w 109 long-run economic aspects of the european union's eastern ...

A SOUND AND DYNAMIC ECONOMIC UNION‘left-over’ cases. In Slovenia the losses incurred by those cases are relatively high.In those three instances privatization is part and parcel of the restructuring approach.The utilities sectors are on the way of becoming properly regulated (e.g.natural monopolies like water/sewage) or of being liberalized under EU -basedregulatory regimes. Transitions problems also persist in the financial servicessector, be it in different degrees. What is important for the EU -15 is the explicitunderstanding and full acceptance that banking and insurance need to be (more)open to competition, more effectively regulated and supervised and subsequentlyfar more ‘deeply’ developed in terms of branches and types of services. In otherrespects, such as wage determination, pension systems and the functioning of thelabour market, the typical policy intentions hardly differ from what one observesin EU Member States.Table 5.1 provides indicative evidence that concerns about the quality of economicunion after accession can be usefully embedded in a special framework agreedbetween the EU and the respective acceding countries for a period of another fiveyears or so. It enables a close scrutiny of the determinants of economic growth inCentral Europe and confirms the joint commitment to avoid ‘new Mezzogiornos’by striving for high catch-up growth. Such a framework has the great advantage ofgoing beyond the legalistic and institutional approach, indispensable to the verificationof acquis adoption, and of focusing instead on the socio-economic objectivesof the Union that are pursued via a properly functioning economic union.Furthermore, this approach attempts to link micro and macro-economic aspectsand can thereby help to establish the confidence that the Euro area’s underlyingeconomic union after enlargement is of sufficient quality to support the properfunctioning of an enlarged Euro zone. In so far as table 5.1 can be regarded as‘hard’ evidence, the more advanced candidate countries seem to understand thenational prerequisites for beneficial participation in a robust and dynamic economicunion. In the long run, the special framework of assessment should beabolished, allowing the new members to become normal partners in the EU ’svarious co-ordination processes (including Cardiff, Luxembourg and Cologne).97