Ramūnas Vilpišauskas

Eurozone Crisis and European Integration: Functional Spillover, Political Spillback?

Abstract This paper analyzes the decisions taken since the start of the financial and economic crisis in the European Union and assesses them in the light of the traditional debates of integration theories. It discusses the key characteristics of the process of responding to the crisis since 2008–2009 when the problems of Greece have been increasingly publicized, the main actors involved, and provides an interpretation of the key decisions dealing with the crisis and their implications in terms of further European integration. First assessing these events in the light of the neofunctionalist and liberal intergovernmentalist debate, it then presents a framework linking the accounts of the integration process with a domestic politics approach. In this respect it contributes to the literature on European integration as well as the changing nature of EU polity, policy-specific effects of politics and how politics in member states constrains decisions on the further deepening of the Economic and Monetary Union and efforts to move towards transfer union. The incremental process of centralizing redistributive policies accompanied by the debates about financial transfers from some EMU countries to the others have altered popular ‘permissive consensus’ about the process of European integration and exposed territorial cleavages which became a key constraint in responding to the crisis and pressures for further integration.

Fiscal consolidation and structural reforms in Lithuania in the period 2008–2012: from grand ambitions to hectic firefighting

This article analyses the inputs, decisions, outputs and outcomes of fiscal consolidation and structural reforms undertaken by the Lithuanian authorities in the period 2008–2012. Our research was based on desk research, which was supplemented by interviews with government decision-makers. The article found that Lithuania successfully pursued fiscal consolidation, which contributed to stabilising its economy and public finances. If economic factors largely explain the timing of fiscal consolidation decisions, political factors are more powerful in accounting for the expenditure-led nature of fiscal consolidation in Lithuania. However, despite bold and ambitious plans, Lithuanias structural reforms proved to be fragmented and incremental due to the absence of a stable base of political support, sustained political attention and persistent political leadership. Points for practitioners First, Lithuanias experience shows the importance of previous policies and the constraints that they impose throughout crises when the speed of decision-making is crucial. Second, it illustrates that an external shock and a reform programme are not sufficient conditions for successful implementation – coalition politics and institutional resistance can derail some initial plans. Third, it demonstrates that even countries that successfully executed a large-scale fiscal consolidation programme may fail to seize the ‘windows of opportunity’ offered by the financial crisis to implement long-term structural reforms.

Lithuania and the EU: Pragmatic Support Driven by Security Concerns

Lithuania has been focusing on several European policy priorities since its accession in 2004: support for reforms and closer relations between Eastern neighbours and the EU, completing its infrastructural integration with particular attention paid to energy and transport networks between the Baltic States and the remaining EU (Northern and Central Europe), dealing with so called ‘left-overs’ from accession, membership in the Schengen area and the eurozone, and economic convergence with the rest of the EU.

Making change happen: Policy dynamics in the adoption of major reforms in Lithuania

Previous studies of policy reforms that were undertaken during the recent global financial crisis mostly focused on fiscal consolidation, with much less attention paid to other structural reforms. Although the impact of such external shocks as crisis or change of government on systemic change is widely acknowledged, little agreement exists on which intervening factors can best account for successes or failures of reform commitments. In this article, we propose an innovative explanation that focuses on the variables of political attention and change leadership, and which analyses temporal political and policy dynamics of reform decision making. We conduct a comparative analysis of the four performance priorities of the 2008–2012 Lithuanian Government led by Prime Minister A. Kubilius. The article concludes that a combination of persistent high political attention to policy reforms and strong reform leadership aimed at mobilising coalition support are essential factors in fulfilling reform commitments.

Parliamentary Scrutiny of EU Affairs in Lithuania: The Dog That Rarely Barks

Accession to the European Union (EU), North Atlantic Treaty Organization (NATO) membership and good neighbourly relations became the strategic priorities of Lithuania’s foreign policy soon after it re-established its independence on 11 March 1990.1 European and transatlantic integration gathered pace, and Lithuania with the other two Baltic states — Estonia and Latvia — negotiated a number of agreements with the EU, leading to the start of accession negotiations less than a decade after they were recognized as sovereign states. Lithuanian political leaders formally applied for EU membership in December 1995. Accession negotiations, which Lithuania started together with so-called second wave of candidate countries in 2000, were finalized at the end of 2002. After a referendum in 2003, which produced a clear majority for EU membership (91 per cent backed Lithuania’s EU accession on a turnout of 63 per cent), Lithuania joined the EU on 1 May 2004, having become a member of NATO on 29 March 2004.

The Euro Zone Crisis and Differentiation in the European Union: a Threat to the Goals of the EU or an Instrument of Managing the Divergence of National Interests?

Abstract This article discusses the institutional evolution of the European Union (EU) in reacting to the euro zone crisis and the new forms of differentiation in the EU. It presents and elaborates several arguments. First, despite calls to complete the creation of the “genuine Economic and Monetary Union“ and to make a step towards federal structure of the Union with single currency and single central budget used to react to asymmetric shocks, most decisions actually agreed upon by member states since the start of the crisis can be seen as attempts to avoid exactly such a scenario. Second, although the divide between the “Northern“ and “Southern“ groups of the EU member states seems attractive in its simplicity, it is a gross simplification of the current situation and hides important differences of member state preferences within each of the groupings. Third, it is also too simplistic to see the membership in the euro zone as the main characteristic defining the state of differentiation in the EU. As it is discussed in the text, both euro zone member states and EU countries outside the euro zone participate in different initiatives of integration and show different national preferences. Finally, the text concludes with a formulation of the main policy dilemmas for Lithuania in terms of ongoing process of complex differentiation and taking into account the prospect of joining the euro zone in 2015.

EURAZIJOS SĄJUNGA AR EUROPOS SĄJUNGA? DILEMA RYTŲ PARTNERYSTĖS ŠALIMS

The author analyzes the Eurasian Customs Union, the motives for its creation, its impact on Russia, Kazakhstan, and Belarus as well as the perspectives for the further integration of its member states to establish the Eurasian Economic Union. It is argued that the creation of the Eurasian Customs Union is based mostly on the foreign trade policy measures applied by Russia and adopted by the other members of the Union. The Eurasian Union and its institutions such as the Eurasian Economic Commission and Court are seen as agents of the member states, especially Russia, rather than independent supranational actors acting in of the Union’s interests. The Eurasian Union represents a regional entity which is both being modelled on the EU and is intended to provide a competing center of attraction for third countries. The establishment of the Eurasian Customs Union has changed the geopolitical situation in the EU eastern neighborhood by creating an alternative option of regional integration for the EU Eastern Partnership countries. For Ukraine and other countries of the Eastern Partnership, which declare their intention to sign association and deep and comprehensive free trade agreements with the EU, joining the Eurasian Customs Union would imply that the EU will have to negotiate agreements on trade with the Eurasian Union rather than with individual countries. This would significantly postpone the prospects of integration of these countries into the EU. The eastern partners of the EU, therefore, have to choose between two alternatives of integration (and Belarus has already chosen the eastern direction). Meanwhile, the EU has to rethink its own policy towards the Eastern Partnership countries and offer incentives for the further reforms to advance trade liberalization and association with the EU without damaging its own credibility. This is the key issue for the Lithuania’s EU Council Presidency forthcoming in the second half of 2013.