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Searching European Identity Latvian 3rd Year of Membership in the European Union

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Searching European Identity Latvian 3rd Year of Membership in the European Union Andzs Ubelis MSC Eco. student Cardiff University Deputy State Secretary, Ministry of ... – PowerPoint PPT presentation

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Title: Searching European Identity Latvian 3rd Year of Membership in the European Union


1
Searching European Identity Latvian 3rd Year of
Membership in the European Union
  • Andzs Ubelis
  • MSC Eco. student Cardiff University
  • Deputy State Secretary, Ministry of Finance,
    Republic of Latvia
  • EPRC
  • Glasgow, 20 March, 2007

2
Content of Presentation
  • Past - EU accession success story
  • Present - Resume after 3rd year in EU
  • Future in the search of new European identity

3
I. EU accession success story
  • 9 years of reforms (1995-2004)
  • economic transition (Free Trade Agreement with
    EU, Russian crises 1998) and shifting trade from
    East to West
  • market liberalisation
  • harmonisation of the legislation
  • building institutions and improving governance

4
I. EU accession success story
  • Accession process
  • proving commitment for reforms
  • getting on a fast track escaping from the group
    of 2007 enlargement (1999 Helsinki)

5
II. Resume after 3rd year in EU
  • Status of a new member state
  • newcomers in an old club EU15 vs EU10 (EU12)
  • EU6 vs Cohesion countries
  • Donors vs Beneficiaries
  • Liberal economies vs Social Model

6
II. Resume after 3rd year in EU
  • Costs and Benefits
  • good financial package for 2007-2013
  • little success with EU agenda (constitution,
    legislation on free movement of services)
  • limited influence at European scale
  • only one clearly visible political leader from
    Latvia on European / International scene
  • poor representation in EU institutions
  • joining Euro zone becomes a challenge

7
II. Resume after 3rd year in EU
  • Baltic tiger walking on the edge
  • high real GDP growth rates (10 and more)
  • inflow of FDI and capital
  • high inflation
  • current account deficit
  • indebtedness
  • risk of overheating
  • risk of devaluation of national currency and
    financial crisis

8
II. Resume after 3rd year in EU
  • Baltic tiger walking on the edge ? Macroeconomic
    policy trap for the Government and the Central
    Bank
  • EU accession ? economic growth ? higher demand
    for labour ? higher wages ? higher prices ?
    inflation
  • EU accession ? agenda for joining Euro zone ?
    pegging Latvian Lat to Euro ? the Central Bank
    loosing control over monetary policy (interest
    rates, exchange rates) ? cant control inflation
  • EU accession ? opening EU labour market ? outflow
    of labour force (e.g. to UK, Ireland) ?
    Government has to rise salaries and reduce taxes
    to motivate people stay in Latvia ? cant control
    inflation

9
II. Resume after 3rd year in EU
  • Baltic tiger walking on the edge ? Structural
    changes in economy required to sustain the growth
  • rising productivity
  • higher value and less labour intensive added
    services and production
  • less capital intensive production
  • more export oriented services and production
  • smart use of EU funding

10
III. Further perspectives in the search of new
European identity
  • Why new European identity needed for Latvia
  • setting medium term development targets for the
    nation also requires searching for a new global
    / regional (e.g. Europe, Baltic Sea Region) role
  • mobilizing and targeting scarce resources (human,
    intellectual, financial) for action at
    international / EU scale

11
III. Further perspectives in the search of new
European identity
  • Possible identity scenarios - endogenous
  • from fast growing economy ? to most competitive
    economy
  • standing for liberal values - free movement of
    services, reducing tax burden
  • building knowledge based economy
  • benefit from having 2 most competitive European
    economies at our door step - new identity for
    Baltic Sea Region
  • from periphery and buffer zone with Russia ?to
    the bridge with Russia and former Soviet Union

12
III. Further perspectives in the search of new
European identity
  • Possible identity scenarios - endogenous
  • from beneficiaries of extensive EU assistance ?
    to effective manager of public financing in EU
  • from a country dependent on supplies of fossil
    energy from Russia ? to front runner of
    sustainable energy policy in Europe

13
Conclusion
  • Latvian accession to European Union proved to be
    success. However accession itself does not grant
    to a country a status of a successful member
    state. Its now in the hands of Latvians to prove
    their ability to become successful Europeans.
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