Portugal has gained the least from European integration

Paul 31 July 2014

4854 Germany and Denmark have done the best from their membership of a wider Europe, leaving Portugal languishing at the bottom of the pile of member countries.

Portugal’s per capita increase in income attributable to European integration has been just €20 a year, way behind Denmark’s €500 and Germany’s €450.

The study by the Bertelsmann Foundation published this week examined the economic impact resulting from the integration of the single European market in 14 countries between 1992 and 2012, noting that overall it was positive but that there were large variations between countries with the southern countries benefitting the least.

The deepening of European integration meant an average annual increase in income for Italy of €80 per capita, in Spain and Greece €70, and just €20 per head in Portugal.

The Bertelsmann Foundation's report claimed that "A single market based on free movement of goods, persons, services and capital, plays a vital role in European integration. These four fundamental freedoms remove trade barriers between the countries involved and make imports cheaper, which in turn boosts consumer purchasing power. In this way, the single market allows companies to produce for a larger market and further reduce prices thanks to mass production. Moreover, cross-border mobility of workers and capital mean that production factors can be deployed in areas where they can be of greatest value, again providing additional growth stimulus."

The main goal of a single market, which was to bring more prosperity for its citizens, has been reached, the Foundation continues, adding that these results should encourage the EU to deepen the single market.

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Study methodology:

In order to quantify the European single market's impact on growth, the study measured European integration based on its own index.

This integration index is based on an index developed by Jörg König und Renate Ohr, but has been adapted with respect to the evaluation period and the indicators used regarding the specific purpose of the study.

This showed how close the economic ties are between different countries. The index was calculated for the period between 1992 and 2012, for 14 Member States out of the EU-15 (it has not been possible to build up a reliable index for Luxembourg due to large data gaps).

Using regression analysis, this study undertook an econometric evaluation of the impact that any increases in the integration index may have had on real GDP growth rates per capita.

The later stage involved calculating how the GDP per capita in the 14 countries would have developed, if European integration had not progressed since 1992.

Comments

+5 #3 Bethan Thomas 2014-08-01 12:22

The difficulty - as we now see with BES - is that an assumption is made that we are all on the same song sheet.
Marching to the same drum beat. That market sector regulation, supervision of subsidies, inter EU state trade rules etc - all mean the same thing. It doesn't! :cry:

For far too long the southern EU has wrongly ridiculed the northern EU states and the British in particular for taking the regulations too seriously.

And saying Britian is a bad european. When our Govt. long ago anticipated the EU lunatic states. But annoying that our Govt. did not warn us Brits trying to survive in the southern EU !

It is nonsensical for example that the Italians still lose a fifth of their revenue to Mafiosi organised crime.
How much is Portugal losing to their equivalent 'organised crime' - their 'political mafiosi' in the town halls and in regional ministries? :-?

That is what our EU ministers have not begun to address !

+4 #2 Peter Booker 2014-08-01 09:35

Let us make a big assumption, which is that the EEC and EU investors knew what they were doing when they "opened" the market and provided enormous wodges of money to these southern states. Did the EEC and then the EU just stand idly by while these southern nations spent (or misspent) and failed to adapt as predicted? Of course, in Brussels the EU was far more concerned with the shape of bananas than in any meaningful fiscal and economic supervision. The idea of a combined Europe is attractive, but the EU as presently constituted is an overpaid, overstaffed, continuing and worsening disaster.

+6 #1 Bethan Thomas 2014-08-01 09:33

Spot on .... No one minds a country being poor but honest - but so many Portuguese have excelled at being both poor in spirit and malignantly dishonest to so many of us trying to live and work amongst them.

Having deliberately misled us over some regulation - they then metaphorically then just stand watching us .... shrieking with laughter. Not attempting to help us put things right.

Yet so often telling us they are 'smart' .... how often have we foreigners been told that 'We Portuguese are doing it (the EU directives) ... the Portuguese Way'. :cry:

If a 'right' way is designated by Brussels (or spotted by some wily old fox) then almost all Portuguese will unerringly head in the opposite direction.

Even simple tax paying is for most - still far beyond their understanding !

This research just confirms what so many of us foreigners have known for years.

That the 'EU bar' is still too high for them :zzz