ECONOMIC POLICY CHALLENGES OF SMALL EUROPEAN COUNTRIES
DOI:
https://doi.org/10.7251/ACE1727119MKeywords:
economic vulnerability, economic resilience, diseconomies of scale, small domestic market, external shocks, regional cooperation, the European UnionAbstract
The aim of this paper is to study the pace and role of small states in international economic relations. The main characteristics of small states are a high degree of economic openness, export concentration and high dependence on strategic imports. In addition, their significant features are also indivisibility of overhead costs and diseconomies of scale. There is no single definition of small states since the size is a relative term. In addition to the size of population, sometimes other indicators are used as size criteria such as territory size or gross domestic product. This paper emphasizes the endogenous and macroeconomic characteristics of small states in detail and some small countries’ problems that can be challenging in developing their economies. Furthermore, the concepts of small states’ economic vulnerability and resilience are covered. This paper pays special attention to arguments in favor of regional cooperation among small countries. The final part of the paper is dedicated to the similarities, and also economic di?erences among the small European states. It also highlights the benefits of small states’ membership into the European Union. Numerous economic benefits for small countries arise from the process of regional integration, especially with regard to strengthening economic resilience, foreign trade, strengthening their bargaining power, joint management of regional public goods, receiving technical assistance and geopolitical aspect.
References
Briguglio, L., Cordina, G., Farrugia, N. & Vella, S. (2008). Economic Vulnerability and Resilience: Concept and Measurements. Research Paper, 55. Retrieved on 3. 1. 2017 from https://www.researchgate.net/publication/46527233_Economic_Vulnerability_and_Resilience_Concepts_and_Measurements
Briguglio, L. (2014). A Vulnerability and Resilience Framework for Small States. In Building the Resilience of Small States – A Revised Framework (p. 10-76). London: The Commonwealth.
Briguglio, L. (2016). Introduction: Small states and the European Union. In Small States and the European Union – Economic Perspectives (p. 1-27). London: Routledge.
Commonwealth Secretariat. (2000). Small States: Meeting Challenges in the Global Economy. Washington, D.C.: Commonwealth Secretariat and World Bank Joint Task Force on Small States.
Eurostat. General government gross debt (% of GDP). Retrieved on 22.1.2017 from http://ec.europa.eu/eurostat/tgm/table.do?tab=table&init=1&language=en&pcode=tsdde410&plugin=1
Eurostat. International trade. Retrieved on 22.1.2017 from http://ec.europa.eu/eurostat/web/economic-globalisation-indicators/indicators/trade
Eurostat. Volume indices per capita, 2013-2015 (EU-28=100). Retrieved on 22.1.2017 from http://ec.europa.eu/eurostat/statistics-explained/index.php/File:Volume_indices_per_capita,_2013-2015_(EU-28%3D100)_Dec.png
International Monetary Fund. (2015). Macroeconomic Developments and Selected Issues in Small Developing States. Washington, D.C.: IMF.
International Monetary Fund. IMF Outlook database. Retrieved on 22.1.2017 from http://www.imf.org/external/pubs/ft/weo/2016/02/weodata/weorept.aspx?pr.x=41&pr.y=7&sy=2014&ey=2021&scsm=1&ssd=1&sort=country&ds=.&br=1&c=946%2C137%2C962%2C181%2C943%2C423%2C939%2C961%2C176%2C941&s=GGXWDG_NGDP&grp=0&a=
International Monetary Fund. IMF Outlook database. Retrieved on 22.1.2017 from http://www.imf.org/external/pubs/ft/weo/2016/02/weodata/weorept.aspx?pr.x=76&pr.y=10&sy=2014&ey=2021&scsm=1&ssd=1&sort=country&ds=.&br=1&c=946%2C137%2C962%2C181%2C943%2C423%2C939%2C961%2C176%2C941&s=LUR&grp=0&a=
Panke, D. (2008). The Influence of Small States in the EU: Structural Disadvantages and Counterstrategies. Dublin European Institute Working Paper, 08-3. Retrieved on 25.12.2016 from http://www.ucd.ie/t4cms/WP_08-3_Diana_Panke.pdf
Schiff, M. (2002). Regional Integration and Development in Small States. Policy Research Working Paper, 2797. Retrieved on 20.1.2017 from https://pdfs.semanticscholar.org/b4ba/b9899d2d7c53a43885a365ec7a30fda9ae47.pdf
Schiff, M. (2010). Small State Regional Cooperation, South-South and South-North Migration, and International Trade. Discussion Paper Series, 4938. Retrieved on 20.1.2017 from https://pdfs.semanticscholar.org/f0d3/8ed07b57627f45e2bf602d7cd53ad9b08c5e.pdf
Schwab, K. (ed.). (2015). Te Global Competitiveness Report 2015-2016. Geneva: World Economic Forum.
Schwab, K. (ed.). (2016). Te Global Competitiveness Report 2016-2017. Geneva: World Economic Forum.
World Bank Group. (2016). World Bank Group Engagement with Small States: Taking Stock. Washington, D.C.: World Bank Group.
Zaman, G. and Vasile, V. (2014). Conceptual framework of economic resilience and vulnerability at national and regional levels. Romanian Journal of Economics, (2(48)), 5-18.
_Dec.png){kind=link}