Nicholas C. Baltas

European Union Enlargement: An Historic Milestone in the Process of European Integration

Ten European countries with economies in transition and two market economies are negotiating full membership with the European Union. This paper considers the economic dimension of the forthcoming enlargement of the European Union, especially on the characteristics of the economies in transition and on the economic implications of the enlargement for European Union agriculture. The transition of the central and eastern European countries from a centrally planned to a market economy, although already in progress for a decade, is far from complete. Uneven macroeconomic developments in the various countries can be attributed to some extent to their individual situation at the start of the transformation. However, they also reflect the varying extent to which institutional reform programs have been implemented in these countries.

Foreign direct investment in OECD countries: a special focus in the case of Greece

ABSTRACT Foreign Direct Investment (FDI) is considered as an important instrument for economic development all over the world. The aim of this paper is to examine the FDI inflows determinants for 24 OECD countries. To this end we employ annual data from 1980 to 2012 for a series of potential FDI determinants that have been identified as the most important by the relevant literature. Our empirical strategy employs both the standard fixed effects panel as well as a dynamic panel approach. The empirical findings highlight the importance of market size, trade openness, unit labor cost, schooling, taxation, gross capital formation, institutional variables, and ROA/ROE as significant FDI determinants. In the case of the dynamic panel model those FDI inflows determinants are not uniform for all country groups. Additionally, the results indicate that corporate tax rates clearly affect FDI attractiveness. This finding is robust when testing different countries subgroups. The present study has important policy implications indicating the factors that host economies should place emphasis on in order to attract FDI inflows. Policy makers should not only pay attention to the corporate tax rate level but they should also design a simple, stable and transparent taxation system that minimizes the relevant business risk.

EU Strategy on the Governance of the Euro Area

The crisis which initiated in the housing market of the USA in 2007 has since spread to the world financial system and the real economy. The crisis in the banking system climaxed in September 2008 and spread to Europe. Most economies experienced negative rates of growth, the unemployment continues on the increase, a number of financial giants have closed or are having severe problems; the private consumption and investment have shrunk because of uncertainty and reductions in the value of financial assets. The global financial crisis has shown fundamental weakness in the fiscal and monetary policies in the Eurozone. The sovereign debt crisis in the euro area during the spring of 2010 has revealed that the monetary and fiscal policy framework of the European Monetary Union (EMU) is still incomplete. In this paper a number of questions with respect to the current economic crisis are analyzed: What measures have been taken by the European authorities to confront the debt crisis in the Eurozone? What is the role of European Central Bank? What kind of changes does the current crisis lead to in the legal and institutional basis of European integration?