Colin Barry

European Integration (MOC, Monday, Week 10)


Goals in Central American integration:
-- Foster stability
-- Common markets
-- Focus on economics
-- Pursue win-win opportunities
-- Voluntary
-- Maintain national sovereignty
-- Loose structure, no funding

Goals in European integration:
-- Avoid future wars
-- Long-term vision of united Europe
-- Give up some sovereignty
-- Treaties, institutions, budget!
-- Restive: slow growth vs. USA

Steps along the way <<< European Coal & Steel Community ('52): Create economic interdependence in strategic resource Avoid further Franco-German wars over Ruhr and Alsace-Lorraine Treaties of Rome ('57/'58): Fix tariff policy Institutionalize single market in goods, cap subsidies to "national champion" firms European Monetary System ('79): After Bretton Woods, need currency stability and limits on devaluation (distort growth) Single Europe Act/Common Market ('86): Fix non-tariff policies Open trade in services, people, and capital; remove non-tariff barriers (NTBs) BUT need to compensate poor countries for inability to protect nascent industries Maastricht ('92): European social and political unification Free capital movement...but weaker countries get cheap money! And then it goes off the rails... Lisbon Agenda ('00): Catch up on productivity growth, fix labor inflexibility What goes wrong? Integration fatigue? - Moral suasion only, opt-out is possible - Threatens sovereignty - Diversity/number of members - More competition based on wages/taxes - Immigration - More "center-left" governments So what happens now? Definitely: more fiscal coordination, simplify EU institutions, mutual recognition of training/job qualifications BUT: More integration? "Bigger is better." >>>> OR <<<< Dis-aggregate? Smaller = more accountable, focus on integration issues not country-specific issues.