THE IMPOSSIBILITY OF THE ‘LADDER OF INVESTMENT’ APPROACH TO REGULATION

The ‘ladder of investment’ is a regulatory approach that has been used by EU National Regulatory Authorities (NRAs) to foster infrastructure competition among telco operators. In this paper, it is argued, using the method of the Austrian School of Economics, that the ladder of investment cannot possibly attain the expected results.     

THE EUROPEAN COURT: THE FORGOTTEN POWERHOUSE BUILDING THE EUROPEAN SUPERSTATE

Less attention is paid to the European Court of Justice than to other European Union institutions when discussing the centralising tendencies of the Union. However, the court has given an important impetus to the process of centralisation through its individual decisions and also through its tendency to give effect in its decisions to what it believes to be the'purpose'of EU treaties rather than to the text of the treaties. The proposed EU constitution will significantly widen the power of the European Court since it includes articles which are wide open to a number of different interpretations, and it will be for the court to decide how they should be interpreted.     

Management Accounting: Retrospect and Prospect

In this paper we discuss regulation of the statutory auditor in the United Kingdom, France and Germany. Previous research has addressed regulation of statutory auditors with respect to regulatory harmonization and the reduction of barriers to intra-European trade in professional services. While these are important goals, it has also been the policy of the European Commission to encourage high standards of auditing, which the Commission anticipates will evolve within the legal and regulatory frameworks of the Member States of the EU. In this regard, our paper seeks to investigate how auditor regulation is organized in three important EU economies. In particular we examine several key functions of auditor regulation and how these are deployed in the three countries investigated. In addition we provide some forward-looking comments concerning regulation of statutory auditors in the EU.     

Canada‐style trade deal most likely Brexit scenario

• ? All options for the Brexit endgame remain on the table. A free‐trade agreement (FTA) along the lines of the EU's deal with Canada looks like the most likely outcome. The two sides will also need to reach agreements on customs and regulations, with the latter involving the UK compromising on maintaining a high degree of regulatory alignment, to provide a permanent fudge on the Irish border issue. But there is still a sizeable risk of a “no deal” outcome .
• ? We expect a transitional deal to be agreed relatively quickly. The UK has suggested it would prefer a bespoke arrangement, but the EU is unlikely to offer such an option. We expect the UK to remain bound by EU rules during the transition, with the transitional period ending on 31 December 2020.
• ? If the two sides continue to pursue the preferred option of a FTA, it is unlikely to be completed by the end of the transition period. We expect the EU to reject the UK's request for a comprehensive agreement including services and insist on a Canada‐style deal. The Irish border issue means that customs and regulatory agreements would need to accompany such a deal. We place a 40% chance on this outcome.
• ? The question of regulatory alignment and the time required to negotiate a detailed FTA could spin the talks off in one of two opposing directions. If the prime minister is unable to get her party to agree to maintain a high degree of regulatory alignment, the talks could break down. If this occurs, we think it's very unlikely that the UK would honour the phase‐one agreement to maintain regulatory alignment, and we see a 30% chance that the UK walks away from the talks, resulting in a “cliff‐edge” Brexit in 2019.
• ? If the UK accepts the need to maintain regulatory alignment with the EU, it could conclude that joining the EEA and participating in the single market are better than lengthy FTA negotiations, resulting in an inferior deal. But the need to respect the four freedoms means this remains a relatively low probability outcome (20%). Wth Parliament seemingly committed to Brexit, remaining in the EU looks unlikely (10%).

     

FEDERATION WITH MAJORITY DECISIONS: ECONOMIC LESSONS FROM THE HISTORY OF THE UNITE D STATES, GERMANY AND THE EUROPEAN UNION

This article examines the potential impact of qualified majority voting on decision-making within the EU. It draws on the experience of US federalism, Germany under Bismarck and the UK in the European Union. In each case, it is shown that geographical majorities (nations, states or regions) have used majority decision-making as a means of increasing their rivals' costs. It is argued that to prevent such behaviour in the future in the EU, the proposed Constitutional Treaty should raise, not lower, the decision-making quorum.     

THE EU/IMF RESCUE PROGRAMME FOR IRELAND: 2010–13

The EU/IMF €85 billion rescue of the Irish economy required Ireland to address critical problems in banking and bank regulation, the public finances and structural reform. Ireland must also address weak expertise in economics in the public sector and in banking, rent‐seeking, regulatory capture, moral hazard, lack of accountability and failures of corporate governance.     

THE POLITICAL ECONOMY OF OVERLAPPING JURISDICTIONS AND THE FRENCH/DUTCH REJECTION OF THE EU CONSTITUTION

In seeking to protect their failed social model by rejecting the EU constitution, French and Dutch voters ironically contributed to promoting the very 'liberal' order they misunderstand and despise. When, as in federalist politics, functions overlap, two levels of government compete for the same votes in the same territory in the supply of similar services. Not unlike the tragedy of the commons in oil extraction, it is in the interest of both political authorities to seek to gain votes in implementing the programme first. The overall equilibrium supply of public services is excessive and both levels of government have a tendency to invade every field. Short of effective constitutional limits on the powers of the central government, a more decentralised EU offers an opportunity to overcome the common-pool problem of multi-level government.     

TRADE AND FACTOR FLOWS IN A DIVERSE EU: WHAT LESSONS FOR THE EASTERN ENLARGEMENT(S)?

Abstract.  This paper reviews the neoclassical and new economic geography (NEG) theoretical frameworks used to analyse the effects of integration on trade and factor flows, and the empirical work carried out within those theoretical frameworks for the European case. The European Union (EU) is of particular interest because it is illustrative of the tensions between deepening of the integration process and widening membership: whereas deepening requires homogeneity, widening has made the EU increasingly diverse. The orthodox framework saw trade and factor flows as substitutes, thus separating their analysis, and was mainly concerned with efficiency issues of trade integration. The NEG framework saw trade and factor flows as complements, and analysed them jointly, looking mainly at distribution issues such as disparities in industry location and wages arising from a single market for goods and factors. The main lesson for the Eastern enlargement(s) is that integration in its various forms leads to an uneven distribution of gains across member countries when these have very diverse economic structures.     

Liberalisation of Utilities and Evolving European Regulation

In this article, David Coen and Chris Doyle provide an overview of recent liberalisation and regulatory developments affecting key utility sectors (electricity, gas, postal service, and telecommunications) in the European Union. They examine what kind of competition is suitable in the utilities, and discuss obstacles that lie in the path of competition. They address in detail the institutional design of sector specific regulation. National and supra-national regulatory structures are analysed and these are illustrated by examples drawn from several European countries. In institutional terms, they argue that it is important regulatory regimes have a high degree of flexibilityand speed to allow for the continued evolution of the EU utility sector.     

CONSTITUTIONALISM, FEDERALISM AND THE EUROPEAN UNION

The purpose of a constitution should be to restrain governments. The proposed EU constitution does not do that - it provides agendas for government action. There is also no mechanism to facilitate jurisdictional competition. As such, if adopted, it will lead to further centralisation and abuse of statutory powers.     

THE IMPACT OF THE EU EMISSIONS TRADING SYSTEM ON COMPETITIVENESS AND CARBON LEAKAGE: THE ECONOMETRIC EVIDENCE

This paper carefully surveys the econometric literature that tests for competitiveness effects and related carbon leakage caused by the EU Emissions Trading System (EU ETS). The results of this literature tell us that to date there is no evidence of the EU ETS having had widespread negative or positive effects on the competitiveness of regulated firms, nor is there evidence of significant carbon leakage. However, the paper also identifies three important caveats to this general conclusion. Firstly, the evidence we have still largely refers to the first two trading periods, namely Phases I (2005–2007) and II (2008–2012). Secondly, some heterogeneity of estimated effects is observed, but patterns, notably sectoral patterns, hardly emerge. Thirdly, very little explored is whether the EU ETS has had long-term effects on the economy via investment leakage or firm dynamics. Further empirical studies investigating these long-term effects are particularly desirable.     

Complementary pensions in the European Union

In some countries of the European Union (EU) complementary pension schemes represent a major part of pension provision, whereas in others they play a relatively marginal role. An important factor is whether the social security scheme provides earnings-related benefits and whether the ceiling on eligible earnings for social security purposes leaves room for there to be a demand for supplementary pensions arrangements, in particular for the higher paid. Pressures on the financing of social security, especially with the expected ageing of the population in the first 30 years of the next century, are encouraging many countries to develop complementary provision, and a number of new pension laws have been passed in recent years. However, important though the growth of complementary provision is, it should not be forgotten that investment markets are also likely to be affected by the ageing of the population. There are increasing pressures for greater investment freedom for complementary pension schemes, but little progress has been made by the EU in harmonisation of the regulatory regimes for complementary pensions. If mobility of labour between the countries of the EU is to become a reality, progress needs to be made soon on these pensions issues.     

论欧盟对华反倾销调查的现状与成因——兼论我国企业的应对

欧盟是我国双边贸易中的第一大贸易伙伴,但中欧之间的中欧经贸关系发展中仍然存在一些不和谐的因素。我国目前是世界上遭到反倾销指控最多的国家,而其欧盟是对中国反倾销指控最多的地区之一。因此,有必要对中欧之间的反倾销制度进行比较,对我国企业更好地参与国际贸易提供建议。文章将结合经济学与法学的知识探讨中欧反倾销法差异问题,并在研究的基础上对中国的反倾销立法的完善和我国企业的应对上提出有益的建议。     

INNOVATION,COMPETITION AND ANTITRUST: AN EXAMINATION OF THE INTEL CASE

Microprocessor‐maker Intel has been subjected to the highest fine in the history of EU competition policy. Intel operates in a market with one other main supplier, a fact that seemed to provide grounds to those accusing it of abusing a dominant position. The authors argue that, in spite of the limited number of players, the microprocessor market showed the distinctive marks of dynamic competition: ever‐lower prices and ever‐growing innovation. Political considerations more than sound economic reasoning seem to be behind the EU antitrust decision.     

THE CZECH REPUBLIC: PROGRESS TOWARDS FREEDOM AND A MARKET ECONOMY

The Czech Republic has made good progress towards a market economy, though its experience shows that it is easier to change the political system than the economic system. It shows also that public expectations tend to be too high: economic transformation cannot be costless and rapid as is often assumed. The Czech Republic wishes to participate in European integration though it has reservations about the degree of regulation, harmonisation and bureaucratisation in the EU.     

THE DEVELOPMENT OF REGIONAL INTEGRATION IN EAST ASIA: FROM THE VIEWPOINT OF SPATIAL ECONOMICS

This paper examines the recent evolution of regional integration in East Asia, and discusses the prospects and tasks of further integration. After an overview of the globalization and regional integration trend in EU, NAFTA and East Asia during the past half-century, we introduce the basic framework of spatial economics, often called the new economic geography. In terms of globalization and regional integration, it is important to examine the general effects of decreasing transport costs (broadly defined) on spatial distribution of economic activities. Given this theoretical framework, we examine the changing economic interdependency within East Asia, as well as that between East Asia and the rest of the world over the last three decades. Next, we focus on regional diversity and disparity in East Asia. Finally, we compare the regional integration in EU with that of East Asia, and examine the tasks and prospects of further promotion of East Asian integration.     

FINANCIAL REGULATION,THE STATE AND THE MARKET: IS THE FINANCIAL SERVICES AUTHORITY AN UNNECESSARY EVIL?

The most successful stock exchanges developed without detailed regulation by the state. This article examines the role of the FSA in regulating stock market activity and finds that the justification for a statutory regulator is very weak. Indeed, one of the functions of a stock exchange is the development of a safe (private) regulatory environment for those using the exchange. Stock exchanges should be allowed to compete on the basis of the regulatory services they provide as it is only through a process of competition that regulation can be improved.     

Brexit – Customs borders will impose costs and delays

• ? The UK's decision to leave the EU customs union is likely to see physical customs borders being introduced, including in Ireland. This will impose administrative costs and delays, with our modelling suggesting that introducing customs checks would reduce the level of UK GDP in 2030 by between 0.7–1.3%. But there are opportunities for the two sides to limit the damage through cooperation and the UK could also mitigate the costs by agreeing free‐trade agreements (FTA) with third countries.
• ? The UK can take as ‘light‐touch’ an approach to customs checks on imports from the EU as it desires. But it is likely that the EU will introduce customs checks on goods imported from the UK, even if the two sides agree an FTA, to ensure regulatory compliance and that ‘rules of origin’ have been satisfied – this will be particularly important if the UK agrees FTA with countries the EU does not have deals with.
• ? Introducing customs borders would pose some logistical problems, particularly in the Dover Strait where existing infrastructure is limited and there are space constraints. A potential fivefold increase in customs declarations will also pose challenges on the IT front. If the UK and EU are unable to agree transitional arrangements, then the additional infrastructure would need to be up and running in a very short period of time. This risks a period of substantial disruption.
• ? Traders will have to complete additional paperwork – such as export licences and import declarations – but much of this can be dealt with electronically, which should help to limit costs and delays. In addition, if the two sides were to share information then this could help to limit the extent to which risk‐based inspections caused delays.
• ? The Government is effectively calculating that the benefits from agreeing FTA with other countries will outweigh the costs of customs controls on the UK‐EU border. This judgement looks doubtful and, at best, would take many years to bear fruit.

     

The global financial crisis: Lessons for European integration

The EU's limited fiscal capacity has proven to be the most critical constraint in responding to the global financial crisis in a coordinated manner. The EU does not have enough resources to rescue the troubled financial institutions and member states. This leads to a nationalization of rescue operations, which undermines the Single European Market and requires IMF involvement with respect to member states in distress. The EU must also complete the lacking elements of the Single European Market architecture (such as European financial supervision) and help in strengthening global policy and regulatory coordination.     

INSTITUTIONALISED JUSTIFICATION OF CORPORATE ACTION: INTERNATIONALISATION AND THE EU IN CORPORATE REPORTS

This paper provides an institutional analysis of the way a set of Finnish firms have used the concept of internationalisation and the EU in justifying major strategic decisions. They have used internationalisation, and in particular the then new possibility of Finland joining the EU, as an argument in support of radical change. An analysis of their annual reports reveals a number of institutional arguments which are strong because they are generally accepted, a priori, as being important not only to firms but indeed to Finland as a whole. In using institutional arguments firms are aligning their own interests with those of the country, and in so doing are able to justify radical changes in most parts of their own organisations. We are not claiming that Finnish firms should not react to the challenges which EU represents. Rather, we suggest that by using institutional arguments they are borrowing legitimacy from a wider public. The arguments used are typically very broad, invoking very general visions of the role of Finland in the EU. We call these arguments “easy rides” because, even if they are only partially explicated, it is generally assumed that they will become accepted without questioning by public and employees alike. Certain specific patterns of “easy rides” can be distinguished: i) The mobilisation of a “national mission”, ii) “Sacrifice now, reap the benefit later”, and iii) “Bigger is better”. The paper concludes with a methodological discussion about the difficulty of distinguishing between the technical/functional and the institutional arguments.