Cover 1
Half-title 3
Title 5
Copyright 6
Contents 7
List of Charts, Tables, and Boxes 9
Contributors 13
Acknowledgments 15
Introduction 17
ONE Has Europe Lost Its Heart? 22
Introduction 22
Task Allocation in the EU 23
Principles from Fiscal Federalism 23
Real-Life Governments 23
Europe\u2019s Way 24
Widening Versus Deepening 26
Costs of Enlargement 26
Europe as a Common Market 30
Dilution? 32
Making a Large Union Work 35
Pioneers and Followers 36
Safer Centralization: Toward a Two-Way Street for the Acquis 39
More Power to the People 40
Conclusions 42
References 43
TWO Economic Implications of the Social Provisions of the Stalled EU Constitution 45
Introduction 45
Productivity and Structural Factors in Europe 49
Regulatory Burdens and Social Protection 49
The Liberalizing Force of EU Integration 52
Highlights of the Constitutional Treaty 53
Social Entitlements in the Constitutional Treaty 54
The \u201cSolidarity\u201d Title 55
Antecedents and Alternatives 56
An Alternative, Legislative Approach to Social Policy in the Union 58
What the Implications of the \u201cSolidarity\u201d Title Might Have Been 60
One Constitution for All 60
Safeguards 61
Conclusion 63
References 64
THREE Fiscal Policy and Fiscal Rules in the European Union 66
Introduction 66
The Progressive Relaxation of Fiscal Rules 69
Pitfalls in the Implementation of Discretionary Policy 72
Fiscal Policy in the EU 76
Concluding Remarks 78
References 79
FOUR Design and Implementation of the Stability and Growth Pact: The Perspective of New Member States 81
Introduction 81
Fiscal Policy and the Pace of Transition to the Euro 84
Fiscal Policy in the NMS: A Heterogeneous Picture 84
Size of the Government 85
Deficits 86
Debt 87
Shortcomings of the Existing Framework for New Members 91
GDP Volatility and the 3 Percent Ceiling 92
Pro-Cyclical Bias 93
Evaluating Policies, Not Just Outcomes 94
Conclusions 99
References 99
FIVE Perspectives on the Lisbon Strategy: How to Increase European Competitiveness 101
Introduction 101
From Demographic Bonus to Malus 102
The Productivity Slowdown 106
Growth Potential 106
Big and Small: Lessons for a More Flexible Europe? 111
Does Weak Supply Lead to Weak Policies? 114
The Crumbling of Fiscal Policy Discipline 114
The Unraveling of Structural Reform 117
Concluding Remarks 120
References 120
SIX Is Europe Reforming: Evidence from Cross-Country Structural Indicators 122
Introduction 122
Recent Changes in European Labor Markets 123
Taxation of Low-Wage Earners 128
Financial Incentives to Retire Early 129
Stringency of Employment Legislation 131
Unemployment Insurance 132
Productivity and Product Market Competition 135
How to Reinvigorate the Lisbon Strategy? 140
References 141
SEVEN Recovery Growth as a Stage of Post-Socialist Transition 143
References 156
EIGHT Comparative Oligarchy: Russia, Ukraine, and the United States 159
Introduction 159
What Is an Oligarch? 160
The Economics of Oligarchy 161
The Politics of Oligarchy 163
Complaints About Oligarchs 166
A Matter of Ideology 170
Current Trends in Russia and Ukraine 171
What Should Be Done? 173
How Should Privatization Have Been Done? 176
Conclusions: Make a Deal with the Oligarchs and Preach Capitalism 177
References 178
NINE The Economic Rationale of the \u201cEuropean Neighbourhood Policy\u201d 181
Introduction 181
The European Neighbourhood Policy 183
Economic Situation of the \u201cNew Neighbors\u201d 186
Possible Impact of ENP 190
Trade and Investment 190
Energy 195
Migration 197
Democratization and Conflict Resolution 198
Environment and Health 199
Conclusions 200
References 202
TEN Economic Integration of Eurasia: Opportunities and Challenges of Global Significance 205
Energy Trade and Transport 211
Non-Energy Trade and Transport 219
Trade in Illicit Drugs 227
Investment and Capital Flows 229
Migration 235
Communication and Knowledge Sharing 238
The Institutional Infrastructure, Politics of Regional Cooperation, and the Future of Regional Integration in Eurasia 240
Conclusions and Policy Implications 242
References 245
Index 249