Posts Tagged: European Coal and Steel Community

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10
Nov 08

EC4333 Lecture 9: Inequality in the EU

We have seen how the EU has affected economic growth and development across the EU in previous lectures. In this lecture, we will examine how the EU affects the social fabric of its constituent societies, through a series of cohesion funds. We will look at the definitions of inequality in the economics literature, develop some tools to measure this inequality, and expose these tools to available data.

The origins of EU social policy can be found in all three of the original treaties founding the European Communities. Article 46 of the Treaty of Paris establishing the European Coal and Steel Community refers to the improvement of the living and working standards of workers in the coal and steel industries. The Euratom Treaty sets out provisions for the health and safety of workers in the civilian atomic energy industry. By far the most extensive treatment of social policy is to be found in the Treaty of Rome, which refers to:

  • Free movement of workers (Articles 48–51);
  • Improvement in working conditions and in standards of living (Articles 117–128);
  • Equal opportunities for men and women (see Box 14.1) (Article 119); and
  • The creation of the European Social Fund (Article 123).

In this lecture, I aim

  • To examine the role of the social cohesion funds in the development of economic integration
  • To discuss their history and potential economic effects and affects.
  • To develop the Gini coefficients and Lorenz curves for individual countries and discuss the role of income distribution and redistribution

Activity

Students will construct a hypothetical Lorenz curve in class.

Michie, J., `Unemployment in Europe’, in Amin and Tomaney, eds. Behind the Myth of European Union: Prospects for Cohesion}, Routledge Press, 1995, pgs. 51–82. 337.14 AMI.

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Preview Of “Ec4333 Lecture9 Handout Numbers”

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3
Nov 08

Economics of EU Integration Lecture 8: Industrial Policies in the EU

Competition policy was developed as an essential part of the integration process, both in the Treaty of Paris, establishing the European Coal and Steel Community, and in the Treaty of Rome. Competition policy is aimed at preventing distortions in competition caused either by private firms, or by government actions. EU competition policy is complementary to national measures, but in cases of conflict EU competition law prevails.

Central to the analysis of the likely benefits of integration are the cost and price reductions that were expected to accrue.
There is a risk that restrictive practices between otherwise independent firms, or the behaviour of dominant (or monopoly) firms, might prevent these price reductions from being realized. Integration is also expected to lead to increased competition, and to meet these additional pressures firms might be induced to form cartels or undertake mergers in order to reach dominant market positions. National governments may be tempted to help their firms face the additional competitive pressures by granting them state aids.
To prevent such developments undermining competition, EU policy therefore covers:

■ Antitrust measures, or the fight against cartels and restrictive practices (Article 81) and against dominant position (Article 82);

■ Mergers (Reg. 4064/89 of 1989); and

■ State aids and regulated industries (Articles 86–88).

To prepare for EU enlargement, the EU introduced new rules on competition policy from 1 May 2004.

We’ll spend the lecture talking about these new rules and discussing how the simple monopoly/perfect competition model can be adapted to allow us to understand cartelisation and industrial policy.

You can watch the lecture below and download the slides, and there will be a podcast after the lecture.

Download the handout by clicking the image below.

Ec4333 Lecture8 Handout Numbers