IMPACT OF EUROPEAN INTEGRATION : WHICH RELEVANCE FOR LATIN AND CENTRAL AMERICA?

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IMPACT OF EUROPEAN INTEGRATION : WHICH RELEVANCE FOR LATIN AND CENTRAL AMERICA?. MARCO LOPRIORE Atlas Study Visit Montevideo, November 5, 2002. TODAY’S AGENDA I nternal m arket - Impact on prices, benefits for companies - FDI and trade Cohesion - Impact on closing development gap - PowerPoint PPT Presentation

Text of IMPACT OF EUROPEAN INTEGRATION : WHICH RELEVANCE FOR LATIN AND CENTRAL AMERICA?

  • IMPACT OF EUROPEAN INTEGRATION:WHICH RELEVANCE FOR LATIN AND CENTRAL AMERICA?

    MARCO LOPRIOREAtlas Study VisitMontevideo, November 5, 2002

  • TODAYS AGENDAInternal market- Impact on prices, benefits for companies- FDI and tradeCohesion - Impact on closing development gap- Macroeconomic impact on trade balanceEnlargement - Impact on trade with Central and Eastern Europe- And with Mediterranean areaEconomic and Monetary Union Macro impacts Regional

  • INTERNAL MARKET

  • INTERNAL MARKET CECCHINI REPORT 1988 (A)Delays at frontiers for custom purposes, administrative burdens impose costs on trade, restrictions on competition for public purchases, Restrictions on financial and transport sector;Empirical estimates: frontier formalities cost 1,8 % of value of intra EU traded goods; technical regulations cost 2% of companies total cost;Forecasted: Increase in GDP of 5% or 20-30% intra EU tradeToo optimistic ?

  • INTERNAL MARKET (A)Impact on public purchase: imports of public sector from 6% in 1987 to 13% in 1997;Impact on peripherical regions: (Portugal, Ireland, Greece);Prices are becoming more similar (except for motor vehicle - see table);Large industries reap benefits: in particular from smaller countries (Greece, Finland, Denmark, Ireland); Difficulties of SMEs (higher fixed costs);

  • CAR PRICE DIFFERENCES IN EUR10: annual average of difference of highest to lowest price in %

    The introduction of the euro has not yet had an impact on manufacturers pricing policies: the highest price can still differ more than 25% from the cheapest country within the euro area

  • PARTICIPATION OF LARGE COMPANIES IN INFRASTRUCTURE PROJECTS

    PROJECT

    MANAGEMENT CONSORTIUM

    SUBCONTRACTANT ENTERPRISES

    Athens-Sparta airport

    Athens Internation Airport Co.

    (Gr-D): Hochtief AG (D)

    ABB Airport System (Switzerland-D), Airsys Navigation System (D-F), Milgo Solutions (USA)

    Rio-Antirrio Bridge

    Gefyra (F-Gr): Vinci (F)

    Kinopraxia Gefyra (F-Gr): Dumez-GTM (F)

    Thessaloniki underground

    Thessaloniki Metro SA (F-Can-Gr): Bouygues (F), Bombardier (Can), Systra (F)

    Bombardier Transportation (Can), Loughbrough (UK), Alcatel (Can)

    Athens underground

    Attiko Metro (Gr)

    Olympic Metro JV (D-F-Gr)

    Egnatia road

    Egnatia Odos SA (Gr)

    Brown&Roots (UK), Sogerleg (F)/ Omec (USA)/Lahmeyer (D), DeLeuwe Cather (USA), Drosch Consult (D)/ Scetaroute (F)/ Ado (Gr)

    Medcenter Container Terminal of Gioa Tauroi

    Constship Italia (D): Eurokai (D), BLG (D)

    BLG (D)

  • INTERNAL MARKET(B)EU attracted 44% FDI in 1990 compared to 28% in 1980;While mergers / acquisitions doubled between 1991 and 1999, only 30% between 1986-1995 were between 2 different Member States;Foreign businesses reaping benefits?US companies produced in 1997 48% of value added and 44% of jobs in UK and respectively 44% and 33% in NL;

  • EU INTEGRATION AND TRADEPattern of trade tend to become more similar as EU become more interdependent;Intra industry trade is high for all EU; Exception for Greece, Ireland and Portugal where it is low because of their development gap in the productive structure;

  • INTRA-EU TRADE INTEGRATION

    BLUE (B + L), IRL and NL intra-EU trade GDP ratio is higher than 30%;Small MS intra-EU trade GDP ratio is higher than Large MS ratio;D,E,F and I intra-trade GDP ratio is lower than 15%;

  • COHESION

  • REDISTRIBUTING INCOME BETWEEN COUNTRIES AND REGIONS Million

  • 01

    GDP and population growth in cohesion countries, 1988-2002

    PeriodELEIRLPEU3 **EUR12 *EU15 *

    Annual average % change in GDP88-981.92.66.53.12.62.02.0

    88-931.22.04.42.62.01.71.7

    93-982.73.18.63.73.22.42.4

    projections98-023.73.28.02.53.22.12.2

    GDP per head (PPS), EU15=100 ***198858.372.563.859.267.8106.6100.0

    198959.173.166.359.468.4106.4100.0

    199057.474.171.158.568.6106.4100.0

    199160.178.774.763.873.0105.2100.0

    199261.977.078.464.872.3105.3100.0

    199364.278.182.567.774.0105.0100.0

    199465.278.190.769.574.4104.9100.0

    199565.978.293.370.574.8104.8100.0

    199666.779.394.170.775.7104.6100.0

    199765.979.9103.674.776.5104.5100.0

    199866.879.2105.773.676.1104.5100.0

    199968.282.2111.773.778.3104.1100.0

    200069.282.5118.573.578.7104.1100.0

    projections200170.983.1121.273.479.4103.9100.0

    200272.583.2122.173.779.8103.9100.0

    * Growth rates 88-98 and 88-93: excluding new German Lnder

    ** EL + E + P

    *** ESA95 methodology from 1995 onwards

    Source: Eurostat (national accounts) + calculations DGREGIO

    &C&"Small Fonts,Regular"&6REGIO.A1/HP/&F &A &D &T

    02

    GDP per head (in PPS) in Objective 1 regions (1994-99), 1995-1999

    19951996199719981999

    HAINAUT7675737369

    Obj. 1 BELGIQUE-BELGI7675737369

    BERLIN-OST, STADT:::::

    BRANDENBURG7274727170

    MECKLENBURG-VORPOMMERN7173726970

    SACHSEN7375737171

    SACHSEN-ANHALT6770696868

    THRINGEN6869706969

    Obj. 1 DEUTSCHLAND7173717070

    ANATOLIKI MAKEDONIA, THRAKI5656545556

    KENTRIKI MAKEDONIA6469686869

    DYTIKI MAKEDONIA6061666765

    THESSALIA5758575960

    IPEIROS4343454651

    IONIA NISIA5657616060

    DYTIKI ELLADA5353515153

    STEREA ELLADA8385818083

    PELOPONNISOS5353545655

    ATTIKI7674737477

    VOREIO AIGAIO5961636464

    NOTIO AIGAIO7478818180

    KRITI6568666668

    Obj. 1 ELLADA6667666768

    GALICIA6364646365

    PRINCIPADO DE ASTURIAS6969706971

    CANTABRIA7373747478

    CASTILLA Y LEN7475747375

    CASTILLA-LA MANCHA6465656565

    EXTREMADURA4950504952

    COMUNIDAD VALENCIANA7475777679

    ANDALUCA5859595760

    REGIN DE MURCIA6566676668

    CEUTA Y MELILLA6565666665

    CANARIAS7576777781

    Obj. 1 ESPAA6566666668

    CORSE7976767881

    GUADELOUPE5656565656

    MARTINIQUE6364636364

    GUYANE5953515151

    REUNION5352515151

    Obj. 1 FRANCE6059585859

    IRELAND9394104106112

    ABRUZZO8888858585

    MOLISE7779818080

    CAMPANIA6564656666

    PUGLIA6767656667

    BASILICATA7072727375

    CALABRIA6161616263

    SICILIA6666666766

    SARDEGNA7676767879

    Obj. 1 ITALIA6868676869

    FLEVOLAND8378828280

    Obj. 1 NEDERLAND8378828280

    BURGENLAND7172717071

    Obj. 1 STERREICH7172717071

    NORTE6060636161

    CENTRO5757595757

    LISBOA E VALE DO TEJO9394100100100

    ALENTEJO5959625858

    ALGARVE6866697069

    AORES5049515253

    MADEIRA6364687172

    Obj. 1 PORTUGAL7171757474

    MERSEYSIDE6870727271

    HIGHLANDS & ISLANDS7777777775

    NORTHERN IRELAND7979828178

    Obj. 1 UNITED KINGDOM7475777775

    EU15100100100100100

    6869697071

    6970707071

    (1) Only regions wholly eligible for Objective 1 (1989-93 and/or 1994-99)

    (2) Only regions with Objective 1 status throughout the period

    (3) Regions with Objective 1 status from 1994 to 1996 (i.e. including Abruzzo)

    Source : Eurostat

    &C&"Small Fonts,Regular"&6REGIO.A1/HP/&F &A &D &T

    03

    (standard deviation of index EU15=100)

    Member State19851986198719881989199019911992199319941995199619951996199719981999

    B25.925.024.824.524.725.125.126.027.125.925.526.040.140.840.740.839.4

    D38.635.832.431.330.930.225.825.425.225.425.4

    - excl. New Lnder21.322.021.621.021.021.822.723.022.823.423.523.7:::::

    EL6.26.06.16.16.56.36.16.67.67.88.28.610.410.29.59.59.7

    E13.013.714.013.914.914.916.015.915.215.916.616.816.817.217.818.018.9

    F28.427.828.328.628.628.929.928.929.930.829.629.028.328.227.627.027.2

    IRL13.813.516.716.617.4

    I24.425.225.125.725.824.824.724.924.725.526.827.228.528.627.728.127.7

    NL12.612.212.611.510.610.611.811.311.510.811.512.313.414.315.416.116.2

    A24.824.725.327.527.027.528.628.730.328.128.828.625.524.923.822.322.4

    P14.216.218.517.217.713.515.013.614.313.813.313.116.016.518.219.119.1

    FIN17.417.417.918.117.717.917.715.417.017.117.120.019.520.920.823.924.2

    S9.710.711.010.710.910.812.010.912.811.010.911.113.114.016.217.016.4

    UK18.719.620.721.220.720.219.219.620.618.317.318.531.531.634.035.634.2

    EU15 (by region)29.428.627.727.527.226.928.728.528.629.028.4

    - excl. New Lnder27.127.127.026.726.426.526.426.526.326.526.426.1:::::

    EU15 (by Member State)13.113.212.512.712.511.812.411.911.511.510.8

    - excl. New Lnder17.417.216.415.915.315.415.515.614.614.614.513.6:::::

    EU15 (within M.S.)24.523.823.423.022.923.024.724.825.025.425.2

    - excl. New Lnder19.920.320.620.720.720.621.020.921.321.221.221.523.924.224.524.824.6

    Source : Eurostat + calculations DGREGIO

    (*) till 1994: GDP (ESA79 figures) for NUTS2 regions (v.95); from 1995 on: GDP (ESA95 figures) for NUTS2 regions (v.98)

    &C&"Small Fonts,Regular"&6REGIO.A1/HP/&F &A &D &T

    04a

    Regions with lowest employment rates, EU15, 1999/2000

    RegionPopulationEmployment rateUnemployment rateGDP/head (PPS)

    (1000 inh.)(%)(%)(Index, EUR-27 = 100)

    1999200020001999

    CORSE (FR)260.337.712.593.1

    CALABRIA (IT)2057.639.727.772.2

    SICILIA (IT)5093.040.624.276.6

    CAMPANIA (IT)5786.740.723.676.2

    PUGLIA (IT)4085.844.317.677.7

    SARDEGNA (IT)1653.244.920.591.0

    ANDALUCA (ES)7255.945.425.369.3

    CEUTA Y MELILLA (ES)138.346.025.575.5

    BASILICATA (IT)607.046.217.486.2

    PRINCIPADO DE ASTURIAS (ES)1060.447.517.982.0

    EXTREMADURA (ES)1088.748.324.859.8

    CANTABRIA (ES)529.050.014.289.8

    MOLISE (IT)328.551.713.692.9

    NORD - PAS-DE-CALAIS (FR)4004.052.513.492.0

    LAZIO (IT)5259.552.811.9134.4

    VOREIO AIGAIO (GR)183.853.17.474.2