EU Entry Research Articles

Opa! Did EU Entry Contribute to the Greek Crisis?

This paper focuses on possible underlying causes of the current Greek debt. The Gregory and Hansen residual-based cointegration test is to test Greek deficit sustainability with annual data from 1988 to 2012. This cointegration test identifies structural breaks when they are unknown a priori. Estimated results reveal a break in 1996. The break in 1996 coincides with the election of Simitis as prime minister, suggesting that the current debt problem may be due to increased government expenditure associated with the tenure of Simitis rather than due to EU entry.

Stock Market Comovements in Central Europe: Evidence from Asymmetric DCC Model

We examine time-varying stock market comovements in Central Europe employing the asymmetric dynamic conditional correlation multivariate GARCH model. Using daily data from 2001 to 2011, we find that the correlations among stock markets in Central Europe and between Central Europe vis–a–vis the euro area are strong. They increased over time, especially after the EU entry and remained largely at these levels during financial crisis. The stock markets exhibit asymmetry in the conditional variances and in the conditional correlations, to a certain extent, too, pointing to an importance of applying sufficiently flexible econometric framework. The conditional variances and correlations are positively related suggesting that the diversification benefits decrease disproportionally during volatile periods.

Greek Drama on a Global Stage

Greek Drama on a Global Stage

European Immigration Law: Compliant with the Rights of National Minorities?

This article examines a problem at the intersection of two areas of law: European immigration law and international law on the protection of minorities. The introduction of the EU entry requirements by the new Member States in Central Europe has had a negative impact on the intensity of cross-border travel between these states and their neighbors that remain outside of the EU. Groups that are among the most a fected by this development are national minorities divided by the EU external border. Strict entry requirements may prevent these people from maintaining people-to-people contacts and preserving their group identity. The right of national minorities to cross-border contacts is enshrined in several instruments of international law, in particular the Framework Convention for the Protection of National Minorities. On a model case of the Rusyn minority living alongside the border of Slovakia and Ukraine, this article will demonstrate the conflict between this legal instrument and EU immigration rules, thus pointing to a clash of two legal orders. On one hand, the international law for the protection of minorities obliges the new Member States to respect the right to cross-border contacts; on the other hand, EU law obliges them to apply strict entry requirements for third-country nationals, thus making those contacts difficult.

TERRITORIAL (DIS)CONTINUITY DYNAMICS BETWEEN CEUTA AND MOROCCO: CONFLICTUAL FORTIFICATION VIS‐À‐VIS CO‐OPERATIVE INTERACTION AT THE EU BORDER IN AFRICA

ABSTRACTThis contribution examines the development of territorial dynamics on the Ceuta‐Morocco border region in the context of the structural Spanish‐Moroccan rebordering that followed Spain's EU entry. The evolution of border practice is canvassed through the confronting notions of territorial discontinuity and territorial continuity. Clearly, current territorial dynamics between Ceuta and Morocco are characterised by both the existence of conflictive geopolitical cross‐border dialectics and the implementation of fortifying securitisation measures. However, simultaneously, the border region is also marked by intensifying patterns of cross‐border interaction which are sourced in the rising potentialities of economic and urban cross‐border co‐operation. In this light, the paper seeks to map the present intertwining of these apparently disagreeing territorial trends. To conclude, the paper underlines the ongoing modification of relational power between Ceuta and Morocco. It depicts the strengthening of local cross‐border co‐operative practices as a potential tool to cope with persistent sovereignty disputes in the border region.

The price stabilization effects of the EU entry price scheme for fruit and vegetables

The paper assesses the stabilization effects of the EU import regime for fresh fruit and vegetables based on the entry price system. The analysis is carried out on the EU prices of tomatoes and lemons and those of imports from some of the main competing countries on the EU domestic markets: Morocco, Argentina and Turkey. It is based on the estimation of a threshold vector autoregressive econometric model that is shown capable of taking the workings of the import regime into account. The model shows that prices behave differently when import prices are above/below the trigger entry price. This paper allowed to highlight the cases for which the isolation effect of EPS seems reached and the resulting stabilization effects.

Working Paper 9: The situation of Financial Intelligence Units in Central and Eastern Europe and the former Soviet Union

The transition process in many countries in Central and Eastern Europe from a one-party state to a democratic system has been long and difficult and has frequently been accompanied by institutional instability.
 The judiciary and law enforcement bodies have been no exception. Both have suffered from a weak legal tradition in many countries of the region, weak implementation of existing legislation, limited operational effectiveness, corruption and the influence of informal personal networks. These developments can also be observed in the area of financial intelligence.
 Following the fall of the Berlin wall in 1989 and the events of September 2001, most countries of the region adopted legislation aimed at combating money laundering and terrorist financing, as required by their international commitments as well as EU entry requirements. In this context, most countries also set up the required institutions, notably a Financial Intelligence Unit (FIU).

Cointegration in Central and East European markets in light of EU accession

This study investigates the impact of EU accession on financial markets in the Czech Republic, Estonia, Hungary, Poland, Romania and Slovakia and what effect, if any, EU entry had on the cointegration relationships between these markets and developed ones. Using a VAR approach, we find an increase in the number of cointegration relationships over time. However, it appears that EU accession plays a minor direct role in the development of these links, cointegration being driven more by financial and economic factors as opposed to explicit political actions.

Knowledge Management in the Hotel Industry Before and After the Entry in the EU: The Case of Slovenia

Knowledge Management in the Hotel Industry Before and After the Entry in the EU: The Case of Slovenia The paper deals with the impact of the EU entry on knowledge management in the hotel industry in Slovenia. For this purpose, the empirical research on knowledge management was carried out among hotel managers. It explored the changes in knowledge management between 2003 and 2006; that is before and after Slovenia entered the EU. The research revealed a progress in this period of time in knowledge management goals definition, transformation of not-owned into owned knowledge, inclusion of knowledge management in business reports, identification and elimination of the gaps between planned and actual knowledge. On the other hand, there was no further progress in the field of strategies and policy of knowledge management, perception of the importance of knowledge management's measurement, development of measures of knowledge management and diminishment of barriers to knowledge development. Further, several recommendations are suggested for hotel managers.

Competition in the Polish Banking Sector

The paper aims to assess changes in the level of competition in Poland’s banking sector in 1997-2007. Competition between banks is one of the most important factors behind the stability of the financial sector through its influence on the profitability of banks, access to external funding, and the country’s economic development as a whole. In this paper, the Panzar and Rosse model was applied to assess the level of competition in the banking sector. The results of the analysis of the Polish banking sector show that between 1997 and 2007 commercial banks operated under monopolistic competition. The degree of competition in the Polish banking sector is close to that in euro-area banking sectors (which is reflected by the values of the Panzar and Rosse measures). This applies to both corporate and retail banking. The main driving factor behind competition in the Polish banking sector was the country’s entry into the European Union. The same channels, i.e. consolidation and financial deregulation, that were observed in the EU at the time of adopting the euro influenced competition between banks in the Polish banking sector at the time of EU entry. This was mainly due to foreign capital from the euro area.

The entry price system for fresh fruit and vegetable exports from China to the EU — Breaking a fly on the wheel?

Abstract China's exports of apples and pears to the EU have increased substantially, although the EU production of apples and pears is protected by the EU entry price system (EPS), aiming to protect EU producers against international competition by restricting imports below a minimum import price. This study investigates the relevance of the EPS for Chinese exports of apples and pears to the EU accounting for changes over time and seasonal variation. Our results suggest that the high relevance of the EPS for apples originating in China was of temporary nature, whereas the relevance of the EPS for pears originating in China is of a more general nature. In addition, the relevance of the EPS varies seasonally. Finally, we find that the production of pears in China is more competitive than the production of apples vis-a-vis the EU. Therefore, China's fresh fruit and vegetable (FFV) producers would benefit more from an improved EU market access for pears than for apples. Thus, China should put more effort in negotiating improved EU market access conditions for pears rather than for apples.

Iceland’s Neighbours in the EU Entry Queue: Contrasts or Parallels in EU Enlargement to the North and the South-East

In 2009, Iceland finds itself negotiating for EU entry alongside a group of 7 candidates and potential candidates from the Western Balkans. All are much poorer than Iceland and suffer from the legacies of regional conflict, ethnic division and under-development, plus specific weaknesses of governance, law and order. However, all the Balkan applicants have a clear majority of public opinion in favour of the EU and (except for Serbia) a cross-party consensus on accession. The severity of their problems makes EU and NATO membership their only hope and chance of a peaceful future, and also provides the main motive for the EU to grant their wish. Indeed the EU practises a policy of ‘conditionality’, using the lure of accession as leverage to make them improve their ways. Iceland does not have the same life-and-death importance for the EU unless, eventually, in the context of Arctic strategy. Several EU states have made clear they would not wish Iceland to ‘jump the queue’ past the other candidates. There may be lessons here for Iceland’s handling of its own negotiations.

Capital flows and the boom–bust cycle: The case of Estonia

During 2000–2007, Estonia was among the fastest growing emerging market economies, but in late-2008 entered a deep recession. This paper examines shocks, institutions, and policies that have made Estonia's boom–bust cycle so severe. It finds that an open capital account, the prospect for EU entry, and the currency board facilitated massive capital inflows, which led to credit and real estate booms. In late-2008 a domestic slowdown was greatly amplified by the global financial and economic crisis. To resume sustainable growth, the country will need to regain competitiveness and rebalance resources to exports. Estonia's experience underscores the importance for other emerging market economies to retain some flexibility in their macroeconomic frameworks and approach capital account liberalization cautiously.

The Europeanization of Political Parties in Central and Eastern Europe? The Impact of EU Entry on Issue Stances, Salience and Programmatic Coherence

The completion of the two-wave entry of CEE states in the EU potentially changes the impact of European integration issues on party politics in the region. Membership entails movement from a general aspiration to ‘return to Europe’ to hard costs and specific policy instruments. But are these changes reflected in the Europe-relevant issue stances taken by parties and in the importance parties assign to them in their electoral appeals? Has the relationship of European and integration issues to the broader issue bases of party competition changed? Data from expert surveys of political parties in the ten new CEE member states conducted just before and just after accession reveal that, in line with expectations from comparative literature on party competition, entry has had little impact on party stances but greater impact on the salience of integration issues.

The Economic Impacts of Turkish Accession to the European Union

AbstractHalf a century has passed and Turkey is no further toward achieving EU membership. Under the mandate of the Barcelona Declaration, EU–Turkish industrial tariffs will be abolished, whilst agro‐food protectionism remains largely intact. Consequently, the direct impacts from a hypothetical EU accession scenario will be concentrated in agro‐food sectors, whilst their share of economic output in Turkey implies ‘secondary’ macro impacts.To this end, a computable general equilibrium (CGE) framework is employed to quantitatively reassess full Turkish accession. Unlike previous CGE studies, agriculture, fishing and food sectors are disaggregated, whilst significant advancements to the ‘standard’ model code are incorporated to capture the vagaries of agricultural factor, input and product markets. In addition, a realistic ‘baseline’ scenario is constructed including ‘up to date’ trade and domestic agricultural policy reforms prior to Turkish entry to the EU.The results show that trade‐led gains in Turkey are moderated due to tariff liberalisation prior to EU entry, whilst Turkey receives significant budgetary transfers from the CAP budget, which are ‘mirrored’ as EU‐27 costs. With additional migration effects, Turkish (EU‐27) production possibilities fall (rise), whilst real income per capita rises (falls).

Foreign Ownership and Corporate Performance: The Czech Republic at EU Entry

Does foreign ownership improve corporate performance or do foreign firms merely select more productive targets for takeover? Do workers benefit from foreign acquisitions? We answer these questions based on comparing the before/after change in several performance indicators of Czech firms subject to foreign takeover after 1997, i.e., after the initial waves of privatization were completed, with the corresponding performance change of matched companies that remain domestically owned until 2005. We find that the impact of foreign investors on domestic acquisitions is significantly positive only in non-exporting manufacturing industries, while it is small in both services and manufacturing industries competing on international markets.

Securing the Only Game in Town: The EU's Political Conditionality and Democratic Consolidation in Post-Soviet Latvia

The state of democracy in post-communist Europe has been subject to some debate in recent years; but it needs to take account of longer-term trends. The focus here is on how far the EU's political conditionality has contributed to democratic consolidation using an in-depth case study of post-Soviet Latvia. The record of the impacts of conditionality up to EU entry is examined and then attention turns to whether post-accession tendencies have demonstrated any significant changes after the end of Brussels' monitoring. Using a comparative framework, this article shows that the outcome after four years of EU membership is mixed with both positive and negative results. It is concluded that there is no automatic locking-in effect of European integration; and that conditionality assists democratic consolidation more in structural than in attitudinal or behavioural terms.

The EU entry price system for fresh fruits and vegetables – Paper tiger or powerful market barrier?

The EU protects EU growers of 15 kinds of fresh fruits and vegetables against international competition by the entry price system (EPS), which is designed to restrict imports below the product-specific, politically designated entry price level. This study investigates the relevance of the EPS per product and country of origin. We develop two indicators for the effectiveness of the EPS, which serve as variables in a cluster analysis identifying four classes differing in the relevance of the EPS. The relevance of the EPS is found to be heterogeneous among products as well as countries of origin. It is highest for artichokes, courgettes, cucumbers, lemons, plums and tomatoes. The influence of the EPS on apples, clementines and pears is significantly lower, and of least relevance for apricots, mandarins, oranges, peaches and nectarines and table grapes. The EPS has the greatest effect on countries which neighbour the EU, whereas it is of minor importance for exports from far-away countries with the exception of China and South Africa.

A Comparative Study on the Business Environment of Major Nations for EU Entry of Korean Corporations

A Comparative Study on the Business Environment of Major Nations for EU Entry of Korean Corporations

Status Quo Bias or Institutionalisation for Reversibility?: The EU's Political Conditionality, Post-Accession Tendencies and Democratic Consolidation in Slovakia

The EU's political conditions have been a consistent and at times salient element in the accession process, since Brussels enlarged their scope and tightened procedures from the mid-1990s. But so far little attention has been given to post-accession compliance with these conditions. This is important, for while the European Commission no longer monitors them, the political conditions were imperfectly implemented by the time of the 2004 enlargement. The question that therefore arises is whether compliance continues or whether there are any tendencies to reverse the process. Using a comparative approach based on four alternative hypotheses, this problem is explored in detail using the case of Slovakia, a country where the EU has been a prominent factor in its return to the path of democratisation after the Mečiar years. Comparing Slovakia's performance on the EU political conditions before EU entry in 2004 and during the three years after, two competing approaches, ‘rationalist’ and ‘constructivist’, are assessed. It is found that the fears of the rationalists have not been strongly justified nor have the hopes of the constructivists been much encouraged. The outcome of political conditionality is related to democratic consolidation in Slovakia, and the conclusion is that the former assisted the latter despite its limitations but much more with respect to reforming institutions than to changing either attitudes or behaviour.