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The EU Index of Integration Effort

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Indicator-Based Monitoring of Regional Economic Integration

Part of the book series: United Nations University Series on Regionalism ((UNSR,volume 13))

Abstract

Diverging integration efforts or capacities may lead to more economic heterogeneity among countries, thereby challenging present and future steps of European integration. This is why the author measures the general integration efforts of the EU Member States by elaborating composite indicators. There are four dimensions to the indicators: acquis communautaire (measured by “EU Compliance”), Single Market integration (“EU Openness and EU Importance”), Economic and Monetary Union (“EU Symmetry”), and finally, economic convergence (“EU Homogeneity”). The results of the index (based on data for the post-2000 period) indicate an improvement in most of the dimensions, whereas economic convergence has slightly decreased. The analysis reveals that the EU has evolved into a multi-speed Europe, where there are relatively homogenous groups of countries (the core group, EMU opt-outs, CEECs and GIIPS) within a heterogeneous setting.

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Notes

  1. 1.

    According to the WTO website, http://rtais.wto.org/UI/PublicMaintainRTAHome.aspx, there are currently 6 CUs (besides the EU) out of 211 FTAs notified under GATT Art. XXIV or GATS Art. V: the Caribbean Community and Common Market (CARICOM), the Southern African Customs Union (SACU), the Eurasian Economic Community (EAEC), the Central American Common Market (CACM), the East African Community (EAC) and the Southern Common Market (MERCOSUR).

  2. 2.

    See also Fernández Moriana, Vida and De Lombaerde (this volume) on the legal compliance of the EU member states.

  3. 3.

    See Cecchini et al. (1988) and Baldwin (1989) for rather optimistic ex ante analyses of the potential single market effects, and Ilzkovitz et al. (2007), Boltho and Eichengreen (2008) and Badinger and Breuss (2011) for ex post analyses of the European integration effects on trade and growth.

  4. 4.

    Such as the emerging markets of BRICS (Brazil, Russia, India, China and South Africa) and MIST (Mexico, Indonesia, South Korea and Turkey).

  5. 5.

    See also Cuerpo and Fischer (this volume) on the measurement of macroeconomic imbalances within the EU.

  6. 6.

    For more information on the EU Index see www.eu-index.org.

  7. 7.

    Other criteria referring to the ex ante optimality of EMU include the flexibility of domestic prices and wages, the mobility of capital and labor, and the responsiveness of fiscal transfers (Mundell 1961). For an evaluation of the EMU’s constitutional design see Ohr (2009) and De Grauwe (2013).

  8. 8.

    See, for instance, Romer (1986), Lucas (1990) and Krugman (1991) on divergence effects and, on the other hand, the ‘law of one price’, the Lerner-Samuelson theorem and the traditional neoclassical growth theory by Solow (1956) and Swan (1956) to explain economic convergence.

  9. 9.

    Negative correlation values are tolerated here because a value of less than zero represents an anti-cyclical behavior of a country’s figures and should therefore be treated as disintegration.

  10. 10.

    See, for instance, the index of Economic Freedom by the Fraser Institute, the CSGR Globalization Index or the KOF Index of Globalization.

  11. 11.

    Other common measures such as the Kaiser-Guttman criterion or the Parallel Analysis do not lead to reasonable results here as there are too many components with eigenvalues close to 1.

  12. 12.

    The original EU Index developed by König and Ohr (2013) was calculated for the EU-15 countries over the period 1999–2010. As Luxembourg shows many extreme values (e.g. GDP per capita) it is not considered in either EU Index.

  13. 13.

    Among the CEECs, Hungary and Poland have made the lowest integration efforts since 2004. For a more elaborate view on the integration profiles for Hungary and the CEECs see Palankai and Miklos (this volume).

  14. 14.

    GIIPS (Greece, Ireland, Italy, Portugal, Spain).

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Author information

Authors and Affiliations

  1. Market Economy Foundation (Stiftung Marktwirtschaft), Berlin, Germany

    Jörg König

  2. Georg-August-University of Göttingen, Göttingen, Germany

    Jörg König

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  1. Jörg König
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Correspondence to Jörg König .

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Editors and Affiliations

  1. NEOMA Business School, Rouen, France

    Philippe De Lombaerde

  2. Universidad Veracruzana, Xalapa, Veracruz

    Edgar J. Saucedo Acosta

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König, J. (2017). The EU Index of Integration Effort. In: De Lombaerde, P., Saucedo Acosta, E. (eds) Indicator-Based Monitoring of Regional Economic Integration. United Nations University Series on Regionalism, vol 13. Springer, Cham. https://doi.org/10.1007/978-3-319-50860-3_3

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