Economic Geography of the European integration Economic Geography I. International Business bachelor study programme (BA) Spring term 2014/2015. CUB Department of Economic Geography and Futures Studies dr. Jeney László Senior lecturer

2 Factors of European integration process after WW2. 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 – –Scientific-technical revolution  large-series production, but small national markets – –Expenditures of R&D, free movement of capital – –Joining of energetic, transport, telecommunication and informatic system  spread 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 has not become a special currency – –The French remained the 1st 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 relation with TR – GR – TR conflict (from the legend of Trojan horse) – –„Population exchange”, persecutions in both sides – –Question of Cyprus: in 1974 TR occupied NE third of CY (Turkish Republic of Northern Cyprus) – –Jurisdictional waters of Aegean Sea GR did not make demands Development was not a criterion GR has not catch up its lag

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 slower the accession) Harder case: large population, agriculture, dense industry, regional policy Lot of temporary derogation, rapid economic growth EEC: increased with 50 mio 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) In 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: refused  outside from Europe – –Turkey: refused  outside from Europe + other factors – –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, that drops behind North Countries: EFTA (European Free Trade Association) – –Good relations between EC and EFTA – –1977: free trade of industrial products – –1994: European Economic Area (EEA): EU12 + A, SF, IS, N, S (+ 1995: FL) Adoption 80% single of market rules (expect for agriculture, fishing) New rules: possibility of consultation 1993: accession talks: A, SF, N, S N: refused by referendum Beneficial for EU – –Euro scepticism after Treaty of Maastricht (economic – political crisis) – –Weight of EU strengthened in world economy – –Beneficial for introduction of common currency Significance of EEA declined (hardly more than EU) – –IS, FL, N, CH remained EFTA members

10 „Reunification” of Europe, East Central Europe: transition „Europe Agreements”: association treaties (H: 1994) Committee makes country reports (avis) (June 1997) Council decides on the acceptance of application (December 1997) 2003: referendum in the candidate countries on the membership – –H: 88% yes (however: participation only 46%) 2003: Athens: 10 countries sign the accession treaty 1st May 2004: 25 EU member states 1st January 2007: BG, RO also members 2013: Croatia (talks from 2005)  28 members

11 Further enlargement  future boundaries of EUrope Official candidate countries – –Turkey accession talks from 2005 membership unlikely before 2015–2020 – –Montenegro: candidate from 2010 – –Iceland: accession talks from 2010  potential accession 2013 – –Macedonia: candidate from 2005 with no talks – –Serbia: candidate from 2012 Potential applicants: Albania, Bosnia–H, Kosovo Ukraine, Georgia, Moldova?

Impacts of the enlargements on the European economic pattern

13 Effects 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 Impacts of enlargementsAreaPopulationGDP Per capita GDP GDP Growth in %

Position of EU in relation to the other cores Area km 2 Population persons GDP PPP Per cap GDP PPP Export US $ Import US $ EU 4,3 mn WR7 490 mn WR3 14,82 bn WR WR31 1,95 bn WR1 1,69 bn WR2 USA 9,8 mn WR3 310 mn WR4 14,66 bn WR WR10 1,29 bn WR3 1,94 bn WR1 Japan 380 th WR mn WR11 4,31 bn WR WR28 0,76 bn WR4 0,64 bn WR4 China 9,6 mn WR mn WR1 10,09 bn WR WR100 1,58 bn WR2 1,33 bn WR3

16 The pattern of European economy

17 Shifting of the economic Core

18 Geogrpahical concentration of the economy still remained in the Core Economic development: GDP per capita Economic density: area GDP per area

19 The European Pentagon Pentagon/Core –Area: 20% –Population: 40% –GDP: 50% Cities over residents: –population: 20% –GDP: 29% –GDP/cap.: 141% –GDP-growth: faster with +8%- point

20 Economic Importance of Cities in North America Economic development measured only with per capita GDP Economic development measured only with per capita GDP –At current market prices in € –Examined area: V4 Countries (CZ, HU, PL, SK) –Examined regional level: NUTS3 –Examined period: 1995–2004 Data source: Eurostat Data source: Eurostat Proportion of cities in Canada/USA countrypopulationGDP USA (SMA)38%49% Canada (CMA)45%54%

21 Growing Importance of Cities in European Economic Pattern Studying success of cities becomes a key issue for current European regional trends and regional policy Most of the cities over average Some countries: only the cities are over average (e. g. V4) Some countries: other inequality factors are more important (Germany, Italy, Romania, Spain) Economic Development State of Cities and Rural Regions Related to their National Average, 2004.

22 Differences of Urban–Rural Duality in Member States of EU, 2004 Source of data: Eurostat, basis of map: World Gazetteer Cities over residents: population: 20% GDP: 29% GDP/cap.: 141% GDP-growth: faster with +8%- point Measuring Urban–Rural Duality D UR : urban–rural duality index x U : average per capita GDP of cities in a country x R : average per capita GDP of rural regions in a country

23 Relationship Between State of Development and Urban–Rural Duality for EU Members, 2004 Source of data: EuroStat

24 Post-socialist countries: characterized with growing urban–rural dualism Chiefly the outstanding of capitals Chiefly the outstanding of capitals More remarkable in case of underdeveloped, catching-up V4 countries than older members More remarkable in case of underdeveloped, catching-up V4 countries than older members Change of Urban–Rural Duality in EU Member States, 1995–2004 Source of data: EuroStat

25 Post-socialist cities are to join to the 2nd level of European city- network Post-socialist cities: new development wave (similar to Southern Periphery) based chiefly on international investments Post-socialist cities: new development wave (similar to Southern Periphery) based chiefly on international investments New European models on Peripheries should adjust the classic urban zone of Blue Banana New European models on Peripheries should adjust the classic urban zone of Blue Banana –Sunbelt or (Golden Banana) –Central European Boomerang)

26 V4: success of cities not independent of the shift of their sectoral structure V4: success of cities not independent of the shift of their sectoral structure V4: success of cities not independent of the shift of their sectoral structure –Increase of urban–rural inequality is mainly tertiary based –Industrial renewal hide in the background of fine differences among rural regions AgricultureIndustryServices Cities 1995– Rural regions 1995– Growth Indexes of Gross Value Added (GVA) in the Sectors in V4 Countries, 1995–2004.