will be able to sell meat and milk products inside Poland that
do not fulfil the high EU hygiene standards for several years after EU membership. Another
example is provided by EFTA, the member-states of which began to reduce VAT-like taxes
before the enforcement of the EEA agreement, in order not to distort competition between
domestic and EU producers within the EEA. More generally, it can be said in the light of the
EEA experience that harmonisation of legislation becomes a necessity sooner or later, even in
fields that were excluded from the original agreement, since otherwise benefits from the
Single Market are not fully exploited.
On the other hand, the reference to the CEA of 1992 could become misleading for Russia. The
main reason is the strong asymmetry between the EU and Russia: as shown by Havlik (2002),
Russian real GDP amounts to less than 13% of that in the EU(15), in nominal terms to less
than 4%; Russia's per capita real GDP is even lower than the average of the CEECs; Russia is
a relatively small trading partner for the EU, whereas the EU is the main trading partner for
Russia; the commodity structure of Russian exports and imports is also widely different, there
is virtually no intra-industry trade between Russia and the EU. This asymmetry is one of the
main reasons why Russia's EU membership is not on the agenda.
This leads to another difficulty in defining the concept of the CEEA, which is to escape from
the paradigm of EU enlargement. Such a paradigm, well-represented by Hamilton (2002),
consists of relying on the tools and the dynamics of the EU enlargement for understanding the
integration process between the EU and Russia, and leads to a dead end. Reference to the
EEA belongs, of course, to this approach. To rely on this paradigm means to under-estimate
the asymmetry while focusing on the legal approximation process and neglecting the needs
for economic approximation.
3 - Why does Russia need to build a CEEA with the EU?
Like the European Economic Area (EEA) for the EEC and EFTA, the CEEA is a pragmatic
approach to solving the problems of increasing trade and investments between Russia and the
EU. We will therefore offer a preliminary analysis of the problems of EU–Russian trade, and
the importance for the Russian economy of improving productivity and achieving sustainable
growth. It will then be shown that prospects of imminent EU enlargement strengthen the need
for the EU–Russia CEEA.
3.1 The shift towards another growth model for the Russian economy
Russia’s macroeconomic situation since 1999 appears fairly healthy. Russian growth is
mainly powered by exports: the increase in the trade surplus since 1998 has been 2–2.5 times
greater than the rise in GDP. However, as two-thirds of Russian exports are primary goods,
7
Russia’s growth depends on the evolution of world market prices. The point is confirmed by
the fact that imports, particularly imports of machinery and equipment, have not increased
significantly. We are thus far from a Russian economic boom, based on multi-sectoral
productivity increases and strong investment activity. The overall investment rate relative to
GDP has remained low at under 20% during the last five years. This is a long way below the
rates that are needed for economic take-off in emerging economies – between 25% and 35% in
a medium-term perspective.
Russia remains mainly a rent economy, with growth driven by primary goods production and
export. This model cannot be maintained in the long term for the following reasons:
 The model is incapable of providing sustainable growth, since growth in such a model
depends on increasing world prices for energy or huge investments to increase output;
 Rent is highly concentrated and largely exported, threatening a situation in which
economic growth is accompanied by the growth of inequalities;
 The model produces effects typical of Dutch disease, i.e. strengthening of primary, state
and public service sectors at the expense of industry and agriculture, low inter-sectoral rent
flows, and slow growth of productivity;
 Without strong political will for economic reform, the division of the economy into rich
and poor sectors becomes unalterable, because those with dominant economic power do not
need structural change.
The alternative model for growth in Russia is to turn the country into a diversified
manufacturer and competitive exporter. That means making the economy more integrated and
open. Such a way forward is more consistent with the human and capital resource endowment
of the country.
The features of the alternative, sustainable growth model are:
 Homogenisation of Russia’s internal economic space in order to improve macroeconomic
efficiency (factor allocation) and ensure a multiplicatory effect;
 Strong exports of manufactured goods, requiring major productivity increases through
Russian and foreign capital investment. This requires:
 strong improvement of the investment and business climate;
 consistent macroeconomic policy (low inflation, stable rouble);
 consistent social policy to reduce poverty.
The concept of this growth model is to transform mineral rent into capital invested in valueadded activities. This model is not a dream: some elements of it are already working in
selected open regions, such as Novgorod Velikii, and of course Moscow and St. Petersburg.
However, the dynamic factors in these regions are too partial, and disseminating effects fail to
operate. Strong sustainable growth requires 30 Novgorods in Russia. A qualitative leap is
needed.
Such an economic diagnosis is very close to the views expressed by the Ministry of Economic
Development and Trade (MEDT) in, for example, ‘The Mid-Term Programme for Social and
Economic Development of the Russian Federation’ which deals with the period 2002–2004.
The prospect of a CEEA between Russia and the EU is likely to foster and give a decisive
impulse to this process. Besides its fuel exports, Russia has potential for growth based on an
internal market, mainly oriented towards final demand of consumers. This market is currently
8
too small to generate strong endogenous growth, and has a preference for imports, because
domestic production fails to meet the standards which Russian consumers desire. The creation
of a CEEA with the EU is likely to extend this market by the addition of EU demand and
provide new investments in domestic consumer goods production. The potential for additional
trade between the EU and Russia is very important/significant [Fontagnié, Freudenberg and
Pajot (1999), as well as Busch and Piazolo (2001) have shown that potential for trade
expansion remains very large even between the EU and Central and Eastern European
countries]. Thus, the CEEA will generate strong flows of investment attracted by the
opportunity of using local skills and materials to serve the expanding domestic market.
Crucially, it will also open the possibility of serving the huge EU consumer and business
markets from a manufacturing base in Russia. The EU represents Russia's largest trade
partner, accounting for 33% of Russia's imports and 36% of its exports in 2000 [Soos, Ivleva
and Levina (2002)].
Overall, then, the opening of Russia thanks to the CEEA will help to increase the productivity
of Russian companies by expanding markets, modernising equipment, and providing
information. This will lead to diversification of the production and export structure of the
Russian economy towards value-added manufactured goods.
3.2 Fostering structural change in Russia
Russia is half-way along the road to a fully-fledged market economy. In short, the
liberalisation stage of reform has been largely implemented, with the economy freed from
state intervention, at least at the federal level. But the institutions of a market economy are
sometimes not in place or not functioning properly. Building the institutional framework of a
market economy is a difficult task and there is no rich store of international experience
showing how to accomplish this successfully [Samson (1994), Jordan, Samson (2000)]. It
requires change in the behaviour of enterprises, producers and consumers, as well as of central
and regional administrations. This cannot be achieved by law or decrees alone, because the
processes have cultural and political dimensions. They have a cultural dimension because the
structural changes also concern values and mentalities, which are often hard to change or are
even unchangeable, except by ‘special events’ (of which more below). They have a political
dimension because there are confidence and consensus factors involved in the change, and the
leaders, political forces and elite, who carry out the change, are an important variable.
In this respect, the new political impulse and image given by Vladimir Putin is vital. Under
his authority, the reform programme implemented by the MEDT has made substantial
progress and the State Duma has done intensive and efficient work: major changes worth
citing include the Tax Code, the Corporate Conduct Code, and the Customs Code. However,
this process is still too slow to meet the economic requirements of sustainable growth. Lack of
rapid progress is producing a bottle-neck in the development of a market economy and
impeding the improvement of the business climate.
Completion of the institutional framework of the market is needed to reverse capital outflows
and to attract both Russian flight capital and foreign capital from abroad. A common
weakness of analyses of Russia's opening up is their focus on trade, such as Hamilton (2002),
whereas capital flows (investments) represent the main form of the globalised world
9
economy. Current flows of foreign direct investment to Russia are around $3 bn per year,
which is 10 times less than flows to China and far below Russian capacities and needs.
What are the most recent findings in the economic literature on FDI? New research,
conducted by Brenton, di Mauro and Lücke (1999) on Central and Eastern European countries
(CEECs), shows complementarities between trade and FDI flows. Di Mauro (2001) showed
with gravity equations that the idea of two phases, commercial transition and then FDI
transition, is a wrong representation, since nowadays the two phenomena occur
simultaneously. In fact, the deciding role is played by investment itself, whether domestic or
foreign. In the neo-classical model of growth in a closed economy, the saving rate is
exogenous and equals investment/production. A higher saving rate increases the growth rate
for a given initial GDP level. However, the causality is not necessarily one-way. Sometimes,
especially in open economies, the growth prospects of domestic markets are what cause
investment. Barro (1997) showed that this second relation is more active, as did Blomström,
Lipsey and Zejan (1993). This relation could also be valid in the case of Russia.
The importance of FDI for growth has been widely discussed in the economic literature. In an
empirical study on 114 countries spanning 25 years, Barro (1997) showed a strong positive
correlation between FDI and economic growth. However, the direction of causality between
FDI and growth has been a controversial issue. Two groups of studies exist:
The FDI-led growth approach, represented by Sanghamitra (1987), Musleh-ud (1994),
Rodriguez-Clara (1996), Balasubramanyam, Salisu and Sapsford (1996) and Borenzstein, De
Gregorio and Lee (1998). Based on growth theory (with FDI as one of the factors), FDI
enhances economic growth through spill-over effects and technology transfer (changes in the
nature of market concentration and the dissemination of technological, managerial and
financial expertise in the industries which multinational firms (MNFs) enter). FDI also helps
economic growth through capital formation, export promotion and employment augmentation.
The growth-driven FDI approach, represented by Tsai (1991), Wheeler and Mody (1992),
Markusen (1995), Markusen, Venables, Konan and Zhang (1996), Zhang and Markusen.
(1999). Better economic performance creates a better investment environment and profit
opportunities. Most studies focus on MNFs, seeing FDI as a substitute for domestic capital,
and judging that FDI inflows increase with domestic demand for capital, generated by
economic growth. More importantly, income growth makes it possible for MNFs to exploit
economies of scale. Human capital development, labour productivity and infrastructure
improvements increase marginal return on capital and thus, the demand for investment,
including FDI.
In fact, very few empirical studies use a robust procedure in addressing the issue of short-term
dynamics and the long-run relationship between FDI and income growth. Instead, they
implicitly assume the causality from the statistical association. Zhang and Markusen (1999)
tested the relationship and the direction of causation with cointegration and error-correction
modelling based on Chinese data for 1977–1998. The estimates provide strong support for bidirectional causation between FDI and income in China and a positive long-run relationship
between them. Hence, there are virtuous cycle effects. Such an analysis might be the right
approach for Russia and might be confirmed empirically: the recent growth of the Russian
10
economy following 1998 induced an increased inflow of FDI, likely to foster growth and
attract more FDI.
However, such development is dependent on a second factor, which is institutional change
towards a better investment climate. This evolution is reinforced by the growth effect of
institutional measures and respect for the law. Analysis of the effect of institutions has not
been carried out until recently, and institutions were absent from standard economic theory.
Institutions appear in descriptive growth studies, after North (1990), and such studies were
followed by empirical research relying on an objective approach to institutions. The works of
Kormendi and Meguire (1985), Barro (1991) and Levine and Renelt (1992) revealed solid
links between the quality of institutions, on the one hand, and growth, FDI and foreign trade,
on the other hand.
Subjective assessments of the importance of institutional quality have been developed more
recently, based on expert data (country-risk agencies). Mauro (1995) established a solid
relation between bureaucratic efficiency and investment (and, indirectly, growth). Knack and
Keefer (1995) measured security of property rights and established a robust and positive
relation to both growth and investment. Barro (1997) followed Knack and Keefer’s reliance
on subjective assessment by experts and focused his attention on respect for law, particularly
that concerning contracts and property rights. The correlation with growth is strongly positive.
Studies of transition economies started later, but show the same patterns as regards the effect
of institutions. The first major research was developed by Brunetti, Kisunko and Weder
(1997a) of the World Bank, also using a subjective approach to institutions. A first work on
18 transition economies between 1990 and 1995 revealed a solid link between growth and the
credibility of institutions. Another work scrutinised the link between FDI and growth, with
FDI being used to assess the credibility of institutions: Brunetti, Kisunko and Weder (1997b)
established a solid causality link between the credibility of institutions and both growth and
investment. The most recent study, to our knowledge, conducted by Grogan and Moers
(2001), is not based on expert views, but on a broader sample of civil society in 25 transition
countries from 1990 to 1998 and assessed the impact of perceptions of the role of ‘legal
safeguards’, ‘corruption and crime’, ‘law fostering investment’ and ‘risk of non-payment, risk
of non-repatriation of capital’. The findings are that quality of institutions is significant for
growth, and also for low inflation and economic liberalisation. Moreover, FDI and
institutional quality are mutually reinforcing.
In studying the experience of CEEC candidates in the approximation of laws, one important
finding is that the prospect of EU membership strongly accelerates structural change. Piazolo
(2000) shows that requirements for transition towards a market economy overlap with the
requirements for EU accession. In another paper, Piazolo (1999) argues that the CEECs can
enhance their economic growth prospects through EU-induced institutional change. Adapting
the CEECs' institutions according to the EU acquis communautaire helps to establish a
functioning market-oriented framework. An estimate of the potential growth effect resulting
from this process of institutional rapprochement through EU membership suggests a static
bonus in GDP of 12%, not accounting for induced capital accumulation and an additional bonus
of up to 24%.
11
The use of the acquis communautaire as a reference, which is already well-functioning and
allows creation of a single institutional space, combines with the ‘special event’, represented
by the idea of becoming an EU member soon, and the combination produces rapid change in
mentalities and behaviours. To take an example: even though the EU competition regime is
far from perfect for transition countries, it has been demonstrated by Fritsch and Hansen
(1997) and Estrin and Holmes (1998) that rapid implementation of the regime in the context
of Europe agreements provides a much-needed anchor for domestic institutions, enhances
legal certainty and can foster integration between the EU and the CEECs.
Under certain conditions, the orientation of structural reform in Russia towards the EU acquis
communautaire may bring a similar result. Of course, Russian history is rather different from
that of the CEECs and EU membership is not an objective. The PCA already includes several
chapters dealing with the institutional framework of a market economy in Russia, but its
committees have not managed to produce a visible effect on the transformation process.
Therefore, the CEEA with Russia should be designed to create the ‘special event’ which will
carry Russia quickly through its current structural bottle-neck and dramatically improve the
investment climate in the country.
3.3 The prospect of EU enlargement favours EU–Russian rapprochement
EU membership for 8 or 10 CEEC countries (discussion remains open concerning Bulgaria
and Romania) plus Cyprus and Malta is no longer a distant target, and is achievable in the
near future.
The impact of this enlargement on the Russian economy and on EU–Russian cooperation is a
very controversial question. RECEP is investigating this issue and will present its views and
measurements in another paper. What we offer here are only initial observations (the
simulation conducted by RECEP with GTAP model is still in progress). Trade between Russia
and the CEECs has decreased by three times since 1989. The asymmetry of the late-Soviet
period, when Russia was more important for the CEECs, has been inverted: in 2000, the
CEECs represented 8% of Russia’s imports and 22% of its exports, while Russia represented
9% of CEEC imports and 2% of CEEC exports. This trend suggests that EU enlargement is
likely to have consequences for Russia, based on the fact that about 70% of Russia's exports
stem from energy, while CEEC sales are more diversified.
Russian experts, such as Zuev (2001), assume a likely deterioration in trade and the economic
regime for Russia in its relations with the CEECs after their accession to the EU. On the plus
side, introduction of EU tariffs in the CEECs will be positive for Russia, because EU tariffs
are much lower than those currently in force in the CEECs. However, a number of concerns
have been raised by the author, such as application of new non-tariff barriers to trade,
deterioration of conditions for the transit of goods (including the problem of transit between
Kaliningrad and the rest of Russia), trade diversion due to an increased productivity gap with
the CEECs, diversion of investments from Russia to the new EU members, increased
competition, infrastructure problems, etc.
From a political point of view, the process of EU enlargement is welcomed by Russia, since it
is understood that Russia will have a reliable neighbour on the continent to the west of its
borders, and that the EU will be increasingly able to adopt policies independently of the US. At
12
the end of his visit to Italy to hold talks with the Italian President in November 2000, Vladimir
Putin stated unequivocally that Russia had a positive attitude towards EU enlargement4.
This favourable political climate should be a basis for intensifying cooperation between
Russia and the EU15 in order to prevent any crowding-out of Russia. In a similar way, closer
cooperation between Russia and the CEECs should be fostered, in order to keep these
important export markets for Russia. This issue is now a part of Russia’s export strategy. The
building of a CEEA that will embrace Russia and the EU15, as well as the new CEEC
members, is an adequate solution to these issues. The CEEA is more than a useful solution for
Russia – it is a necessary solution, since the enlarged Union will represent 55% of Russian
exports. This is almost the same percentage as the EEC share of EFTA exports when the EEA
was signed in 1992.
3.4 The spirit of building a common European home
We should not underestimate the support that can be provided by public opinion in the EU
and Russia for the task of reconnecting the two main parts of the European continent, which
share a common history and destiny. It is clear that the iron curtain has not moved eastwards,
but has definitely disappeared. This corresponds to Mikhail Gorbachev's motto of building a
common European home or to Francois Mitterand’s idea of a large European family. It is in
accordance with the values of European democracy, which managed to embrace the traditions
of different cultures and nations.
Movement into the CEEA should not be understood on the Russian side as a further step away
from traditional CIS allies. On the contrary, most of the western CIS countries have made
their strategic choice in favour of closer ties with the EU, so that closer interaction with the
EU is also a way for Russia to keep these traditional allies. Moreover, in a second step, there
is no reason why entry of some other CIS countries into the CEEA should not be envisaged.
4 - What content and options for a CEEA concept?
The concept of the CEEA, which emerges from the present analysis, highlights mutual
intensification of exports and FDI between the EU and Russia, fuelled by a self-enforcing
mechanism of growth and structural change in Russia oriented towards the EU acquis. The
main features of this concept are presented in what follows, although several options still
remain open and need to be discussed further. RECEP has begun studies to simulate the
impact of various forms of this concept on the Russian economy.
4.1 Cornerstones of the proposed CEEA concept
The most important features and requirements of the CEEA are as follows:
The core of the CEEA concept is a major increase in flows of goods and capital between
the EU and Russia, connected to productivity increases in most sectors of the Russian
economy;
 The CEEA requires broad adoption by Russia of the acquis regarding two issues which are
crucial for market transparency and efficiency: company law (Chapter 5: public disclosure of

4
Kommersant, Interfax, November 28, 2000, quoted by V. Zuev
13





the identity of those empowered to represent a company, its financial situation; protection of
intellectual and industrial property rights) and competition policy (Chapter 6: antitrust
legislation, state aid, mergers, liberalisation of market entry). These are the main factors
capable of improving the investment climate in Russia. Following the spill-over effects of the
CEEA, some additional and partial approximations in laws on such issues as taxation (Chapter
10), agriculture (Chapter 7), environment (Chapter 22) and consumer protection (Chapter 23)
would increase the benefits of the single market (see next item);
Another major tool of the CEEA is the implementation of a single market between Russia
and the EU, ensuring the four fundamental freedoms, which are the free movement of goods,
persons, services and capital. This means the broad adoption in EU–Russian exchanges of
provisions of the first four chapters of the acquis. Together with the two essential chapters
mentioned above, Russia will thus need to broadly adopt the acquis in its first six chapters;
Strengthening and broadening of cooperation: this sub-title of the EEA concept of 1992
should be kept because it helps to focus in a pragmatic way on the issues likely to bring the
largest and quickest mutual benefits within the CEEA. With regard to existing cooperation,
the energy dialogue is in first place, since it is the best example of a mutually advantageous
issue. Another special field for new cooperation is internal and external use of the euro by
Russia;
Elements of membership criteria and of Maastricht criteria: political dialogue in the CEEA
framework and cooperation on security issues will lead to inclusion of large parts of the first
and second pillars of the Copenhagen criteria in the definition of the CEEA;
Institutional and jurisdictional structure: the first step towards the institution of the CEEA
was the creation of the High-Level Group after the 7th Summit. The point is to define to what
extent PCA institutions are able to provide a basis for CEEA institutions;
Administrative structure building for enforcement and implementation of laws and
regulations The adoption of the acquis cannot be limited to the formal legal process: the key
issue is to ensure implementation of these laws and to provide the administration necessary
for following-up and controlling this process. Proper functioning of the CEEA is thus
connected with the improvement of economic federalism in Russia and requires a reform or
radical change in the working, and possibly in the structure, of state administration.
To summarise, the content of the CEEA proposed here relies on intensive co-production made
possible by Russia’s broad adoption of the acquis in six chapters, on complex cooperation
measures in political, economic and social fields and on administrative reform in Russia to
improve economic federalism and control implementation of laws and regulations.
4.2 Options and implementation of the CEEA as a tool for modernising Russia
Further definition and implementation of the CEEA concept and sequencing should not forget
the comprehensive logic of the CEEA. It is important to remember that the free-trade
agreements between the EC and EFTA signed in 1973 brought slow results compared to the
accelerating integration dynamic within the EC. The purpose of building the EEA in 1992 was
to boost this process by injecting self-enforcing integration dynamics. The concept of the
CEEA between the EU and Russia aims at injecting similar integration dynamics, which, as in
the EEA, go far beyond trade liberalisation. However, in the case of Russia, this process must
be initiated by a strong rapprochement, in which the acquis fosters market institution-building
in Russia as the condition for launching an integration dynamic within the CEEA that will
intensify mutual flows of trade and investments. The EU will function as an outside peg for
14
institution building. The other conditions are administrative reform and the unification of the
internal Russian market, without which the quick shift towards a sustainable growth model will
not happen.
One major weakness of the CEEA discussion is that it is conceived within the paradigm of EU
enlargement and its tools, whereas this issue is not on the agenda. According to this paradigm
for example, it is not acceptable to select what part of the acquis is relevant for Russia,
whereas the other approach subordinates the legal approximation to its impact on economic
convergence [Hamilton (2002)]. On the contrary, the CEEA should be more understood as a
tool for economic approximation between the EU and Russia than as an institutional target in
itself. There is no reason to press the binding function of the acquis on Russia, and a strategy
of ‘take this and leave that’ is reasonable5. However, it is also important to prevent domestic
lobbies from dictating Russia’s attitude towards the acquis. The key point is not acquis
orthodoxy, but the high economic consistency, described above, which is behind the
orientation of Russian structural change toward the acquis.
The broad adoption of six chapters of the acquis is a huge challenge for Russian society,
entailing orientation towards the highest standards in economic and social life. Three
important remarks need to be made:
 There is a broad field for discussion between the two parties to define the precise content of
acquis adoption in the six chapters and the process for achieving it;
 The right sequencing between the six chapters needs to be found. Broad opening of borders
should keep in step with the modernisation of Russian companies through strong investment
activity relying largely on outside (foreign and repatriated Russian) capital. It is not
unthinkable that, after a change in the investment climate, the CEEA could be mainly
characterised by extensive, joint-productive activities between EU and Russian partners;
 Russia is neither an EFTA country nor a CEEC. Its national specifics, both geographical
and historical, must be taken into account, as well as the distinctive features of its society.
Moreover, the CEEA concept should bear in mind Russia's specific situation, and the
asymmetry caused by its lower per capita GDP and institutional development. The special
position of Kaliningrad also needs to be considered: a recent report written by Samson (2002)
shows that this region is not really depressed and contains many potentialities. This opens the
way for a step-by-step approach, keeping these factors in view. For example, the mutual
opening up could be quicker on the EU side than on the Russian side. Precedents of
asymmetric treatment granted by the EU (CAP agreements, association agreements)
demonstrate that the mutually-beneficial integration of Russia into the CEEA is quite feasible,
despite Russian–EU asymmetry. Manzocchi and Ottaviano (2001) showed that the
asymmetric phasing-out of trade barriers within the accession process (Europe Agreements)
reduces the insider-outsider income gap.
Many options remain open for other elements of the CEEA concept, which are less precise
and sometimes less binding. Such options will be defined later on. However, the six chapters
should have rather binding force for creating a common area. Of course, important adaptation
work is needed, with numerous relevant EU directives giving birth to a national legislative
process. One should not underestimate the huge work that has to be done in this respect, for
5
See, for example, in Fritsch and Hansen (1997) a contribution by Nikolaides and Mathis, in which the authors
analyse under what circumstances EU laws and policies are inadequate or inappropriate for promoting and
maintaining competition in transition economies.
15
example, in demonopolising the banking sector, or creating the conditions of freedom of
establishment and service provision.
In certain respects, this process takes the same direction as accession to the WTO. In addition
to foreign trade regulation, important measures of legislation approximation in the field of
internal economic regulation are characteristic of the WTO discussions, as they are of the
CEEA discussions. The areas concerned include intellectual property rights, competition,
subsidies to industry, opening up of the services market, prices and norms in agriculture etc.
The question which arises is: how to organise WTO and CEEA negotiations? The fact that the
WTO requirements are less deep and comprehensive in these fields suggests that negotiating
WTO accession should be a first step, followed by concentration on the CEEA. This approach
is correct, but sometimes not optimal, for two reasons. According to Prikhodko and
Pakhomov (2001), WTO accession requires the changing of more than 1000 laws and
regulations on foreign trade issues alone, not to mention laws and regulations on internal
economic regulation. This is an immense and long task and in several fields the legal process
can start immediately in the CEEA perspective, without awaiting the outcome of the WTO
discussions. This was already partly the case in competition issues. The second reason why it
may not be right to focus first exclusively on WTO accession is that lack of an institutional
framework based on the impulse provided by the acquis might make it hard for Russia to reap
the full benefit of economic opening up, as well as other advantages associated with WTO
accession. However, one good reason for supporting a sequenced approach relies in what we
could call the "political economy of opening up": the expert staff which the Russian
government mobilised for WTO negotiation is rather narrow, and it is the same staff that is
discussing CEEA issues. The margin for intensifying CEEA thinking without damaging WTO
negotiation is thus very limited.
The discussion of options for the CEEA should, however, take into account the greater
economic distance between the EU and Russia, compared with that between the EU and CEE
countries. This is principally reflected in levels of economic development, but also by
economic history and the late and young capitalism that appeared in Russia at the end of the
19th century.
GDP per capita 1999 $ PPP (purchasing power parity)
Russia Bulgaria Czech R. Estonia Hungary Latvia Lithuania Poland Romania Slovak R. Slovenia
7473
5071
13018
8355
11430 6264
6656
8450
6041
10591
15977
Source: World Bank
Russia's per capita GDP is lower than the average of the CEE candidate-countries, and of
course, much lower than those of the EFTA countries when the EEA was created in 1992.
This fact should be taken into account when discussing the options for the CEEA and the
transition phases which Russia would need in adopting the acquis. However, as the table
shows, Russia’s PPP per capita is not very far from the CEEC average and is more developed
than four candidate countries (estimations of Russia’s PPP per capita are between 5500 and
7500 USD) . The distance is greater as regards the institutional framework of a market
economy. However, like WTO accession, CEEA integration should not mean brutal and
extensive opening up, or loss of protection. The process would involve adaptation periods, in
which selected industries would prepare for the new competition conditions, as happened with
16
Brazil’s automotive industry when that country acceded to the WTO. A transition period of 12
years was introduced in the CEEC for implementing the right of foreigners to buy land.
One issue of special importance for the CEEA is that the four fundamental freedoms call for
free movement of persons between the EU and Russia. This was also stressed by EU
commissioner Chris Patten during the Moscow Summit of December 3, 20016. The issue has
extremely strong symbolic power as a visible sign that the iron curtain has been demolished
and that we are all living in the same Europe. Free movement of persons is the highest
message of confidence that the EU can give to the Russian people. Is it realistic to envisage
this measure being implemented in the near future? Our view is yes, within the CEEA. Free
movement of persons in the EU is planned for CEEC candidate countries with a delay of
seven years after EU membership, after the period needed for reducing the strongest
asymmetries, i.e. around the year 2011. If a strong and efficient impulse is given to the
building of a CEEA between the EU and Russia, with strong investment activity and an
economic boom in Russia, the prospect of free movement of persons seems realistic in a
similar time-scale following the formal start of the CEEA. Concrete ways of liberalising the
movement of people between the EU and Russia could be tried earlier on a small scale in
Kaliningrad, which has been nominated by the two sides as a pilot-region for EU–Russia
cooperation.
***
Through the building of a CEEA, the EU is not aiming to uniformise Russia, but to offer a
model for economic and legal integration which can help to boost Russian economic
performance. Both the EU and Russia have achieved internal unities, made up of a huge
diversity of nations, cultures, and religions. The time has now come to close the gap opened in
Europe at the beginning of the last century. Integration within a CEEA opens the way to this
objective. For Russia, the concept can offer a time-saving of 10-15 years. The anchoring of
Russia’s economic growth and institutional change to the European Union, the world’s
biggest economy, will save the Russian people from another long test of patience, allowing
rapid changeover to a strong and sustainable growth model in Russia and thus, a better life for
its citizens.
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19
RUSSIA’S FOREIGN TRADE7
Table 1. Commodity structure of Russian exports*
Agricultural raw
materials and
foodstuffs
Energy and fuels
$ mn
%
$ mn
%
Chemical products $ mn
Wood and paper
Textiles and
footwear
%
$ mn
%
$ mn
1996
1688
1997
1407.1
1998
1186.9
1999
764.2
2000 2001**
1298.8 1335.75
1
2.1
1.8
1.8
1.1
1.3
1.5
38214.9 38061.3 27648.6 30601.4 52142.2 48487.4
6
46.8
47.4
41.5
44.3
53.5
55.2
7005.5 6577.1 5587.8 5676.5 6801.4 6360.10
6
8.6
8.2
8.4
8.2
7
7.2
3492.9 3501.9 3405.8 3594.3
4276 4157.03
9
4.3
4.4
5.1
5.2
4.4
4.7
901.1
826.3
725.5
694.2
655.4 544.125
1.1
1
1.1
1
0.7
0.6
16178.9 16714.8 14708.2 14147.2 16681.7 12940.6
7
%
19.8
20.8
22.1
20.5
17.1
14.7
Machinery and
$ mn
7874.6
8176 7316.5
7257 8394.3 8756.92
equipment
7
%
9.7
10.2
11
10.5
8.6
10
Other
$ mn
6229.5 5097.9 6063.9 6383.7 7216.8 5246.94
5
%
7.6
6.2
90
9.2
7.4
6.1
Total
$ mn
81585.4 80362.4 66643.2 69118.5 97466.6 87829.0
2
%
100
100
100
100
100
100
* Total registered exports, excluding exports to Belarus
** January-November
Source: Customs Committee
Metals and metal
products
7
%
$ mn
Prepared by S. Afontsev, RECEP.
20
Table 2. Commodity structure of Russian imports*
1996
1997
1998
11168.1 12714.6 10265.6
1999
7673.7
2000 2001**
6976.8 7782.1
Agricultural raw $ mn
materials and
foodstuffs
%
26
26.3
26.3
28.4
23.1
23.4
Energy and
$ mn
1720.6 1869.8 1416.2
723.3 1382.6
894.9
fuels
%
4
3.9
3.6
2.7
4.6
2.7
Chemical
$ mn
6309.4 7019.2 5940.5 4446.1 5620.7 6286.5
products
%
14.7
14.5
15.2
16.4
18.6
18.9
Wood and
$ mn
1446 1738.3 1530.6
955.9 1136.8 1354.1
paper
%
3.4
3.6
3.9
3.5
3.8
4.1
Textiles and
$ mn
1966.9 1935.7 1267.6
1150 1451.1 1599.3
footwear
%
4.6
4
3.3
4.3
4.8
4.8
Metals and
$ mn
3748.1 3310.8 2664.7
1955 2491.6 2502.8
metal products
%
8.7
6.9
6.8
7.2
8.3
7.5
Machinery and $ mn
13671.7 16938.8 13909.3 8773.4 9227.1 10809.9
equipment
%
31.8
35.1
35.7
32.4
30.6
32.5
Other
$ mn
2978.9 2731.3 1976.9 7978.2 1855.2 2073.1
%
6.8
5.7
5.2
5.1
6.2
6.1
Total
$ mn
43009.7 48258.5 38971.4 33655.6 30141.9 33302.6
%
100
100
100
100
100
100.0
* Total registered exports, excluding exports to Belarus
** January-November
Source: Customs Committee
Table 3. Regional structure of Russian foreign trade* (%)
Exports
Total
100
100
100
100
100
100
100
CIS
18.6
18.7
19.5
19.2
14.7
13.4
14.0
Imports
EU
CEE Other Total
33.6
13.7
34.1
100
32.1
14.8
34.4
100
32.9
15.7
31.9
100
32.5
14.6
33.7
100
34.1
15.2
36
100
35.8
17.3
33.5
100
37.4
16.7
31.9
100
1995
1996
1997
1998
1999
2000
2001*
*
* Total registered foreign trade
** January-September
Source: Customs Committee
21
CIS
29.1
31.6
26.8
26
27.6
34.4
28.8
EU
CEE Other
38.4
11
21.5
34.5
8.6
25.3
36.9
10.1
26.2
36.1
8.8
29.1
36.9
7.0
28.5
32.8
7.2
25.6
35.1
5.5
30.6
VARIOUS INDICATORS FOR RUSSIA AND CANDIDATE COUNTRIES (2000)
Russia Bulgaria Cyprus
Area
Population
Pop. density
GDP PPP/
GDP %
Agriculture
% added value
% employment
Inflation
Unemployment
Budget bal.
Trade bal.
exp > EU
imp < EU
EU trade bal
Current acc.
FDI stock
FDI net flow
Czech Estonia Hungary Latvia Lithuania Malta Poland Romania Slovakia Slovenia Turkey
Rep
79
45
93
65
65
0,3
313
238
49
20
775
10.3
1.4
10
2.4
3,7
0,4
38,6
22,4
5,4
2
65,3
130
32
108
37
57 1240
124
94
110
98
84
13018
8355
11430 6264
6656
8450
6041
10591
15977 6380
2.9
6.9
5.2
6.6
3,3
5
4
1,6
2,2
4,6
7,2
1000 km² 17 075
mln inhab 144.8
inhab/km²
8
USD per capita 7473
annual
8.3
111
8.2
74
5071
5.8
9
0.8
82
6.4
13
21.3
10.5
4.4
235.3
35.8
32.8
-27851
14.5
n.a.
10.3
16.4
-0.7
74.1
51.2
44
146
3.8
9.2
4.9
3.4
-3.2
12.2
47.7
55.9
2098
3.9
5.1
3.9
8.8
-4.2
90.1
68.6
61.9
2330
6.3
7.4
3.9
13.7
-0.7
74.5
76.5
62.6
94
4.8
6.5
10
6.4
-3.1
87.6
75.1
58.4
1086
4.5
13.5
2.6
14.6
-2.7
58.5
64.6
52.4
118
7,6
2,3
19,6
1,9
0,9
2,4
16
4,5
-3,3 -6,6
69,8 71,9
47,9 33,5
43,3 59,9
4,3 1773
3,3
18,8
10,1
16,1
-3,5
64,7
69,9
61,2
10530
12,6
42,8
45,7
7,1
-3,8
78,8
63,8
56,6
1061
4,5
36,7
12,1
18,6
-6,7
92,8
59,1
48,9
-434
3,2
14,6
9,9
34,9
8,9
54,9
7
6,6
-2,3
-11
86,4
50,9
63,8
52,3
67,8
48,8
1818 12266
18.4
161
-0.2
-5
239
7.1
-5.2
n.a.
1.8
-4.7
2213
9
-6,7
1980
8
-3.3
1790
2.9
-6.9
943
5.7
-6 -14,5
683 n.a.
3,4
18
-6,3
671
5,3
-3,7
317
2,8
-3,7
1000
10,8
-3,3
1348
1
Ann. average
% active pop.(ILO)
% GDP
% exp/imp
% tot exp
% tot imp
With country
(mlnEUR)
% GDP
EUR per cap.
% GDP
4.8
Sources: Eurostat from national sources
http://europa.eu.int/comm/enlargement/report2001/#Conclusions
PPP calculations World Bank 1999
For Russia: RECEP from national sources
-4,9
n.a.
0,5
23