( prof. m. zonis )

( Prof. M. Zonis )

October 10, 2000

March 26, 2002

EUROPEAN MONETARY UNION

AND

EUROPEAN UNITY

L.G. Beckers, Chairman, LOBO n.v.

THE UNIVERSITY OF CHICAGO

GRADUATE SCHOOL OF BUSINESS

[email protected]

CONTENT

1. Introduction : Relevant Left-overs

2. European Agendas compared

3. Constructing the European Pyramid

4. Excerpts from the Political Agenda

5. Excerpts from the Economic Agenda

6. Concluding remarks

[email protected] LOBO

RELEVANT LEFT-OVERS

• The broader perspective

• Membership of EU and EMU

• The European Single Market

• Outlook for the $/€ exchange rate

• Reasons for optimism in Oct. 2000 : three


THE BROADER PERSPECTIVE

€ EMU ESM EU the euro the Economic and the European the European Monetary Union Single Market Union

currency the monetary the economic the political

as a medium framework dimension system

$ Federal Reserve Interstate USA System Trade - UCC


EU

EMU MembersAustria IrelandBelgium ItalyFrance Luxembourg Finland NetherlandsGermany Portugal Greece Spain

EU - EMU

Non-members EMUDenmarkSweden

United Kingdom

HungaryPolandEstoniaCzech Rep.SloveniaCyprus

RomaniaSlovak Rep.LatviaLithuaniaBulgariaMaltaTurkey

Non - EU Members

EU Enlargement

NorwaySwitzerland

Iceland


€ EMU ESM EU

single currency

single monetary policy

coordinated economic policy

enhanced global competitiveness

THE REAL OBJECTIVE IS THE ESM

effective single market


OUTLOOK – I ( as of October 2000 . . . )

A) Short term:

• the euro is likely to remain weak :

- certain US fundamentals are more positive, although not all (i.e. the public sector deficit and over-all level of government debt)

- inflationary pressure by high oil prices will be felt, although comparatively speaking not necessarily more than in the USA

- institutional credibility is not yet firmly established


• but also :

- the euro clearly is a cost-saving factor and enhances financial efficiency, and

- the single currency shelters individual countries from the potentially adverse effects of purely domestic developments

OUTLOOK – II (as of October 2000 . . . )

B) Medium to longer term:

• likely to strengthen

- the euro zone will become comparatively more competitive

- institutional credibility will improve

- the new economy has great scope for fast growth in Europe

- governments in the euro zone will have a better track record of coordinated economic policy and will be addressing the real issues like structural reforms of the public sector and labor mobility


EUROPEAN AGENDAS COMPARED

BIARRITZ

Oct.2000

Inf. Summit

NICE

Dec. 2000

IGC

BARCELONA

March 2002

Inf. Summit

• Oil prices • EU Commission: size and structure

• European energy market

liberalisation

• EU Charter of Rights

• Council of Ministers: weight

of votes

• Integration of financial markets

• Balkan Situation • Closer cooperation

•

European transportation

• Middle East conflict

•

Qualified majority vote

• Flexible labor markets

• Institutional reforms

• Nice Treaty • Improve education and

training

• Enlargement


CONSTRUCTING THE EUROPEAN PYRAMID

1950

1960

1970

1980

1990

2000

EMU

Security & Defence

Treaty of Rome

Treaty of Maastricht Single market

C.A.P.

E.C.C.S.Euratom

E.M.S.

Social chapter

ESCB Euro

1992

1999

Single Act

EMI

EU EnlargementFiscal harmonization

28


EXCERPTS FROM THE POLITICAL AGENDA

• External representation, defence, foreign policy

• Enlargement

• Intitutional reform, voting power, role of existing EU institutions

• Moving closer to the citizen

• Preparatory constitutional initiatives, the Convention



• External representation, defence, foreign policy


- Foreign policy making

- European defence structure

- External representation


• Enlargement


- Short-term costs, long-term benefits

- The enlargement / candidacy process

- Frontier issues


• Institutional reform


- Powers of nation-states and European institutions

- Voting rights in European institutions

- Simplifying the Treaties

- Reforming the 6-month Presidency

- Role of national and European Parliament


• Citizens’ concerns

- The democratic deficit


- Need to reform or rewrite the Treaties

- Governance issues / transparency

- Charter of Rights / human rights


• Preparatory constitutional initiatives: the Convention


1. Objectives of the Convention

2. Membership of the Convention

3. Recent and future hurdles

4. New pitfalls and booby traps

CONTENT








EXCERPTS FROM THE ECONOMIC AGENDA

• Make Monetary Union work

• From EMU of 12 to an EMU of 15

• Liberalisation / privatisation of key industry sectors

• The next M & A wave?

• Strategic responses to the ESM

• External role of the euro



• European Monetary Union

- Disappearance > appearance

- Serious snags? No

- Monetary policy

- Expected further developments



• From EMU 12 to EMU 15

- United Kingdom

- Denmark

- Sweden

Additional comment:

1. Organizational consideration

2. The € and EU candidate member countries



• Liberalisation of industry sectors / privatisation

- Telecommunications

- Energy / electricity

- Banking and finance

- Rail transportation

- Airlines / aerospace



• The next M & A wave?

- ESM prompts the need for re-sizing

- will finance be available?

• the IPO and US market segments

• the bond markets

• the credit markets

• the equity markets



• Strategic responses

- finance / investments

- human resources

- technology

- knowledge

Execution

Organic Growth

Non-financial objectives

Financial objectives

Advertising and Marketing

External Growth

Mission

Target Market

Client Segments

Products / Services

Delivery Channels and Systems

Pricing



• The external role of the euro:

- New signs of growing external credibility

- Failed dollarization compared to the eurozone experience

- How many international currencies in 2010?


CONTENT








Concluding remarks

• New transatlantic issues and challenges

- trade disputes

- ‘ militarization of foreign policy ’

- several national elections in Europe

- ENRON / ABB backlash

• Renewed optimism

- the euro: collateral benefits to arrive

- relative harmony in diversity

- influential agents of change


LOBO N.V. EUROSTRATEGIES

EIKELENBERGSTRAAT 20, DILBEEK/Brussels

B - 1700, Belgium

Tel. : (32-2-)466.8626

Fax : (32-2-)466.3347

e-mail : [email protected]

Lode G. Beckers, Chairman & Managing Director

Ronny Noerens, Research Associate

( prof. m. zonis )

Documents

european pyramid4

european single market

european agendas compared3

broader perspective

eurothe economic

economic agenda6

euro zone

esm effective single