Economics and Policies of an Enlarged Europe

Economics and Policies of an Enlarged Europe

Carlo Altomonte and Mario Nava

Carlo Altomonte and Mario Nava have written a very rigorous text in an accessible and jargon-free style, ensuring easy acquisition of invaluable insights into the European economic set-up and the possible evolution of EU policies, including an update on the reform of the Growth and Stability Pact and of the 2007–13 Financial Perspectives.

Foreword by André Sapir

Carlo Altomonte and Mario Nava

Subjects: politics and public policy, european politics and policy

Extract

Foreword The European Union has changed radically since its inception in 1958. Over the years, the Union has progressively enlarged from the original six (Belgium, France, Germany, Italy, Luxembourg and the Netherlands) to the current 25 member states. As a result, its population has grown from 170 million to 460 million and its land area has increased from 1.2 million to nearly 4 million square kilometres. By comparison, the population of the United States has grown from 180 million to 280 million and its land area has stood at 9.4 million square kilometres. At the same time, the Union has evolved from a mere free trade area to a Single Market, with half of its member countries currently sharing a single currency, the Euro, which is already the world’s second most important reserve currency behind the US dollar. The latest enlargement of the European Union, which took place on 1 May 2004, is far larger and more challenging than the previous enlargements, which occurred in the 1970s (Denmark, Ireland and the United Kingdom), the 1980s (Greece, Portugal and Spain) and the 1990s (Austria, Finland and Sweden). The 2004 eastern enlargement (Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia and Slovenia) and southern enlargement (Cyprus and Malta) presents both similarities and differences when compared with the southern enlargement to Mediterranean countries in the 1980s. In terms of size (population, GDP) relative to the EU total of the time, the rounds are quite similar. However the income gap between the new...