International Papers in Political Economy

International Papers in Political Economy

International Papers in Political Economy Series Series Editors: Philip Arestis and Malcolm Sawyer Titles include: Philip Arestis and Malcolm Sawyer (editors) ALTERNATIVE PERSPECTIVES ON ECONOMIC POLICIES IN THE EUROPEAN UNION FINANCIAL LIBERALIZATION Beyond Orthodox Concerns. International Papers in Political Economy Series Standing Order ISBN 978-1-4039-9936-8 You can receive future titles in this series as they are published by placing a standing order. Please contact your bookseller or, in case of difficulty, write to us at the address below with your name and address, the title of the series and one of the ISBN quoted above. Customer Services Department, Macmillan Distribution Ltd, Houndmills, Basingstoke, Hampshire RG21 6XS, England

Alternative Perspectives on Economic Policies in the European Union Edited by Philip Arestis and Malcolm Sawyer

Selection and Editorial Matter Philip Arestis & Malcolm Sawyer 2006; individual chapters contributors 2006 Softcover reprint of the hardcover 1st edition 2006 978-0-230-01891-4 All rights reserved. No reproduction, copy or transmission of this publication may be made without written permission. No paragraph of this publication may be reproduced, copied or transmitted save with written permission or in accordance with the provisions of the Copyright, Designs and Patents Act 1988, or under the terms of any licence permitting limited copying issued by the Copyright Licensing Agency, 90 Tottenham Court Road, London W1T 4LP. Any person who does any unauthorised act in relation to this publication may be liable to criminal prosecution and civil claims for damages. The authors have asserted their rights to be identified as the authors of this work in accordance with the Copyright, Designs and Patents Act 1988. First published 2006 by PALGRAVE MACMILLAN Houndmills, Basingstoke, Hampshire RG21 6XS and 175 Fifth Avenue, New York, N.Y. 10010 Companies and representatives throughout the world PALGRAVE MACMILLAN is the global academic imprint of the Palgrave Macmillan division of St. Martin s Press, LLC and of Palgrave Macmillan Ltd. Macmillan is a registered trademark in the United States, United Kingdom and other countries. Palgrave is a registered trademark in the European Union and other countries. ISBN 978-1-349-28516-7 ISBN 978-0-230-62735-2 (ebook) DOI 10.1057/9780230627352 This book is printed on paper suitable for recycling and made from fully managed and sustained forest sources. A catalogue record for this book is available from the British Library. Library of Congress Cataloging-in-Publication Data Alternative perspectives on economic policies in the European Union/ edited by Philip Arestis and Malcolm Sawyer. p.cm. (International papers in political economy) Includes bibliographical references. 1. European Union countries Economic policy. 2. European Union countries Economic conditions. I. Arestis, Philip, 1941 - II. Sawyer, Malcolm C. III. Series. HC240.A78284 2006 337.1 42--dc22 2006046166 10 9 8 7 6 5 4 3 2 1 15 14 13 12 11 10 09 08 07 06

Contents List of Tables List of Figures Preface vi vii viii 1 Macroeconomic Policy and the European Constitution 1 Philip Arestis and Malcolm Sawyer 2 EU Financial Integration: Constraints and Alternatives 37 Marica Frangakis and Jörg Huffschmid 3 The Reform of European Regional Policy: Underlying Debates 86 Marisol Esteban 4 Assessment and Alternative Proposals on European Structural Policies: Why It Is Right to Support both the Common Agricultural Policy and Research and Innovation Policy 129 Jacques Mazier 5 Labour Market Policies in the European Union 169 John Grahl Index 203 v

List of Tables Table 1.1 Recent macroeconomic performance 3 Table 1.2 Overview of decisions relating to the Stability and Growth Pact 20 Table 2.1 Corporate finance structure in the euro area, USA and Japan (% GDP) 53 Table 2.2 Banking intermediation and foreign ownership of banks in NMS and in EU 15, 2003 54 Table 2.3 Areas of action envisaged by the Financial Services Action Plan 1999 2005 58 Table 2.4 The EU financial services sector organisational committee structure 60 Table 3.1 Commitment appropriations by cohesion objective 2007 2013 103 Table 3.2 Financial Perspectives 2007 2013. Comparison between the European Commission (February 2004), the LP proposal (June 2005) and the FA (December 2005). Differences by spending priority 2006, 2007 2013 110 Table 3.3 Main changes in Cohesion policy proposed by the LP and brought about by the FA 112 Table 5.1 EU 15 EES targets and outcomes (per cent) 188 vi

List of Figures Figure 2.1 Economic Growth in the EU-15, 1960 2004 40 Figure 2.2 Unemployment in the EU-15, 1960 2004 41 Figure 2.3 Wage Share in the EU-15, 1960 2004 42 Figure 2.4 Rate of Profit, total economy, in the EU-15, 1960 2003 43 Figure 2.5 Investment Share in the EU-15, 1960 2004 44 Figure 2.6 Market capitalisation and equity trading on european stock exchanges, 1960 2004 47 Figure 2.7 Cost-income-ratio of commercial banks in major OECD countries, 1992 2001 49 Figure 2.8 EU-15 financial integration across market participants 56 Figure 3.1 Financial perspective 2007 2013 102 Figure 3.2 Expenditure on Cohesion policy, 2000 2013 103 Figure 3.3 Financial perspectives 2007 2013. Comparison between EC proposal, the LP proposal, the FA and planned 2006 spending by main spending priority. Annual average 109 Figure 3.4 Convergence and competitiveness objectives 2007 2013 by region 121 vii

Preface This is the second volume of the new series of International Papers in Political Economy (IPPE). The new series will consist of an annual volume with four to five papers on a single theme. The objective of the IPPE will continue to be the publication of papers dealing with important topics within the broad framework of Political Economy. The original series of International Papers in Political Economy started in 1993 and has been published in the form of three issues a year with each issue containing a single extensive paper. Information on the old series and back copies can be obtained from Professor Malcolm Sawyer at the University of Leeds (e-mail: mcs@lubs.leeds.ac.uk). The theme of this second volume of five papers is alternative perspectives on the political economy of the European Union in the aftermath of the rejection of the proposed European Constitution. viii