Report on the State of the European Union: Reforming the European Union

218 Pages·2007·20.018 MB·English

by  Jean-Paul Fitoussi, Jacques Le Cacheux (eds.)

Report on the State of the European Union
Also by jean-Paul Fitoussi
ECONOMICS IN A CHANGING WORLD
REPORT ON THE STATE Ot THE EUROPEAN UNION
Volume 1 (edited with Fiorella Kostoris Padoa Schiappa)
Report on the State of
the European Union
Volume 2
Reforming the European Union
Edited by
Jean-Paul Fitoussi
and
Jacques Le Cacheux
With contributions from
Louis Chauvel, Sciences Po and OFCE
Jerome Creel, OFCE
Gunes Kamber, University of Paris I
Eloi Laurent, OFCE
Sandrine Levasseur, OFCE
* © OFCE 2007
Softcover reprint of the hardcover 1st edit ion 2007 978-1-4039-87 40-2
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ISBN 978-1-349-54137-9 ISBN 978-0-230-28793-8 (eBook}
DOI 10.1057/9780230287938
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Contents
List of Figures viii
List of Tables
X
List of Boxes xii
Preface xili
Introduction: Europe beyond the Treaty 1
Slim down for Lisbon? 1
Reform without growth? 3
Impeached growth: Social norms and logic of
collective action - two complementary hypotheses 6
The European constitutional treaty:
Powerlessness through alienation? 7
Contents of the book 13
Part I Economic Outlook
1 A Short-Lived Recovery or 'Double-Dip' Recession? 19
Over-long stagnation 20
A sluggish and precarious recovery? 22
Inertia of the ECB monetary policy and
heterogeneity of the eurozonc 24
Fiscal policies in Europe: The second life of
the Stability Pact 27
No common policies for growth and the emergence
of an inappropriate policy mix 30
2 The Lisbon Strategy 33
Introduction: The case for an institutional
perspective on European shortcomings beyond
labour markets 33
The record of Lisbon 36
What is wrong with 'Lisbon'? The
incompatibility of objectives 44
Is anybody in charge of Lisbon? The incoherence of
objectives/instruments 47
v
vi Contents
Conclusion: Naming, blaming,
shaming growing? 53
000
Part II Norms and Institutions
3 Social Norms and Macroeconomic Policies 59
Social norms and inequalities: Some
theoretical considerations 61
The efficiency of the instruments 64
Social norms, political convention and
macroeconomic policies 68
Epilogue: The 'missing decade' 70
4 Growth Policies in Europe: A Problem of
Collective Action? 72
Coordination for what? 73
Which coordination? 75
The logic of collective action, or the rational
exploitation of the 'large' by the 'small' 76
The European constitutional treaty, or the
equation of powerlessness 78
Part III Cohesion and Enlargement
S The EU Budget: The Poisonous Budget Rebate Debate 87
The emergence of a concept 89
The arbitrary nature of the methods used
to calculate budget balances 99
Critical analysis of net balances from an
economic standpoint 104
Financial solidarity: Basis and implications 109
Conclusion 113
6 European Integration and the Dynamics of Inequalities 117
Some new members quite different from the
earlier ones, not to mention the later ones 117
The dynamics of European inequalities 119
Intra- and inter-state inequalities: The difference
between Europe and the United States 123
Uncertainties and hopes 124
Conclusion: Understanding and tackling
the issue of inequalities 126
Contents vii
7 Focus on Enlargement 127
Labour markets 129
Pension systems 130
Exchange rate policies 131
'Euroisation' 132
The case of Turkey 133
European budget 134
Economic geography 136
8 Fiscal Policies of the CEECs After Joining the EU 138
Fiscal positions of the new EU members: An appraisal 139
The 2004 convergence programmes of
the new members 144
Fiscal consolidations relying essentially on households 147
Conclusion: What scope for fiscal manoeuvre
do the CEECs have? 151
9 The Turkish Republic and the EU: A Very
Long Engagement 158
The state of the Turkish economy: The damaging
effects of liberalisation? 163
Major macroeconomic characteristics: A synthesis 170
Anatomy of the crises and their cost 179
Notes 185
Index 198
List of Figures
2.1 The 'dismal decade', 1990-2004 35
2.2 Real GDP growth rate year on year, 2000-2004 39
2.3 Annual growth rate of productivity per person
vis-a-vis EU 25, 2000-2004 40
2.4 Total employment rate, 2000-2010 41
2.5 Female employment rate, 2000-2010 41
2.6 Elderly employment rate, 2000--2010 42
2.7 R&D expenditures, 2000-2010 42
2.8 The EU's 'incoherence diamond' 52
5.1 European budget expenditure: aggregate
amounts and breakdown, 1962-2006 91
5.2 European budgetary revenue: aggregate
amounts and breakdown, 1970--2006 91
5.3 European budget: breakdown of revenue,
1971-2004 92
5.4 Each country's share of European
budget revenue, 2002 94
5.5 Each country's share of EU operating
expenditure, 2002 94
5.6 Average per capita income of the UK
population, 1973-2003 95
5.7 National contributions and GDP in EU 15, 2003 95
5.8 National contributions as percentages
ofGNI, 2003 96
5.9 Budgetary net balances, 2001-2003 96
5.10 Net balances by country expressed in
different units, 2003 103
5.11 GDP of 'cohesion countries', 1994-2005 107
6.1 Intra- and inter-state inequalities in Europe
and in the United States 124
6.2 Development of GDP per capita PPP in
Greece, Ireland, Portugal and Poland compared
with that of France, 1975-2002 125
viii
List o( Figures ix
9.1 Turkey: Rates of GNP growth by volume,
1980-2003 170
9.2 Turkey: Inflation rates, 1980-2003 171
9.3 Turkey: Public debt, 1980-2003 172
9.4 Turkey: Foreign investments, 1986-2002 178
9.5 Turkey: Variations in retail prices and
exchange rates, 1975-2002 180
9.6 Turkey: Public debt, public deficit (-) and
seigniorage revenues, 1975-2002 181