Conferences of Ezoneplus at a Glance
The Final Conference
"Eastward Enlargement of the Eurozone"
The final EzonePlus Conference took place on June 18, 2004 in Berlin.
This conference marked the end of a 36-months research project that was supported by the European Commission (5th FP). Participants were distinguished scholars from universities and research institutes in Estonia, Finland, Italy, Slovenia, Poland, and Portugal. The purpose of the conference was to present the project's Final Report, which contains its main findings, and to initiate a public debate on the next step of the Union's widening, i.e. EMU enlargement.
The conference took advantage of the fact that this independent group of scholars has been studying the relevant issues for more than three years and came up with policy advice regarding goods and services, capital, and labour markets, fiscal and monetary policies, and the social dimension.
Key findings of Ezoneplus
The admittance of eight CEECs into the EU, and the subsequent enlargement of the
EMU, will cause deep changes within the political, economic, and social settings
of both old and new EU-members. The hallmark of the current enlargement process
is that it has been a political decision to include new members into the EU. The
enlargement process has originated from the realization that post-communist
countries required political stabilization. The marked difference between the
sizes of the population and of the economies is the prime source of underlying
tensions of the enlargement process. The research project Ezoneplus focuses on
the ensued reshaping of politics and markets. In particular, Ezoneplus
ascertains how to overcome imponderables in organizing the process of leading
new EU-members toward the eurozone. In this regard, Ezoneplus tries to get the
bottom of ensuring sustainable growth and convergence in respect of new members'
run-up to EMU. The simultaneous deepening of the EU acquis communautaire and, in
particular, the adoption of a common currency entail new challenges for both old
and new EU-member states.
Key results of this project may be summarized as follows:First, a common
currency induces the reshaping of markets - i.e. markets adopt to new
circumstances , thereby pushing the Euro-area closer to an 'optimum currency area'.
Nevertheless, reshaping will remain incomplete due to political reasons. National
policy-makers cannot sacrifice their own electoral survival by implementing
efficient economic and social policies. Second, as a consequence, there is an
ongoing tug-of-war on the distribution of costs of social and economic adjustment between
old and new member states. The political bargaining on these costs affects the
prospects of stabilizing the capital influx towards CEECs and their ability to
catch up to living standards in the old EU-member countries.
The stability of the CEECs' convergence process is the main goal of both current
and new EU-members. Ezoneplus discusses the implications of a particular catch-up
strategy and has a look at the economic, political, social and institutional
consequences involved. A process of new EU-members joining the eurozone, implying
the reshaping of economic determinants that may lead to efficiency gains, has
thus to consider economic adjustment and social costs as well because real
convergence, based on sustainable increased growth, can only be a long-term
process. In addition, both new and old EU-members have to cope with particular
challenges that derive from an ageing population, growing immigration, labour
shortages in key sectors and social inclusion problems. Failure to attain
sustainable convergence may jeopardize the benefits arising from EU accession
and may even be a source of destabilisation for old EU-members.
On the one hand, Ezoneplus explores these uncharted waters along the lines of
capital markets, labour markets, as well as goods and services markets with
regard to trade and FDI. On the other hand, the project puts emphasis on
policies related to fiscal and exchange-rate issues as well as to the social
dimension of new EU-members' convergence towards the eurozone.
The starting point of our considerations is that economies in new EU-member
countries have to rely on sizable capital influx in order to stimulate growth and
real convergence towards current members of EMU. The track of EU-enlargement has
to be politically stabilized and the social acceptance of the course taken be
maintained. Hence, the general trend towards real exchange-rate appreciation in
new EU-member countries fostering their catching-up is desirable and has to be
maintained for a prolonged period...
(18 June 2004 by Prof. Dr. Hanns-D. Jacobsen, Managing Director - The full-length version is available here)
The detailed Workshop program here (PDF).
The EU's "Research Information Centre" has published a report on the Ezoneplus project: "Taking on the euro".