Chapter i: History Chapter 2: Facts, Law, Institutions and the Budget Chapter 3: Decision Making
1
73
Part II: The Microeconomics of European Integration Chapter 4: Essential Microeconomic Tools Chapter 5: The Essential Economics of Preferential Liberalization Chapter 6: Market Size and Scale Effects Chapter 7: Growth Effects and Factor Market Integration
103 122 147 174
Part i l l ; IU Policies Chapter 8: The Common Agricultural Policy Chapter 9: Location Effects, Economic Geography and Regional Policy
242
tiiw!^^ Chapter 10: A Monetary History of Europe Chapter 11: The Choice of an Exchange Rate Regime Chapter 12: The European Monetary System
275 292 313
Chapter 13: Optimum Currency Areas Chapter 14: The European Monetary Union
329 357
Part VI: Beyond Money: Budgets, Financial Markets, jobs Chapter 15: Fiscal Policy and The Stability Pact Chapte* 16: The Financial Markets and the Euro Chapter 17: Economic Integration and Labour Market Institutions
IV
381 401 426
Detailed Table of Contents Preface
x
Guided Tour
xiv
Teaching and Learning Resources
xvi
Technology to Enhance Learning and Teaching
xvii
Acknowledgements
xix
Part I: History, Facts and Institutions
xxi
1.1 Early post-war period 1.2 Two strands of European integration: federalism and intergovernmentalism 1.3 Evolution to two concentric circles: domino effect part I 1.4 Euro-pessimism 1.5 Deeper circles and domino effect part II: the Single Market Programme and the EEA 1.6 Communism's creeping failure and spectacular collapse 1.7 German unification, Maastricht and the euro 1.8 Preparing for Eastern enlargement: Amsterdam and Nice Treaties 1.9 Summary ANNEX A ANNEX B ANNEX C
19 22 24 24 26 28 30 35
2.1 2.2 2.3 2.4
39 43 47 57
Some important facts EU law The 'Big-5' institutions Legislative processes
3 8 14 16
Detailed Table of Contents 2.5 The budget 2.6 Summary Chapter 3: Decision Making 3.1 3.2 3.3 3.4 3.5 3.6
Task allocation and subsidiary: EU practice and principles Fiscal federalism and task allocation among government levels Economical view of decision making The distribution of power among EU members Legitimacy in EU decision making Summary
Part II: The Microeconomics of European Integration Chapter 4: Essential Microeconomic Tools 4.1 Preliminaries I: supply and demand diagrams 4.2 Preliminaries II: introduction to open economy supply and and demand analysis 4.3 MFN tariff analysis 4.4 Types of protection: an economic classification 4.5 Summary Chapter 5: The Essential Economics of Preferential Liberalization 5.1 5.2 5.3 5.4 5.5 5.6
Analysis of unilateral discriminatory liberalization Analysis of a customs union Customs unions versus free trade agreements WTO rules Empirical studies Summary ANNEX
Chapter 6: Market Size and Scale Effects 6.1 Liberalization, defragmentation and industrial restructuring: logic and facts 6.2 Theoretical preliminaries: monopoly, duopoly and oligopoly 6.3 The BE- COMP diagram in a closed economy 6.4 The impact of European liberalization 6.5 State aid
VI
Detailed Table of Contents 6.6 Competition policy and anti-competitive behaviour 6.7 Summary
169 171
7.1 The logic of growth and the facts 7.2 Medium-term growth effects: induced capital formation with Solow's analysis 7.3 Long-term growth effects: faster knowledge creation and absorption 7.4 Microeconomics of capital market integration 7.5 Microeconomics of labour market integration 7.6 Summary
175
Part III: EU Policies
179 188 190 197 205
209
8.1 8.2 8.3 8.4 8.5 8.6
Early days: domestic price supports CAP problems Reforms Evaluation of the today's CAP Future challenges Summary
229 232 236 238
9.1 9.2 9.3 9.4 9.5 9.6 9.7
Europe's economic geography: the facts Theory part 1: comparative advantage Theory part 2: agglomeration and the new economic geography Theory part 3: putting it all together EU regional policy Empirical evidence Summary ANNEX A ANNEX B
243 247 250 258 260 265 266 267 270
Part IV: Monetary Integration: History and Principles
10.1 Metallic money
212 220
273 276
Detailed Table of Contents 10.2 10.3 10.4 10.5 10.6 10.7
The Gold Standard The unhappy inter-war period The post-war years: fear of the past After Bretton Woods: Europe on its own Lessons from history Summary
Chapter n : The Choice of an Exchange Rate Regime 11.1 11.2 11.3 11.4
The exchange rate and monetary policy The range of exchange rate regimes Choices Summary
Chapter 12: The European Monetary System 12.1 12.2 12.3 12.4
The EMS agreements EMS-i: from divergence to convergence and blow-up The EMS re-engineered Summary
Part V: The Monetary Union Chapter 13: Optimum Currency Areas 13.1 13.2 13.3 13.4 13.5
The question, the problem, and the answer The optimum currency area criteria Is Europe an optimum currency area? Will Europe become an optimum currency area? Summary
Chapter 14: The European Monetary Union 14.1 14.2 14.3 14.4 14.5 14.6
The Maastricht Treaty The Eurosystem Objectives, instruments and strategy Independence and accountability The first years Summary
Detailed Table of Contents
Part VI: Beyond Money: Budgets, Financial Markets, Jobs
15.1 15.2 15.3 15.4 15.5
Fiscal policy in the monetary union Fiscal policy externalities Principles The Stability and Growth Pact Summary
16.1 What is special about financial markets and why a single currency might matter 16.2 Financial institutions and markets 16.3 The international role of the euro 16.4 Summary
17.1 17.2 17.3 17.4 Index
National labour markets and economic integration Labour market institutions A European model: what's on the menu? Summary