Economic Geography of the European integration Economic Geography I. International Business bachelor study programme (BA) Spring term 2015/2016. CUB Centre of Economic Geography and Futures Studies dr. Jeney László Senior lecturer

2 Factors of European integration process after WW Military/defence factors (important rather at the very beginning) – –Soviet military threats (initially German) Economic (later) – –Balancing of the American hegemony in world economy – –Collapse of colonial empires  higher towards the European direction – –Scientific–technical revolution  large-series production – BUT: too small national markets – –Expenditures of R&D  need for free movement of capital – –Joining of energetic, transport, telecommunication and informatic systems  need for free movement of services Principled idea – –‘European thinkers’, Europe as a country (rules, parliament, constitution, citizenship, currency, flag, anthem, troops)

3 Beginning of the European integration: Treaty of Rome, I. I.ECSC – European Coal and Steel Community (1952) II. II.EURATOM (1958) – –Friendly usage of nuclear energy – –Development of researches, technologies, coordination of trade III. III.EEC – European Economic Community (1958), its 3 main directions: 1. 1.Establishment of a customs union 2. 2.Establishment of an economic union 3. 3.Establishment of development funds Ratification (1957): D, F, I, NL, B, L International voice – –GB: stayed out (common agricultural, customs policy not its interest) – –SU: just a ‘further imperialist manoeuvre’

4 1 st widening, : talks have started with 4 countries: GB, IRL, N, DK Main questions (ended with compromise): GB agreed: – –Font-Sterling: not a special currency – –The French remained the 1 st working language – –EC evolved towards a federative way Claims of GB (the others has not): – –Temporary derogations: coastal fishing areas 10, joining to the agricultural market 5, to the ECSC 5, to the industrial common market 4, to the EUROATOM 1 year – –Only gradually increasing contribution to the common budget till 1978 – –Same place in the institutions like the other large ones (D, F, I) Ratifications: GB, IRL, DK yes, N no Largest market (252 mn), GDP (630 bn $, however it is only 2/3 of the US GDP)

5 Accession of Greece, : application for associated membership (1962 articles of partnership) 1967–1974: ‘coup’, military junta (‘Black Colonels’) 1975: application for full EC-membership Slow political stabilization, difference: orthodox Bad relations with TR (from the legend of Trojan horse) – –400 years Turkish rule, 9 years war of independence: 1821–1830 – –After WW1 „population exchange”, persecutions in both sides – –Question of Cyprus: 1974 – need for unification with CY (enosis)  TR occupied 1/3 of CY (Turkish Rep. of Northern CY) – –Question of jurisdictional waters of Aegean Sea GR did not make demands Political question  development was not a criterion GR could not catch up its lag – –Per capita GDP: 1980 – 60%, 2000 – 65–70% of EC average

6 Iberian Accession, Included in the West European thought since the Romans 15th–17th century: strong, 18th–20th centrury: weakened Post-war: authority regimes remained P: Salasar – –Founding member of EFTA – –Colonial wars (Angola, Mozambique), support from USA – –1974: carnation revolution – democratization by a socdem. leading E: Franco – –1972: application for associated membership to the EEC – –1975: democratization by the leading of Juan Carlos from the top – –1982: Felipe González (NATO membership) – –1983: talks (I, F slowered the accession) Harder case: large population, agriculture, dense industry, regional policy Lot of temporary derogation, rapid economic growth EEC: increased with 50 mn people (large market)  ‘Blue Europe’

7 German reunification, : no one expected to this East German tourists at the Embassies of D – –Political Office (Politbüro) of DDR has resigned (free emigration, collapse of wall) Those who could lost by the German reunification – –Leaders of DDR, SU (lost position), F, GB (occupation rights) USA: not disinterested Paris, Palace of President: agreement outside, fear inside 1990: free elections in DDR (Christian democrats  rapid reunification) By law DDR joined to D (also to EC, NATO) D: huge country in the middle of Europe, self-restraints

8 The gradually widening EU, as synonym of Europe Treaty of Maastricht: any European country can join, which respects the principles of the EU – –Morocco: outside from Europe  refused – –Turkey: other factors  refused – –But parts of the EU: Cyprus + numerous dependencies (e.g. French Guiana) Copenhagen criteria (1993) – –Political (democracy, rule of law, human and minority rights) – –Economic (functioning market economy) – –Legislative alignment (to bring the laws into the line with EU law – acquis communautaire) Accession must not endanger the results of the EU

9 The North Accession, EU came to existence: ‚who drops out, drops behind’ 1993: accession talks: A, SF, N, S (N refused by referendum) 1994: European Economic Area (EEA): EU12 + A, SF, IS, N, S (+ 1995: FL) – –Antecendents: good EC–EFTA (European Free Trade Assoc.) relations, 1977: free trade of industrial products – –Adoption 80% of single market rules (except for agriculture, fishing) – –New rules: possibility of consultation – –Significance of EEA declined (hardly more than EU): IS, FL, N, CH remained EFTA members Beneficial for EU – –Euroscepticism after Maastricht Treaty (economic–political crisis) – –Weight of EU strengthened in world economy – –Beneficial for introduction of common currency

10 Antecendents of the East Accession East Central Europe: transition 1994: „Europe Agreements”: association treaties Main question: which countries should be begun the accession talks with? Differentiation or Regatta Principle – –Majority of member states supported the differentitation 1995: Council asked the Committee to make country reports (avis) (June 1997) – affect of enlargement to EU 1997, Agenda 2000: determines the financial conditions of enlargement (adopted by the Berlin Summit, 1999) Council decides on acceptance of application (Luxemburg Summit, Dec 1997: launching of Eastern enlargement) – –Accession talks with the most prepared 5+1: CZ, H, PL, SLO, EST + CY (H: from 1988) – –Only process of enlargement: 5 countries (BG, LT, LV, RO, SK) – –Only partner of the EU: TR (human rights)

11 „Reunification” of Europe, : Helsinki Summit – –Accession talks with the others – –Except for TR, candidate status 2002: Reforms of Nizza: determines the institutional conditions of enlargement Closing of accession talks (except for BG and RO) 2003: referendum in the candidate countries on the membership – –H: 88% yes (however: participation only 46%) 2003, Athens: 10 countries signed the accession treaty 2004: 25 EU member states

12 Impacts of enlargementsAreaPopulationGDP Per capita GDP GDP Growth in %

13 Challenges of East Accession 13 countries wanted to access More underdeveloped ones Widening and deepening at the same time: – –Community achievements (acquis communautaire) should remain – –EU should remain being able to be financed Area increased with 34%, agricultural land area 50%, pop. 29%, agricultural producers 100%, GDP 9% Per capita GDP: decreased with 16% – –Institutional bodies should function

14 Further Eastern enlargement  future boundaries of EUrope 2007: BG, RO also members 2013: Croatia (talks from 2005)  28 members – –Supported by the Hungarian Presidency, accession talks from 2005, but paused Official candidate countries – –Albania: candidate from 2014 without accession talks – –Macedonia: from 2005 without talks (GR, BG hamper) – –Montenegro: from 2010, accession talks from 2012 – –Serbia: from 2012, accession talks from 2014 – –Turkey (1964: associated member, 1987: application for membership, candidate from 1999, talks from 2005, but membership unlikely before 2020) Potential candidates: Bosnia–H, Kosovo Ukraine, Georgia, Moldova?

15 Outher countries standing out Refused by European integration – –Morocco: 1987: application for membership, non- European  refused Not scheduled – –Belarus – –Russia Refused by the given country – –Norway: refused 2X by referendums (1973 and 1994) – –Greenland: exit in 1985 – –Switzerland: refused by referendum (1992) – –Iceland: candidate from 2010, but requested (2015)