EU INTEGRATION

Lecture X

EUINTEGRATIONS

EUINTEGRATION steps

EMUINTEGRATION

EU ECONOMIC POLICIES
EUECONOMICPOLICIES
MACROECONOMIC POLICIES
MACROECONOMICPOLICIES
1.
1
2.
3
3.
4.

Budget
B
d t
Monetarypolicy
T d
Tradepolicy
li
Cohessionand
redistribution
5. ....

MICROECONOMICPOLICIES
MICROECONOMIC
POLICIES
1. CAP
2 Taxharmonization
2.
T h
i ti
3. Industrialpolicy
4 Transportpolicy
4.
T
li
5. Energy
6. Environmnetalpolicy
l l
7. Socialpolicy
8. Regionalpolicy
9. ....
5

EU PUBLIC REVENUE SIDE

EUPUBLICREVENUESIDE
1 TRADITIONAL
1.
TRADITIONALOWNRESOURCES(around15%):
OWN RESOURCES (around 15%):
DutiesderivingfromCAPandsugarandisoglucoselevies
CustomsdutieschargedbytheCommonCustomTariffand
Customs duties charged by the Common Custom Tariff and
collectedattheEUexternalborders
2. NON
NONTRADITIONAL
TRADITIONALOWNRESOURCES:
OWN RESOURCES:
AproportionoftheVATcollectedbythememberstates
(g
(generally0.33%oftaxbasewithsomedifferences)
y
)
around16%ofthetotalbudget
ApercentageofeachmamberstatesGNI(1.27%ofGNI
EU) around65%ofthetotalbudget
Othersources around6%
6

EU PUBLIC EXPENDITURE SIDE

EUPUBLICEXPENDITURESIDE

EU REGIONAL POLICY
EUREGIONALPOLICY
Therearebiginternaldisparitiesofincomeand
opportunitybetweenEUregions.
Throughitsregionalpolicy,theEUtransfersresources
fromaffluenttopoorerareas.
Theaimistomodernizebackwardregionssothatthey
ca ca c up
cancatchupwiththerestoftheUnion.
e es o e U o
2004and2007EUenlargementshaveincreasedthe
economic disparities within EU
economicdisparitieswithinEU

EU REGIONAL FUNDING
EUREGIONALFUNDING

LABOUR MARKET DISPARITIES

LABOURMARKETDISPARITIES

10

BOSNIA AND HERZEGOVINA

NOMINALANDREALGDPBiH

HOUSEHOLD CONSUMPTION BiH

HOUSEHOLDCONSUMPTIONBiH
Structure in percentages

13

UNEMPLOYMENTBiH,%ofLF

14

INFLATIONBiH

15

BUDGETBALANCEBiH

16

CURRENTACCOUNTBiH

17

FDIINFLOWBiH,millKM

18

REMITENCESBiH,bill$

19

AGRICULTUREBiH,%GDP

20

BiH INSTITUTIONS EBRDINDEX

BiHINSTITUTIONS
EBRD INDEX
1,00
0,90
0,80
0,70
0,60
BiH BiH BiH BiH

0,50
0,40
,
0,30

BiH BiHBiH
BiH
BiH BiH
BiH
BiH

BiH
BiH BiH

BiH
BiH BiH

,
0,20
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

BiH

CROATIA

ALL COUNTRIES

EU COUNTRIES
21

BiHINSTITUTIONS HFINDEX
10
1.0

08
0.8

06
0.6
BIH

BIH

BIH

BIH

BIH

04
0.4

BIH
BIH

BIH

2000 2001 2002

ALL TRANSITION

2003

BIH BIH
02
0.2
1998 1999
BIH

2004 2005
Best (Est)

2006

2007
Worst (Turkm)
22

BiH INSTITUTIONS HFINDEX

BiHINSTITUTIONS
HF INDEX structure
1

0.8

0.6

0.4

0.2

0
A ggregated Regulatio n
2007

Trade

BIH

Fiscal

Go v't

M o netary

Investment

Financial

P ro perty
Rights

Labo ur

AVERAGE 27
23

BiH INSTITUTIONS RULEOFLAW

BiHINSTITUTIONS
RULE OF LAW
100
90
80
70
60
50
40
30
20
10
0
1996

BiH

1998

2000

SLOVENIA

2002

2003

CROATIA

2004

2005

MACEDONIA

2006

2007

ALBANIA

2008

2009

SERBIA
24

GLOBALIZATION

GLOBALGDPGROWTH

26

27

REGULARITY OF CRISIS?
REGULARITYOFCRISIS?
GLOBALIZATIONandCRISIS businesscyclesthroughoutthe
economichistory
IsthereanyREGULARITY?:
Is there any REGULARITY?:
Regularityinthebehaviourofkeyeconomicindicators
Every810yearsaglobalcrisis
Every 810 years a global crisis
Lastfewdecadesmorethanonecrisisperyearindifferent
regionsoftheworld(?)
g
( )
Hence,globalworldandcrisis(i.e.Negativebusinesscycles
areregularityconfirmedinthepast)
Inaglobalworldhighprobabilityforeconomiccrisisbecause
oftheinterdependenceandspreadouteffects
28

INSTITUTIONALBASISOFMARKET
ECONOMIESISNOTUNIQUE
Functionscompatiblewithmanydifferentforms
bl
h
d ff
f
USfreemarket
e.g.,primacyofshareholdervalue
g,p
y
modelfollowedbyUKsince1979

Germansocialmarket
emphasisonstakeholders;andconsensusbetweensocial
p
partners
similarinWesternEurope&Scandinavia

Convergenceordivergence?
Finance:movetowardsAngloAmericanmodel
Labourmarket:increaseddivergence

Whypersistentinstitutionaldifferences?
Why persistent institutional differences?
Societiesdifferinvaluesandnorms
Institutionsaremutuallyreinforcing
hence,difficulttoimitate
hence difficult to imitate
29

ONE OF THE IMPLICATIONS

ONEOFTHEIMPLICATIONS

Economicmodels,predictionsandprescriptions
were correct but institutions did not work well?????
werecorrectbutinstitutionsdidnotwork

30