The Economics and Policies of Integration -- a Finnish Perspective

European integration has come a long way since the fIrst steps in the aftermath of the Second World War. At that time, the neutral European countries chose to stay outside the European Economic Community. Those countries that wanted less ambitious cooperation formed the European Free Trade Association. Increasing trade dependence between the two groupings was institutionalised when they signed free-trade agreements with each other, creating thus a wider European free-trade area in manufactures. The strong push towards deepening integration among EC countries, manifested in the Single European Act in 1985, and the dismantling of non-tariff barriers to trade and factor flows in the EC by 1993, made it necessary for EFTA countries to secure access on equal conditions to their most important export market and thus prevent trade diversion. The ensuing agreement on the European Economic Area responded to these demands, but did not resolve the apparent asymmetry in EEA decision-making. This emanated from the supremacy ofEC legislation over EEA rules, thus making EFTA countries passively adjust to EC norms. Consequently, Finland applied for membership in the EC in March 1992, with effect from 1995. The latest phase in the integration process, the Treaty on European Union, has an aim to further deepening, e. g. the formation of the economic and monetary union by 1999. Front Matter....Pages i-xvi Finland and European Integration....Pages 1-7 Finland in the European Community — The Economic Impacts....Pages 9-19 New Developments in the Study of Economic Integration....Pages 21-36 The Identification of Barriers to International Trade Under Imperfect Competition....Pages 37-54 An Imperpect Competition Model in an Industry with Differentiated Domestic and Foreign Products....Pages 55-65 Foreign Trade in Denmark and Finland....Pages 67-88 Finnish Participation in the Internal Market....Pages 89-116 Is the EU an Optimal Currency Area and is Finland a Part of it?....Pages 117-148 The Functioning of Labour Markets in EMU....Pages 149-160 Macroeconomic Policy and EMU....Pages 161-173 Voting Rule Reforms in the EU Council: Needs, Means and Consequences....Pages 175-205 Back Matter....Pages 207-210 The Economics and Policies of Integration - A Finnish Perspective reviews the expansion of the EU to EFTA, adopting the perspective of a small, open economy as it integrates further into the international division of labour and opens up to the free mobility of production factors, goods and services. The book considers participation in the EC's internal market programme and the threats and opportunities that this poses to the small, open, Nordic countries. EMU is also reviewed, together with decision making in the EU, covering a wide range of theoretical, empirical and policy related issues. Audience: The book is intended for a wide range of readers including academics, policy makers and students of European integration