Social Policy in Central and Eastern Europe - Assignment Example

TOPIC: 'The EUROPEAN UNION has expanded too far. There are now too many conflicts of interest between the countries involved for it to be a successful economic entity.' Discuss. Lately we may observe the scale economic, political, and social transformation processes, which have rendered a great influence on the world economy, its qualitative characteristics. After liquidation of division of the world on two opposite systems, there was a cardinal re-arrangement of forces and revaluation of goods and material values in the world, in result of which existed stereotypes concerning the problems of the world economy, world division of labour and international economic relations have become obsolete. In transition period, which the whole world has already entered, it is already not enough just to understand the impossibility of living in conditions of confrontation. It is critical to have constructive and creative thinking adequate to new realities. The key economic objectives of the transition are "to raise economic efficiency and promote growth. The major elements of the transition process comprise macro-stabilization, price and market liberalization (including international trade), restructuring and privatizing state enterprises, and redefining the role of the state" (IMF, 2002, pp. 90-91). The major problem of more and more interdependent world is the interaction of world structures, which are characterized not only by different levels of development, but also by different extent of an involvement in the world division of labour and the world economy. Waltz on expressing his neorealist conceptualization of the determinants of international behaviour claims, "International structure emerges from the interaction of states and then constrains them from taking certain actions while propelling them toward others" (Waltz, 2000, p. 11). The analysis of modern economic and integration processes allows allocating two basic tendencies. One of them is quantitative growth of countries incorporated in the various international economic unions and other international economic alliances that is the evidence of increase of globalization of economy. The other tendency is continuous perfection of forms and methods of realization of world economic integration that speaks about deep qualitative changes occurring in this process. At the present stage the international economic integration has reached global scales. Globalization of economy represents the maximum form of the international economic integration. It is expressed in formation and activity of interstate and international economic associations, and also in occurrence and development in modern community of the international economic institutes and trans-national corporations. The changing global economy is also "providing challenges to the European Union. Globalization of production, procurement, and distribution; e-logistics and e-transport; and outsourcing of what traditionally had occurred internal to a company or country have caused many government and private sector officials to rethink what types of investment and at what levels are necessary to remain competitive" (Caldwell, 2002, p 7). Each state is expressed in "structural and quantitative characteristics. For the world economy the international monetary system (IMS) will be considered as a structural characteristic. The growth rate of the gross national product of countries participating in international economic relations will be regarded as a quantitative characteristic" (NATO, 2006, p. 101). If early stages of the international economic integration have had only one form of its realization - the international trade, the stage of globalization alongside with it assumes moving of labour, capital, scientific and technical knowledge, and information in planetary scale. Thus, at a stage of globalization the international economic integration gets not only more significant quantitative characteristics, but also new more developed forms. Globalization is a complex and developing process, which present stage represents only its initial level of development. Today within the limits of globalization there is a process of formation and organization of the international economic alliances, and alongside creation of the international (trans-national) corporations and financial centres. Let us try to summarize the reasons for the rapid development of integration processes in economy on a boundary the twentieth and twenty first centuries. From a number of the reasons and factors it is possible to allocate three core reasons: 1. The amplified competitive struggle caused by essential growth of scales of manufacture compels business to "cross" its national borders in searches of the best conditions for its activity. 2. The favourable political circumstances, which have developed in second half the twentieth century: the disintegration of the colonial system, which have caused necessity of an establishment in the world of the new economic order, and the termination of Cold War, the period of opposition of two social and economic systems, allowed to consolidate the world community and to consider the world as a complete system. 3. Last achievements of the scientific and technical progress allowed creating qualitatively new, reliable world economic infrastructure, including the international transport networks, adequate to the requirements of time, and wide information system. Owing to it, costs for transportation of goods and products of manufacture were essentially reduced, the degree of economic risk has decreased, and an opportunity to transfer labour, technologies and the capital in scales of the whole world very soon become real. The European Union integration is one of the most important spring motives of modern stage of historical development. Internationalisation of economics, growth of international economic, scientific and cultural cooperation, creation of information network systems, necessity of joint efforts in solving global problems of mankind, formation of universal human values - all these is favourable to overcoming barriers in the international cooperation. "In the East there are questions of national separation, retribution, and ethnic cleansing" (European Union Studies Association, 2005, p. 383). In political circles of majority of states now one may observe the understanding of fallibility of idea of national separation and self-sustainability within the state borders, artificial separation of any state from the international intercourse. Integration processes get their legal implementation through the variety of agreements between states on creation of various unions and organisations. The European Union belongs to such organisations. Since May, 1st, 2004 ten more member-states has entered the European Union. The European Union is becoming the leading economic world centre, has sharply strengthening its political influence on the world scene, having united the states, which population is made nearby half milliard people. So, the European Union has expanded too far. No doubts that it has a lot of benefit for the European Union itself and for its member-states. But at the same time there are now too many conflicts of interest between the countries involved for it to be a successful economic entity. The fifth expansion of the European Union on May, 1st, 2004 was the most ambitious for the whole history of the Union taking into consideration both quantity of the joined member-states, and complexity, as new member-states are the countries with different and often various social and economic history. Since then it has already passed more than two years, and this term is sufficient to analyse short-term and mid-term consequences of the expansion for economic development of new member-states. The process of the last expansion of the European Union from the economic point of view had some prominent features. First of all, it was a joining of ten countries with essentially lower social and economic indices in comparison with the European Union-15 that proves a crucial opportunity of association for different by the level of development groups of countries not only on principles of free trade or a customs union, but also the economic union. Secondly, the expansion of the Union became the important stage of the soft enough (without any economic shocks) adaptation of the economy of the European Union-10 to new conditions of the competitive environment of the European Union home market. Thirdly, obvious positive consequences of expansion have already felt both new member-states (in the first instance), and in smaller measure old member-states at all levels of realization of economic benefits of this process: consumers, manufacturers, national economies, integration association as a whole. The process of the expansion was mutually advantageous both for the European Union-10, and for the European Union-15. At last, the expansion has been well planned, effectively supervised; its risks and expenses have been internationalized and minimized within the limits of the European Union and joined countries. Real embodiment of positive economic expectations - that is the basic conclusion from the analysis of consequences of the expansion of the European Union for the new member-states. The countries of the European Union-10 have stable and high enough rates of economic growth, macroeconomic stability of their development strengthens, employment grows and unemployment decreases, social rapprochement to the most developed European Union countries also occurs with fast rates, competitiveness of national manufacturers growth both in the markets of the Union, and on the markets of the third countries. Actually the preparation for the joining of these countries in the European Union proceeded over ten years, more intensively since 1997 when the decision on prospects of the expansion was accepted. In view of the transitive positions in some branches and spheres for the European Union -10 this process completely will come to the end in 2009. During preparation for the joining the new countries successfully transformed their economy from planned economy to effectively functioning market economy (of course it does not concern Central European Union countries that are the European Union-10 not including Malta and Cyprus). Unlike other states of the East European Union, the crisis phenomena in economy of these countries in the beginning of 1990ss were short, and in 1993-1994 they already showed positive rates of economic growth, first of all owing to effective market reforms, cardinal reorientation of foreign economic relations, and integration into the European home market. Unlike the European Union enthusiasm of early 1990ss of the twentieth century, the European Union debates regarding the introduction of the new member-states into the European Union have been designated by mixture of hopes and fears. In public opinion, and also among the political elites of the European Union increased not only impatience about long enlargement process, but also amplified disputes between supporters and opponents of membership in the European Union. It is obvious that "some old member-states had always had more influence than probably they naturally would have got and suddenly in an enlarged European Union they felt that they were losing that influence" (Great Britain, 2006, 31). According to item 49 of the Treaty of the European Union, "Any European Union State which respects the principles set out in Article 6(1) may apply to become a member of the Union. It shall address its application to the Council, which shall act unanimously after consulting the Commission and after receiving the assent of the European Parliament, which shall act by an absolute majority of its component members" (Warleigh, 2002, p. 100). So to join the European Union, a new Member State must meet three criteria: "political: stability of institutions guaranteeing democracy, the rule of law, human rights and respect for and protection of minorities; economic: existence of a functioning market economy; the capacity to cope with competitive pressure and market forces within the Union; acceptance of the Community acquis: ability to take on the obligations of membership, including adherence to the aims of political, economic and monetary union" (Rhodes, 1998, p. 25). In other words in the political sense it means that the free democratic order and a stable lawful state should be created. Economically there should be a functioning market economy, which can resist under the pressure of European home market. In the legal sense it is necessary to adopt acquis communautaire, i.e. all general law of the Union and Communities, in the internal law order and the government of the country. Specific legislation: "the acquis communautaire The acquis communautaire, comprising 31 chapters and 81000 pages, is the "rule book" of the EU, to which countries joining the Union have to adhere or be close to doing so (Barr, 2005, p. 14)". In this case it is a question of 14 000 legal acts, which were prepared by the Commission in 31 chapter and on 81 000 printed pages. However new member-states entered the European Union do not to the full correspond to the Copenhagen criteria. Concerning economic criteria the financial policy, chronically high inflation, absent reform of public health services and provision of pensions are criticized. With the expansion on the East the European Union continues continue further its euro-political concept. All European Union integration, as well as former expansions, has been designed by the principle: "economical entails political" as it was visible at creation of the Monetary Union. The European integration association uses the general home market as the primary tool of joint growth. Thus, it is possible to approve that a kernel of the European Union is to certain degree the European Community, and a kernel of the European Community is home market. In opinion of some western jurists, the European Union inherently was and remains economic community. This integration principle is kept also within the limits of the eastern expansion. So, economically the expansion of the European Union on the East already for a long time has occurred. Owing to the European Union agreement concluded in 1991, the free trading zone between the European Union and new states has been created in the industrial sphere de jure and de facto. The European Union is the major trading partner of all Central and Eastern European Union states. Nevertheless economic distinctions between the member-states of the European Union and Central and Eastern European Union states cause fears concerning the labour market, social sphere and public health services. Both in today's European Union and in Central and Eastern European Union states the increase in pressure of import is expected, for example. Besides there are fears concerning a massive migration of workers from the Eastern to the Western Europe, and in Central and Eastern European Union states they are afraid of sale of the land and the real estate to financially strong West-Europeans. Despite of it, leading research institutes do not expect additional economic impulses from the expansion on the East. After the home market has been widespread on Central and Eastern European Union states, it was necessary to solve the problem first of all on inclusion of the entering states in a policy of the European Union and Communities, in particular in the European agrarian and structural policy. For a long time, "typically southern European products, such as olive oil, were largely neglected by the price and market policy. Thus, because the financial outlays under the Guidance section were limited, holdings and products not subject to the price and market policy were hardly compensated at all via the CAP's structural policy. Moreover, the implementation of projects under the CAP was mainly left to the national governments. Therefore, agricultural systems that relied on structural policy became relatively dependent on the financial and administrative systems of (and possibilities within) their national governments. Disparities in national agricultural systems were heightened by differences in the financial support available for agriculture in each Member State" (Hennis, 2005, p. 42). As positive prospects of eastern expansion of the European Union it is possible to specify the following moments: expansion of trade, increase in assortment of production, the improved exchange of knowledge, increasing convergence of vital conditions, improvement of well-being, political stability in the Europe and as a result increase in competitiveness of the Europe in economic. Moreover with full membership of Central and Eastern European Union states in the European Union the division of the Europe, which has resulted from the World War II and Cold War will be finally prevented. The general economic gains, allowing overcoming the last political division of the Europe into two parts, are indisputable. Thus, it is possible to draw the following conclusions: Membership of Central and Eastern European Union states in the European Union, which considerably differ from it former member-states if to consider per capita income and the structure of economy, does free forces of a competition, economic growth and increase in well-being in the member-states of the European Union. Institutional integration between the Eastern and the Western Europe consolidates economic and political stability on the European Continent that is a basic condition for long-term investments and further economic growth. The increase in a competition and acceleration of structural changes from the general economic point of view increases general welfare - basically from the expansion of the European Union win all parties. Structural change is connected with decrease in production and reduction of workplaces in non-competitive spheres and enterprises. Economic policy should support social change of structure by means of prompt actions, such as the qualified activity and investment assistance in structurally-weak spheres. Despite of extensive obligations within the limits of acquis communuataire, the great number of applications for the joining the European Union reflects economic appeal of the European Union. The uniform home market guaranteeing the freedom of movement of persons, capitals, the goods and services, does possible an effective distribution of resources and the raised competition inside of the European Union that conducts to the increase in the general European Union commonwealth. Works cited: BARR, N. A. (2005). Labour markets and social policy in Central and Eastern Europe: the accession and beyond. Washington, D.C., World Bank. CALDWELL, H. (2002). Freight transportation the European market. Washington, D.C., U.S. Dept. of Transportation, Federal Highway Administration, Office of International Programs. EUROPEAN UNION STUDIES ASSOCIATION. (2005). The state of the European Union. Oxford, Oxford University Press. GREAT BRITAIN. (2006). The Further Enlargement of the EU: threat or opportunity Report with evidence. London, The Stationery Office. HENNIS, M. (2005). Globalization and European integration: the changing role of farmers in the common agricultural policy. Lanham, Md, Rowman & Littlefield. IMF. (2002). The information technology revolution. Washington, D.C., International Monetary Fund. NATO ADVANCED RESEARCH WORKSHOP ON THE INFLUENCE OF CHANCE EVENTS AND SOCIOECONOMIC LONG WAVES IN THE NEW ARENA OF ASYMMETRIC WARFARE, & DEVEZAS, T. C. (2006). Kondratieff waves, warfare and world security. NATO security through science series, v. 5. Amsterdam, IOS Press. RHODES, C. (1998). The European Union in the world community. Boulder, Colo, Lynne Rienner Publishers. WALTZ, K. N. (2000). Structural Realism after the Cold War. International Security. 25, 5-41. WARLEIGH, A. (2002). Flexible integration: which model for the European Union Contemporary European studies, 15. London, Sheffield Academic Press. Read More