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Map of Europe |
Summer 2001 Volume 2 - Number 3
Leader in Focus
The Future of Trade Negotiations
ECB Can Boost European Growth by Keeping Inflation Down
Jean-Claude Trichet
Governor, Banque de France
Despite initial cynicism in some quarters, the euro has made a successful start, and European financial markets are becoming much more integrated. The European Central Bank is keeping inflation in check, paving the way for robust, sustainable growth. The euro is encouraging necessary structural reforms, and old attitudes are changing. But Europe will have to pursue the reforms it has begun if it is to maintain its competitiveness and bring down unacceptably high unemployment.
The EU's Institutions
The Great Debate Begins on Europe's Future
Philippe Lemaître
Brussels Correspondent, European Affairs
Now that France and Germany have put their cards on the table, the great debate over the future organization of the European Union can get under way. The Franco-German relationship has recently been strained, and the two countries' latest proposals for a future European constitution are poles apart. If the debate is to proceed smoothly, Paris and Berlin will have to make a big effort to overcome their differences.
The European Economy
Europe and the New Economy
The so-called new economy has firmly implanted itself in the United States, helping to generate the longest U.S. economic expansion ever recorded. The United States leads the world in many aspects of the internet-based economy and in technological innovation. Meanwhile, Europeans have been grappling with high unemployment, slow growth and out-of-date economic models. All that may now be changing, as Europe begins to embrace the new economy, and economic recovery gains ground.
A More United Europe is Growing Economically Stronger
Arnout H.E.M. Wellink
President, De Nederlandsche Bank NV
Europe is benefiting from healthy economic growth, low inflation and, finally, declining unemployment. It is currently better placed than the United States to withstand economic shocks. It will grow stronger as monetary union and EU enlargement to include Central and Eastern Europe generate further pressures for economic reform.
The Unconventional Case For a Stronger Euro
Robert H. Dugger
Managing Director, Tudor Investment Corporation
Exchange rate forecasts are usually based on macro-economic developments, such as differences in interest rates and economic growth rates. Consideration should also be given, however, to unconventional factors, such as demographics and the likelihood of economic restructuring. When these elements are included in the forecasts, it looks as if the euro zone could be heading for an outburst of dynamic economic growth and a big rise in the value of the euro against the dollar.
Immagration Policy
Austria Needs More Time Before Free Entry of Workers
Martin Bartenstein
Federal Minister of Economic Affairs and Labor of Austria
Austria is very in much in favor of EU enlargement, from which it expects to benefit economically. But transitional arrangements must first be negotiated to prevent an immediate influx of migrant workers from Central and Eastern Europe. That inflow may not be very large, but the problem must be resolved to ensure continuing public support for enlargement. Broader European policies on immigration are at stake.
Special Report
Agricultural Policy in the WTO
U.S. and EU agricultural policies are once again in the international limelight. Agriculture is the subject of difficult negotiations in Geneva designed to complete unfinished business left over from the Uruguay Round, the last major round of multilateral trade negotiations, and it is sure to feature prominently in any new round that may be launched later this year. Neither of these negotiations can succeed, however, unless the United States and the European Union, the world's two biggest agricultural producers, can agree on what needs to be done. This special report examines the policy differences between the two agricultural giants, and the prospects for resolving those differences in negotiations in the World Trade Organization. Much of the material for the report is drawn from a seminar organized by The European Institute in Washington this spring. One of the more surprising conclusions is that U.S. and EU farm policies are far more alike than is generally acknowledged.
Transatlantic Farm Conflicts Will be Hard to Resolve
Jane Earley
President, Earley Initiatives
The Bush administration is working toward a new farm bill, while the European Union will soon be reviewing its efforts to reform the Common Agricultural Policy. Both U.S. and EU policies still contain elements that the other finds objectionable, although many of the mutual recriminations are virtually identical. It will be tough to make the domestic reforms on either side of the Atlantic that will be necessary for progress to be made in negotiations in the World Trade Organization. But there are hopes that it can be done.
In Farm Trade, U.S. and EU Differ But Have Much in Common
Excerpts from The European Institute's seminar on Agricultural Policy in the Transatlantic Relationship held in Washington on May 18, 2001.
Methods of Measuring Farm Support Must be Made Fairer
Harry de Gorter
Associate Professor, Department of Applied Economics and Management, Cornell UniversityAn international agreement on reducing trade-distorting farm support measures, negotiated as part of the Uruguay Round, unfairly penalizes the European Union. U.S. support measures encourage higher farm production much more than EU policies. These imbalances must be rectified to ensure a level playing field.
In The News
Why Bush's "No" to Kyoto Vexed Europe
Bret Stephens
Editorial Writer, The Wall Street Journal Europe
European countries reacted with extraordinary hostility to President George W. Bush's rejection of the Kyoto Protocol on global warming this spring. Many center-left governments had political reasons for doing so, but the reaction also marked a growing desire by Europeans to assert themselves vis-à-vis the United States. The Europeans, however, are themselves split on Kyoto.
Beyond Kyoto: a Plan to Bridge the U.S.-EU Gap
William A. Nitze
President, Gemstar Group
With no end in sight to the differences between the United States and Europe over the Kyoto Protocol on global warming, President George W. Bush should propose an alternative plan. The United States and the EU could bridge the gap between them by agreeing on a combination of more far-reaching environmental goals, market-based policies for achieving those goals and a common approach for encouraging deployment of environmentally friendly technologies.
Industry and Technology
A New Legal Framework for EU Communications Services
Robert Verrue
Director-General, Information Society Directorate-General, European Commission
The European Commission is proposing a package of measures to provide a new legal framework for communications services in the European Union. By making the regulatory process transparent and efficient, the Commission hopes to create conditions in which the European communications sector can flourish and expand.
EU Plans Concrete Steps to Technological Excellence
Rosalie Zobel
Director, New Methods of Work and Electronic Commerce, Information Society Directorate-General, European Commission; and Paul Timmers, Head of Sector for Electronic Commerce, Information Society DG, European Commission
The EU has made some progress toward its aim of becoming the most dynamic knowledge-based economy in the world, overtaking the United States. The eEurope action plan defines a number of concrete steps toward achieving that objective, and calls for joint action among EU member states, industry and the European Commission. Projects of particular interest to business include the wider use of smart cards, action to combat cyber-crime and new kinds of virtual business partnerships.
Enlargement
EU Must Not Keep Candidates Waiting Too Long
John Palmer
Director, European Policy Centre, Brussels
Negotiations to expand the European Union into Central Europe and the Eastern Mediterranean are at last beginning to tackle the hard issues. Perhaps 10 new members will join by 2004 or 2005. It will be dangerous to postpone enlargement beyond those dates. But the EU must first conduct a major debate on the future of its institutions and a new constitution for Europe.
Slovenia Will be a Good Member of the West
Dimitrij Rupel, Minister of Foreign Affairs of the Republic of Slovenia
Slovenia wants to join the European Union and the North Atlantic Treaty Organization as soon as possible, perhaps in 2003 or 2004. Common European defense policies should strengthen, not weaken, NATO. Slovenia's negotiations to join the EU are on track, and, with special expertise in mountain warfare, it is ready to make a military contribution to NATO.
Opinion
The EU Should Act on Its Principles in the Middle East
Steven Everts
Senior Research Fellow, Centre for European Reform, London
As it strives to assert a stronger presence in world affairs, the EU should develop a more action-oriented policy in the Middle East. It should make use of the economic instruments at its disposal, such as tariffs on Israeli exports and financial aid to the Palestinians. Such a plan would run into opposition in the region, but it should be welcomed by the United States.
Book Reviews
A Scary Preview of Future Wars
Waging Modern War. By General Wesley K. Clark
Reviewed by Michael D. Mosettig
More Questions Than Answers
A History of Fragments. By Richard Vinen
Reviewed by Martin Kettle
Letters to the Editor