European Economic Integration

441 Pages·2013·17.904 MB·English

by  Frank McDonald, Stephen Dearden

With its clear and accessible style and its combination of theory and applications, European 4
Economic Integrationprovides a comprehensive introduction to EU economic theory and
th
policies. The book focuses principally on the economic dimension of the EU, but places this
firmly within the context of the surrounding political debates. Edition
Much has changed in the European Union since the publication of the 3rd edition with the
successful launch of the Euro and the accession of ten new member states. The 4th edition has
been comprehensively revised to reflect these changes, providing up-to-date-coverage of the
most important issues facing European economies in the 21st Century.
E E
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KEY FEATURES d o
• Comprehensive coverage of economic theory and b p
policy. Assuming only an introductory y e
knowledge of economics and with M a
• Boxes within the text summarise complicated
n
its comprehensive coverage of EU
institutional detail making the material more c

accessible. economic policies, European D E
Economic Integrationis ideally
• Non-mathematical explanation of economic theory. o c
suited to all students taking n o
• Detailed captions accompany the graphs, ensuring courses on the economics of the a n
students understand the economics discussed. EU as part of an economics, ld o
• Full list of references and guides to further business studies or inter-disciplinary m
reading at the end of each chapter. European studies degree. &
i
c
D
NEW TO THIS EDITION
e I
• Comprehensively revised and updated to reflect a n
recent changes in the EU. r t
d e
• Up-to-date assessments of the impact of the
e g
single market and European monetary union.
Frank McDonaldis Professor of n r
• The chapter on the budget has been substantially International Business at Hull a
revised. University Business School. t
i
• The environmental policy chapter has been o
Stephen Deardenis Senior
updated to trace the development and impact of n
Lecturer in Economics, Department
environmental Directives.
of Economics, Manchester
• The Common Agricultural Policy chapter has been Metropolitan University.
rewritten to include greater analysis of the
political debates surrounding this subject.
• The political and economic debates within the EU
have been updated to cover the expansion of the
Community into Central and Eastern Europe and
the strains this has put upon the institutional
frameworks and decision making processes of
the EU.
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European Economic Integration
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Fourth Edition
European Economic Integration
Edited by
Frank McDonald
Stephen Dearden
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Pearson Education Limited
Edinburgh Gate
Harlow
Essex CM20 2JE
England
and Associated Companies throughout the world
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First published 1992
Second edition 1994
Third edition 1999
Fourth edition published 2005
First edition © Longman Group UK Limited 1992
Second edition © Longman Group Limited 1994
Third edition © Addison Wesley Longman Limited 1999
Fourth edition © Pearson Education Limited 2005
All rights reserved. No part of this publication may be reproduced, stored in a
retrieval system, or transmitted in any form or by any means, electronic, mechanical,
photocopying, recording or otherwise, without either the prior written permission of
the publisher or a licence permitting restricted copying in the United Kingdom issued
by the Copyright Licensing Agency Ltd, 90 Tottenham Court Road, London W1T 4LP.
ISBN 0 273 67908 2
British Library Cataloguing-in-Publication Data
A catalogue record for this book is available from the British Library
Library of Congress Cataloging-in-Publication Data
European economic integration / [edited by] Frank McDonald, Stephen Dearden.—4th ed.
p. cm.
Includes bibliographical references and index.
ISBN 0-273-67908-2 (alk. paper)
1. Europe—Economic integration. 2. European Union countries—Economic policy. I.
McDonald, Frank, 1951– II. Dearden, Stephen, 1950–
HC241.E7853 2005
337.1′42—dc22
2004051222
10 9 8 7 6 5 4 3 2 1
08 07 06 05
Typeset in 10/12.5pt Sabon by 35
Printed and bound by Bell & Bain, Glasgow
The publisher’s policy is to use paper manufactured from sustainable forests.
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Brief contents
Contributors xiii
Preface to the fourth edition xv
Acknowledgements xvi
Abbreviations xviii
Introduction The origins and development of the European Union 1
Part 1
THE FOUNDATIONS OF THE EUROPEAN UNION 37
Chapter 1 Market integration in the European Union 39
Chapter 2 Macroeconomic policy coordination 75
Chapter 3 Economic and monetary union 99
Chapter 4 The budget of the European Union 125
Part 2
THE INTERNAL POLICIES OF THE EUROPEAN UNION 145
Chapter 5 Competition policy in the European Union 147
Chapter 6 Industrial policy in the European Union 174
Chapter 7 Social policy 193
Chapter 8 Regional policy 227
Chapter 9 Environmental policy 254
Chapter 10 Transport policy 269
Chapter 11 The Common Agricultural Policy 302
Part 3
THE EXTERNAL POLICIES OF THE EUROPEAN UNION 325
Chapter 12 External trade policy 327
Chapter 13 The European Union and Central and Eastern
Europe 337
Chapter 14 The European Union and the Developing World 353
Chapter 15 Economic relations with the Triad and emerging
economies 381
Index 404
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Detailed contents
Contributors xiii
Preface to the fourth edition xv
Acknowledgements xvi
Abbreviations xviii
Introduction
The origins and development of the European Union 1
Frank McDonald and Stephen Dearden
Introduction 1
What is the European Union? 2
The European Unity movement 3
The origins of the European Union 5
The development of the European Union 8
The institutional structure of the European Union 15
The main challenges facing the European Union 23
Democratic deficit 29
Political union 30
Conclusion 35
References 35
Further reading 36
Part 1
THE FOUNDATIONS OF THE EUROPEAN UNION 37
Chapter 1
Market integration in the European Union 39
Frank McDonald
Introduction 39
Defining economic integration 39
Types of single markets 41
Transaction costs and single markets 43
Customs union 47
The Single European Market 48
The economic effects of establishing free movement 50
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viii Detailed contents
Problems with empirical studies 60
Empirical studies 62
The 1996 Review of the Single European Market programme 65
Evidence on the effects of the SEM since the 1996 Review 68
Plans to improve the effectiveness of the SEM 70
Conclusion 71
References 71
Chapter 2
Macroeconomic policy coordination 75
Nigel Healey
Introduction 75
Policy interdependence between member states 76
The case for policy coordination 78
Monetary policy coordination through managed exchange rates 81
EU macroeconomic policy coordination since 1979 84
Conclusion 96
References 96
Chapter 3
Economic and monetary union 99
Nigel Healey
Introduction 99
What is EMU? 99
The Maastricht Treaty and the road to EMU 100
The theoretical benefits and costs of EMU 105
The performance of the euro since 1999 113
Conclusion 121
References 122
Chapter 4
The budget of the European Union 125
Clara Mira Salama
Introduction 125
The budget: main concepts, structure and principles 127
The revenue side: where the money comes from 130
The expenditure side: how the money is spent 132
Budgetary imbalances: the UK rebate 134
The budgetary procedure: budget implementation and control 136
The budget and enlargement 139
Conclusion 141
References 142
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Detailed contents ix
Further reading 143
End notes 143
Part 2
THE INTERNAL POLICIES OF THE EUROPEAN UNION 145
Chapter 5
Competition policy in the European Union 147
John Kemp
Introduction 147
An economic rationale for intervention 147
Alternative policy approaches 154
European Union competition policy 156
The relationship between EU and UK competition policy 170
Conclusion 171
References 171
Chapter 6
Industrial policy in the European Union 174
Frank McDonald and Margaret Potton
Introduction 174
Rationale for industrial policy 174
Types of industrial policy 179
Industrial policy in the treaties 179
Competitiveness and EU industrial policy 183
Policies to promote favoured sectors 188
Policies to promote innovation 189
Conclusion 190
References 191
Chapter 7
Social policy 193
Stephen Dearden
Introduction 193
The European labour market 193
The Treaty of Rome 196
The Single European Market 199
Social cohesion 203
Community policy 211
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