Authors Iain Begg | Gabriel GlÃ¶ckler | Anke Hassel ... - The Europaeum

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liberalisation. The City of London strengthened its dominance as Europe’s major financial centre, apparently unaffected by the UK decision not to the join the Eurozone, though benefiting greatly from the increased momentum of European economic integration. Strong catch up growth, meanwhile, took off in the new member states, particularly the Baltics, Slovakia and Poland, suggesting that the central and eastern enlargement would lead to rapid convergence as it had in the case of the Cohesion Four. The December 2005 European Council agreement on the EU Financial Perspective for 2007-13 significantly increased EU Budget transfers to the new member states to support public investment in that catch-up. Free movement of labour within the enlarged EU facilitated above trend growth in member states such as Ireland, Spain and the UK, strongly suggesting that if all restrictions on free movement were to be lifted when the current 7 year transition period comes to an end in 2011, there would be overall benefit to the Union. As for social cohesion, enlargement profoundly altered the character of the EU without much serious analysis of the economic and social implications thereof. It greatly increased ethnic and religious diversity as well as geographical disparities between EU regions. Average income per head ranged from a high of 290% of the EU average in London to a low of only 27% in north east Romania. Within the EU15, the wage share in national income declined in many member states and measures of inequality and child poverty grew. But Europe saw nothing like the increase in inequality that occurred in the United States. Rather increases in inequality in Europe appeared member state specific and episodic rather than part of a general trend. 2 Worryingly, though, within the Eurozone macroeconomic structural divergences grew. Whereas in the period up to the establishment of the Euro, the convergence criteria acted as a discipline on fiscal policy, once the euro was in being, these disciplines were relaxed and countries like Greece and Portugal began to accumulate unsustainable deficits, while Spain enjoyed an unsustainable housing boom as a result of the euro sharply loosening the domestic monetary conditions. Despite this record of on the whole improved economic performance, with the single (though admittedly large) exception of energy policy and climate change, the momentum for policy integration slowed the entire economic and social field. Only modest progress was made in strengthening Eurozone governance. The rules of the Stability Pact underwent pragmatic revision and were made more flexible and intelligent, but it remained only 14 After the crisis: A new socio-economic settlement for the EU
the smaller weaker member states who really felt they had to take notice. Also, the Eurogroup elected a permanent President in the person of Luxembourg’s Jean Claude Juncker but still lacked effective single external representation. It was striking how in the EU’s intra-institutional debates on the Constitutional and Lisbon Treaties, very little attention was paid to economic questions as opposed to improving the EU’s effectiveness as a “global actor”. Internally, debate focused on the justice and home affairs agenda, not economics. Governance and political will have arguably failed to keep pace with economic integration. The Lisbon process was in part conceived as an alternative to the classical focus of integration. Yet though it was re-launched with a flourish at the start of the Barroso Commission in 2004, it failed to engage political attention or deliver high-profile results. Lisbon’s bolder ambitions were clearly beyond reach, even in 2004: the 2010 deadline had always been overambitious, especially given the EU10 enlargement. One valid criticism of Lisbon was that the initial goals were inadequately specified or prioritised. The Barroso Commission attempted to narrow the focus to “growth and jobs” as recommended by the Kok report. However, pressures within the Council and Parliament soon widened them again. More seriously, the German refusal to contemplate the “naming and shaming” of member states failing to reach their targets meant that delivery depended on an opaque partnership between the EU and its member states that lacked real political purchase. In terms of further market liberalisation, services have the most economic potential as they constitute some 60% or more of the EU economy. In the latter days of the Prodi Commission, Frits Bolkestein, the Dutch liberal Commissioner responsible for the Internal Market, convinced his colleagues that the way to liberalise “services” was through an omnibus measure based on codifying in EU law the founding freedoms of the Rome Treaty. This broad based approach liberalising a vast range of economic activity from sensitive “public services” such as health and social care, to high value added professional services, ran into immediate political difficulties. The Services Directive that eventually emerged was substantially amended – strict economic liberals would say watered down – by the European Parliament. This demonstrated the limits of political will to drive Single Market purism beyond goods. Beyond that, there was sparse legislative achievement in harmonising internal rules and standards, not to mention questions of taxation, with the important exceptions of the passage of the REACH Directive and much Chapter 1 – Roger Liddle 15
Page 1 and 2: Authors Iain Begg | Gabriel Glöckl
Page 4 and 5: Published in 2009 by Policy Network
Page 6 and 7: 4 After the crisis: A new socio-eco
Page 8 and 9: 6 After the crisis: A new socio-eco
Page 10 and 11: Simona Milio is associate director
Page 12 and 13: Chapter 10 Simona Milio ...........
Page 14 and 15: Before the crash: the EU as a parti
Page 18 and 19: of the Financial Services Action Pl
Page 20 and 21: confidence and world trade, to whic
Page 22 and 23: following the ECJ’s controversial
Page 24 and 25: signals are in place to promote a n
Page 26 and 27: need to be constructed to create ac
Page 28 and 29: or indeed re-impose, what they rega
Page 30 and 31: Markets with rules The overall conc
Page 32 and 33: 30 After the crisis: A new socio-ec
Page 34 and 35: Target financial stability The EMU
Page 36 and 37: Belgium, the Netherlands and Luxemb
Page 38 and 39: mortgage banks and the insurance se
Page 40 and 41: financial market rules. The ESFS au
Page 42 and 43: prudential regulation - though only
Page 44 and 45: initiatives vis-à-vis ratings agen
Page 48 and 49: Even if membership in a monetary un
Page 50 and 51: emained relatively contained to spe
Page 52 and 53: The second channel of functional sp
Page 54 and 55: But even so, the depth and intensit
Page 56 and 57: governance in the EU and the euro a
Page 58 and 59: in the EU show, authorities at the
Page 60 and 61: factors will remain prevalent and b
Page 62 and 63: centralised decision-maker. Similar
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(GNI), the interests of the member
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terms only very slowly and as a per
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policy proposal asks itself what th
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ensure that a ceiling is put on the
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Reform of EU expenditure Spending 4
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The medium-term financial framework
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unanimity. The need to obtain the c
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therefore, was weakening the Europe
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for the signing of the strict and d
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Since then, member states have name
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in the world monetary system. It al
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a Treaty that not only ignores trad
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88 After the crisis: A new socio-ec
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Firstly, they should include policy
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emanate from demographic trends. Ho
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Furthermore, the Lisbon agenda may
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Strengthening, if not really crafti
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incentives in the welfare schemes a
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security, yet at a lower cost than
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102 After the crisis: A new socio-e
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asis only in the 1990s, and over th
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in an increasingly global age the
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So what kind of social role for the
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effective common policies in areas
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help by ensuring a thorough audit a
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irrespectively of benefit and costs
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to the European Innovation Scoreboa
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flexible labour regulation than cou
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to cope with change is germane to a
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average job tenure figures in the E
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(74), and road vehicles (78). On th
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Towards a less dogmatic approach Wh
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will be reinforced rather than cont
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Where do we come from? The EU agend
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However, so far the flexicurity app
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existing practices of wage subsidie
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minimum wage tend to have higher pr
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commitment for employment”, 18 un
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provisions for minority protection,
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eflected in the objective of the Li
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instruments have been criticised fo
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However, the countries’ planning
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ich developed country pre-occupatio
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emerging markets (indeed the rules
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Energy and carbon use depend on fou
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concentrate on the size of the cake
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esurgence of long-term unemployment
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22 Financial Services Authority (FS
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7 This idea is not new. The 1970 We
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33 Arpaia, Alfonso, Declan Costello
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9 See Garabiol-Furet, M.-D. (2006)
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Chapter 11 1 Victor, D.G. (2006)
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Authors Iain Begg | Gabriel GlÃ¶ckler | Anke Hassel ... - The Europaeum

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