part i- european economy basics
TRANSCRIPT
8/2/2019 Part I- European Economy Basics
http://slidepdf.com/reader/full/part-i-european-economy-basics 1/35
EUROPEAN ECONOMY
Dr. Marielle GOTO
8/2/2019 Part I- European Economy Basics
http://slidepdf.com/reader/full/part-i-european-economy-basics 2/35
CONTENTS
• Part I- European Union basics
• Part II- European monetary Policy
• Part III- Policy mix
• Part IV- Enlargement
• Part V- European policies and firms
• Part VI-Presentations
Dr. Marielle GOTO
8/2/2019 Part I- European Economy Basics
http://slidepdf.com/reader/full/part-i-european-economy-basics 3/35
PART I- EUROPEAN UNION
BASICS
Dr. Marielle GOTO
8/2/2019 Part I- European Economy Basics
http://slidepdf.com/reader/full/part-i-european-economy-basics 4/35
Contents
• I. A quick glance at the European Union
•
II. Historical steps of the European integration
• III. European Institutions
• IV. European economic outlook
Dr. Marielle GOTO
8/2/2019 Part I- European Economy Basics
http://slidepdf.com/reader/full/part-i-european-economy-basics 5/35
I. A QUICK GLANCE AT THE EUROPEAN
UNION
• Continuing evolving process of integration andenlargement since the 1950’s
•
27 different countries at the moment (GDP, size,language, mainland, outermost regions…)
• Analysis of the economic strengthes and
weaknesses of the European Union
• A complex and ongoing process
Dr. Marielle GOTO
8/2/2019 Part I- European Economy Basics
http://slidepdf.com/reader/full/part-i-european-economy-basics 6/35
European Union Countries
Dr. Marielle GOTO
8/2/2019 Part I- European Economy Basics
http://slidepdf.com/reader/full/part-i-european-economy-basics 7/35
Some figures
500 million inhabitants
4.2 million km² (9.6 for China and the UnitedStates)
At the moment 27 countries
First GDP in the world (a quarter of it); 40% of the world trade
Dr. Marielle GOTO
8/2/2019 Part I- European Economy Basics
http://slidepdf.com/reader/full/part-i-european-economy-basics 8/35
ow r c s e compare othe rest
of the world?
EU China Japan Russia United States EU China Japan Russia United States
12 508
1 326
3 329
468
9819
25 100
4 400
27 800
12 200
38 700
Size of economy: 2008 gross domestic product
in billion of euros
Wealth per person: 2008 gross domestic product
per person
8/2/2019 Part I- European Economy Basics
http://slidepdf.com/reader/full/part-i-european-economy-basics 9/35
GDP per inhabitant: the spread of
wealth
L i t h u a n i a
2008 GDP per inhabitantIndex where the average of the 27 EU-countries is 100
271
137
135 123118
114
122117
115116107
101103
10095 94
9180 76 76
68 6372
61 5658
46 40
L u x e m b o u r g
I r e l a n d
N
e t h e r l a n d s
A u s t r i a
D e n m a r k
B e l g i u m
S w e d e n
F i n l a n d
G e r m a n y
F r a n c e
I t a l y
S p a i n
E U - 2 7
C y p r u s
G r e e c e
S l o v e n i a
M a l t a
P o r t u g a l
E s t o n i a
H u n g a r y
S l o v a k i a
L a t v i a
P o l a n d
R o m a n i a
B u l g a r i a
U n i t e d K i n g d o m
C z e c h
R e p u b l i c
8/2/2019 Part I- European Economy Basics
http://slidepdf.com/reader/full/part-i-european-economy-basics 10/35
GDP per Capita
Source: Eurostat
8/2/2019 Part I- European Economy Basics
http://slidepdf.com/reader/full/part-i-european-economy-basics 11/35
Dr. Marielle GOTO
Source: Eurostat
8/2/2019 Part I- European Economy Basics
http://slidepdf.com/reader/full/part-i-european-economy-basics 12/35
II-Historical steps of the European
integration
Dr. Marielle GOTO
60 years of history
A deepening integration
Complex and eventful process
Important enlargement (a fourfold rise in the
number of member countries in 60 years)
8/2/2019 Part I- European Economy Basics
http://slidepdf.com/reader/full/part-i-european-economy-basics 13/35
1950
• Speech of Robert SCHUMAN based on the ideas of Jean Monnet
• Proposal of a pool of coal and steel sources by France and Germany
1951
• Signature of the treaty establishing the European Coal and Steel Community(ECSC) by 6 countries: Belgium, the Federal Republic of Germany, France, Italy,Luxembourg and the Netherlands
1957
• The same six countries sign the treaties of Rome related to:
• the European Economic Community(EEC)
• the European Atomic Energy Community (Euratom)
1960
• the Stockholm Convention establishes the
• European Free Trade Association (EFTA) with countries outside the EEC like theUnited Kingdom, Iceland , Norway, Switzerland
1965
• Merger of the ECSC, EEC and Euratom
• Creation of a single Council and a single Commission.
Dr. Marielle GOTO
8/2/2019 Part I- European Economy Basics
http://slidepdf.com/reader/full/part-i-european-economy-basics 14/35
1968
• Establishment of a Common External Tariff (CET) and custom duties, betweenmember countries, are abolished on industrial goods
1973
• Denmark, Ireland and United Kingdom join the European communities. It is thefirst enlargement.
1979
• The first direct elections to the 410-seat European Parliament
1981 • Greece is the new member of the European Communities
1985
• The Schengen Agreement is signed in order to suppress checks at the bordersbetween member states of the European Communities (free movment of persons)
Dr. Marielle GOTO
8/2/2019 Part I- European Economy Basics
http://slidepdf.com/reader/full/part-i-european-economy-basics 15/35
1986 • Spain and Portugal join the European Communities club
1986 • The European Single Act is signed in Luxembourg and the Hague
1992
• The Treaty on European Union is signed at Maastricht.
• One of the aim is the creation of an economic and monetary union with a
single currency
1993 • The single market is implemented
1995• Austria, Finland and Sweden become part of the European Union
Dr. Marielle GOTO
8/2/2019 Part I- European Economy Basics
http://slidepdf.com/reader/full/part-i-european-economy-basics 16/35
Dr. Marielle GOTO
1997 • The Amsterdam Treaty is signed
1999
• The Euro is adopted by 11 countries and used on their financial markets fornon-cash transactions
• The European Central Bank (ECB) takes charge of the common monetary policyfor all th emembers of the European Monetary Union (EMU)
2001
• Signature of the Treaty of Nice
• The aim is to allow enlargement thanks to a change in the decison makingprocess
2002
• Euro-notes and coins are implemented in the Euro area. This area comprises 12countries: Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy,Luxembourg, Portugal, Spain and The Netherlands
2004 • Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland,
Slovakia and Slovenia join the European Union.
8/2/2019 Part I- European Economy Basics
http://slidepdf.com/reader/full/part-i-european-economy-basics 17/35
Dr. Marielle GOTO
2004
• The European Constitution is adopted in Rome but was to be ratified bymember states
2005
• Rejection of the European Constitutions by voters in France and the Netherlands as aresult of referendums
2007
• Bulgaria and Romania join the European Union
• Slovenia adopts the Euro
2007
• The Lisbon Treaty (a modifed version of the European Constitution) is signed
2008 • Malta and Cyprus adopt the Euro
8/2/2019 Part I- European Economy Basics
http://slidepdf.com/reader/full/part-i-european-economy-basics 18/35
Dr. Marielle GOTO
2009 • Slovakia adopts the Euro
2009
• The Lisbon Treaty has been implemented
2011 • Estonia has joined the Euro area
May 2010
•Greece has benefited from a financial assistance package of EUR110 billion
•Measures package of 750 billion € to create a safety net with the creation of the European
Financial Stability Facility (EFSF), the European Financial Stability Mechanism and
International Monetary Fund financing
21 July
2011
• New rules for the European Financial Stability Facility and new package bailout of 109billion € for Greece with the assistance of the private sector (banks)
8/2/2019 Part I- European Economy Basics
http://slidepdf.com/reader/full/part-i-european-economy-basics 19/35
A focus on European treaties
Dr. Marielle GOTO
8/2/2019 Part I- European Economy Basics
http://slidepdf.com/reader/full/part-i-european-economy-basics 20/35
Main European Treaties•
Treaty of Rome(1957):• Creation of a common market for goods and services
• Maastricht Treaty (1992):
• Creation of an economic and monetary union
• Implementation of convergence criteria to become amember of the monetary union
• Amsterdam Treaty (1997)
• New fiscal criteria commitments added to the convergencecriteria
• Technical treaty that renumbered articles from the EU andthe EC treaties
Dr. Marielle GOTO
8/2/2019 Part I- European Economy Basics
http://slidepdf.com/reader/full/part-i-european-economy-basics 21/35
• Treaty of Nice (2003):
• Preparation of the important enlargements of
2004 and 2007 with mostly countries for theEastern Europe
•
Lisbon Treaty (2007):• A strengthened role for the European parliament
• Qualified majority:
From 2014 a double majority: a decision is takenby 55% of the Member States representing at
least 65% of the Union’s population
Dr. Marielle GOTO
8/2/2019 Part I- European Economy Basics
http://slidepdf.com/reader/full/part-i-european-economy-basics 22/35
• The function of President of the European
Council is created. This president is elected for
2 and a half years. At the moment, Herman
Van Rompuy.
• A high representative of the Union for
Foreign Affairs and Security function is
created. At the moment, Catherine Ashton.
Dr. Marielle GOTO
8/2/2019 Part I- European Economy Basics
http://slidepdf.com/reader/full/part-i-european-economy-basics 23/35
III. European Institutions
• Regulation, recommandations and directives
are taken by the European Union institutions
• The EU institutions rules are modified by the
different treaties
• The three main institutions are the European
Council, the European Commission and the
European Parliament
Dr. Marielle GOTO
8/2/2019 Part I- European Economy Basics
http://slidepdf.com/reader/full/part-i-european-economy-basics 24/35
Difference between regulations, directives,
decisions, recommendations and opinions
•
To exercise the Union's competences, the institutions shall adoptregulations, directives, decisions, recommendations and opinions
• A regulation shall have general application. It shall be binding in itsentirety and directly applicable in all Member States
• A directive shall be binding, as to the result to be achieved, upon eachMember State to which it is addressed, but shall leave to the nationalauthorities the choice of form and methods
• A decision shall be binding in its entirety upon those to whom it isaddressed
• Recommendations and opinions shall have no binding force
Dr. Marielle GOTO
8/2/2019 Part I- European Economy Basics
http://slidepdf.com/reader/full/part-i-european-economy-basics 25/35
European Parliament
(direct election of the members)
The EU institutions
Court of Justice
Court of Auditors
Economic and SocialCommittee
Committee of the
Regions
Council of Ministers
(Council of theEuropean Union)
European
Commission (thecommon interest)
European Investment
Bank
European Central
BankAgencies
European Council
(Head of States)
Institutions
8/2/2019 Part I- European Economy Basics
http://slidepdf.com/reader/full/part-i-european-economy-basics 26/35
The Council of the European union
• Present presidency of the Council of theEuropean Union: Poland
• The high representative of the Union for
Foreign Affairs and Security is the permanentchairperson for the foreign affairs ministers’council
Dr. Marielle GOTO
Council of Ministers(Council of the
European Union)
8/2/2019 Part I- European Economy Basics
http://slidepdf.com/reader/full/part-i-european-economy-basics 27/35
How EU laws are made
Citizens, interest groups, experts: discuss, consult
Commission: makes formal proposal
Parliament and Council of Ministers: decide jointly
Commission and Court of Justice: monitor
implementation
National or local authorities: implement
How European Laws are established
8/2/2019 Part I- European Economy Basics
http://slidepdf.com/reader/full/part-i-european-economy-basics 28/35
IV. European Economic Outlook
• Before the crisis
• Different economic situations
• Different economic profiles
• From 2009
• GDP growth rates are not high enough to solve
sovereign debt issues• Labour market still weak with high
unemployment
Dr. Marielle GOTO
8/2/2019 Part I- European Economy Basics
http://slidepdf.com/reader/full/part-i-european-economy-basics 29/35
The differences among European
Union countries
• Difference in trade openness
• Difference in financial exposure
• Difference in competitiveness
• Questions of fiscal sustainability
• A rise in the countries differences
Dr. Marielle GOTO
l h
8/2/2019 Part I- European Economy Basics
http://slidepdf.com/reader/full/part-i-european-economy-basics 30/35
European GDP real growth rate 2000-2010
(%)
Dr. Marielle GOTO
Source: Eurostat
8/2/2019 Part I- European Economy Basics
http://slidepdf.com/reader/full/part-i-european-economy-basics 31/35
INFLATION RATE
Dr. Marielle GOTO
8/2/2019 Part I- European Economy Basics
http://slidepdf.com/reader/full/part-i-european-economy-basics 32/35
Inflation rate 2010
Dr. Marielle GOTOSource: Eurostat
8/2/2019 Part I- European Economy Basics
http://slidepdf.com/reader/full/part-i-european-economy-basics 33/35
Unemployment rate July 2011
Dr. Marielle GOTOSource: Eurostat
8/2/2019 Part I- European Economy Basics
http://slidepdf.com/reader/full/part-i-european-economy-basics 34/35
Conclusion
• A long, ongoing and complex history of
economic integration
• European integration is mostly a political
process
• Increasing economic differences with the
successive enlargements
• The rules of the monetary integration process
are put to the test since the 2008 global crisis
Dr. Marielle GOTO
8/2/2019 Part I- European Economy Basics
http://slidepdf.com/reader/full/part-i-european-economy-basics 35/35
Additional references
• Benassy-Quere A., Coeure B., Jacquet P. and Pisani-Ferry J.,2004, Politique économique, de boeck
• El-Agraa A.,2001, The European Union Economics and policies, Financial Times, Prentice Hall
•
Hallwood C.& MacDonald R., 2000, International Money and Finance, Blackwell publishers
• Henning C., 1998, «Systemic conflict and regionalmonetary integration: the case of Europe », in International organization, vol.52, n°3, Cambridge University Press
•
Mongelli F., 2008, « European Economic and Monetaryintegration and the Optimum Currency Area », EuropeanEconomy n°302
Dr Marielle GOTO