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The Continuing Evolution of Europe

The Continuing Evolution of Europe

Thiess Buettner
Wolfgang Ochel
Copyright Date: 2012
Published by: MIT Press
Pages: 184
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  • Book Info
    The Continuing Evolution of Europe
    Book Description:

    The European Union began with efforts in the Cold War era to foster economic integration among a few Western European countries. Today's EU constitutes an upper tier of government that affects almost every level of policymaking in each of its twenty-seven member states. The recent financial and economic crises have tested this still-evolving institutional framework, and this book surveys key economic challenges faced by the EU. Prominent European economists examine such topics as the stability of the financial markets and possible policy options to reduce future vulnerability to crises, including Glass-Steagull-style narrow banking; the effect of emerging economies such as China and India on Europe's economic position; the protection of national interests in industrial policy; reforming and preserving the welfare state in the face of unemployment, population aging, and worker mobility within the EU; and improving the EU's institutional framework by reassigning responsibilities among supranational, national, and local governments. Among the conclusions that emerge from these analyses are the necessity for banking regulation as well as budgetary discipline; the need to consider global as well as European integration; and the idea that an environment that fosters internal competition will increase Europe's competitiveness internationally.

    eISBN: 978-0-262-30146-6
    Subjects: Economics, Political Science

Table of Contents

  1. Front Matter
    (pp. i-iv)
  2. Table of Contents
    (pp. v-vi)
  3. Contributors
    (pp. vii-viii)
  4. Series Foreword
    (pp. ix-x)

    This book is part of the CESifo Seminar Series. The series aims to cover topical policy issues in economics from a largely European perspective. The books in this series are the products of the papers and intensive debates that took place during the seminars hosted by CESifo, an international research network of renowned economists organized jointly by the Center for Economic Studies at Ludwig-Maximilians-Universität, Munich, and the Ifo Institute for Economic Research. All publications in this series have been carefully selected and refereed by members of the CESifo research network....

  5. 1 The Continuing Evolution of Europe: Introduction and Overview
    (pp. 1-8)
    Thiess Buettner and Wolfgang Ochel

    The economic history of Europe is closely intertwined with the enlargement and deepening of the European Union. This body of institutions has evolved in rapid succession from the European Communities of the 1960s, a grouping of supranational institutions that fostered economic integration among a few Western European nations, into a new upper tier of government affecting the policies of twenty-seven member states in almost every sphere of government activities. Given this institutional setting, one might think that Europe is well prepared to face new challenges. This, however, is not the case. The financial crisis has resulted in a substantial increase...

  6. 2 Financial Market Regulation in Europe
    (pp. 9-32)
    Paul De Grauwe and Frank Westermann

    Looking at the development of financial markets in Europe before the financial crisis in 2007–2008, it is remarkable that key macroeconomic and financial variables have been reminiscent of those in countries with well-known financial crises observed in the past twenty to thirty years. Aggregate domestic credit increased substantially and so did the share of liquid liabilities to GDP. The share of foreign currency liabilities was—particularly in Eastern Europe, but also in parts of Western Europe—as high as in some countries during the Asian and Latin American crisis episodes in the mid- and late 1990s. Also, stock markets...

  7. 3 Global Constraints on European Integration over the Next Few Decades
    (pp. 33-52)
    Peter Egger and John Whalley

    This chapter highlights some key global constraints on future European integration that have recently intensified, given the 2008 financial crisis, the pressures on the eurozone, and the financial difficulties in Greece, Ireland, Spain, and elsewhere.¹ The main argument of the chapter is that the first fifty years of implementation of the Treaty of Rome have concentrated on ever-deeper integration within Europe, following the sequenced approach set out in the 1957 treaty. Now, a half century later, Europe needs to more centrally focus on the constraints imposed on the integration process by global developments as it carries integration forward, rather than...

  8. 4 Do We Need National or European Champions?
    (pp. 53-70)
    Christian Gollier and Ludger Woessmann

    The rapid march toward a more globalized economy over the last decade has generated a wave of anxiety among Western consumers, employees, businesspeople, and politicians. This has created more pressure on national governments to protect national firms from foreign takeovers, to promote national or European champions, and more generally to reinstall a strong industrial policy agenda, for the sake of national prosperity. Globalization requires adjustment and makes change necessary. This generates potential winners and losers. Potential losers want markets to be shielded from foreign competition through trade barriers, technical obstacles, health regulations, and subsidies.

    This evolution has been particularly visible...

  9. 5 Reforming the European Welfare State
    (pp. 71-118)
    Martin Werding and Kai A. Konrad

    European-style approaches to designing policies of “the” welfare state have often attracted attention, though not necessarily unanimous support, from an international audience of researchers and policymakers. According to a simplified but widely held view, Europeans tended to place excessive emphasis on security, at the expense of other objectives, in the 1960s and 1970s when the welfare state expanded virtually everywhere in the developed world. Some observers may have admired or even envied that, for it has given rise to relatively high levels of social protection for everyone covered by these systems. From the early 1980s until very recently, however, such...

  10. 6 Europe at a Crossroads: Reforming Political Institutions and Public Sectors
    (pp. 119-154)
    Massimo Bordignon, Thiess Buettner and Frederick van der Ploeg

    The process of reforming the European Union (EU) institutions appears to be once again in jeopardy.¹ The shock and the political impasse generated by the results of the French and Dutch referenda in 2005 effectively killed the constitutional process initiated with the Convention in 2003 (and in itself a result of the general disaffection with the current Treaty of Nice (2000, ratified in 2004)). Furthermore, existing EU institutions seem unfit to rule an enlarged Europe (Baldwin et al. 2001), but European governments eventually found a working solution with the Lisbon Treaty of December 2007. While formally renouncing all symbols of...

  11. Index
    (pp. 155-174)