EUROPEANIZATION

Introduction Europeanization has been described by many scholars and analysts in various ways; some describe it as the effect European Union policies impact on the member states, whereas others consider the EU as one element of Europeanization. However, the attention here is on the former. It is important to address the impact of the EU policies upon the member states, highlighting the effect on the domestic policies and decision making. In this essay, Europeanization shall be used to refer to the European Union. However the term shall not be used as a synonym of the EU integration. There are various issues pertaining to Europeanization with regards to the effect the EU has on its member states. This paper will try to address issues such as whether Europeanization is providing policies that eventually create similarities amongst the member states; if internal political frameworks ascertain Europeanization in diverse ways; Has Europe altered domestic politics (in areas such as party systems) and public policy? Europeanization has immensely affected the domestic public policies of member states. Nevertheless, the effect has not always been the same. The EU member states have misplaced their domestic priorities for self regulating activities in some areas, for example in monetary policy or trade. While in other areas like health care or employment policy, the effect has always been patchy. In assessing this subject, various parameters regarding the perception of Europeanization, the dynamics, governance and domestic political structures shall be discussed in order to understand what Europeanization implies to Europeans. The concept of Europeanization The concept of Europeanization is generally applied to examine the adjustments that take place in the EU member states in connection with common relations, composition and capability of legislative, executive and judicial institutions existing in both vertical and horizontal arrangements. Furthermore, it is applied with an orientation to arrangements, relations and resources of predominant systemic actors as well as in examining the formulation and implementation of specific public policies. The model is also considered as the stage in which consciousness occurs within the influence of actions that are found at the community level. There are three elements of Europeanization. First: It can be developed from various levels and structures of the policy process such as in policy formulations: implementing policy: diffusing the policy in an area where EU role may be restricted. Second; Europeanization does not only include a set of policy issues but it also encompasses some aspects like belief and value. Third; the concept shows the influence of European policies on member states. This concept involves two levels; implementation that takes place at the EU level and then the integration at the domestic level. Integration process is responsible for the facilitation of Europeanization especially in the political arena in Central and Eastern European countries (CEECs). Following the disintegration of communism, numerous International organizations got engaged in the political and economic changes in the CCEs. The longing by many CEECs to integrate in the EU, mingled with the high volume and meddling of the rules connected with membership, grants EU an exceptional influence in reframing domestic institutions and the whole range of public policies within the CEECs. Dynamics of Europeanization The argument about whether Europe is being Europeanized has inspired a lot of scholarly debate recently. There are however four elements that could be used to justify why Europe is being Europeanized. First; the single market economy promoted by European Union institution is a worth considering. Even though the EU hasn’t finished with domestic market, the EU directives set of laws and policies impacting the domestic markets of member countries increased considerably from the single European Act of 1986. Second; the introduction of Economic and Monetary Union (EMU) has created a single currency (Euro zone) and interest rate system across the member states. The single currency has created a high level of interdependency along with some additional policies. With EMU, one member states’ problem is likely to spill over to another member state subsequently affecting the rest of participating members. A good example is the recent bailout plan in Greece where members of the Euro zone had to jointly work on Greece’s domestic financial predicament. Under EMU, stability should be embraced by all the members; therefore it has aimed at giving directives on main issues pertaining to labour market reforms and changes in national pension system. It has also been argued recently that EMU has been a game changer in politics by giving more powers to other actors while others are deprived. Europeanization is not just a mere product of an expanding range of policies at the EU level. It also happens as a result of procedures that are more market oriented. A third dynamic; a process that matched the establishment of a single market was an evolving blueprint of regulatory competition. Fourth: The method of enlargement. Even though this method had not been completed, the dialogue with the contending countries signified a massive exercise in policy shift. The EU was trying to sell acquis in its entirety. The EU was also creating an attempt to shift the rules and norms of democratic activities to member states, positively proceeding outside the sphere of the single market. The scope of Europeanization Policies There exist numerous policy issues that are influenced by policy-making in Brussels. Every year, the EU releases about 500 policy resolutions. The existing body of community legislation constitutes more that 5,000 directives and policies. Some policy sectors like the environment and agriculture have been Europeanized to a point where over 80% of current policies are prepared at the EU level. The execution of EU policies results in significant modifications in the policy frameworks of the member states. This kind of Europe-stimulated policy changes is likely to influence the policy principles. In Economic policies alone, EU places over 80% set of laws, and the EU membership prerequisites include a confirmation that they are capable of executing a whole range of EU acquis, frequently quoted as having more than 80,000 pages of legislation. Considering various activities the EU impose on CEECs membership hopefuls, many analysts argue that the sway of EU is very invasive. However, it is not apparent as to the extent the EU exerts its influence on the membership candidates, although the process has been described as mainly a policy of conditional. Polity A large portion of work on the impact of Europeanization centers on internal institutions both formal and informal. They examine how European processes, regulations and institutions impact on internal systems of interest, intermediation, intergovernmental relations, national bureaucracies and administrative structures, regulatory structures, the relationship between executive and legislature and macro-economic frameworks. These elements center either on particular policies or they are apprehensive with overall institutions concerning the member states, their communities and economies in general. Be it politics, policies or polity, the general notion that Europeanization impacts member states is not contested. Although, there are different views lately that the internal influence of Europeanization varies in different member states. Governance by negotiation The European Union is invariably in a state of negotiation in numerous policy issues: weather its foreign policy, fisheries or immigration. However, the EUs power varies noticeably across the range of policy issues: From having exclusive influence for example in domestic market to having limited command of setting benchmarks in issues such as employment policy. Nevertheless, in any situation whereby the EU makes a decision either legally binding or just a declaration, it has to be done through the process of negotiation. Governance by negotiation resonates with Europeanization due to the fact that European policy does not evolve from nowhere but instead from a process of negotiation. The member states are primary to this method: either by directly getting involved in the negotiating table or by creating the under which power has been entrusted to such supranational bodies. One aspect of Europeanization at the policy level is that national policy laws are included in EU-bargaining stage, with the end result probably becoming a synthesis, although one member state may be particularly dominant. Governance by hierarchy Governance by hierarchy involves a situation whereby the supranational institutions posses a substantial amount of influence accorded to them. The institutions that are associated with this hierarchy are the Commission, the Council and the European court of justice. It is imperative to mention that EU governance by negotiation does not always abide by the patterns prevailing in single member states. France and the UK for a long time have had political confrontations. They feel that Europeanization needs some type of cultural transfer in the direction of negotiated governance. Upon the completion of negotiations stage, the council categorically accepts the European legislation which requires further implementation within the member states. A number of ‘rules and regulations’ mechanism takes a centre stage. These mechanisms obtained from distinctive supranational character of the EU, assist in guaranteeing that the agreements are executed by the member states. The character of mechanism and the subsequent account of the dynamics of Europeanization differ depending on what are perceived as positive and negative integration. Positive integration needs the initiation of a vibrant supranational policy. Normally, the EU agrees on a policy outline, and its duty is to designate it to the member states. In economic policy issues positive integration usually involves market-correcting regulations. In essence, it implies that the policy is intended to minimize the negative results of market processes Unlike positive integration, negative integration entails areas where the national barriers are gotten rid of in order to pave way for a common policy. National legislation is usually not needed to execute the policy. The commission is assigned a far-reaching authority and the jurisdiction of the ECJ can be depended upon to impose the structure of the rules and regulations, such as the ones specified in the supranational agreements. Therefore the EU laws are shaped to encourage the effective performance of the market. A good example is EUs competition policy, which indicates what is allowed in situations such as merger or joint venture between companies, costing and market sharing agreements between them among others. In negative integration it is the contest amid rules or amid socio-economic aspects that justifies Europeanization instead of the want for domestic policy to conform to EU policy outlines, in accordance with positive integration. Domestic political structures (Institutions) Domestic political structures incorporate institutions, public administration, inter-governmental relations and the legal frameworks. Regarding institutions, it is clear that Europeanization in away restricted the duty of parliaments and traditional regional representation. Furthermore, even though the EU encouraged the creation of virtual relations between cabinets and assemblies, this is not a homogeneous pattern; a distinctive demonstration of Europeanization that is dependent on the type of domestic structures that it encroaches on. There occurs Europeanization of national administration in regards to developing range and amount of contacts amongst the supranational and the national centers of administration. National officials have been gradually involved into the European policy formulation and implementation procedures. The method of integration has generated an increasing group of committees, taking national civil servants to Brussels. Considerable areas of national policies have been replaced by the EU laws. Therefore the responsiveness to the European structure pervades the national political administrative system of the member states. Conclusion The EU has been having a considerable influence on the policies of member states. It has as well influenced its neighbors through its neighborhood policy issues especially in countries within the European Economic Zone and outside Europe, specifically on the beneficiaries of the aid programs. This essay however, has covered only the European Union and member states. In the last years the EUs influence has been a debate in the academic field, taking the arguments towards its traditional concerns with the methods of integration and policy making. It is now the main subject of discussion in the 21st century. Empirical evaluation of Europeanization can be projected in different ways: by the member states or by integration or by particular policy issues. In this essay, I have resorted to focus on the concept, dynamics, and scopes of Europeanization. I have argued that, governance by negotiation-a bargain in the EU policy- possesses an Europeanization process. There are however no plain broad way to be made on the technicalities of member states adopting to Europeanization, considering the negotiating elements impacting the results, like in the situation of EMU and some environmental standards. There seems to be more impact of Europeanization at the policy level. Europeanization of policy has prompted the process of changing the state.

Trade links between Europe and Africa so far have been under the COTONOU agreement which gave African, Caribbean and Pacific (ACP) member countries access to the EU markets in order to promote their market competitiveness within the international economy.

The trade was based on non reciprocal preferences. However, the objectives of the preferential terms did not meet the expectations of the ACPs who were recording the diminishing import figures at the international stage. In order to solve this problem, together with the pressure from the WTO[i], the two blocs signed a binding agreement in 2001 in Benin (COTONOU) that launched an Economic Partnership Agreement (EPA) with enthusiastic ACP member countries. It was to be wrapped up in 2007; some countries met the time frame while majority of them signed provisional agreements, others initiated the process in order not to interrupt the trade. However, the trade links between the European Union and African countries through regional groupings, under the framework of Economic Partnership Agreement (EPAs) took effect in most countries in January 2008. It replaces the preferential trade treatment granted by the EU under the Lomé convention and COTONOU agreement. EPA indicates good results to Africa’s regional organizations.

An EPA objective surpasses the normal trade relations between the EU and Africa. They are devised towards creating trade amongst various sub regional blocs in Africa with the purpose of its incorporation within the global economy. There is a great potential in Africa, however the continent has not been doing well in improving inter regional trade because of an overlapping membership in numerous trade agreements.

Regional integration is the principal aim of the EPA deal; its proper implementation will eliminate the intra-regional trade barriers in the existing customs union and free trade agreements. Apart from the Southern African Development Community (SADC), all Africa’s regional arrangements contain internal barriers to trade like limiting rules of origin and other restrictions that hamper trade and safeguard existing businesses.

The EU commenced negotiations with West Africa in October 2003, leading to the implementation of a roadmap in Accra on 4th August 2004 – the negotiations that would permit most of the EU products to gain access to West African market. While the negotiations are still taking place, the EPAs have rejuvenated the reality of regional economic integration. Ken Ukaoha, the President of National Association of Nigerian Traders (NANT), reiterated at the conference held in Abuja in August that before the negotiations went underway, the West African region was in an “apparent comatose” in regards to integration. Not much was happening there apart from fighting and conflict resolution. The negotiations have led to a rising union of member states’ macroeconomic policies, as well as a more developed performance on a common external Tariff.

In the lake region, the East African Community (EAC) EPA framework that has been temporarily signed has facilitated the smooth process of integration within the region. In fact, all the EAC member states have initiated the process. The EAC is now closer to sign the EPA agreement after some of the most contentious issues, for instance, development support halted for about three years was finally ironed out. The EU consented on giving financial support to development programs in East Africa. There has also been a consensus on the development requirements connected with the EPAs in advancing sustained growth, reinforcing integration and promoting structural changes that eventually will augment production in the region.

There has been a considerable development within SADC. Four of its members (Botswana, Lesotho, Mozambique and Swaziland) became a signatory to the interim EPA. This development has resulted in a discussion on the integration projects in the region. However, there lacked consensus in some of the major issues like economic development, export taxes, as well as most favored nations were a drawback in concluding the negotiations.

Implications

Evaluating the impact of EPAs on Africa’s economy is not clear-cut considering the contentious issues that are still under negotiation. The EU is pushing forward the EPA framework in the negotiations which seems to create distress on the impact it will have on Africa’s economy towards poverty eradication, regional integration and economic development.

Under EPA, the EU expects Africa to liberalize a considerable component of their trade through reciprocity, African countries are supposed to lower and remove tariffs up to 80%-98% on its EU import for a period of 12 years[ii]. An assessment done by the United Nations Economic Commission for Africa (UNECA) in 2004 on the implications of EPAs in Africa predicted that the total removal of tariffs on the EU import would provoke public revenue losses in the continent to an average of USD 2.9 billion[iii]. This assessment is especially appalling for ECOWAS that has a fiscal loss of USD 980 million. On the other hand, removing tariffs will create a direct competition between the EU companies and the African domestic producers. Most of African producers will not have the aptitude of competing with the EU import on a reciprocity level due to supply-side constraints. The agricultural sector also will be badly affected due to inexpensive and mostly highly subsidized agricultural commodities in the EU. Moreover, it will pose a negative impact on African countries whose government budgets depend largely on tariff revenues, especially those who import a lot from the EU[iv], hence creating impediment in financing development projects. The end result is that most of African countries will face a constraint in reimbursement for the loss of revenues stimulated by the EPA.

Considering the difference in the structure of African economies and their EU counterparts in regards to intra-regional trade and attainment of integration, the method of reciprocity that is based on EPAs conditions is likely to have its ramifications on Africa’s exports trade and overall economic activities in the continent. On the other hand, African exports that are currently enjoying duty free access to the EU markets and endure supply constraints, will not considerably top up their trade in the EU market, whereas the EU exporters will expand their shares on the African market. Consequently, Africa would probably experience trade imbalances that may lead to a dwindling intra-regional trade at the expense of Africa-EU trade.

EPA has the capability of reorganizing regional organizations’ projects and improves the reliability of regional integration. Conversely, if the existing limitation that results from contradicting and overlying regional trade programs is not adequately tackled prior to African countries implementing EPA, then employing free trade agreement with the EU may lead to destabilizing the progress of regional markets. In a situation where the ongoing negotiations are deemed to fail in countering the development efforts of Africa, another deal must be made in order to maintain persistent access to the EU market.

Africa requires an organization that would provide an ideal economic understanding of significant policy questions to the negotiators. Such organization should create an emphasis on what the agreement is on, for instance, if it is prudent for African countries to open up their markets for competition. Such organization should also present unbiased and consistent information that could result in baffling circumstances. With the ongoing negotiations, it is with high hope that the EPA framework will cater for both the EU and Africa’s economic development.

[i] Preferences to ACP member countries were not commensurate with the "enabling clause" (GATT decision, 1979), that consented preferential treatment of developing countries, as they discriminated among developing countries on the basis of non-objective criteria.

[ii]SADC-EPA are to eliminate tariffs on 86% of imports from EU within 8 years, by 2016; Comoros 98%, Madagascar89.9%, Mauritius 96.6%, Seychelles 97.7% and Zimbabwe 87%, in the East South Africa ESA(ESA) group are to eliminate their duties within 14 years, by 2022. The East African Community are to eliminate duties on 80% of the value of imports within this period and 64% within the first two years of EPA. Ghana is to eliminate duty on 80.5% of the tariff lines within this period and Cote d’Ivoire on 88.7% within the period.

[iii] Regional meeting on Economic Partnership Agreement. 29th September 2005.

http://www.uneca.org/tfed/meetings/mombasa/index.htm

[iv] Most of the COMESA member states largely depends on customs duties for budgetary resources. Countries that suffer the most from the elimination of tariff reductions are Kenya, Sudan, Mauritius, Ethiopia, DRC and Seychelles.

Financial Sector Integration in the East Africa community Region of Sub-Saharan Africa

For most African states, the small scale of national markets constrains financial sector growth and efficiency, contributing to higher costs, a narrowed range of financial product offerings and the exclusion of numerous Africans from formal financial services. African states have long noted the limits imposed by their scale and set various courses on the pathway of economic regionalization, establishing a mosaic of regional agreements and bodies. Each African state is a member of on average four regional agreements relating to trade and/or finance. Making Finance Work for Africa. Regional financial integration, when set within the broader context of the financial sector reform agenda, offers one set of strategies to help unlock the efficiency of scale and market forces of competition.
While Africa has taken some steps toward regional financial integration, many of the benefits seem to be elusive. What aspects of financial sector integrations have the regions attained, and what should be prioritized among that which remains? What financial regulations, infrastructure and instruments should be tapped to deepen the financial sector and drive shared economic growth? Regional economic communities in Africa frequently focus upon the long term goal of a monetary union and prioritize convergence criteria, marginalizing discussions on banking supervision, payment systems, credit information and other pieces in the backbone of financial system. Yet the regionalization of these elements can offer significant gains either in conjunction with or in absence of a monetary union. History also suggests that the timeline achieving monetary union is long, while modest interim steps can advance the larger agenda and be realized in a relatively short timeframe.