The Constitutional Structures of the National Political Economy: Barrier to or Precondition for European Integration?

The Court of Justice of the European Union is increasingly dedicated to the pursuit of economic efficiency. As this article will demonstrate, this has led to diagonal conflict between European legal pronouncements on the free movement of labour within a services regime and national jurisprudence on democratically-legitimated public procurement policies within distinct state aids regimes. Where once the CJEU treated public procurement as a distinctive part of the EU’s state aids regime, or one which might be reconciled with redistributive ethical and social concerns maintained at national level, the application of the EU services regime to procurement has placed this traditional understanding in doubt. This re-alignment, however, as well as the supranational-national conflict that it has created, reflects both the deeper mismatch both between European economic and national social competences, as well as friction between national and European conceptions of constitutional legitimacy. Such tensions must be overcome in order to secure continuing legal integration within Europe.     

Enlargement and the Textiles,Clothing and Footwear Industry

The textiles, clothing and footwear (TCF) industry is a labour intensive industry, strongly determined by globalization and easy relocation to low‐cost countries. Hence also in the European Union this industry is relatively more important in the low‐wage regions of the EU‐Southern periphery. With the envisaged enlargement, however, these countries fear a further shift of the sector to Central and Eastern Europe as these countries still have a comparative advantage in terms of low labour costs. The present article investigates whether this fear is justified, looking at three main aspects: first at the position and history of the TCF sector in the European Union and its role in the EU periphery, second at the sector in the Central and Eastern accession countries, and third at gobalization issues. The second aspect is dealt with in great detail, as development trends in the Central and East European countries are important and telling. Much has happened during the 15‐year (and more) period between the collapse of communism and the EU membership in this region, most important the integration to the EU by the means of trade, in particular outward processing trade. These developments mainly seem to determine future trends in an enlarged Europe. Overall however, future prospects have to be seen in a global context, strongly influencing the sector via changes in global trade policies.     

Territorial disparities in Europe

Traditionally, EU policies have been focused on economic and social cohesion. Recently, the territorial dimension of regional disparities as an aspect of EU policy has gained importance. The European Spatial Development Perspective (ESDP), adopted in 1999, is meant to support a balanced development of the EU territory. Moreover, the European Commission addressed issues of territorial cohesion in its latest cohesion report. The present paper deals with territorial disparities and their current development in the EU. It analyses which kinds of region develop dynamically and offer favourable labour market conditions. The differences between rural and urban areas are a fundamental feature of territorial disparities in the EU and are of essential significance for the ESDP. The analysis deals with the question whether disparities between poor and rich regions as well as different growth trends and labour market conditions are still marked by the dualism between city and countryside. The authors would like to thank Elena Tcharykova for her excellent research assistance.     

Migration and institutions: Evidence from internal EU mobility

Despite the formal achievement of the free movement of labour within the EU , the institutional characteristics of the labour markets of the Member States may influence European mobility. The paper seeks empirical evidence of the relationship between labour market institutions and intra‐EU migrations, estimating a gravity model for bilateral migration for the period 2001–11. The results indicate that trade union density negatively correlates with the size of bilateral migrations: destinations with relatively high union density are associated with lower migration inflows. Since these countries tend to have a relatively flat earnings distribution, it is also investigated whether their earnings structure reduces their attractiveness as destinations hindering the access to their labour market. Even if a dependence between the earnings dispersion and migrations is found, trade union density remains the main driver of migration patterns. Clear effects of employment protection on EU mobility are not found.     

The Future of European Growth Policies: Resetting Integration

This note argues that one should lay the focus of future European growth policy on integration and technology. This focus should be on maximising the growth effects of their interaction, with an emphasis on the importance of deep integration. The note provides three examples that show how deep integration has contributed to stop the relative economic decline in the UK vis-à-vis the EU founding members; how deep integration increased productivity in Sweden, Austria, and Finland compared to that in Norway; and how a key mechanism to advancements in the new EU member states has been the capacity of deep integration to generate institutional change.     

欧盟天然气市场一体化分析

20世纪80年代以来,欧盟内部统一大市场建设取得了巨大的进展,但在欧盟能源市场的自由化和一体化方面却收效甚微。近年来,随着能源重要性的不断加强,欧盟将天然气市场作为内部统一市场新一轮的发展重点。文章运用协整检验方法对欧盟天然气市场一体化进行了实证分析,认为目前欧盟天然气市场一体化程度仍然较低、成员国市场分割严重。     

Western European integration and Eastern European transformation

The process of EU integration has intensified in the 1980s and early 1990s. The desire of a number of central and eastern European countries to join the EU is often seen as a threat to the continuation of this process. How wide should the radius of EU enlargement be? Which forms of integration would be appropriate between the EU and different subsets of ex-CMEA countries?     

Does value chain integration dampen producer price developments? Evidence from the European Union

We draw on trade theory to empirically explore the effects of value chain integration on producer price dynamics. Using the EU as an example of an integrated area, we construct measures of backward and forward linkages with intra‐ and extra‐EU trading partners at the country‐sector level. We find that especially upstream integration and EU accession dampen inflation. The results for downstream integration indicate a price‐increasing relationship. We propose novel EU integration indicators and offer insights to both theory and applied research. We also add to the policy debate on the price effects of (dis‐)integration of EU countries.     

Growth Potential for Maritime Trade and Ports in Europe

Global economic development in recent decades has been characterised by a rapidly progressing intensification in world trade and the international division of labour. As a result of the expansive development of international merchandise trade, cargo shipping has been one of the fastest growing economic sectors. The progressive global integration processes, the future reduction in trade barriers and the expected increase in prosperity in numerous regions of the world will also call for a marked expansion in world trade and cargo shipping. This designates maritime logistics as an economic sector with favourable perspectives for development. What growth rates can be expected for EU maritime trade? And what impact will these have on Europe’s ports? This article is based on the HWWI and Berenberg Bank study “Maritime Trade and Transport Logistics” published in 2007.     

Ein Arbeitsmarktprogramm für Europa

The European Employment Strategy is the subject of controversial discussion. It is hard to find an economic justification for transnational responsibility since European labour markets are heterogenous and spillover effects of national employment policies are almost negligible. In its latest communication, the European Commission fails to provide a masterplan for a recovery of the struggling labour markets, although it provides convincing and less convincing proposals for tackling unemployment in EU member states. There is a suspicion that the package mainly serves as a first step towards transferring employment policy responsibilities from the national to the EU level. But the EU labour market policy lacks appropriate instruments and competences. Finally, it is questionable whether the package fits in an economic growth plan.     

State Aid Policy, Territoriality and Federalism: EU Scrutiny and Control of Regional Aid and the Supranationalisation of Subnational Autonomy in Federal Member States

Whilst its impact on national industrial policy has attracted considerable attention in the scholarly literature, the implications of EU state aid policy on regional development policy and its effects on territorial relations inside EU member states have been largely neglected. Drawing on the experience of Bavaria, Flanders and Upper Austria, this article shows how EU action has imposed increasingly wide reaching and detailed constraints on subnational authorities, undermining and eroding their capacity to define and implement regional policy. It thereby also challenges the widely held presumption in the EU literature, as for example by proponents of multi-level governance, that European integration works invariably to empower and strengthen regions in Europe. To the contrary, the case studies show that the autonomy of subnational states in EU member countries with federal systems has been eroded as they have been forced to abandon traditional policies and practices. More generally, the article invites reconsideration of the relationship between European integration and subnational authorities.     

Assessing the Enlargement and Deepening of the European Union

This paper estimates a theoretically‐motivated gravity model to examine the effect of the European Union (EU) on trade and whether the order of entry has affected the trade performance of member countries. Additionally, we analyse the impact of the different phases of EU integration on trade. The results show that both original countries and successive enlargements boost intra‐bloc trade. Moreover, the results suggest that the deepening in the integration process has led to more trade creation among members. Finally, only the latter phase of the European integration process (the single currency) has increased trade with non‐members.     

The Pure Effects of European Integration on Intra‐EU Core and Periphery Trade

This paper analyses the effects of EU integration on intra‐EU trade volumes with a special focus on the evolution of trade within and between the core and the periphery countries. In the early phases of EU integration, there have been sizable trade creation and diversion effects with respect to EFTA countries. Both the creation and the diversion effects of EU membership have declined as the EU and EFTA have integrated. In all phases of EU integration, both core–periphery and intraperiphery growth of trade have experienced stronger positive effects than intracore trade. Hence, the EU enlargements did not cause any kind of intra‐EU ‘peripherality’.     

欧盟商品市场一体化的影响因素研究:基于边界效应的视角

本文选用2000-2005年欧盟成员国之间以及欧盟成员国与外部主要贸易伙伴国之间的双边出口贸易额等数据,使用面板数据方法,基于边界效应的视角,分别探讨了欧盟25国和欧盟15国的商品市场一体化影响因素。结果表明:欧盟这样的区域贸易协定对其成员国具有正面影响。地理临近性和文化联系鼓励紧密的贸易伙伴,距离、税率和人口对双边贸易存在负面影响,这与以往的研究结果相同。非关税壁垒成为重要边界可部分解释欧盟25国的内部边界效应高于欧盟15国的研究结果。     

Services Provision and Temporary Mobility: Freedoms and Regulation in the EU

International posting of workers and mobility of self‐employed service suppliers lie between outright migration and trade in goods: their regulation, for both distributional and market‐correcting purposes, is not as difficult to harmonise as that of labour markets, but personal mobility is more visible and socially intrusive than product market interactions. This paper analyses economic and legal tensions between national regulatory frameworks and international competition in these areas, in both the intra‐EU and global contexts, highlighting how interactions between the external and internal roles of the European Commission may foster efficient integration of markets and policies in this and other fields.     

Lessons Learnt from the Nordics: How to Fight Long-term Unemployment

This study examines policies that can successfully address long-term unemployment. It focuses on Denmark and Sweden, where, despite sizeable job losses during the crisis, labour market indicators are at present better than in any other EU country. By looking at the interaction between labour market flexibility (especially in hiring and firing regulations) and passive and active policies, we argue that well-designed active policies matter more than labour market flexibility for employment.     

Youth unemployment

Youth unemployment has been on the rise since the beginning of the crisis in 2008. Even more troublesome is the dramatic rise in the number of youth not in employment, education or training, which has led to widespread concerns about the impact on social cohesion and fears of a “lost generation”. Given the extreme differences in youth unemployment levels among member states, it is clear that no single labour market policy will be appropriate throughout the EU. There may, however, be opportunities for mutual learning on how to combat youth unemployment. This Forum explores youth unemployment in the EU via case studies of England, Belgium, Spain, Poland and Ireland. It also examines Germany’s dual vocational training system as one potential solution.     

Does Regulation in Credit,Labour and Business Matter for Bank Performance in the EU-10 Economies?

Cost efficiency scores for banks in ten new EU member countries of Central and Eastern Europe are estimated using a parametric approach (data envelopment analysis) for the period prior to and immediately following their accession (2000–2010). These are then used in both fixed effects and dynamic panels to estimate the impact of regulation on bank specific efficiency in the transition economies of the EU. Using the Fraser Index of Economic Freedom (Gwartney, Hall, and Lawson 2012) we find that, among all the indices of economic freedom, the composite regulation index that includes regulation in credit, labour and business has more importance for the banking sector as results suggest a positive and statistically significant impact on bank efficiency. By decomposing the regulation index into its three components (credit, business and labour regulation) we find that strict labour regulation is associated with lower bank cost efficiency while certain aspects of credit regulation such as foreign ownership and competition as well as private ownership are significantly associated with improved efficiency. The dynamic panel vector autoregression (VAR) results using impulse response functions and variance decomposition further support the validity of these results. These findings are valuable for both academics and policy makers in their attempts to understand the drivers of bank efficiency.     

Brexit und Ausländerbeschäftigung in Großbritannien: vom Musterland zum Bollwerk?

In the course of the EU’s Eastern enlargement, the United Kingdom was one of the few EU 15 countries which took advantage of the opportunities provided by the freedom of movement for workers from the beginning. Since then, the United Kingdom is prospering and still relies heavily on migrant workers. As the empirical analysis shows, labour migration from the accession countries was not a determining factor in the outcome of the Brexit vote. It was rather the less educated voters who perceive a threat to their social status and their national identity as the EU’s grows. As a result, a policy discussion on varying EU policies is advisable.     

Measuring financial market integration in the European Union: EU15 vs. New Member States

This paper quantifies financial market integration in the European Union, using a large array of credit and bond market indicators, stock market indicators, as well as indicators based on household and firm decisions. It focuses on comparing the evolution of the European Union before the Eastern enlargement (EU15) with that of the 12 New Member States (NMS) that joined after 2000. It documents improvements in the integration of the credit and bond markets as well as stock markets for both groups within the EU27, the heightened heterogeneity brought about by the NMS, but also a reversal of the integration process over the recent years (corresponding to the financial crisis), divergence disrupting both the EU15 core and the NMS. For all the decades of achievements within both the EU15 and NMS groups in terms of credit and stock market integration, the ultimate goals of financial market integration, perfect capital mobility and full international risk sharing remain out of reach.