The EU Neighbourhood Policy: Implications for Economic Growth and Stability*

Abstract

The article discusses the incentives, economic effects and risks of the European Neighbourhood Policy (ENP). The ENP should support growth provided that integration with the EU internal market is concrete and wide-ranging. It should not endanger macro stability but involves two specific risks: over-regulation and fragmentation of the internal market.The article is organized as follows. Section I describes the ENP's historical and political context and the institutional mechanisms for its implementation. Section II is dedicated to presenting the constituent elements of the policy in the economic domain. Section III explains the potential growth-enhancing effects of the ENP. Section IV lists the expected economic impact across the 'four freedoms' of the EU internal market. Section V discusses the possible risks posed by ENP implementation. Finally, it recapitulates the main findings and draws some policy conclusions.-this article is based on the assumption that in the medium term most of them will participate in the ENP.The ENP's design draws from the experience of EU integration, including successive EU enlargements and from the history of relations with non-EU European neighbours. The approach rests on progressive political and economic integration of the NCs with EU policies as well as on increased social and Source: Commission (2006).

East-West Integration and the Economic Geography of Europe

“…In the context of the EU Neighbourhood Policy (see e.g. Dodini and Fantini 2006), an urgent issue is whether there is an "agglomeration shadow" whereby regions outside the enlarged EU are worse off.…”

The European Union and neoliberal governmentality: Twinning in Tunisia and Egypt

“…The EU is said to have supported authoritarian regimes to secure its neoliberal economic interests and cooperated with market-oriented civil society actors to expand the scope of its economic activities (MacKenzie et al, 2013;Seeberg, 2009). It has also been noted how EU economic development policies through investment, business and aid provision have intensified imbalanced economic and trade relations between EU member states and Arab countries and created an asymmetric dependency to the detriment of the latter (Attinà, 2003;Dodini and Fantini, 2006).…”

The Euro-Mediterranean Partnership: A Macroeconomic Governance Perspective*

“…Some ideas have been brought forward on how the EU might serve as an effective macroeconomic policy anchor for MPCs, where the Barcelona Process failed to gain momentum so far (Philippart, 2003; Dodini and Krause, 2005). On theoretical grounds, Tovias and Ugur (2004) and Dodini and Fantini (2006) formulated an explicit ‘anchoring’ mechanism within the EMP framework and drew on conditional foreign assistance by international financial institutions 19 . In the context of the EMP, Galal and Hoekman (1997) argue that Association Agreements within the EMP will enhance the credibility of the commitment of MPCs to policy reform.…”

“…The economic catch‐up process will require interrelated and targeted economic policy reforms, which are essential to attracting foreign investment as an ingredient to overcome constraints arising from modest savings and investment levels in the region. Opening up to international capital markets – as requested by the EU – will induce higher economic volatility (Dodini and Fantini, 2006; Gibson et al ., 2006), and sustaining macroeconomic stability via committed prudent macroeconomic policies is therefore a prerequisite for such a strategy to materialize into higher growth. Consequently, this also requires an institutional setting generating this stability and ensuring political reliability (Acemoglu et al ., 2004).…”