+

REGIONAL INTEGRATION- THE EUROPEAN UNION

BY LARINA ALEXANDRA AND MATHILDE FAGEGLOBALIZATION AND REGIONAL INTEGRATION

+Table of Content

1. Definition – what is Regionalism?

2. Introduction to the European Union

3. Political integration - Member states vs. supranational

institutions.

4. Economic integration – The Single Market and the Eurozone.

5. Neighbourhood policies and regional integration.

6. Future perspectives of the European Union.

+What is Regionalism?

2014 – 377 RTAs in force (WTO)

Regional Trade Agreements in Goods & Services Participation (WTO)

+What is Regionalism?

A growth of social and/or economic integration within a region, interdependence

Greater common interests and identity + self-awareness as a region

Regional Agreements may cover: social, political, economic, and security matters

Most significant impact is caused by “market-led integration”

+Regional Cooperation

Cooperation with no changes in int’l status

Forms of Regional Cooperation:

Functional co-work in specific areas (transport, energy, health)

Economic without polices harmonization and common obligations on int’l arena

Political mutual support in implementing values & practices

In foreign and security policy consultations, common positions on int’l arena, joint actions.

+Regional Integration

States go further, remove obstacles between their countries, create regional space & harmonize rules

The stages of Economic integration:

FTA No internal tariffs

CU FTA + common external tariffs

Must act with single international voice, which lead to super-state governance

Common market CU + free movement of capital and labour, g&s, common product regulations

Economic & Monetary Union SM + common currency & monetary policy

Full Economic Union All above + common economic policies and institutions

Full Political Union FEU+ political governance& policy-making on supranational level

+Political IntegrationSupranationalism vs Intergovernmentalism

National states transfer certain rights or parts of their sovereignty to a supra-national authority constituted as an independent international actor by international treaty

Role of supranational actors Role of norms Spill over dynamics (neofunctionalist

argument) which cannot be controlled by govt

Functional spill over: interdepedence of policy areas

Political spill over: İnterest groups, bureaucrats orient

their activities towards the European level

National states cooperate on the (inter-) governmental level without formally questioning parts of their sovereignty or limiting the execution of their sovereign rights

Governments control integration process

Supranationalism Intergovernmentalism

+Political Integration

The Commission proposes

The Parliament advises….(on a restricted range of matters)

The Council decides….(almost invariably by unanimity)

The Court adjudicates

EU Institutions

+Political IntegrationThe Role EU Institutions in terms of supranationalism and intergovernmantalism

+Political IntegrationMember states vs. Supranational Institutions

+Political Integration

Common Defend and Security Policy

Fiscal Policy

Other critical policies

Policy areas critical for member states and supranational institutions conflict

+Introduction to the European Union The European Union (EU) is an economic and political union of 27 member states.

The EU operates by supranational institutions and intergovernmental decisions

Important institutions include the European Commission, the European Parliament, the Council of Ministers, the European Council, the Court of Justice, and the European Central Bank.

The EU origins from the European Coal and Steel Community (ECSC) and the European Economic Community (EEC) after World War II.

The community have grown in size and in power by new countries and policy areas.

EU policies aim to ensure the free movement of people, goods, services, and capital, enact legislation in justice and home affairs, and maintain common policies on trade, agriculture, fisheries.

Through the Common Foreign and Security Policy the EU has developed a role in external relations and defence. Permanent diplomatic missions have been established around the world, and the EU is represented at the UB, the WTO, the G8 and G-20.

With a combined population of over 500 million inhabitants, or 7.3% of the world population, the EU, in 2011, generated the largest nominal world gross domestic product (GDP) of 17.6 trillion US dollars, representing 20% of the global GDP when measured in terms of purchasing power parity.

+The history of the European Union

1945-’59: The beginning of corporation

The European Union is set up with the aim of ending the frequent and bloody wars between neighbours, which culminated in the Second World War.

In 1950, the European Coal and Steel Community begins to unite European countries economically and politically in order to secure lasting peace.

The six founders are Belgium, France, Germany, Italy, Luxembourg and the Netherlands.

In 1957, the Treaty of Rome creates the European Economic Community (EEC), or ‘Common Market’

1960-’69: A period of economic growth In 1961, the communist authorities in East

Germany build a wall across Berlin to prevent t their citizens from escaping to a life in the West.

In 1962, The EU starts its common agricultural policy giving the countries joint control over food production. Farmers are paid the same price for their produce. The EU grows enough food for its needs and farmers earn well. The unwanted side effect is overproduction.

In 1963, The EU signs its first big international agreement — a deal to help 18 former colonies in Africa. By 2005, it has a special partnership with 78 countries in Africa, the Caribbean and Pacific regions.

In 1968, the countries remove custom duties on goods imported from each other, allowing free cross-border trade They also apply the same duties on their imports from outside countries. The world’s biggest trading group is born. 

Trade among the six and between the EU and the rest of the world grows rapidly.

+The history of the European Union

1970-’79: A growing Community – Enlargement

The EU’s first plan for a single currency dates from 1970. To maintain monetary stability, EU members decide to allow their currencies to fluctuate against each other only within narrow limits. This exchange rate mechanism is a first step towards the introduction of the euro

The EU regional policy starts to transfer huge sums to create jobs and infrastructure in poorer areas. The European Parliament increases its influence in EU affairs and in 1979 all citizens can, for the first time, elect their members directly.

Denmark, Ireland and the United Kingdom join the European Union on 1 January 1973, raising the number of member states to nine.

EU citizens directly elect the members of the European Parliament for the first time. Previously they were delegated by national parliaments. The influence of the Parliament is constantly increasing.

1980 – ’89: A changing Europe

In 1981, Greece joins the EU.  

In 1986, Spain and Portugal enter the EU, bringing membership up to 12.

Although customs duties disappeared in 1968, trade is not flowing freely across EU borders. The main obstacles are differences in national regulations. The Single European Act of 1986 is launched to sort this out. The Act also gives the European Parliament more say.

The collapse of communism across central and eastern Europe is symbolised by the fall of the Berlin Wall in 1989. Faced by a mass exodus of its citizens to West, the East German government throws open the gates. Germany is united after more than 40 years, and its eastern part joins the EU

+The history of the European Union

1990-’99: A Europe without frontiers

In 1992, the Treaty on European Union is signed in Maastricht. It is a major EU milestone, setting clear rules for the future single currency as well as for foreign and security policy and closer cooperation in justice and home affairs. Under the treaty, the name ‘European Union’ officially replaces ‘European Community’.

In 1993, the single market and its four freedoms are established: the free movement of goods, services, people and money is now reality. More than 200 laws have been agreed since 1986 covering tax policy, business regulations, professional qualifications and other barriers to open frontiers. The free movement of some services is delayed.

In 1995, Austria, Finland and Sweden join the EU. The 15 members now cover almost the whole of western Europe.

Same year, the the Schengen Agreement takes effect in seven countries — Belgium, Germany, Spain, France, Luxembourg, the Netherlands and Portugal. Travellers of any nationality can travel between all these countries without any passport control at the frontiers.

In 1997, the Treaty of Amsterdam is signed. It builds on the achievements of the treaty from Maastricht, laying down plans to reform EU institutions, to give Europe a stronger voice in the world, and to concentrate resources on employment and the rights of citizens.

 In 1997, EU leaders agree to start the process of membership negotiations with 10 countries of central and eastern Europe: Bulgaria, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia and Slovenia. The Mediterranean islands of Cyprus and Malta are also included.

In 1997, the euro is introduced in 11 countries for commercial and financial transactions only. The euro countries are Belgium, Germany, Greece, Spain, France, Ireland, Italy, Luxembourg, the Netherlands, Austria, Portugal and Finland. Denmark, Sweden and the United Kingdom decide to stay out for the time being.

+The history of the European Union

2000 to today – further expansion and euro-crisis

In 2002, Euro notes and coins arrive. Using Finnish (or any other) euro coin to buy a Madrid metro ticket is something we take for granted.

In 2003, the EU takes on peace-keeping operations in the Balkans. EU-led forces replace NATO units.

In 2004, eight countries of central and eastern Europe — the Czech Republic, Estonia, Latvia, Lithuania, Hungary, Poland, Slovenia and Slovakia — join the EU, fending the division of Europe decided by the Great Powers 60 years earlier at Yalta. Cyprus and Malta also become members.

In 2004, The 25 EU countries sign a Treaty establishing a European Constitution. It is designed to streamline democratic decision-making and management in an EU of 25 and more countries. It also creates the post of a European Foreign Minister. It has to be ratified by all 25 countries before it can come into force. When citizens in both France and the Netherlands voted 'No' to the Constitution in referendums in 2005, EU leaders declared a "period of reflection".

In 2007, Bulgaria and Romania, now join the EU, brining the number of member states to 27 countries. Croatia, the Former Yugoslav Republic of Macedonia and Turkey are candidates for future membership.

In 2007, The 27 EU countries sign the Treaty of Lisbon, which amends the previous Treaties. It is designed to make the EU more democratic, efficient and transparent, and thereby able to tackle global challenges such as climate change, security and sustainable development. The Treaty of Lisbon is ratified by all EU countries before entering into force on 1 December 2009.

In 2008, a major financial crisis hits the world economy. Several European banks also experience difficulties. The crisis leads to closer economic cooperation between EU countries.

+Enlargement

+Economic integration

The decision to form an Economic and Monetary Union was taken by the European Council in 1991, and was later enshrined in the Treaty on the European Union (the Maastricht Treaty) in 1992. The Economic and Monetary Union takes the EU one step further in its process of economic integration.

Economic integration brings the benefits of greater size, internal efficiency and robustness to the EU economy as a whole and to the economies of the individual Member States. This, in turn, offers opportunities for economic stability, higher growth and more employment. In practical terms, the EMU means:

Coordination of economic policy-making between member states.

Coordination of fiscal policy through limits on government debt and deficit

An independent monetary policy run by the European Central Bank (ECB)

The single currency and the Euro-area

Whilst all EU member states take part in the economic union, some countries have taken integration further and adopted the euro = the Euro-zone.

+Degrees of economic integration

+Theoretical benefits of economic integration

Direct cost reductions – increase in intra-EU trade.

Abolition of border and national regulation creates harmonisation of production and quality standards, which enables products to be marketed more easily and cheaply within the EU. This reduces the price of imports for companies and consumers. The Single Market Act ensures that a product which is already approved in one country can also be sold in the other member states.

Economies of scale – a boost of competiveness and EU as a more appealing region for FDI

Access to a bigger market increases the sales potential of companies. Companies operating across borders can optimise their production processes by establishing international manufacturing networks and using comparative cost advantages.

Better competition – price convergence and product diversity.

Simplified market entry for foreign firms increases competition. Inefficient companies are squeezed out by more efficient competitors-

Cross-border mobility - higher welfare for citizens and companies across Europe

Freedom of movement guarantees all EU citizens the ability to settle in another country. They must not be subjected to discrimination there and they have to be able to participate in the labour market on the same terms as domestic workers. This enhances earnings prospects , and makes it easier and less costly for companies to attract skilled personnel

+First step of economic integration - The Single Market

What is the Single Market?

The Single Market is the core of Europe's economic and integration architecture.

The idea behind the Single Market is to treat the EU as one territory where people, money, goods and services interact freely to stimulate competition and trade, and improved efficiency. The idea is that increased economic integration will raise quality and cut prices. It is the basic recipe for prosperity.

Early days of the Single Market

In 1986 the European Union adopted the Single European Act, which allowed for over 280 pieces of legislation to be passed to pave the way for one common law for the EU based on the principle of mutual recognition for laws and regulations of member states.

On 1 January 1993 internal border controls between EU countries were abolished and the European Single Market was launched. The 12 original member states were Belgium, Denmark, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal, Spain and the United Kingdom.

Expansion of the Single Market

Initially open to 345 million people and 12 member states, the Single Market can now be accessed by over 500 million people across 27 member states. Restrictions on trade and free competition have gradually been eliminated. While individual member states are still responsible for taxation and social welfare, the Single Market is supported by a large number of related pieces of legislation put in place by the EU over the years.

+The Four Freedoms of the Single Market

The cornerstones of the Single European Market are 4 freedoms:

Free movement of goods: No restrictions on the trade in goods, which also implies a fundamental

ban on state subsidies, discriminatory taxes on imported goods and preferential tax treatment for exports.

Free movement of people: Freedom of movement of workers and the freedom of establishment. This

gives all EU citizens the right to work in another member state. They must not encounter discrimination due to their nationality. Moreover, there is to be mutual recognition of educational and vocational qualifications.

Free movement of services: Providers of services may conduct their business in all member states

without having to be settled there. Consumers can select the best offer from the whole of Europe.

Free movement of capital and payments: Capital controls and restrictions on the amount of currency that may be

imported or exported are abolished and utilising the offers of foreign financial service providers is made easier.

+Empirical effects of the economic integration

What do we know about the consequences of the Single Market for growth, direct investment, trade, competition and employment in Europe over the last 20 years?

Or on other words – have the economic integration led to welfare gains?

A number of developments, for example the sharp rise in exports (inside and outside the EU) or the foreign direct investment, are ultimately driven by global developments.

Given the complexity of the assessment the empirical evidence on the impact of the Single Market is relatively sparse

+Heterogeneous effects of the economic integrationIntra-EU trade intensity:

The greater the volume of external trade with the other EU member states the more effect. Exports into the EU make up over half of total exports in nearly every country, and in some countries the share even exceeds 70%.

Size of the country:

External trade intensity (exports + imports as a percentage of GDP) tends to be higher for small countries, which is why they probably benefit more from trade liberalisation. Moreover the market is large relative to the domestic market. On the other hand, companies that operated in a larger national market could better exploit economies of scale

Economic structure:

Countries with a relative specialisation in industries with rising economies of scale should derive more benefit from the Single Market. E.g. Germany.

Degree of liberalisation:

In previously highly protectionist countries the benefits for consumers are greater than in those countries that a had a high degree of liberalisation.

+Moderate effects on GDP

Most reports agree that the Single Market has had a positive impact on growth, which however has been less pronounced than anticipated (in the 1988 Cecchini report)

Some comprehensive reports based on the period 1958 to 2005 estimates that European integration has boosted GDP in the EU by 2-3%.

This is more pessimistic than another study that estimate about 5% for the whole of the EU.

It also depends on whether or not the enlargement to the East in 2004 is taken into account. If left out the effect amounted to 2%. The number of jobs in the EU is said to have risen by around 1.35%. Most of the impact is static in nature, however, while the dynamic effects due to increased investment activity and productivity gains have been somewhat disappointing to date.

+Large impact on trade volume

• The Single Market has led to an increase in international trade within the EU and with the rest of the world.

• Intra-EU trade intensity increased between 1992 and 2012 from around 12% to 22% of GDP.

• Exports to non-EU countries grew faster than intra-EU exports, which reflects both the global trend towards increasing trade and the high competitiveness of the export-oriented firms in the EU. The comparison with the US and Japan underlines the positive development by the EU- 15.

• Exports and imports are now some 8% higher than they would have been if there had been no European integration since 1960. For the Netherlands the effect was nearly twice as strong.

• The biggest increase occurred between 1981-1991, with the effect then receding slightly.

• With services, the SM effect is smaller as services that are actually tradable are fewer

• The European Commission estimated that in 2007 around 25 million jobs (or 10.3% of all jobs in the EU) were directly dependent on exports to non-EU countries.

+Slow labor mobility

The freedom to take up employment in any member state initially has not led to a major increase in mobility within the EU-15. By 2004 fewer than 2% of EU citizens were working in another member state.

This situation changed after the enlargement round of 2004. The huge differences in income between the new eastern European member states and the EU-15 created strong incentives for mobility. In the cases of Bulgaria and Romania, which joined in 2007, the gulf in incomes is even wider. Most of the older member states introduced the freedom of movement for new EU citizens only in stages, as there were fears of a huge spike in migration from eastern European countries.

This has not proved to be the case for the whole of the EU, but a pronounced unequal regional distribution is discernible. Some 70% of the migrants from the 2004 EU joiners went to Ireland and the UK, while 80% of Romanians and Bulgarians emigrated to Spain and Italy.

For the entire EU-28 the share of those who work in a different member state has roughly doubled since the early 1990s to about 3%

+Eurozone – the final step of economic integrationThe Eurozone is both an economic and a monetary collaboration between some of the member states.

The European Central Bank (ECB) is a political independent central bank solely responsible for the monetary policy.

The economic policy of the Eurozone is decided through soft coordination in the ‘Euro-group’. This is a informal group of the member countries in the Euro-zone, and the group works as a political counterweight to the ECB.

+Fault lines in the Eurozone

There are two main fault lines in the Eurozone-collaboration

Germany vs. France Germany and France have opposing views upon the

economic and monetary union. In this way, Germany’s and France’ position can be used to understand one of the major disputes in the France

‘A Institutional birth defect’ Institutional problems.

+The position of Germany – pricestability

Monetarism views intervention in the economic in general, and in the monetary especially, as destabilizing. Government intervention must therefore by avoided. Instead, states must lead a disciplined economic policy, which must underpin price stability.

Since the establishment of the monetary collaboration, Germany has been the strongest protagonist for ‘monetarism’, i.e. a monetary policy, where price stability is the objective. This is because price stability is view as the foundation of economic growth, as price stability is conducive for competitiveness and foreign investment.

In the initial fases of the Euro-collaboration, Germany stood in a strong negotiation position due to among other things its favourable economic situation. By many, this situation was a direct consequence of its monetary policy. In addition, Germany was less dependent on the establishment of a collaboration than France, which was in a worse economic situation.

Because of this, Germany succeeded in getting it interests through in the design of the Euro-collaboration, which among other things is reflected in the European Central Bank. ECB is to a high extent a copy Deutsche Bundesbank (its high degree of political autonomy)

The primary function of the ECB is to secure pricestability, and it is not allowed – only secondary – to implement monetary policies, which underpins the different member countries economic policies.

+The position of France - gouvernement économique

The one-sided focus on price stability is criticised by France, which is the main proponent of ’gouvernement économique’ or a more Keynesian fiscal policy. Such a approach focus on means to create economic growth. Since the establishment of the euro-collaboration, France has worked hard to give the union a larger role in economic governance with the main aim of increasing political accountability in the monetary union. In this respect, France is less in favour of a political independent central bank.

Due to France pressure, in 1997 the ’Eurogroup’ (an informal body of the finance ministers of the Eurozone countries) was established as a political counterweight to the ECB, and France is still a very strong proponent of economic governance and a more keynesian approach to the economic policy in the Union.

In the current economic environment, France is a proponent of a more solidary approach to the effects of the euro crises, and has among other things expressed a wish of more solidarity across the Eurozone, as well as to increase financial transactions from north to south

+ The debate between the German prioritisation of price stability

and a strict economic discipline versus a French preference of economic governance was again actualised during the crisis, as the two different economic paradigms lead to different views upon, how to deal with the crisis. Where Germany endorsed the troika’s (IMF, ECB, and the Commission) focus on austerity, France did instead support a more ‘loose’ approach to the restoration of the European economic. This approach would allow a larger budget deficiency with a view to stimulate the economy, and to invest in education and research.

Despite of their disagreements, Germany and France are often viewed (cf. Sadeh 2012) as the future of the Eurozone, and many argue that Eurozone is depend upon whether or not the two countries can agree upon a united approach.

The conflict between France and Germany is intertwined into a political cleavage in the European Union between the North European member countries and the South European member countries, where the first-mentioned emphasise austerity, and the latter wish a stronger focus on solidarity and growth.

+Fault line 2: Institutional defects

The Euro is often described a ‘faulty construction’ both in academia as well in the public debate. The fault consist according to many of that the Eurozone countries are way to different structurally, economically, and politically, when the monetary union was established. This has lead to a division between the Eurozone countries between strong and weak economies. The division is reflected in that many of the South European countries (e.g. Greece, Span, Portugal, Italian) have lost their competitiveness vis-à-vis the strong export position of Germany.

The South European countries are not likely to catch up with Germany, as many of the most frequently used economy tools used to balance against the German economy is not longer allowed because of the monetary union. For example, it is no longer allowed or even possible to devaluate the national currency to stimulate the national export or to cover a budget deficiency. Neither the interest rate can be adjusted, as they do not have access to the printing press.

Those who argue in favour of the ‘institutional birth defect’ have long argued that the Eurozone is not likely to last in the long term. The institutional birth defect is more severe as the EMU is only a monetary union. Many points to the fact that the Eurozone needs to pool more sovereignty and coordinate their economic policies.

+Optimum Currency Area Theory

An optimum currency area, also known as an optimal currency region, is a geographical region in which it would maximize economic efficiency to have the entire region share a single currency. There are several criteria which must be met for the merger of currencies or the creation of a new currency.

1. Labor mobility across the region. This includes physical ability to travel (visas, workers' rights, etc.), lack of cultural barriers to free movement (such as different languages) and institutional arrangements (such as the ability to have pensions transferred throughout the region)

2. Openness with capital movement and price and wage flexibility across the region. This is so that market forces of supply and demand automatically distribute money and goods to where they are needed.

3. A fiscal transfer mechanism to redistribute money to areas/sectors that have been adversely affected by the first two characteristics. This usually takes the form of taxation redistribution to less developed areas of a country/region. This policy is politically difficult to implement as the better-off regions rarely give up their revenue easily.

4. Participant countries have similar business cycles. When one country experiences a boom or recession, other countries in the union are likely to follow. This allows the shared central bank to promote growth in downturns and to contain inflation in booms. Should countries in a currency union have idiosyncratic business cycles, then optimal monetary policy may diverge and union participants may be made worse off under a joint central bank.

The theory is used to argue whether or not a certain region is ready to become a currency union, one of the final stages in economic integration. Part of the rationale behind the creation of the Eurozone is that the individual countries of Europe do not each form an optimal currency area, but that Europe as a whole does form an optimal currency area.

+Eurozone as an Optimum Currency Area?

Many argues that the Eurozone is not a OCA. There are different reasons for this, e.g.

1. The Eurozone has a no-bailout clause in the Stability and Growth Pact from 1997 meaning that fiscal transfers are not allowed. During the 2010 Eurozone crisis the no-bailout clause was de facto abandoned in April 2010.

2. The Eurozone countries are not exposed to the same exogenous shocks.

+Other effects of the economic integration

The Euro is a fundamental condition for a fruitful single market as the common currency lowers transaction cost in trade, price transparency, independence from the dollar, and a common reserve toward competing economies.

The Euro has secured price stability (low inflation). The Euro has secured an inflation on less than 2 procent in the first 10 years.

The Euro has made it easier to be a tourist

The Euro has created growth in Europe. Eurozone members trade with each other (intra-European trade is greater than int’l trade), and recent analyses suggest that the currency has increased trade by 5-15 % in the euro-zone compared to trade between non-euro countries.

The Single Market has increased GDP in the EU by some 2-3%. Exports and foreign direct investment in particular have received a major boost. The dismantling of trade barriers has created cost advantages, intensified competition in the Single Market and made companies more competitive in the global arena. The reduction of barriers to intra-EU trade has also made the countries in the EU more attractive for investment.

Positive effects

+Other effects of the economic integration

Overregulation, inefficient bureaucracy and deficient allocation of tasks between the administrative levels of the federal system impose direct costs on companies.

Standardised regulations do not necessarily represent an improvement if they are geared more towards the standards of the majority rather than those of the most efficient countries.

The centralisation of competences runs counter to the subsidiarity principle, according to which responsibilities are only meant to be transferred to a higher level if they can be executed more efficiently there.

The total administrative costs for companies are equivalent to about 3.5% of EU output.

In the less competitive countries the liberalisation of national markets has resulted in temporary adjustment costs. Firms that previously had a protected position in nationally demarcated markets suddenly had to contend with more efficient competitors from other countries.

Opinions differ about the efficacy of EU structural policy, and most empirical studies come to the conclusion that it has generated virtually no significant growth stimulus.

Negative effects

+Neighbourhood policies

+Diffusing Regional Integration

Diffusion is a process through which ideas are spread

EU’s objective – diffuse an idea of regional integration to third countries as a model of peace, wealth and social justice.

+Diffusing Regional Integration

Coercion (legal / physical enforcement to accept an idea)

EU has internal coercion (no external coercion):

Every Member-state is obliged to comply with EU law.

Ideas diffused by the European Court of Justice or European directives harmonizing national legislations

Diffusion Mechanisms

+Diffusing Regional Integration

Manipulation of utility calculations

Promoter of ideas provides rewards (financial / technical assistance), sanctions, empower domestic actors who push for the idea.

EU externalize its ideas of security, stability, prosperity & environmental protection trough conditionality & capacity-building.

Conditionality – manipulation of cost-benefit calculations through incentives

Capacity-building – additional resources to make choice in favor of EU ideas.

Diffusion Mechanisms

+Diffusing Regional Integration

FTAs

Criteria to access the RI progress. Conditions to launch FTA negotiation process:

Fully operational institutional framework

Creation of Customs Union

Reduction of non-tariff and other technical barriers to trade among regional members through recognition and harmonization of technical regulations

Manipulation of utility calculations Conditionality

+Diffusing Regional Integration

project on “Technical Assistance for strengthening and enforcement of the capacities of the Albanian Copyright Office”, Human Dynamics will provide services for 18 months to the Albanian Copyright Office

One of the goals:

ensuring proper transposition of EU laws into Albanian legislation and to upgrade legislation in accordance with European best practice on intellectual property and copyrights.

Manipulation of utility calculations Capacity-building

+Diffusing Regional IntegrationEffectiveness problem

+Diffusing Regional Integration

Malawi – which recently outlawed flatulence in public and ruled that gay people could face 14 years’ jail – will get £450million in aid money over five years. Malawi’s president Bingu Mutharika bought a jet shortly after receiving the latest tranche of EU cash.

Uganda is getting £407million over five years. President Yoweri Museni, 67, who fought an election with posters depicting him as Rambo, bought a Gulfstream G550 jet. He has also built a lavish £100million residence while most of his people live in poverty.

EU aid has always been bedevilled by corruption and waste but lessons have not been learnt. They continue to support questionable projects and corrupt regimes at a time when national governments are tightening their belts

‘Old colonial links and regional proximity, rather than fighting global poverty, continue to determine the destination of most EU aid.’

Effectiveness problem

+Diffusing Regional Integration

Socialization – adoption of “the right things”, social norms through habitualization and political dialog

Market Competition lead third countries to increase their quality standards, provide proper certification for goods and services to be competitive with/within EU market

Diffusion Mechanisms

+Diffusing Regional Integration

Persuasion – adoption of a model trough arguing and political dialog

"I call on the authorities of Belarus to release unconditionally all remaining political prisoners and to remove all restrictions on the enjoyment of their civil and political rights,"

"This would certainly contribute to possibilities for moving towards improved relations between the EU and Belarus.“ Catherine Ashton

Diffusion Mechanisms

+Diffusing Regional Integration

Emulation – indirect influence, may be based on competition, mimicking

EU is an institutional blue print (for the African Union, ASEAN)

Korea mimics Chemical Regulation in the European Union (EU): Registration, Evaluation, and Authorization of Chemicals

Diffusion Mechanisms

+Diffusing Regional IntegrationCopenhagen criteria as a mechanism of diffusion

+Discussion – The future of integration in Europe

Economic integration – the prospects of the Eurozone.

Political integration – further pooling of sovereignty.

The European model – the diffusion to other regions.

+References

http://www.dbresearch.com/PROD/DBR_INTERNET_EN-PROD/PROD0000000000322897/The+Single+European+Market+20+years+on%3A+Achievements,+unfulfilled+expectations+%26+further+potential.pdf