The European Union and Its Neighbours: "Everything but Institutions"?

By Chilosi, Alberto | The European Journal of Comparative Economics, January 1, 2007 | Go to article overview

The European Union and Its Neighbours: "Everything but Institutions"?


Chilosi, Alberto, The European Journal of Comparative Economics


Abstract: The paper considers the status of the European Neighbourhood Policy in the light of the new Financial Perspective 2007-2013 and of the present internal state of the European Union. Even if in theory the ENP could have been a valid substitute for enlargement, it does not seem to have reached its aim of providing an adequate surrogate for full membership. Considering the figures of the new Financial Perspective 2007-2013, the issue of market access, and the internal power dynamics of the EU, we see that it is hardly conceivable that the ENP could ever give to its neighbours the same economic advantages that membership gives to the poorer members of the EU. Another controversial aspect is the clear asymmetric nature of the ENP, whereby the payoff for neighbours is conditioned on their "good behaviour", thus amounting to a form of soft imperialism. While ENP tries to establish a comprehensive and coherent framework of the EU's relations with its neighbourhood, the actual behaviour of EU towards its neighbours is shown to present some inconsistences due to political expedience and pragmatic concerns. The consideration of some related basic issues of EU institutional reform, such as the weakening of the powers of the member states, or the introduction of some intermediate forms of partial membership, concludes the paper.

Jel classification: F02, F15

Keyword: Economics of the European Union, Neighbourhood Policy, Enlargement, European Economic Area

1. Prodi's promise

1.1 Introduction

Facing the greatest enlargement of its history (in terms of the number of countries, territory, and population), and a possibly long interruption of the enlargement process, the EU launched in 2003 the European Neighbourhood Policy (henceforth ENP) in order to furnish to its new neighbours of the East, left outside of immediate, or any, prospects of enlargement, some compensation and a kind of comprehensive framework for their relations with the EU, which could apply also to the neighbours (or alleged neighbours) of the South.2 Presenting the basic philosophy of ENP in 2002 President Prodi made the famous promise: "everything but institutions."3 The promise refers to the possibility for neighbours to have the same treatment and economic advantages of EU membership, except the participation in EU institutions, through a process of gradual adaptation to EU's membership requirements. Has Prodi's promise been fulfilled, or is it going to be fulfilled? We believe it has not, nor is it likely to be. Considering the figures of the new Financial Perspective 2007-2013, the issue of market access, and the internal power dynamics of the EU, we see that it is hardly conceivable that the ENP would ever give in practice to its neighbours, notwithstanding the theoretical possibility, the same economic advantages that membership offers to the poorer members of the EU, at least until when, if ever, the EU radically changes its decision making mechanisms.

1.2 Economic advantages for neighbours of "Everything but Institutions"

Let us consider now what are the advantages of membership and how nonmembers could share them. Considering the economic aspects only, the main advantages are three: The first refers to the creation of public goods, such as standards and norms, that can benefit economic activity, notably trade (not only with the EU), through predictability and uniformity. This can benefit non-members provided they accept those standards and norms,4 but does not require in principle a specially devised Neighbourhood Policy (no more than the non-participation in the European Monetary Union may hinder countries outside the EU from adopting the euro as a legal tender).5 The EU does not hold a copyright on its legislation and can only be happy if anybody else decides to mirror it.6 However, neighbours cannot take part in the process in which these norms and regulations are established, and these standards are devised, even if they can in principle influence the agreements that can be reached in the framework of the international organizations to which they may belong, which may constrain the establishment of those standards and regulations.

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