Abstract
The chapter analyses the outcomes of recent economic agreements and unions that have affected the interests and attitudes of multiple actors in the Trans-European space. The author explores the effects of these unions on trade flows and investment, both in the EU and in ten countries of the EU neighborhood. The chapter contributes to the book’s narrative by examining spill-over effects of financial crises and financial sanctions across the whole area. Using a comparative approach, Mirkina explains differences in the choices that the EU’s neighbors must make. Examining the consequences of these choices helps in predicting the economic and political trajectories of each country, describing antagonistic forces that impair their economic integration and security and highlighting issues that should be resolved before steady development in this area could be achieved.
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Notes
- 1.
See also chapter “Iran: An Unrecognized Regional Power” by Perteghella, chapter “Saudi Arabia’s Regional Space-Shaping: Making or Unmaking a Region?” by Santini and Costantini and chapter “Shifting Dynamics in Turkish Foreign Policy in the Trans-European Space” by Baracani and Çalımlı in this volume.
- 2.
See also chapter “Facing a Fragmented Neighbourhood: The EU and Six Eastern Partnership Countries” by Pishchikova in this volume.
- 3.
The Deep and Comprehensive Free Trade Agreements (DCFTA) in both countries are officially in force since July 2016, although some parts have been provisionally applied since September 2014.
- 4.
The informal approval of the observer status for Moldova has been granted at the Supreme Eurasian Economic Council meeting in August 2017 and is expected to be formally approved in 2018. One of the issues delaying the approval was the apparent lack of a statute on the EAEU observer countries, which would regulate their relationship with the union. Putin, V. (2017) Press statement following CIS and SEEC summits, October 11, 2017. Accessed February 1, 2018 http://en.kremlin.ru/catalog/keywords/126/events/55820
- 5.
The Moldovan economy still heavily depends on remittances (accounting for 23 per cent of the country’s GDP), a large part of which comes from Russia (EU Directorate-General for External Policies 2017). Since 2014, however, individual money transfers to Moldova followed almost the same trend as trade flows: remittances from the EAEU countries dropped from 66.3 per cent in 2013 to 34.9 per cent in 2017, while remittance from the EU countries slowly rose from 18.6 per cent in 2013 to 34.4 per cent in 2017 (Vlas 2018).
- 6.
Since over 60 per cent of Russia’s export revenues came from oil and gas up until 2015, there is no doubt that the economic growth of the EAEU has been largely driven by oil. The lack of true domestic modernisation meant that the Russian economy did not adjust to competitive forces, and instead largely kept relying on the government to protect its markets. This was a recipe for economic stagnation even before the imposition of sanctions and was only compounded by Russia’s continuing use of trade as a political weapon.
- 7.
Remittances constituted about 45 per cent of GDP in Tajikistan, 30 per cent in the Kyrgyz Republic, 24 per cent in Moldova, and 20 per cent of GDP in Armenia as of 2015, with the bulk of these remittances originating from Russia.
- 8.
By the authors’ own admission, the assessment was fairly optimistic because it was based on the 2011 data, predating sanctions and conflicts (Felbermayr and Gröschl 2017).
- 9.
Also discussed in detail in chapter “China’s Belt and Road Initiative in Eurasia: Space-Shaping as Ordering” by Caffarena and Gabusi in this volume.
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Mirkina, I. (2019). Economic Challenges in Trans-Europe. In: Giusti, S., Mirkina, I. (eds) The EU in a Trans-European Space. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-03679-9_10
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