European Economic Integration – 110451-0992 – 2014
I. Introduction
World Economy Research Institute
Prof. Dr. Günter S. Heiduk
Warsaw School of Economics – SGH
Phone +48 (22) 564 9373; gheidu@sgh.waw.pl
Office hours: Friday, 12:00 – 13:00, or by appointment via e-mail/phone
Website: http://kolegia.sgh.waw.pl/pl/KGS/struktura/IGSKGS/struktura/ZBGPAW/Strony/default.aspx
Timetable
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
09:50 – 11:30
A8
X. Europe 2020 Dr. Marta Mackiewicz
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
Fr
04 - 25
Fr
05 - 02
Fr
05 - 09
Fr
05 - 16
09:50 – 11:30
A8
Fr
05 – 23
09:50 – 11:30
A8
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
Easter break
09:50 – 11:30
A8
VI. Common Agricultural Policy
May holiday
06 – XX
* Mgr Agnieszka McCaleb
VII. Cohesion Policy
EU-China Economic Relations*
Exam: - Essay
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
EU-27
25.8%
Source: Eurostat online data code (nama_gdp_c) and the United Nations Statistics Division (National Accounts Main Aggregates
Understanding “Integration“ – Searching for “Europe“
Integration = Globalisation?
Integration = Regionalisation?
Integration = Regionalism?
Integration = Multilaterisation?
Integration = Multilateralising regionalism?
------------------------------------------------
Europe defined by geography, culture, institution?
5
-Exports
- Imports
“Far distance
integration“ by
international
trade flows =
Globalisation?
6
-Exports
- Imports
“Far distance
integration“ by
international
trade flows =
Globalisation?
7
Trade Blocs
::
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)
Regionalism = Institutionalized regional integration
ASEAN, EU, Mercosur, NAFTA
9
Regionalism: Spaghetti bowl’ RTAs in the Western Hemisphere
10
Global, inter-regional, intra-regional trade
Centeno, M and Cooke, A (2006). Introduction to the Data from GKG Project. Princeton University.
Europe‘s intra- and inter-regional exports , 2012 (in %)
CIS
3,8
North America
10,1
7,7
EU
68,6
3,3
Middle
East
1,9
South and
Central America
Asia
3,3
Africa
Source: WTO, International Trade Statistics
Merchandise Trade of Selected Regional Trade Agreements, 2012
Total Trade (USD billion)
14000
12000
10000
8000
6000
4000
2000
0
EU-27
NAFTA
ASEAN
MERCOSUR
Share of Intra- and Extra-Regional Exports (in %)
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.
Source: WTO, International Trade Statistics 2013, Appendix Table A3.
Where are the borders of Europe?
14
EUROPEAN UNION
DIVERSITY IN UNITY
?
UNITY IN DIVERSITY
15
The European Union:
503.5 million people (1 Jan. 2012) – 28 member states
st
16
EUROPE AT NIGHT
Source: Courtasy: DMSP and NASA, www.nasa.gov
Symbolic description
Against 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.
18
Founding fathers
New ideas for lasting peace and prosperity…
Alcide de Gaspari
Konrad Adenauer
Winston Churchill
Robert Schuman
Jean Monnet
19
Multilingualism: 24 official languages
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.
Hrvatski
Working languages: English, French, German
20
Eight +1 enlargements 1952-2013
1952
Eight enlargements
1973
1981
1986
1990
1995
2004
Ninth enlargement: Croatia on July 1, 2013
2007
21
Ninth enlargement 1st July 2013 and current official and potential candidates
The treaties – basis for democratic cooperation built on law
1952
1958
The European Steel and Coal
Community
The treaties of Rome:
The European Economic Community
The European Atomic Energy Community
(EURATOM)
1987
The European Single Act: the
Single Market
2007
Treaty of Lisbon (signed)
1 Dec. 2009 into force
2003
1999
1993
Treaty of Nice
Treaty of Amsterdam
Treaty of European Union
– Maastricht
23
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
the world stage
High Representative for Foreign Policy, etc.
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.
24
How rich is the EU compared to the rest of the world?
GDP per capita (PPP), Selected Countries/Regions, 2000, 2005, 2010, 2012, US$
90000
80000
70000
EU
60000
Luxembourg
50000
Germany
40000
Romania
30000
USA
20000
Japan
10000
0
2000
Source: IMF.
2005
2010
25
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
26
EU‘s greatest achievements

Customs Union
- Abolishing internal tariffs
- Establishing a common external tariff
 Single Market
 Monetary Union
 Enlargement
- Four freedoms of movement:
Goods
Services
People
Capital
- European Monetary System (EMS)
- Euro
- Economic and political stability in
Europe
27
EU‘s greatest challenges: Widening versus deepening
Deepening:
Lessons from
the Euro crisis?
2004
2007
2015 ?
20... ?
Widening
28
Future Enlargements?
Acceding country: Croatia 1st July 2013
Potential candidates: Albania, Bosnia and Herzogovina, Kosovo, Serbia
Candidate countries: Island, Macedonia, Montenegro, Turkey
29
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 between
the Western Balkan countries
 Autonomous Trade Measures: Duty-free access to the EU market for practically all
products originating from the region
30
GDP PPP per capita, EU-27 = 100
Widening results in
declining average GDP/capita
Basic Indicators of Exports + Imports
31
Agreements in the Euro-MED Area, 2008
Schengen Agreement: Imperfect mobility for persons
33
Bulgaria, Cyprus, Romania are not yet fully-fledged members of the Schengen area.
Characterizing the European Union:
Diversity in Unity versus Unity in Diversity?
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.
Boundaries versus Borders
Geographical
Political
Cultural
Economical
Institutional/legal
Transactional
38
Europe: Diversity
in Unity ?
39
40
National identities: language, history and culture of a country
41
The Impact of Enlargement
42
Discipline perspective:
Diversity in law, economics,
politics, history
Language

§

Law
History,
Culture
€
Economics

Politics
43
 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.
Europe: Unity
in diversity ?
“In varietate concordia”
45
European identity?
Institutions and integration process in
Europe
Enlargement
Hungary
Poland
Institutions
Commission
Parliament
....
Council
ECB
...
Slovakia
...
46
”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 interaction
as well as distances
&
display methodological
openness
Educate economists
to be aware of the noneconomic!
47
Conceptualizing Europe
A) An institutional approach
Levels of institutions
Economy
Horizontal
and vertical
interdependencies,
distances,
interactions
Culture
Nation states
Law
Europe
west
World
Technology
east
B) A dynamic approach
Evolution of Europe‘s economy, cultures, nations, law, technologies (e.g., by
using a socio-dynamic method)
48
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!
49
Nothing is possible without
men, nothing is sustainable
without institutions!
Jean Monnet –
The intellectual father of the European Union
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