Search

The article elaborates upon the reasons of institutional default (Part 1) and, in turn, upon the implications of economic default in Europe (Part 2). In relation to the reasons of institutional default, the paper cast light on three broadly interrelating elements: First, the conceptual issue that the EU has been operating as a community without democracy, which was clearly illustrated in the case of the economic crisis (Sect. 2.1). Second, the structural issue that EU democracy, where applicable, was deprived of politics, in the sense that founding ideology has been completely superseded by the inflexible dominance of free market (Sect. 2.2). And, third, the technical issue that EU politics, where applicable, especially after the Euro-zone launching, lacked principles that could keep the community intact (Sect. 2.3). In relation to the implications of economic default, the paper reveals three salient features. First, the political impact, namely that Europe seems to be puzzled by a sharp division between stability/cohesion and growth/monetarism, which mutates the essential mainstays of a Community (Sect. 3.1). Second, the social impact, i.e. increase of discrepancies within the EU, mostly as a result of diminution of labour rights and the correlating destruction of cohesion (Sect. 3.2). And, third, the psychological impact, which revolves around two antithetical poles, namely stereotyping and nationalism (Sect. 3.3). The epilogue reflects the view that the current depression is both a disaster and an opportunity for Europe, therefore the old messianic deal of the European integration needs an afresh look within the frame of democratic legitimacy and accountability and with an essential preservation of social state. [ABSTRACT FROM AUTHOR]

Enlargement of the EU with 10 Central and Eastern European Countries is a major item on the EU’s policy agenda. Assessing the economic consequences of the accession to the internal market is not obvious. This paper provides a new method to quantify the impact of the accession. The assessment is based on a gravity equation, estimated for 16 industries. The estimations exploit the fact that the current EU members already operate in a Single Market since 1992. The estimations provide information on the barriers, at the level of industries, that the Single Market program succeeded to remove. This is used to assess the industry-level impact of enlargement, for the current EU members and for the accession countries.This approach yields different estimates for the impact of accession to the internal market for the different industries and different countries. The impact of accession to the internal market is notably large in Agriculture, Textiles, Trade Services, Transport Equipment, Non-metallic Minerals and Food Processing. Moreover, the aggregate excess trade within the internal market is comparable to what other studies find. The shock of accession to the internal market is plausibly largest for the accession countries. For the current members of the EU the upcoming enlargement likely has the largest impact for Austria, Greece and Germany. [Copyright &y& Elsevier]