Economic Integration and the Euro

The United States of Europe

A. Economic IntegrationHighly successful since beginnings of the EEC Improved trading relations

Fewer trade wars, disputes, retaliatory measures Greater cooperation: sharing markets and transport networks

Higher growth in volume of intraregional (international) trade than that between non-EU industrialized countries

Single market reduces barriers to trade: administrative (institutional decision making/national economic

policy) and, technical (non-standard forms of production and business, e.g.

European single currency (EMU), national laws governing quality standards)

New Infrastructures designed and built according to new EU institutional contexts

New geography of Integration being established

Euro Tunnel: New Landscape of Integration

A. Economic Integration (cont.)New geography of Integration being establishedSome stats:

In 1983, <50% of trade in Denmark, Finland, Iceland, Italy, UK was with European countries

Over 50% in all 5 countries by 1992. Older EEC countries well over 70% (especially Benelux)

Recent non-EU countries have also experienced greater economic integration since joining

European Regional Development Fund (ERDF) Funds infrastructural development Fosters greater integration

New Bridge spanning the CorinthGulf Strait

Rotterdam, “Germany’s largest port”

A. Economic Integration (cont.)Recent non-EU countries have also experienced

greater economic integration since joining European Regional Development Fund (ERDF)

Funds infrastructural development Fosters greater integration

So what are the advantages?Why are more and more Europeans buying from

other Europeans? What structural changes have taken place across

Europe?What are the challenges to European integration? Where does the Euro fit in?

A. Economic Integration (cont.)Why integration?Facilitated by reduction of trade barriers to create a

single marketGlobal trend of accelerated mergers, take-overs

and consolidation foster horizontal as well as vertical linkages (to remain competitive)

Growth of European multinationals BP (UK) Unilever (Netherlands) Daimler-Chrysler (Germany)

Euro is key ingredient of European Economic integration

Revenue no longer related to foreign exchange rates

B. Introducing the EuroEuro is key ingredient of European Economic integration

B. Introducing the EuroEuro is key ingredient of European Economic integrationAdopted on January 1, 2002.12 member states currently use the Euro: Belgium,

Germany, Greece, Spain, France, Ireland, Italy, Luxembourg, the Netherlands, Austria, Portugal and Finland

Culturally symbolic of integration and unity

See “Striking Stories: a political geography of eruo coinage,” Political Geography 23 (2004) 929-956

Currency of the Generation ‘E’

B. Introducing the EuroEuro is key ingredient of European Economic integrationAdopted on January 1, 2002.12 member states currently use the Euro: Belgium,

Germany, Greece, Spain, France, Ireland, Italy, Luxembourg, the Netherlands, Austria, Portugal and Finland

Culturally symbolic of integration and unity Illustrates the uneven integration of Europe, even

within the EUAdoption of Euro as challenge to continued EU

integrationCloser regional ties among ECU countries

Regionalism Toward IntegrationEuropean Integration is not an even processRegional blocs even within Europe

Reflect levels of developmentEstablished trading partnershipsPropinquityAdoption of the Euro

Still remain non-EU alliancesEFTA (European Free Trade Association; 1960)EEA (European Economic Area; 1990s)

Regionalism Toward IntegrationEuropean Integration is not an even process

Regional blocs even within Europe Reflect levels of development Established trading partnerships Propinquity Adoption of the Euro

Still remain non-EU alliances EFTA (European Free Trade Association; 1960) EEA (European Economic Area; 1990s)

SummaryEconomic Integration is driving cultural and political

integrationAdoption of the Euro is key to creating a fully

integrated, unimpeded European Economic space