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European economic integration regional inequalities and the Community budget

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  • Kostopoulos Tryfon


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    In this article we will attempt to analyse the dialectic relation of European economic integration under the prism of the European Union public finance. The course of European integration will be examined via the Community Budget. The vital question in our selected subject, seeking for a persuasive answer, is the relation of economic completion and unequal growth. It is, as we will prove, an ambiguous phenomenon. This ambiguity is consisted in the fact that the European integration process is developed in the base of social oppositions and is determined by the objecting interests of capital and labour. It is impossible to comprehend the European economic and political integration, outside the process of production internationalisation and supranational mechanisms of social classes regulation. In order to enlighten the relation between economy and policy, it is necessary to present extensively the public finances of the Union. Thus, we can achieve the necessary mediation between the European completion and the E.U. budgetary policy. For all the above reasons, we will proceed in a comparative analysis of the Community budget and that of the member states of the E.U. Furthermore, we will proceed to an analytic sectoral structure of the Community budget, where important redeployments in the Community financing are observed. Policies recede, like the Common Rural Policy, and policies are found in rise, as for example the European Regional Policy. We will emphasize in the critical question: how it is possible for the EU, having a budget which hardly comes to the 1% of the GNP of the European Union, to face the problem of regional inequalities, when the national budgets of the member states do usually exceed the 50% of GNP? We will mention the failure of the Intergovernmental Conference for the approval of the European Constitution (Brussels 2003) and the letter sent to the Community Chairman by «6» wealthy countries (Germany, France, Great Britain, Holland, Sweden, Austria) countries, which, as a rule, are supporting the Structural Funds of the Union. These countries request to reduce the Community Budget at the 0,8% of European GNP. Our discussion therefore is focused in the relation of the rich North and the poor South. In general, the rich countries, especially after the wreck of Intergovernmental Conference declare the “two speeds Europe”, wishing obviously to “punish” some poor countries like Poland. At this point, is also situated the interest of our own approach. The Community Budget investigation and in extension, his as much as possible increase, can confront the problems of unequal growth and bring a solution to the regional problem in the EU25. The “hard core” of the EU is in opposition to this perspective and counter proposes a “two speeds Europe”. The future seems uncertain.

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    Paper provided by European Regional Science Association in its series ERSA conference papers with number ersa05p464.

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    Date of creation: Aug 2005
    Handle: RePEc:wiw:wiwrsa:ersa05p464
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