Table Of ContentCurrent Economic Issues
in EU Integration
Mark Baimbridge, Jeffrey Harrop
and George Philippidis
Current Economic Issues in EU Integration
Also by Mark Baimbridge
FISCAL FEDERALISM AND EUROPEAN ECONOMIC INTEGRATION (co-editor)
ECONOMIC AND MONETARY UNION IN EUROPE: Theory, Evidence and
Practice (co-editor)
THE IMPACT OF THE EURO: Debating Britain’s Future (co-editor)
Also by Jeffrey Harrop
THE POLITICAL ECONOMY OF INTEGRATION IN THE EUROPEAN UNION
STRUCTURAL FUNDING AND EMPLOYMENT IN THE EUROPEAN UNION
THE POLITICAL ECONOMY OF INTEGRATION IN THE EUROPEAN COMMUNITY
Current Economic Issues in
EU Integration
Mark Baimbridge
Bradford Centre for International Development
University of Bradford, UK
Jeffrey Harrop
Bradford Centre for International Development
University of Bradford, UK
and
George Philippidis
Bradford Centre for International Development
University of Bradford, UK
and
Unidad de Economia Agroalimentaria y de los Recursos Naturales
Centro de Investigacion y Tecnologia Agroalimentaria de Aragon (CITA)
Zaragoza, Spain
© Mark Baimbridge,Jeffrey Harrop and George Philippidis 2004
Softcover reprint of the hardcover 1st edition 2004 978-1-4039-1796-6
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First published 2004 by
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Contents
List of Tables vi
List of Figures and Boxes vii
Acknowledgements viii
Preface ix
1 Current Issues in EU Integration 1
Part I Agriculture, Competition and Industry 15
2 Common Agricultural Policy: Evolution and Economic Costs 17
3 Competition Policy in the Single European Market 35
4 Industrial Policy: The Changing Agenda 57
Part II Economic and Monetary Union 77
5 Central Bank Independence and Monetary Policy 79
6 EMU Convergence and Fiscal Policy 99
Part III Regional Convergence and Enlargement 119
7 The New Role and Resurgence of Regions in the EU 121
8 EU Enlargement: EMU and Agriculture 142
Part IV Alternative Futures for the UK 167
9 Alternatives to Further Integration 169
10 Is NAFTA Membership Really a ‘Barmy’ Idea? 183
Notes 200
References 209
Index 225
v
List of Tables
2.1 Transfers in a two-country community 26
2.2 Estimates throughout the 1980s of the
deadweight costs of the CAP 29
2.3 Recent estimates of the deadweight costs of CAP
reform 31
4.1 R&D spending and patent grants 66
5.1 Summary of political independence of EU central
banks and ECB 82
5.2 Political independence of central banks 85
5.3 Economic independence of central banks 86
5.4 Comparison of central bank independence of
EU member states and the ECB 86
5.5 Correlation between central bank independence
and macroeconomic variables for EU member states 94
6.1 The number of MCC achieved by EU member
states (1992–2002) 104
8.1 Summary of EU accessions 144
8.2 EMU convergence criteria and CEECs (2002) 150
8.3 Annual pre-accessional budget allocations for the CEECs 157
8.4 Financial framework for enlargement 2004–06 (€million) 162
10.1 UK trade with North America and the EU(14),
1994–2001 (%) 186
10.2 Total inward and outward FDI for the UK (% of total
investment) 187
10.3 The structure of UK trade and protection (% of
market prices) 191
10.4 Changes in UK exports and imports under scenario (a) 192
10.5 Changes in UK exports and imports under scenario
(b) USITC estimates 192
10.6 Cumulative changes in UK exports and imports in
2008 under scenario (a) compared with the baseline 194
10.7 Cumulative changes in UK exports and imports in
2008 under scenario (b) compared with the baseline 194
10.8 Changes in GDP by region (% real growth) 195
10.9 Changes in US–UK FDI relationships under
NAFTA accession 196
vi
List of Figures and Boxes
2.1 CAP expenditure 20
2.2 A simple partial equilibrium (PE) model of CAP transfers 25
Boxes
8.1 The relative role of agriculture in the EU(15) and
the candidate countries 153
8.2 Agricultural trade statistics between the EU(15)
and the CEECs in 2001 (€ million) 155
8.3 Development indicators for the CEECs 159
vii
Acknowledgements
There are many people to thank for their input into making of this book
possible. Most obviously, we must thank our Commissioning Editor at
Palgrave/Macmillan, Amanda Watkins, for her immediate support for
this project and patience over the duration of its writing. Second, we
would like to thank our colleagues at the University of Bradford for their
comradeship and general support for our research on European eco-
nomic integration. Finally, we owe a deep sense of gratitude to our fam-
ilies and partners for their forbearance during the preparation of this
book. It is to them that this book is dedicated: MB: Mary, Ken and Beibei;
JH: Kandy and Graeme; GP: my late mother, Margaret.
viii
Preface
The number of books available to analyse contemporary European
economic integration have multiplied over recent years to the point where
the ‘wood’ and ‘trees’ frequently become inseparable. However, despite
this extensive choice of texts, a number of weaknesses remain. First,
many of the leading texts have sought to maximise their marketability
by attempting to cover the entire spectrum of EU related topics, but ulti-
mately only do so at a superficial level. Whilst certain areas may lend
themselves to a brief examination presented in a single chapter, many
others are too complex to summarise in such a manner and require a
more sophisticated approach if all the principal issues are to be analysed.
In this book we have sought to address this dilemma through examin-
ing selected topics pertinent to the current and future development of
the European Union (EU). It focuses upon a variety of microeconomic
and macroeconomic issues, together with considering ‘blue sky’ scenarios
of the future direction of Britain’s relationship with the EU. Our principal
aim is to introduce readers to a variety of topics covering a broad range
of issues relating to the process of European integration – agriculture,
competition, industry, enlargement, regional and national convergence,
central banking – and not merely focusing upon a single topic or seek-
ing to be all-encompassing.
The second problem for those seeking a greater understanding of
European economic integration is that many books are ‘positioned’ and
adopt a far from neutral stance when explaining the relevant arguments.
It is, of course, natural that academics who have self-selected European
integration as their speciality, are likely to possess strong opinions
regarding this process. However, too frequently value judgements are
permitted to influence the treatment given to the pertinent issues and
arguments. We hope that this book succeeds in portraying a selection of
the principal themes of the EU’s ongoing development with a balanced
series of view across the spectrum.
A third problem is that the fast-moving events of European integra-
tion can result in books becoming outdated soon after, or even before,
their publication! Readers should always be aware of the time lag it takes
for the latest ideas to be included in texts following their initial publi-
cation as working papers, conference contributions and journal articles.
This process can often take several years, which when added to the time
ix
