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University American College SkopjeTreta makedonska brigada bb, 1000 Skopje, Macedoniawww.uacs.edu.mkConstructing Europe as a Global Power: From Market to Identity?

University American College SkopjeTreta makedonska brigada bb, 1000 Skopje, Macedoniawww.uacs.edu.mk/conferenceFor the publisher. Dr. Marjan Bojadziev, RectorUACS Publishing Editor-in-Chef. Dr. Kokan GrcevPartner institution:Friedrich-Ebert-Stiftung, office Macedonia, www.fes.org.mkDr. Heinz Bongartz, Resident representative of FES MacedoniaSixth Annual International Conference on European IntegrationCONSTRUCTING EUROPE AS A GLOBAL POWER:FROM MARKET TO IDENTITY?Skopje, 19 May 2010Editors:Dr. Ivan DodovskiDr. Stevo PendarovskiProgram Committee:Dr. Biro Gaspar, Eötvös Loránd University, BudapestDr. Charalampos Tsardanidis,Institute of International Economic Relations, AthensDr. Clarisse Behar Molad, EDHEC Business School, LilleDr. Desislava Ljubomirova Boshnakova, New Bulgarian University, SofiaDr. Ivan Dodovski, University American College SkopjeDr. Johan G. Wissema, Delft University of TechnologyDr. Mehmet Zeki Ibrahimgil, Gazi University, AnkaraDr. Stevo Pendarovski, University American College SkopjeProof reading:Christopher HensonDesign & Layout:Dr. Kokan GrcevPrint: V. I - Biblo, dooel, Skopje

CONSTRUCTING EUROPEAS A GLOBAL POWER:FROM MARKET TO IDENTITY?Edited by:Ivan DodovskiStevo PendarovskiSkopje, 2011

Constructing Europe as a Global Power: From Market to Identity?

CONSTRUCTING EUROPEAS A GLOBAL POWER:FROM MARKET TO IDENTITY?

ContentsPreface ............................................................................................................ 8Identity Reconsidered ..................................................................... 12Matthias Waechter:The Political Identity of the European Union:Complement or Overcoming of National Identity? ......................................... 14Ana Tomovska-Misoska:Using Education as a Tool for Promoting a CommonEuropean Identity: Lessons from Different Educational Paradigms ............... 24Ivan Dodovski:From Xenophobic Fortress to Dystopian Supermarket,or How Balkan Playwrights Imagine Europe .................................................. 39Desislava Kraleva:EU Identity – Identities In Formation And Change ......................................... 57Ivan Arsenijević:The Limits and Possibilities of a European Identity ....................................... 69Branko Bošković:European Social Model in the 21st Century ................................................... 80Özgür Ünal Eríş:The Role of the European Union in ConflictManagement/Prevention in Kosovo with a Comparative Approach ............... 96

EU Business and Economy in the Global Context ... 120Tome Nenovski:Ricardo`s Effect: From Idea to Implementation ........................................... 122Ninko Kostovski, Elena Klisarovska:Theories and Practices of Cross-Cultural Managementthat Challenge Ethnocentrism within the European Union ........................... 141Makedonka Dimitrova, Ilijana Petrovska, Marjan Bojadziev:Green Economics: Young Generations to Help AchieveFuture Sustainability of Europe .................................................................... 161Zoran Sapurik:New European Union Consumer Protection Legislationand the Implementation in Macedonia ......................................................... 177Nikica Mojsoska-Blazevski, Marjan Petreski:Does Cultural Heritage Affect Job Satisfaction:The Divide between EU and Eastern Economies ........................................ 196Elena Makrevska:Resilience of the Euro .................................................................................. 211Petar Taleski:Pan-European Pension System, Possibility or Fiction? ............................... 222About the Authors ..................................................................................... 250

Constructing Europe as a Global Power:8 From Market to Identity?PrefaceThis volume includes a selection of papers presented at the 6 thinternational conference on European integration entitled “ConstructingEurope as a Global Power: from Market to Identity?” which was held on May19, 2011 in Skopje. The volume seeks to explore the idea of the EuropeanUnion as a global power. A single market and harmonized legal system whichallow for the free movement of people, goods, services and capital arehitherto considered key achievements of European integration. However, theEuropean Union needs to go a step further – in constructing a sense ofshared values and political identity – if it were to sustain global relevance.Still, what sort of identity should this be?Apart from the problem that Europe might be an empty signifier for manypeople, it is useful to distinguish European and EU identity. This is particularlyimportant if one wants to find out what effects, if any, Europeanization andEuropean integration have had on identity change. People might feel a senseof belonging to Europe in general, while feeling no attachment to theEuropean Union at all – and vice versa.The EU as an active identity builder has successfully achieved an initialidentification level among the citizens of Europe in terms of increasinglydefining what it means to belong to “Europe.” Firstly, EU membership hassignificant constitutive effects on European state identities. States in Europeare increasingly defined as EU members, non-members, or would-bemembers. Their status in Europe and to some degree also worldwidedepends on these categories. Secondly, the European project has achievedidentification potential in a sense that “Europe” increasingly denotes thepolitical and social space occupied by the EU. “Europe” is used synonymouslywith the EU. If Europe and the EU are used interchangeably, it means that thelatter has successfully occupied the social space of what it means to beEuropean. However, one should distinguish between identification with theEU as a distinct civic and political entity, on the one hand, and a largerEurope as a cultural and historically defined social space, on the other.While the European polity seems to co-exist and co-evolve with agrowing sense of European identity, overly optimistic statements should also

Preface 9be avoided. Still little is known about the precise causal relationships andmechanisms between European integration, on the one hand, and Europeanidentity, on the other. The findings of studies published in 2004 (Richard K.Hermann, Marylinn B. Brewer, and Thomas Risse-Kappen, eds.Transnational Identities: Becoming European in the EU. Rowman & Littlefield)suggest that European and national identities can go together, and giving upone’s loyalty to the nation is not required for a European demos. However, asone contributor to this volume points out, for the first time in EU history thecitizens begin to express distrust towards the Union, and only a half of thembelieve that membership brings greater benefits. Then again, manycontributors to this volume seem to share the hope that Europe can become apowerful society, where the problems of today transcend national borders.These and other relevant questions formed the theme of theinternational conference in Skopje which was attended by a number ofdistinguished scholars from USA, Germany, France, Turkey, Hungary, Serbia,Bulgaria, Montenegro, and Macedonia and participants drawn fromuniversities, government departments, research institutions and civil society.The papers presented at the conference were grouped under the sub-themes:“Identity Reconsidered” and “EU Business and Economy in the GlobalContext”.Major issues addressed include: What kind of values does the European Union need – besides asingle market and legal personality – to develop its internal cohesionand to emerge as a global power? What are the faces of Europe today? How to overcome the deficits inEurope’s image, replacing the perception of a technocratic bastionwith that of a political and cultural power? Multiculturalism, up to now the default strategy in Western Europe tomanage cultural diversity, is increasingly under attack. Does adistinction need to be made between multiculturalism as “livedexperience” of diversity and multiculturalism as a political program?

Constructing Europe as a Global Power:10 From Market to Identity? What kind of alliances or relations with the USA does the EU need toassert its global influence? Can the EU identify common targetswith the rest of the world aiming at enhancing effective multilateralismin a long-term perspective? How will practices of multilateralism affectthe positionof the EU in the future (given the shift of economic gravity from theAtlantic to the Pacific, demographic decline, and still predominantposture of nation-states)? Does the EU need to develop a more finely tuned approach toeconomic governance that accommodates the differences among EUmember states' models of growth and competitiveness?This volume contains a selection of conference papers which were furtherrevised by the authors. It is expected that the volume will provide a new lookat some of the controversial issues of Europe as a global power.We are grateful to all colleagues who have helped in various ways inorganizing the conference and preparation of this volume, in particular to allthe contributors who have not only invested time in preparing and presentingtheir papers, but also for undertaking revisions in the light of deliberations atthe conference. Our regrets and apologies go to those participants whosepapers although highly valuable could not be included in the volume becauseof the constraint of space and exigencies of the publication.The conference and this volume were realized in cooperation betweenthe University American College Skopje and the Friedrich Ebert FoundationSkopje. We are grateful to all our colleagues who supported this project rightfrom the beginning until the publication, for their valuable support and advicein the successful completion of the project.Dr. Heinz BongartzFriedrich-Ebert-Stiftung, SkopjeDr. Ivan DodovskiDr. Stevo PendarovskiEditors

Preface11

Identity Reconsidered

Constructing Europe as a Global Power:14 From Market to Identity?The Political Identity of the European Union:Complement or Overcoming of National Identity?Matthias WaechterAbstractThe European Union finds itself in a paradoxical situation: The LisbonTreaty is supposed to provide it with new impetus and institutionalcapacity for becoming a global power, however, confronted with currentevents in world politics, the bloc seems to be more disunited than ever.Regardless of a 60-year long process of integration, citizens still seem toidentify more with their nation-states than with the European Union, allthe more so under the auspices of the current economic crisis. For a longtime, analysts and politicians thought that a “permissive consensus”among the citizens would allow the elites to push forward the integrationprocess step by step. However, since the rejection of the ConstitutionalTreaty through the French and Dutch population, this no longer seems tobe the case. The paper explores the central themes of the debate arounda European identity, discusses the different propositions and conceptsput forward by intellectuals and academics, and examines their currentrelevance. It scrutinizes the relation between national and Europeanidentity, pointing out that the nation state and the European Union areultimately competitors for sovereignty and identity. Thus, a politicalidentity of the European Union can only grow if the member statesrenounce more of their sovereignty.Introduction“Nous sommes tous des Américains” - “We are all Americans” was theheadline of the French newspaper Le Monde after the terrorist attacks ofSeptember 11 th 2001 (Colombani 2001). The often quoted statement wasreminiscent of a period when Europeans defined their political identity asbeing part of an Atlantic community: Since the end of World War II, the US

Matthias Waechter: The Political Identity of the European Union:Complement or Overcoming of National Identity? 15and Western Europe had thought they were not only sharing the same values,but also common experiences in the past and common interests in thepresent (Deutsch et al. 1957; Battistella 2003/4). Pledging transatlanticsolidarity under the auspices of the terrorist attacks, the newspaper continuedthis vision: The threat scenario of the Cold War had made a place for the newmenaces of the 21 st century, which concerned Europeans and Americans tothe same degree.The years following September 11 th showed that the potential fortransatlantic strife was bigger than thought: The responses which the Bushadministration gave to the terrorist threat made lots of continental Europeansbelieve that the period of commonly shared values and interests belonged tothe past. Also, political rhetoric and discourse constructed a sharpcontradiction between American and European perceptions of the world,suggesting that peace-loving Europeans lived on Venus, while realisticAmericans lived on Mars (Kagan 2003). Though the election of Obama madeEuropeans feel again closer to their transatlantic ally, the reactions on thekilling of Osama bin Laden showed the gap between mentalities on both sidesof the Atlantic: While crowds were cheering on New York's Times Square,Angela Merkel was severely criticized for expressing her “joy” about the deathof bin Laden (Erlanger, 2011).Thus, the question arises: Have Europeans since the end of the ColdWar, with the consolidation of the EU, its common currency and itssuccessive enlargements, become more conscious of their Europeanness?Do they identify with the EU as a distinct political identity? And has the EUgained visibility as a coherent international actor? The current situation seemsparadoxical in a number of ways: First, the EU has gained more and moreimpact on the daily life of its citizens. But the Union seems to inspire less andless confidence: For the first time in its history, the spring 2010Eurobarometer recorded a situation where distrust of the European Unionoutweighed trust (Eurobarometer 73 2010). Only half of the citizens believethat the membership of their country in the EU is a good thing. Euroscepticparties, like the French Front national or the True Finns are recently scoringelectoral successes 1 . Also, the Lisbon Treaty produced paradoxical results: Itwas meant to give more coherence to the EU's actions in the internationalarena, however, the reactions to the revolutions in the Maghreb regionshowed the Union again in its well-known discordance and polyphony, withGermany not supporting the UN resolution to protect the Libyan civilianpopulation, and four different protagonists claiming to speak for the bloc.

Constructing Europe as a Global Power:16 From Market to Identity?Thus, three different questions arise which I would like to address in mypaper:I) Why should there be a European identity? Do we need a Europeanidentity?II) What is its relation to national identity?III) How can a European identity be fostered?IBefore treating the first question, I should define what I mean by aEuropean identity: I am referring to a political identity, thus the identificationwith the European Union as a political community. Hence, my essay is notelaborating on identification with the European continent, a certain way of lifeor a distinct civilization. People can very well identify with those culturalelements without embracing the project of the European Union. Countriesintensely shaped by a European culture and lifestyle (like Switzerland) canstay adamantly skeptical of the project of European integration. I doacknowledge, however, that an attachment to those cultural values canpotentially increase the support for the European Union.For a long period, the attachment of citizens to the project of Europeanintegration was considered as not being very important. The unificationprocess was regarded as an elite-driven process, managed by forwardlookingstatesmen and -women, civil servants, industrialists, trade unionistsetc. When launching new ideas for Europe, Jean Monnet, the founding fatherof the community, went to see the pivotal people in each member state inorder to gain their support (Waechter, 2011). As long as those societalleaders went along with the process, it wouldn't be at risk, as the citizenswould follow. The integration process could remain an elite-driven process, aslong as it was accompanied by a tacit, unengaged support on the part of thecitizens. Political scientists have named this attitude the permissiveconsensus: European citizens, according to this concept, let the integrationprocess happen, as they didn't feel very strongly about it: Neither did they feelthe need to block its further advances, nor did they feel passionately attachedto it (Lindberg & Scheingold, 1970). Under those circumstances, a Europeanpolitical identity was not needed, as the citizens' involvement in the processremained very limited.From the 1990s onwards, however, the scope of European integrationsignificantly changed. Previously being mainly a market-making venture, itturned into a full-blown political project touching upon issues with increasing

Matthias Waechter: The Political Identity of the European Union:Complement or Overcoming of National Identity? 17relevance for the political identity of the citizens. A common currency,common borders with common rules on entry and the challenge of creating acommon foreign and security policy made the EU into a much more identitysensitivecommunity than it used to be, when it was mainly concerned withissues like agriculture, competition and regional development. The result is anincreasing politicization of European issues: They are no longer reserved foran arena of elite actors, but enter the normal domestic fora of political debateand decision-making. The public becomes more and more aware of Europeanintegration and wants to have its say in this process. We have moved, asLiesbeth Hooghe and Gary Marks argue, from a permissive consensus to aconstraining dissensus: The public is no longer an innocuous and lenientobserver of European integration, but has become an involved actor, onwhose support no politician can tacitly count (Hooghe & Marks, 2008). Thishas become dramatically evident in the referenda on the constitutional treatyin 2005. The fact that citizens care more about European integration thanbefore, and that EU issues become more politicized, should at first not beregarded as a negative development: On the contrary, an intense publicdebate about issues like the constitutional treaty could give evidence of theexistence of a European identity. However, we can observe that thepoliticization of the EU provides increasing room for such groupings, whichunconditionally oppose the integration process by arguing that it threatens thenation state and national identity (Weßels, 2007). This seems to me thecurrent scenario, which makes the issue of European identity increasinglysalient: The European integration process has become more politicized,which, however, has not yet led to a more passionate support for this project,but has rather given space for an articulate opposition based on nationalism.IIThus, the question arises: What, exactly, is the relation between nationalidentity and European identity? Nationalism and the nation-state are amongthe most powerful, shaping forces of modern times. For the vast majority ofpolitical and social movements in the world, the nation remains the primordialframe of reference, and the majority of European citizens primarily identifywith their nation states as the community they feel most attached to. Hence, isit realistic to expect that citizens will identify with a community larger than theirnation-state? Is a supra-national identity achievable? Can nations and thenation-state be superseded? Authors have given contradictory answers to thisquestion. In the age of globalization, authors like David Held and Martin

Constructing Europe as a Global Power:18 From Market to Identity?Albrow argue that the world has become increasingly denationalized: the keyproblems of our times transcend the borders of the nation-state, which is lessand less capable of controlling action on its territory and becomes more andmore insignificant (Albrow, 1996; Held, 2002). The challenge of our times ishence to realize democratic governance on a supranational scale. For others,like Anthony D. Smith, there are no serious indications that the nation-statewill loose its significance: Not only does nationalism remain powerful inEurope, the continent which gave birth to it, but it has been exported all overthe world in the course of the 20 th century. “There is no area unaffected bynationalist protest or free of the nation. (...) No other principle of government,no other organization of collective economic activity, no other criterion ofculture and identity, is seriously considered today (...) . The nation andnationalism, accommodated or not, separately or together, will, it seems,continue to provide humanity with its basic cultural and political identities andpolitical organizations well into the next century” (Smith, 1990, p. 24).The advocates of a European identity (or better: a EU identity) hold thatthere is no contradiction between an attachment to the nation state and toEurope. The motto of the EU is “Unity within diversity”; hence, a sense ofbelonging to one's nation can very well coexist with a strong support ofEuropean integration. Each individual, they argue, has multiple identities,going from the personal, family level over an attachment to one's home town,region, to the nation and finally to Europe as the all-embracing entity. ThomasRisse, one of the proponents of this viewpoint, gives the images of themarble-cake or the Russian matruska doll in order to describe how anindividual can have multi-layered identities. According to Risse and others,European identity can be fostered through a constructive process not verydifferent from the process of nation-building. The modern nations wereshaped in a conscious process of social construction, which took place fromthe top to the bottom: elites shaped and spread discourses, which weresupposed to create among individuals of different origins the feeling of beingpart of the same community (Risse, 2003; Risse, 2005). Europe, according tothis view, can become an “imagined community” as rich and powerful as thenation 2 . The construction of a European identity will and should not eradicateattachment to the nation; it will just complement the citizens' identity with asupplementary level.This seems to me a somewhat idyllic vision of the coexistence ofEuropean and national identity. First, it remains too focused on the culturalelements of identity. The cultural markers of our identity can indeed very well

Matthias Waechter: The Political Identity of the European Union:Complement or Overcoming of National Identity? 19live next to each other, and it is a statement of the obvious to say that eachindividual would describe his or her identity by referring to multiple layers notexcluding each other. Second, it gives an incomplete account of the processof nation-building, which was not only a top-down discursive process ofconstructing collective identities, but also a pervasive socio-economicprocess, built on a fundamental political act: The acquisition of sovereigntythrough a community of individuals which claimed to be a nation. Acquiringsovereignty - this meant owning all the fundamental attributes of statehoodand exercising an invasive, benevolent, educating or coercive impact on thelives of the citizens. Because of sovereignty and the ownership of allinstruments of statehood, nations could be built: A national language could betaught to the detriment of regional dialects and minority languages. Aninfrastructure could be constructed which made it possible for people to meeteach other. An economy could be developed and an administration could becreated. The process of nation-building made “peasants into Frenchmen”, asEugen Weber showed in his exemplary study, because it went along withmodernization, industrialization, and bureaucratization (Weber, 1976).Citizens became attached to their nation not only because of cultural featuresand the power of a national mythology, but because it provided them withopportunities and upward mobility. Thus, the idea of superseding nationalismby a discourse of Europeanness seems innocuous, as it doesn't take intoaccount how much the nation has become part of our modern society, theindividual biographies and daily lives of the citizens.IIIHow, then, can a European identity be fostered? How can the publicsupport, which the EU more and more needs, be generated? How can weavoid that the nation remains for many citizens the one and only frame ofpolitical reference? Politicians and intellectuals have made variouspropositions on this issue. Among the most influential was and is the idea thatthe EU needs a constitution. Only a constitution, argued Jürgen Habermas in2001, will create a Europe-wide public sphere with transnational media andpolitical parties. The constitutionalization of Europe, according to Habermas,would create among its citizens a “constitutional patriotism”, very much likeWestern Germans after 1949 identified with their constitution, the“Grundgesetz”, rather than with the German nation (Habermas, 2001). AEuropean constitution remains to be created: The constitutional treaty, even ifit hadn't failed in the French and Dutch referenda of 2005, would not have

Constructing Europe as a Global Power:20 From Market to Identity?earned the name of a constitution, since it lacked its pivotal feature - afounding subject in the form of a sovereign people. Up to now, there is noEuropean demos constituting the sovereign of Europe and replacing itscurrent sovereign - the peoples of the European Union.Other authors focus on Europeanization as an incremental processprogressively creating a European identity. This multifaceted term can refer toa variety of developments: It can hint at the domestic impact of Europeanintegration, the consequences of European legislation, its sometimesunintended side-effects (Börzel & Risse, 2000). The fact that 27 memberstates have to follow the same rules makes them arguably more alike andthus increases their identity. Europeanization can also refer to the actorsocialization on the European level, an interaction leading to the creation oftrans-national networks of politicians, administrators, societal interest andadvocacy groups (Meyer, 2010). Finally, Europeanization can also refer to theaccession process, in which the candidate countries have to implement amyriad of European norms into domestic legislation in order to fulfill thecriteria for membership (Lippert & Umbach, 2005). The accession process ismeant to transfer not only laws, but also those values, which the EUconsiders as its heritage to the enlargement countries. The enduring effects ofEuropeanization are, however, difficult to measure: Some countries backpedalafter having achieved full membership, by scrapping legislation, whichthey had implemented previously under EU pressure.The failing compliance of old and new member states to maintaincommon standards highlights the fundamental problem of Europeanintegration: Europeanization which earns its name only takes place in thosepolicy fields in which member states abandon their sovereignty. As long asthey keep sovereignty and only pledge to cooperate, there is always thepossibility that an incoming government changes policies according toelectoral support and ideological preferences. Only the delegation oflegislation and implementing authority to supranational institutions guaranteesthat 27 member states follow the same rules. When I apply this logic to ourtopic of European identity, I would argue: Only the abandonment of nationalsovereignty makes European identity -understood as a political identity -possible: Political identity follows sovereignty. Citizens identify with thoseauthorities taking the ultimate, binding decisions on a matter. A Europeanpublic sphere can only become a reality when those matters which citizensare most interested in - taxes, social security, education - become matters ofdecision-making on a European level. Jean Monnet understood this very well

Matthias Waechter: The Political Identity of the European Union:Complement or Overcoming of National Identity? 21when he opted for coal and steel as the then pivotal sectors of the economy inorder to start European integration. Integrating the production and regulationof coal and steel, Monnet thought, would deal a decisive blow to statesovereignty. Other sectors would necessarily follow, and the end productwould be a united Europe. As soon as a supranational authority would takeover legislation and control of policy fields, the citizens would shift their loyaltyto this supranational authority (Haas, 2004). From today's perspective, we cansay: a shift of loyalty has taken place, but only for those sectors wheresovereignty has been delegated to the European level. Many pivotal policyfields remain purely national, thus, the citizens naturally turn to the nationwhen they want to defend their interests concerning pensions, schools,universities, unemployment benefits, foreign policy; and they are right to doso, because for those issues the nation-state remains the “terminalcommunity” (Carey, 2002). An example should illustrate this important point:The European Union has run, for more than two decades, its own programtargeted to university students: Erasmus. It has largely increased mobilityamong students and has certainly made many of them more aware of thediversity of Europe. However, it has not created a common political identity inthe sense of “shift of loyalty” among Europe's students. They still turn tonational or regional authorities when they want to improve their studyconditions or influence the design of educational policies. As long as Europewon't achieve significant competences on this matter, students will continue todo so. As long as the pooling of sovereignty remains incomplete, a Europeanpolitical identity will always remain rudimentary. In a widely read book, AlanMilward claimed that European integration meant the “rescue of the nationstate”(Milward, 2000). According to him, in the immediate post-war periodEuropeans decided to cooperate and to pool decision-making, because theybecame acutely aware of the incapacity of the nation-state to manage itsimminent problems. Ultimately, however, the nation-state and the EU arecompetitors, because they compete for the same treasures: sovereignty andidentity. European integration, taken seriously, means a constant erosion ofnational sovereignty, and thus a constant loss of a national political identity, tothe benefit of a growing European identity.

Constructing Europe as a Global Power:22 From Market to Identity?Endnotes1 In the Finnish parliamentary elections of 2011, the “True Finns” obtained 39seats and became the third largest party. In the French regional elections of2010, the Front national obtained a nation-wide average of 11,4 %.2 Benedict Anderson has described nations as “imagined communities”(Anderson 2006).ReferencesAlbrow, M. (1996). The Global Age: State and Society beyond Modernity.Cambridge: Polity Press.Anderson, B. (2006). Imagined Communities: Reflections on the Origin andSpread of Nationalism. Rev. ed., London: Verso.Battistella, D. (2003/4). 'L'apport de Karl Deutsch à la théorie des relationsinternationales'. Revue internationale de politique comparée, 10, 567-585.Börzel, T.A., & Risse, T. (2000). When Europe Hits Home: Europeanizationand Domestic Change. European Integration online Papers (EIoP), 4 (15).Retrieved from http://eiop.or.at/eiop/texte/2000-015a.htmCarey, S. (2002). Undivided Loyalties: Is National Identity an Obstacle toEuropean Integration?. European Union Politics, 3, 387-413.Colombani, J.M. (2001). Nous sommes tous Américains. Le Monde,September 13, 2001.Deutsch, K.W. et al. (1957). Political Community and the North Atlantic Area.Princeton: Princeton University Press.Erlanger, S. (2011). In Europe, Disquiet over Bin Laden and U.S. New YorkTimes, May 5, 2011.Eurobarometer 73, (2010). Public Opinion in the European Union. FirstResults. Fieldwork: May 2010. Publication: August 2010. Retrieved from:http://ec.europa.eu/public_opinion/archives/eb/eb73/eb73_first_en.pdfHaas, E.B. (2004). The Uniting of Europe : Political, Social, and EconomicForces, 1950-1957. Notre Dame, Ind.: University of Notre Dame Press.Habermas, J. (2001). Why Europe Needs a Constitution. New Left Review,11, 5-26.Held, D. (2002). Democracy and the Global Order: from the Modern State toCosmopolitan Governance. Cambridge: Polity Press.

Matthias Waechter: The Political Identity of the European Union:Complement or Overcoming of National Identity? 23Hooghe, L., & Marks, G. (2008). A Postfunctionalist Theory of EuropeanIntegration: From Permissive Consensus to Constraining Dissensus. BritishJournal of Political Science, 39, 1-23.Lindberg, L.N., & Scheingold, S.A. (1970). Europe's Would-Be Polity. Patternsof change in the European Community. Englewood Cliffs, N.J.: Prentice-Hall.Lippert, B., & Umbach, G. (2005). The Pressure of Europeanisation. FromPost-communist State Administrations to Normal Players in the EU System.Baden-Baden: Nomos.Meyer, J. (2010). The European Public Sphere. Media and TransnationalCommunication in European Integration 1969-1991. Stuttgart: Franz Steiner.Milward, A.S. (2000). The European Rescue of the Nation-state (2nd ed.).London: Routledge.Risse, T. (2003). The Euro between National and European Identity. Journalof European Public Policy, 10, 487-505.Risse, T. (2005). Neofunctionalism, European identity, and the Puzzles ofEuropean Integration. Journal of European Public Policy, 12, 291-309.Smith, A.D. (1990). The Supersession of Nationalism? International Journal ofComparative Sociology, 31, 1-31.Waechter, M. (2011). Helmut Schmidt und Valéry Giscard d'Estaing. Auf derSuche nach Stabilität in der Krise der 70er Jahre. Bremen: Temmen.Weber, E. (1976). Peasants into Frenchmen: the Modernization of RuralFrance, 1870 - 1914. Stanford, Calif.: University Press.Weßels, B. (2007). Discontent and European Identity: Three Types ofEuroscepticism. Acta Politica, 42, 287-306.

Constructing Europe as a Global Power:24 From Market to Identity?Using Education as a Tool for Promotinga Common European Identity: Lessons from DifferentEducational ParadigmsAna Tomovska-MisoskaAbstractIn a time of increasing debates regarding the future of the EuropeanUnion and Europe in general, the questions regarding ways to promotecommon identity gain in popularity. In such a time, the responsibility ofthe educational systems to provide answers to those pressing issuesbecomes very important because education can serve as a tool forpromoting tolerance and understanding as well as a drive towardscommonality and togetherness. In order to do so the educationalinterventions need to be carefully planned and based on a welldeveloped paradigm.However, such paradigm is still not well defined. Therefore, this paperwill start by exploring the Social Identity Theory to provide a baselineunderstanding on how identity is conceptualized and developed. It willthen move towards discussing the educational paradigms aimed atpromoting multicultural education in different contexts. By doing so, thepaper will try to provide a unique cohesion of different approaches topromoting mutual identity. As a result, the paper will try to uncovercertain conclusions from each paradigm that can be of help when tryingto design a program that can help in promoting a common Europeanidentity through education.IntroductionAs the diversity of Europe and the European Union increases thedebates over important identity issues and building a cohesive societybecome increasingly important. It is not enough to just acknowledge diversityanymore. The questions that arise from group belonging are part of everyday

Ana Tomovska-Misoska: Using Education as a Tool for Promoting a CommonEuropean Identity: Lessons from Different Educational Paradigms 25dialogue and become unavoidable. The issues of equality, dignity and humanrights are gaining momentum coupled with a debate over building a morecohesive European society.Therefore, the issue of intercultural dialogues has gained popularity inrecent years. The dedication to the process of building a more cohesivesociety is visible in many activities of the Council of Europe and otherEuropean organizations. The paper recognizes that only through dialogue andopen discussion about the issues of discrimination, stereotyping,scapegoating and intolerance can we overcome suspicion, anxiety andtension and move towards a more cohesive society with respect for all. Theintercultural dialogue is defined as: “(a) process that comprises an open andrespectful exchange of views between individuals and groups with differentethnic, cultural, religious and linguistic backgrounds and heritage, on thebasis of mutual understanding and respect. It requires the freedom and abilityto express oneself, as well as the willingness and capacity to listen to theviews of others.” (Council of Europe, 2008, p. 17) This intercultural dialoguecan help in developing a deeper understanding of the diverse worldviews andreligious practices as well as tolerance and respect for the other. Thisincludes building open-mindedness, willingness to engage in dialogue andcapacity for peaceful conflict resolution. It also includes a fight againstprejudice and discrimination in public and private life and dialogue betweendifferent cultural and religious communities in order to prevent or de-escalateconflicts, even in post conflict or conflict situations. The bottom line is thatintercultural dialogue has to be tied with the multiple cultural affiliations in amulticultural environment (Council of Europe, 2008). Therefore, it becomesvery important to understand the subtle nature of social identity, especiallycultural and ethnic identity to be able to work through all the importantsensitive issues and remain open to challenges.A successful intercultural dialogue can be developed only through acoordinated effort of different stakeholders working on important aspects,where education is a very important aspect and the formal and informaleducational sector is a key stakeholder. An important aspect is thecoordinated effort reaching all levels of education, focusing on differentaspects and areas of intervention such as dealing with diversity, learning tolive together and paying attention to the quality of the information given tostudents (Batelaan, 2003).Focusing on intercultural cooperation can be a starting point towards thedevelopment of a common denominator such as a broad, inclusive, diverse

Constructing Europe as a Global Power:26 From Market to Identity?and shared European identity. However since the issue of identity is crucial topromoting better understanding the paper will start by outlining apsychological view of social identity. The paper will then continue with thepresentation of the main lessons that can be implemented from theintercultural education and the contact hypothesis.The Nature of Identity and Social Identity TheorySocial identity is a very important concept for people. We all holdmembership in different groups and those social memberships help us todefine who we are. The issue of social identity becomes very important whenone encounters contact with members of different groups which is quitecommon in diverse societies. In this process people’s ethnic, cultural,religious and national identities come into play. Many complex phenomenasuch as stereotypes and various prejudices are rooted in those identitydifferences. Therefore it becomes important to understand how people formtheir social identities, especially the ethnic and cultural identities. By doing sowe can understand the importance of different factors as well as the obstaclesto creating a new identity and ways to overcome them.According to Social Identity Theory (Tajfel & Turner, 1979) individualsdefine themselves in terms of their social group membership and tend to seekpositive social identity (Hewstone & Cairns, 2001). Social identity is a part ofan individual self concept which derives from the knowledge of a person’ssocial group membership together with the value and emotional significanceattached to that membership (Tajfel, 1981, p. 255). Hence, the social identityis a part of the self image which derives from the social categories to whichpeople perceive they are members (Tajfel & Turner, 1979). Furthermore thesocial categories are defined as cognitive tools that not only segment, classifyand order the social environment, but also provide a system of self-referencewhich creates and defines the individual’s place in the society. Thereforesocial groups provide their members with an identification of themselves insocial terms as they are collections of individuals who perceive themselves tobe members of the same social category, share some emotional involvement,and achieve some degree of social consensus about their group and theirmembership in it (Tajfel & Turner, 1979). This means that members of socialgroups seem to share no more than a collective perception of their own socialunity and that is sufficient for them to act as a group (Turner, 1982). Thus, themost powerful determinants of group formation are the knowledge of a

Ana Tomovska-Misoska: Using Education as a Tool for Promoting a CommonEuropean Identity: Lessons from Different Educational Paradigms 27common social category with other people and a critical attribute of the groupwhich is positive rather than negative (Turner, 1982). The necessity ofpositive evaluation is very important to people since social identity is part oftheir self-concept and people strive to have a positive self-concept (Tajfel &Turner, 1979). Furthermore some authors have emphasized that the positiveand negative evaluations of one’s group are determined with reference toother relevant groups in terms of value laden attributes. Therefore the aim ofdifferentiation is to maintain or achieve superiority over an out-groupconcerning some dimensions (Tajfel & Turner, 1979). Additionally in thatsearch for superiority, intergroup competition might arise which might beunrelated to the objective goal relations between the groups, but it would beon dimensions which are of general social value or of particular importance toone of the groups (Hogg & Abrams, 1990).Another important aspect of the social categorization is that itperceptually assimilates people to the relevant ingroup-outgroup distinctionand causes people to be viewed not as unique individual people, but throughthe lens of category membership (Hogg & Abrams, 2003). Moreover there is acontinuum of self-perception and self-categorization ranging from definingone’s self as an individual person and as a group member, so situations thatprovoke group distinctiveness lead to accentuated self-perception in terms ofgroup membership (Turner & Reynolds, 2001). Therefore when social identityis salient people construct a context specific norm from the available andusually shared social comparative information. People are influenced by thenorm because it prescribes context-specific attitudes and behavior for groupmembers. That norm is then represented as a group prototype that prescribesbeliefs, attitudes, feelings and behaviors that minimize ingroup differencesand maximize the differences between the ingroup and outgroup (Terry et.al., 1999). Moreover the closer a social situation is to the intergroup extremein the interpersonal-intergroup continuum, the more uniformity will the groupmembers show towards the perception of the outgroup and the tendency toperceive the outgroup members as “undifferentiated items of a socialcategory” gets stronger (Tajfel, 1981, p.243). This out-group homogeneityeffect stems from the fact that the judgments about the outgroup membersare made on the basis of intergroup comparison whereas judgments aboutthe ingroup are made on the basis of intragroup individualized comparisons(Turner et. al., 1994). This undifferentiation of the outgroup members formsthe basis of depersonalization and dehumanization, which occur when

Constructing Europe as a Global Power:28 From Market to Identity?intergroup relations deteriorate, leading to strong stereotypes and prejudiceabout the outgroup (Tajfel, 1982).This theory is quite important in situations of frequent contact betweenmembers of different social groups in a diverse society, such as the countriesin Europe. Interactions often tend to be on the intergroup level and in manyinterpersonal situations the group identity might become important by raisingissues along the way. Therefore it becomes very important to address issuesrelated to the different social identities in European classrooms wherestudents with different ethnic, cultural and religious background studytogether. It is also important to stress those aspects in situations of mutualencounter between students from different countries, regions or ethnic andcultural groups.Moreover, it is important to stress those issues because national orethnic identities that are too strong might hinder the process of building acommon European Identity. The common identity should provide anoverarching superordinate category of identification that encompasses bothgroups and transforms the “Us” and “Them” into a more inclusive “We”.However in the process of doing that the initial social identities should not bethreatened as that would hinder the creation of an overarching identity(Brewer, 2003; Gaertner et.al., 1993). In that process relying on multiplesocial identities might prove quite helpful. For example ethnicity, religion,gender, and occupation are some of the categories of social identity whichdivide the whole into different subgroupings with overlapping membership.Therefore, as Brewer and Gaertner (2001) emphasized there are reasons toexpect that simultaneous activation of those multiple identities has betterpotential for reducing prejudice than distinction based on only one category.Brewer (2000) noted several reasons why multiple cross-cutting categoriesmight help this process. First, cross-cutting categories would make socialcategorization more complex thus reducing the magnitude of ingroupoutgroupdistinctions. Second, they would reduce the evaluative significanceof intergroup comparison and undermine the motivational basis for intergroupdiscrimination. Third, they would reduce the importance of any social identityfor satisfying an individual’s need for belonging and self-definition. Finally, if aperson is judged positively on one dimension as an ingroup member, butjudged negatively on another dimension as an outgroup member theinconsistency of the judgments would lead towards more balanced andpositive judgment toward the outgroup based on overlapping membership.Furthermore, the benefits of cross-categorization might be enhanced when

Ana Tomovska-Misoska: Using Education as a Tool for Promoting a CommonEuropean Identity: Lessons from Different Educational Paradigms 29the cross-cutting categories become a part of a common superordinate groupidentity. In such a case crossed categorization and recategorization mightwork together to produce enhanced inclusiveness (Brewer & Gaertner, 2001).The above mentioned theory points to the need of taking care of all theelements of identity in the educational programs aimed at promotingcohesion and building a common European identity.There are few areas of intervention that need to be considered whenlooking at a way of building a common European identity. One area ofintervention is to tackle the issues through curricular interventions in eachcountry and the other one is to enable contact between students fromdifferent countries and backgrounds. The curricular interventions are part ofthe concept of intercultural education and the contact programs can bedeveloped having in mind the Contact Hypothesis. The next parts of the paperwill deal with each one.Intercultural EducationThe countries in mainland Europe prior to the 1970’s regarded themigrant workers as temporary non-citizens who would eventually return totheir countries of origin and did not deem it necessary to provide any specialprovision for migrant children (Lynch, 1986b). However as the migrationraised and the population became more diverse the need for someeducational strategies which would help in maintaining the social cohesionand help the accommodation of the migrant children in the society grew. Theanswer has been sought in developing the intercultural educational approach.It has focused as Lynch (1986, p.32) stated on the special problems of themigrant workers’ children through home and host country language provision,preparation of the teachers for that task and marginal changes to thecurriculum in response to the problems “caused” by immigrants. For example,France started to provide classes on the language and culture of origin andsome remedial language classes (Hinton, 1997). At the same time inGermany measures such as bilingual classes, establishment of mixed-culturelearning groups, mother tongue lessons, reception centers and classes formigrant children and overall revision of curricula were implemented (Lynch,1986b). However all the programs were again focused on incorporating themigrants into the dominant culture and creating homogenous states.Although the initial policies of the countries were mainly assimilationistand the intercultural education has been viewed as just a means of

Constructing Europe as a Global Power:30 From Market to Identity?assimilation, as time passed the paradigm evolved to a more just approachtowards the minorities and migrants as the societies became more diverse.Thus the final goal shifted from assimilating the migrants to the dominantculture to preparing young people with different cultural, ethnic and socialbackgrounds to live in highly segmented, multilingual and multifacetedsocieties which seemed to be developing across Europe. Therefore, theintercultural paradigm began to emphasise the ideal that cultures hadreciprocal influence on each other within society and changed in theirinteractions, but the society could function harmoniously if it was based oncommon values and respect. As Perotti (1994) noted it was clear that thediversity in Europe would never disappear and that true democracy wasbased on it, so the main challenge was to find the correct relationshipbetween cultural diversity and social cohesion, as it was seen that everygroup had the right to maintain its cultural identity but the society could notfunction without common bonds between people. The shift from assimilationto respect of all cultures came mainly as a result of the work of the Council ofEurope and the definitions and policy documents that it adopted. According toTaylor (1997) the aim of the intercultural education as defined by the Councilof Europe was to raise awareness of certain key issues: belonging to aculture, the consequences of that belonging, existence of different culturesand the differences between them, and all of this geared toward learning torespect and appreciate other cultures and cultural diversity. Furthermore, asLeonetti (1992, p. 153) stated, the intercultural education movementarticulated the cultures into a harmonious whole while respecting thedifference and legitimacy of each culture.In addition, Flecha (1999) in his critique of the anti-racist approach inEurope gave an example of the need for policy change and the path ofdevelopment. He argued that focusing on diversity and difference whileexcluding the idea of equality obscured the possibility of solidarity and theidea that people can live together sharing the same space and educationalinstitutions. Thus he proposed that the thought “we are different” should bereplaced by the thought “we are equal and we are different”. However, heargued that in order to obtain a true equality of difference the educationsystems and societies as a whole should obtain multicultural solutions whichare both pluricultural and intercultural. They had to be pluricultural in order toenable all individuals and groups to live their differences; and they needed tobe intercultural to allow the exchange between different cultures and to helpwith structuring new cultural forms, as the orientation towards cultural

Ana Tomovska-Misoska: Using Education as a Tool for Promoting a CommonEuropean Identity: Lessons from Different Educational Paradigms 31dialogue and greater understanding needed communication between differentcultures, mutual exchange and developing new cultural forms based on thatexchange. He claimed that adopting a dialogic approach which fostered livingin a society based on rules agreed upon via free and egalitarian dialogue byall people sharing a territory and implementing that approach in theeducational system could help eliminate different sorts of racism. Thusaccording to him educators should base their teaching, educational theoriesand pedagogies on the concepts of human rights, democracy, equality,solidarity and difference, as only that would create possibilities for differentethnicities, cultures, nations and populations in Western Europe to share thesame schools and territories and respect each other.The intercultural paradigm and programs developed under itconcentrated on building communication sensitivity and skills, enabling youngpeople to discover difference and diversity in others and to respect thatdiversity, incorporating knowledge from different cultures into the curriculum,incorporating foreign teachers into the teaching staff and placing specialemphasis on the values that are transmitted through the educational system.The accent has been on transmitting and inculcating the values underlying thehuman rights paradigm as it was seen that they can place the basis ofcommon rules for communication, common legal systems, democratic rule byconsensus and the freedom of individuals in the face of community pressure(Perotti, 1994).This shift in thinking meant developing different educational policies andinterventions. For example in the Netherlands in 1985 the Primary EducationAct was passed which required all primary schools to provide interculturaleducation for all children and that intercultural education should not be aseparate subject but an integrated part of the whole curriculum with the mainobjective of enabling children to acquire knowledge of each others’ cultures,become free of prejudice and racism and learn to live harmoniously with eachother. Since the policy Act did not bring a lot of practical change theIntercultural Education Project Group was set up in 1994 to stimulate thedevelopment of intercultural education in schools. It led to the development ofdifferent materials and practical guidance for schools and teaching staff and in1998 the intercultural education shifted from local level school responsibility tonational policy (Leeman, 2003; Hermans, 2002).Furthermore, Leeman (2003) proposed several educational objectives ofintercultural education. The first objective was the development of knowledgeabout ethnic-cultural diversity which incorporated learning about other

Constructing Europe as a Global Power:32 From Market to Identity?cultures, processes of change, differences and similarities between cultures,and processes of communication and image forming. The second objectivewas the development of a multiple perspective outlook which was concernedwith enabling students to see that knowledge was socially constructed andthere was more than one way of looking at the world. The next objective wasconcerned with the development of knowledge about inequality in the multiethnicsociety and of values and skills to tackle inequality. The fourth objectivewas the development of values and skills aimed at safeguarding ethnicculturaldiversity, personal autonomy and communality in the school andsociety and enabling students to take active responsibility for such values.The final objective was the development of values and skills necessary forliving democratically in a multi-ethnic context which was concentrated aroundthe development of social competence including respect for others, the abilityto empathize, and the development of skills for resolving conflicts in amulticultural context.The paradigm stresses the importance of incorporating the issues ofethnic and cultural diversity in the curriculum and opening possibilities fordiscussion that can prove very useful in creating an overarching commondenominator for all European citizens.Contact HypothesisThe contact hypothesis was first defined by Allport (1954) and in theoriginal formulation it stated that if the members of two groups engage in anequal status, cooperative encounter which leads towards achieving acommon goal and the encounter has institutional support, it should lead toimproved intergroup relations. Its popularity fluctuated over the years and akey concern was the disagreements over the optimal conditions of contact. Asnew conditions were added, Pettigrew warned of turning the contacthypothesis into an “ever-expandable laundry list” which is very cumbersomeand hard to implement (Pettigrew, 1998). However it was also pointed out thatthe conditions proposed by the contact hypothesis may not be essential butrather facilitating conditions for change (Pettigrew & Tropp, 2006). As a result,attention was turned to establishing knowledge of not only when contactworks, but also to how and why contact works, accentuating both quantity andquality of contact as important variables. It became essential to engage inunderstanding of not only cognitive but emotional, situational and contextualvariables present prior to and during the contact situation (Hewstone &

Ana Tomovska-Misoska: Using Education as a Tool for Promoting a CommonEuropean Identity: Lessons from Different Educational Paradigms 33Brown, 2005). Therefore, current formulations of the contact theory suggestthat different sets of factors should be considered when planning the contactsituation. Consequently, the outcomes of contact are complex and vary fromone situation to another. One model proposes interaction between differentsets of variables to produce personal and societal outcomes of contact. Thefirst category of variables in this model stems from the broader societalcontext. It includes the structure of the society, the historical relationsbetween the groups, the current relations of the groups, and the group’ssocialization practices. The second set of variables is the situational context inwhich the contact takes place and it includes: the setting in which the contactoccurs, the nature of interaction, the composition of the groups and the task inwhich the participants are involved. The third set of variables that must betaken into consideration is the personal factors such as: demographiccharacteristics, personality traits and prejudices, stereotypes and otherexpectancies of the contact participants. During the contact situation itselfbehavioral, cognitive and affective processes of the participants serve asmediators of the contact. The contact situation can have personal and societaloutcomes. Changes in behavioral, cognitive and affective processes of theparticipants form the personal outcomes. On the other hand modification inpublic attitudes, social norms or the legal system, and the relative economicor social status of the groups form the basis of the societal outcomes(Stephan & Stephan, 1996).Therefore, the contact hypothesis might provide useful input into theefforts to build a common European identity by providing advice on the factorsthat need to be taken into consideration when planning a contact betweenstudents with different backgrounds and to plan realistic expectations for theprogram. Another important note from the contact hypothesis is that thecontact needs to be sustained over a long period of time (McGlynn, Niens,Cairns, & Hewstone, 2004) and address issues important to the participants inthe contact situation (Tomovska, 2010).This perspective sheds light on the issues that need to be considered inall situations of mutual encounters between people from differentbackgrounds. It is especially useful in planning encounters focused onovercoming differences and misunderstandings and providing a fruitful groundfor encounters centered around promotion of common identity. It also pointsout that the outcomes of the efforts for building common ground can haveimpact on many different levels and as such might take some time to becomeeffective and visible.

Constructing Europe as a Global Power:34 From Market to Identity?Integrating the Perspectives and ConclusionThis paper is focused on integrating various standpoints in an effort toopen up a discussion for building a common European identity for allEuropean nations. As such three different theoretical viewpoints werepresented. The main lesson from each one can provide a starting point in thedebate.The Social Identity Theory outlines the basis of social identity building.By utilizing its main ideas it can be concluded that the identity buildingprocess is a very complex one. It is even more complex to add additionaloverarching identity in the diverse reality of Europe. Each group has alreadydeveloped a strong affiliation with its own ethnic background and culturalroots. Therefore all the efforts towards building a common identity should becarefully planned to provide accommodation for the existing identities as wellas a superordinate identity that will be acceptable to all. As such thesuperordinate category has to be well defined to provide a starting point butalso open enough so as to allow for different elements to be added. By doingso, it will not jeopardize the already existing identities and will not beassimilatory, but will open up a space for exchange of ideas in the process ofintercultural dialogue and exchange.The intercultural education paradigm and the contact hypothesis provideuseful theoretical ideas as well as tools for implementing this process.Therefore the three theoretical paradigms should be used synergistically asthey complement each other and provide ideas for different levels of theeducational system and different viewpoints that can be applied in variousinterventions. The aim of the paper was to open a field for further theoreticaland practical papers and interventions.By accentuating the changing nature of the identity, accentuated by theintercultural education paradigm and the multi-faceted nature of the changeprocess from the contact hypothesis we can fully appreciate the possibilitiesof achieving the creation of a common identity. It can also be accentuated thatthe process is quite complex and many different factors need to be taken intoconsideration if a successful move towards a common identity is to beachieved. The main conclusion from both paradigms is that the efforts need tobe well planned and centered on the issues of commonality, difference,cooperation, trust and respect as well as other issues specific for the regionsand countries. The main emphasis should be put on building an inclusive

Constructing Europe as a Global Power:38 From Market to Identity?Tajfel, H. (1982). Social Psychology of Intergroup Relations. Annual Reviewof Psychology, 33, 1-39.Tajfel, H., & Turner, J. (1979). An Integrative Theory of Intergroup Conflict. InW.G. Austin and S. Worchel (eds.), The Social Psychology of IntergroupRelations. Monterey: Brooks/Cole Publishing Company.Taylor, V. (1997). The Council of Europe and Intercultural Education. In D.Coulby, J. Gundara, & C. Jones (eds.), World Yearbook of Education 1997:Intercultural Education. London: Kogan Page.Terry, D.J., Hogg, M.A., & Duck, J.M. (1999). Group Membership, SocialIdentity and Attitudes. in D. Abrams, & M.A. Hogg (eds.), Social Identity andSocial Cognition. Oxford: Blackwell Publishers.Tomovska, A. (2010). Contact as a Tool for Peace Education? Reconsideringthe Contact Hypothesis from the Children’s Perspectives. Journal of PeaceEducation. 7 (2), 121-138.Turner, J.C. (1982). Towards a Cognitive Redefinition of the Social Group. inH. Tajfel (ed.), Social Identity and Intergroup Relations. Cambridge:Cambridge University Press.Turner, J.C, Oakes, P.J., Haslam, S.A., & McGarty, C. (1994). Self andCollective: Cognititon and Social Context. Personality and Social PsychologyBulletin, 20 (5), 454-463.Turner, J.C., & Reynolds, K.J. (2001). The Social Identity Perspective inIntergroup Relations: Theories, Themes and Controversies. in R. Brown &S.L. Gaertner (eds.), Blackwell Handbook of Social Psychology: IntergroupProcesses. Malden: Blackwell Publishers.

Ivan Dodovski: From Xenophobic Fortress to Dystopian Supermarket,or How Balkan Playwrights Imagine Europe 39From Xenophobic Fortress to Dystopian Supermarket,or How Balkan Playwrights Imagine EuropeIvan DodovskiAbstractIn this paper we examine the imagining of Europe as manifest in severalplays written in the late 1990s and early 2000s by two prominent Balkandramatists - Goran Stefanovski and Biljana Srbljanović. Specific attentionis paid to two tropes: Fortress Europe, and Europe as a dystopiansociety. The analysis signals an emerging agency of the local subjectwho has moved from frustration with imputed Balkanness and exalting inview of the European project to an attitude of scorn for westernhollowness and critical deliberation on a common future for Europe andthe world. The conclusion is that at the core of this vision lies a Balkandiscontent with the enforced acculturation within the western paradigm.IntroductionBalkan scholars since the 1990s have for the most part endeavoured toanalyse and deconstruct western negative perceptions of the Balkan cultures,that is - the discourse which – after Todorova’s seminal study Imagining theBalkans – came to be known as “balkanism” (1997, p. 17). However, only afew thorough efforts have been dedicated to examining the local self and itsimaginative other; see, for instance, the analyses of identity representations inBalkan fiction and film in Norris (1999) and Iordanova (2001). Even those whohave championed Balkan complexity and cultural profusion over westernsimplifications have done so by pointing to a Balkan uniqueness against thebackdrop of a western (or common European) paradigm. For example, whenStoianovich (1994) strenuously claimed that Balkan cultures constituted afundamental part of Europe, he was responding to the pretexts put forward fortheir exclusion from the new European project. While Stoianovich sets out tomake a case for the recognition of Balkan cultures, however, his case

Constructing Europe as a Global Power:40 From Market to Identity?acknowledges a condescending point of view: the Balkans are objectified, andthe West should ensure that they are helped and integrated. Like most otherscholars, Stoianovich does not venture to consider Balkan perspectives onEurope or the West in general. Hence, the relationship remains unidirectional,and western Europe clearly assumed the role of the sole agent of recognition.By extension, this argument may suggest that there is neither intricacy noragency within the Balkan cultures when one tries to conceive their professedEuropean characteristics.Rather than taking on this implication by other scholars who have workedon the issue of western perceptions of the Balkans, in this paper we examineaspects of how the Balkan’s imagine Europe, as manifest in several playswritten by two prominent dramatists – Goran Stefanovski and BiljanaSrbljanović. The nuances are important insofar as they transcend the debateover inclusion or exclusion and reveal a culturally based critique of theEuropean project. In this context, one could recall the words of Rupnik (1988):“Nowhere is the identification with Europe as a whole stronger than where it ismost threatened, where the defence of a culture is part of a search foralternatives to the partition of the continent” (p. xv).It is important to bear in mind that the contrasting imageries which arediscussed here were produced almost simultaneously, in the 1990s and early2000s, when the idea of Europe and the prospect of integrating the Balkancountries into the European Union attained a high currency in publicdiscourse, sometimes even becoming a substitutive ideology for the postcommunistsocieties. The contradictions that we highlight, however, do notseem to be only a corollary of the painful and equivocal transition from onesocial paradigm to another, but also a sign of the emerging agency of thelocal subject who moves from frustration with imputed Balkanness andexaltation in view of the European prospect to an attitude of scorn for westernhollowness and critical deliberation with regard to a common future for Europeand the world.We discern two specific tropes: Fortress Europe; and Europe as posthistoricaldystopia. Ambiguous in principle, the incidence of these tropes incontemporary Balkan drama may be seen as a performative act: rather thanattesting to some reality of Europe, these representations usually serve thepurpose of constituting a backdrop for Balkan self-definitions. As in allperformative enunciations, these images speak much more of the culturalenunciator himself. It is also significant that they usually appear in a farcicalmode; the humour which is used evinces a form of protest. Nevertheless, this

Ivan Dodovski: From Xenophobic Fortress to Dystopian Supermarket,or How Balkan Playwrights Imagine Europe 41is not a symptom of dehumanising occidentalism of the sort which Burumaand Margalit (2004) trace in the Arab world, or exhibited by certain Russianthinkers from the nineteenth century. Rather than an abominable West seenthrough adversarial eyes, at the core of the two Balkan dramatists’ perceptionlies the unease of acculturation: to be recognised and included by Europeseems to necessitate significant change and thankless abandonment of localdifference, albeit the sense of identity loss is preceded and paralleled by astrong desire to be ‘of the West’. The inability to coinhere local differenceswithin the western paradigm does not eliminate this desire; however, itsfailure to be realized throws the local subject back and forth from selfdepreciationto resistant scorn for western hegemony. As can be gatheredfrom the textual analysis below, an impaired or hegemonic transculturationwarps the contact into cultural rifts and stereotyped imagining.Fortress Europe and the Aliens WithinGoran Stefanovski (1952) is a Macedonian playwright and a professor ofdramaturgy formerly working in Skopje and Stockholm, now teaching inEngland. He marks the beginning of Macedonian post-modern drama with hisinter-textual use of dualist mythology and folkloristic material in his play JaneZadrogaz (1974). He was celebrated for plays like Wild Flesh (Divo meso,1979), Hi-Fi (1982), Black Hole (Crna dupka, 1987) and others, which werestaged in theatres across former Yugoslavia. Sometimes employing amodernist strategy, too, Stefanovski writes about intercultural encounters andidentity conflicts. This is particularly evident in his plays Flying on the Spot(Let vo mesto, 1981), Tattooed Souls (Tetovirani dushi, 1985), Sarajevo(Saraevo, 1993) and Casabalkan (Kazabalkan, 1997). In this paper we look atStefanovski’s latest plays.Hotel Europa (2000) was written as a script for theatrical experimentwhich eventually had remarkable success at festivals like the WienerFestvoshen, the Bonner Biennale, the Festival d’Avignon, and Bologna 2000– European City of Culture. This major production involved ten directors,choreographers and designers, and twenty-five actors and dancers fromvarious Balkan and Baltic countries. Its reception was indeed imposing, veryoften due to its ambivalent play with the “West’s stereotypes of the primitiveEast”: to celebrate easternness in front of western audiences, reports onecritic (Munk, 2001b, pp. 132), meant to let them feel “whatever they felt,

Constructing Europe as a Global Power:42 From Market to Identity?including condescension, irritation, sympathy, admiration, and occasionally(…) delighted surprise” (p. 133).Hotel Europa is, in fact, a collage of scenes. These revolve around thetopic of immigrants, refugees, displaced and homeless people from theeastern European countries who headed west after the fall of the Berlin Wall.The dramatic action takes place in the course of 2000. Insisting on strongtheatricality, Stefanovski gives detailed instructions as to the place and settingwhich eventually emerge as a metaphor for Fortress Europe. Formerly asuburban one-night-stand accommodation building, Hotel Europa is meant torepresent many of that kind which in the 1990s were used by westernEuropean governments to house immigrants from the post-communistcountries. The intended audience is invited to enter the “shadowy, dirty andambiguous reality of the underbelly of Europe” (Stefanovski, 2004b, p. 20),led by six locals who run the establishment and give comments as to theoccupants of the nightmarish “labyrinth set-up of rooms, halls, corridors,terraces…” (p. 22). We are presented with a sequence of stories of sufferingand human drama. In the first scene, a Latvian family dissolves: the husbandis ruined by alcohol, fighting imagined wars for Latvian national dignity in pubswhile his wife and mother struggle to keep the baby twins comforted in a tinyroom at Hotel Europa, where they illegally distil vodka and sing the lamentingaria: “Oh, what has the cruel West done to us? Thus left and forsaken” (p.32). In the second scene, we see Odysseus ten years after the walls ofdivided Berlin (“the last Troy”) have fallen; he is unable to escape thebewitching embrace of Circe, and he sadly contends: “We are utterly lost. Wedo not know where East or West is...” (p. 40). In the third scene, a young manpays an older prostitute from an eastern European country to play a pervertedsexual game with him in which a knight awakes and marries princessRosamond; the prostitute then sings him a lullaby, being thankful for salvationfrom the communist prison state and finding freedom and shelter in HotelEuropa. “Next time I want to be a soldier of the United Nations on a peacemission,” he says, before leaving her room (p. 52). In the fourth scene, a longhistory of blood feuds between two Albanian families is settled. Disguised asa waiter, a young man comes to avenge his brother who was killed by someprofessor who now dwells in Hotel Europa. But the visitor decides to forgiverather than to avenge. In the fifth scene, a female drifter enters the hotel andmeets an angel in the cupboard, alleviating her sadness with an ambiguousdream of a safe haven or death. In the sixth scene, a newly-married couplehaving hitchhiked from Russia ends up in a dim room of Hotel Europa. The

Ivan Dodovski: From Xenophobic Fortress to Dystopian Supermarket,or How Balkan Playwrights Imagine Europe 43bridegroom is obsessed with the fact that they have finally made it to theWest, and so he kisses the “western European bed (…) western curtains (…)western floor”, and hurries to make “a western baby (…) who will not sufferthe Eastern fate of his parents” (pp. 78, 80). However, the bride seemsconfused, she imagines the faces of her forefathers on the hotel window andthinks they are angry at her; then she lights a candle and prays to her saint.Eventually, they discover a suitcase under the bed, full of money, and abloody heart wrapped in a cloth inside. She wants to go home, but they stayand make love. The last scene depicts the Eastern European entrepreneur:Igor, a nouveau riche mafioso with a bodyguard and a German Shepherd ona leash who wants to buy the hotel and turn it into a grand hotel casino; theaudience is invited to his party in the banquet hall where a band plays a blendof blues and kitschy turbo-folk music “characteristic of the Balkan countries intransition” (p. 112). Igor is eventually shot by his girlfriend Ivana, who refusesto marry him or accept that a sworn criminal like him could become arespected philanthropist. She ends the party sardonically by singingBeethoven’s Ode to Joy.At the time of its production, Hotel Europa was an alarming theatricalgesture against the lack of deeper concern within the European Union for theagony of the “unwanted European brother” (Stefanovski, 2004b, p. 20). Andalthough the Schengen borders moved further East to include many of theformer communist countries, the issue of ‘The Other’ of Europe who is yetwithin still remains all the same. The images in Hotel Europa are striking fortwo contrasting reasons. At first, they invoke stereotypes which are regularlyemployed to justify the concept of Fortress Europe. For example, the Russianmafioso and eastern prostitute are emblematic of a whole arsenal of negativemodels. Nevertheless, the overall picture which Stefanovski depicts ultimatelyturns into a critique of a Europe of internal divisions. The alien from the Eastis confined to a symbolic social space, within Europe but not of it. He isisolated and displayed as if in a civilizational underground, so that he can bedefined and controlled. Even the ancient canny Odysseus cannot escape themechanisms of the new European order. The six characters in the play(bellhop, social worker, maitre d’hotel, receptionist, daughter, and caretaker)who take the audience around this European limbo represent the system bywhich the other is handled; giving comments – superficial, full of goodintentions or xenophobic, they arbitrate reality and seem to have a definiteanswer. In this macabre vision of Europe there is no space for change of thepre-imputed roles, or a recognition that could lead to an integrated society.

Constructing Europe as a Global Power:44 From Market to Identity?For instance, the breakaway from blood feuds by modern Albanians receivesno credit, while the new generations from the East (like the Russian couple)remain haunted by ancestral ghosts and agonised by the pressure to give uptraditional values of love for the new ethics of money. Ivana’s refusal to marrythe mafioso turns into a shooting; she repeatedly fires at Igor who seems tobear the bullets but will not die; courageous to resist machismo and tribalspin, this eastern woman nonetheless gets beaten and spits blood; realchange, if hardly possible, is pushed into a distant future. Likewise, the lonelydrifter who meets her guardian-angel surfaces as a metaphor of the innerhuman quest for meaning; yet this aspect of human existence seems alsoconfined within a stereotyped framework: “Everything from Eastern Europe isinstantly overtly political”, Stefanovski comments on this fifth scene (Munk,2001a, p. 132). Not only culturally, but even at the crux of humanness, heseems to suggest, Europe exhibits inner fissure. Thus, rather than boostingunity and positive ideals with the anthem Ode to Joy, Europe in this playappears as a dystopic system in which solidarity and openness are replacedby mistrust and ignorance. This very ethos of Fortress Europe, hintsStefanovski (2004b), also breeds Europe’s greatest threat: “Hotel Europa is awomb where the time bomb of European implosion is ticking away” (p. 144).To a certain extent, the ideas in Hotel Europa originate in a precedingscript by Stefanovski entitled Euralien (1998), which was produced byIntercult Sweden and performed within the festival programme of Stockholm -Cultural Capital of Europe 1998. Conceived as a theatrical event in “anamusement park, a kind of Disneyland of nationalist kitsch”, the play reapedan additional symbolic value when performed at Gamla Riksarkivet, theformer Swedish National Archives building in Stockholm (Tiselius, 1998).Choosing the venue as an “obvious place to bury nationalism”, the producer –no doubt – anticipated political implications (Tiselius, 1998; for details on theproduction, see Klaić, 1999). The script, too, touches upon the hot issues ofimmigration and intolerance in Europe. Lacking a basic plot, it comprisesindependent scenes which dramatise the fate of what Stefanovski calls‘Euralien’ - the other of Europe who is within. Two years before Hotel Europa,he explores the possibilities of involving the audience. The spectators areguided through the labyrinth of Riksarkivet, from one room to another, towitness – as some sort of ghost – “how sad and funny it is to be a citizen ofthe ‘other’ Europe” (Stefanovski, 1998, p. 2). They are forced to queue andapply for a visa; they are interrogated and maltreated before they are given apassport that allows them to peep into the dark reality of “the Invisible

Ivan Dodovski: From Xenophobic Fortress to Dystopian Supermarket,or How Balkan Playwrights Imagine Europe 45Republic of Euralien” (p. 3). They meet customs officers, smugglers, asylumseekers, a prostitute, a fool, a fortune teller, a street singer who shows mapsof overlapping kingdoms, a Turkish or Roma toilet cleaner who asks adviceon social allowances, a peddlar who sells forged passports, ammunition, andarms of all kinds… Somewhere in the middle of this nightmarish journey, theaudience meets Dr Eugenio, a specialist in genetic purity, who demonstrateshow each European should be purified from the virus of the other within. Twoscenes are especially illustrative of the contrast which Stefanovski wants toconvey. The one is futuristic, the other self-referential. In the latter, achauvinist (“charming old Swedish gentleman, clean, nicely shaven, wellgroomed, expensive clothes”) greets the spectators with a calm voice andexplains that “civilization is determined by nationality”; he despises “this multicultidrivel” and protests against allowing foreigners to perform the playEuralien at Riksarkivet, “a sacred institution where all of the historicaldocumentation of this nation has been stored for a hundred years” (p. 24). Inthe futuristic scene, called “Ex-Sweden,” we see Stockholm in the throes of acivil war; the city is divided among warring sides, and a Swedish woman triesto find her way home, asking help from Bosnian UN observers. “I envy you somuch,” she says to the soldier at a check-point, “You are a Bosniangentleman. And your country is a civilized social democracy. A welfare state.You haven’t seen war in such a long time. You are simply not barbaric like us”(p. 18). The civilised observer, however, asks her to spread her legs and posefor a photo before she is allowed to cross the sniper-fire and disappear intothe darkness of the cityscape.Both in Euralien and Hotel Europa, Stefanovski employs a farcicaltreatment of cultural conflicts portending a dim future for the old continent.These plays surface as a calculated act of resistance against the investitureof Fortress Europe. Besides bringing politically charged dramatic images,both scripts contain stage directions with unusually extensive ideologicalstatements against nationalism, xenophobia, and intolerance in general. Theprotest, however, seems directed and shifting: while exhibiting and mockingthe frustrations of the ‘eastern aliens’, Stefanovski warns of the arrogance inthe western world. It is a vision of impossible dialogue: defined by a desire forentering where access is denied, the easterners are stigmatized as a sort ofcultural black hole which has nothing to contribute to the western universe.In a later play, Everyman: an Immorality Play (Sekoj: amoralitet, 2002),Stefanovski’s vision escalates into an insurmountable rift: he criticizes theWest as a morally corrupt consumerist society which has jettisoned any

Constructing Europe as a Global Power:46 From Market to Identity?suggestion of former Byzantine grandeur and eastern spirituality for the sakeof technological progress and materialist vainglory. The universal Christiandidacticism of the well-known medieval genre ‘morality play’ is farcicallysubverted into a polarised vision of timeless Byzantium on the one hand anda post-industrial West which has lost its Christian substance on the other. Inthis play, Everyman no longer trembles before Death nor presents gooddeeds to secure a passage to heaven; instead, he confronts Death with selfassurednessand hedonistic pride, while Death recoils back with a shakenidentity. In Stefanovski, the thematic role of Everyman is taken by six mortals,each epitomizing one of the major human vices; they are British tourists whoarrive in a remote hotel at the end of the season in Spain. Anastasia, theliving form of Death, comes disguised as a hotel rep; she speaks poor Englishand she associates herself with Byzantium. She tries to exercise herauthority, but the tourists self-importantly parade their sins, and eventuallyswoop her away. The contrast is both in time and space: postmodern westernEurope represented by the British versus ancient Christian Byzantiumrepresented by Anastasia. The judgement is clear, too: western Europe hasbecome so materialistic, immoral and arrogant that Byzantine spiritual valuesmake no sense; Death is no longer a criterion to understand life and gooddeeds are replaced by the idolatry of sin.It is plausible to see that Stefanovski would distinguish Byzantium andthe West as two disparate civilizations, thus explaining some of thefrustrations of the present-day Balkans. Generally, it may seem that he iskeen to simplify the legacies. Consider, for example, his essay “Tales fromthe Wild East” (“Prikazni od diviot Istok”, 1999) which illustrates how this topichas haunted him for quite some time. Stefanovski admits that he wrote theessay in response to the question “Why is the East not sexy anymore?”,raised at the international theatre summer festival in Hamburg in 1999. Theanswer, among other witty details, includes a depiction of two different masternarratives, of eastern and western Europe, “in their ugliest, most vulgar forms”(Stefanovski, 2005, p. 73). He calls the eastern world Byzantium:It is a closed society, vertical, patriarchal, macho, rural, only one personat the top knows anything - it is a closely-knit society, where you cannever be lonely, but can never be left alone either. Social position isfixed; everyone has a nickname - your past, future and present are all agiven thing. There is no democracy, no tolerance, no logical space forhomosexuals - or women, for that matter. Individualization comes at a

Ivan Dodovski: From Xenophobic Fortress to Dystopian Supermarket,or How Balkan Playwrights Imagine Europe 47deadly price. This is a world of ethnic fundamentalism. On one side,brothers in eternal embrace, on the other-traitors and outsiders. Thisnarrative is black and white and is only concerned with the collectivisttribal issues… The Eastern European story is a tale of one lock and onekey. (pp. 73-74)Western Europe, on the contrary, is personified in Donald Duck:He lives in an urban, fast, global, consumerist, post-industrial society. Hehas no mother, no father, no wife, no children. He takes care of threenephews - God only knows whose they are. He sees his girlfriend fromtime to time, but then they go to their separate homes in their separatecars. Donald Duck doesn’t belong to anything larger than himself. He isan individual par excellence. A loner in pursuit of happiness. He is like acowboy in a saloon whose life depends on being quick on the draw. Hisnarrative has no geography or history. It is splintered, fragmented,dispersed. Donald Duck is the bastion of political sterility andmetaphysical failure. (p. 74)The fall of the Berlin Wall and the events afterwards, suggestsStefanovski, have allowed for the entry of Donald Duck into Byzantium and forimposition of “his model of the world … primitive and unlike the westernEuropean social-democracy. It’s a variety of cowboy capitalism… DonaldDuck comes with a stick and a carrot and the universal mechanism of greedand consumerism” (p. 86). Stefanovski implies that the appropriation of thismodel causes frustrations. Eastern Europe, and in particular the places whichhave been under Ottoman rule, have experienced different historic rhythmsand, indeed, dissimilar cultural definitions. Hence, the historic “arrhythmia”prompts two different attitudes: “Our identity oscillates between deepinferiority and a lofty superiority. The inferiority is based on a sense ofeconomic worthlessness. The superiority is based on a sense that we are theexclusive owners of Soul” (p. 86). The “most vulgar forms” of the opposingmaster narratives defined by Stefanovski in this essay are, in fact, twostereotypes. Presumably, his dramatic ambition would be to deconstructthem.One version of the ideas presented in the essay “Tales from the WildEast” is evident in Everyman. Donald Duck is represented by six characterswho embody various aspects of the contemporary western European ethos:

Constructing Europe as a Global Power:48 From Market to Identity?Ray is a greedy stockbroker, obsessed with money and “too busy to die”; Timis a bulimic freak who worships his body and has “a deal with death … to stayforever fit and healthy”; Jo is an irresponsible single parent of two kids, aslothful housewife who consumes fast food and TV soap operas, quizzes andchat shows, so she “can’t be bothered” to care about death; Vicky is a poshshopaholic lady who trusts that plastic surgery will make her stay “foreveryoung”; Helen is a hedonistic club-goer and lustful drug addict, “oblivious todying”; Ken is an aggressive racist who loves beer and football, and is roughand ready, so death does not dare “to come and show her face” (Stefanovski,2004a, pp. 21-23). All six characters lack spiritual values: they are obsessedwith vanity and passions. They do not think of their souls or believe inanything beyond themselves. They are, in fact, soulless. It is a vision of thewestern world that fights death by disregard and prolongs life by technologicalinventions. Divine moral imperatives are made unnecessary and freedom isdefined in terms of ability to satisfy passions. Death is no longer fearedbecause it is denied the role of providing a meaningful link between moralpractice and eternity. We see a materialistic society which seeks freedom andeternity within itself, not beyond itself, in the form of absolute moral liberalismand a biotechnological make-up of life.On the other hand, Byzantium as depicted in Everyman is different fromthe Byzantium of the essay “Tales from the Wild East”. Rather than “a closedsociety, vertical, patriarchal, macho, rural … a world of ethnicfundamentalism” (Stefanovski, 2005, p. 73) – Byzantium in this play becomesa nostalgic image of something irredeemably lost: it is an ideal of societyguided by three categories: freedom, love, and art – all having a divinemeaning. Here freedom is defined as liberation from passions and sin, and artas a possibility of grasping the truth. The love of the soul for eternitysurpasses all earthly human emotions; the quest to see God as a personnecessitates a tragic endeavour: to dance with death and make her a bride!These representations are mainly uttered by Anastasia. In Scene 4 she tellsof her youth in 1400 when she worked in the Spiritual Death Department. Herearly assignment was to observe if people had neglected their souls. “Ourwork was praised”, she says. “I was someone. Dying was celebrated. It wasconnected to grand things” (Stefanovski, 2004a, p. 19). In Scene 8 shespeaks of Andrey Rublyov, the 15 th century icon painter canonized as a saintby the Russian Orthodox church in 1988 and most renowned for painting themystical icons of the Holy Trinity and Virgin Mary. Anastasia portrays AndreyRublyov as someone who was able to look Death “in the eye” and who

Ivan Dodovski: From Xenophobic Fortress to Dystopian Supermarket,or How Balkan Playwrights Imagine Europe 49danced with her as if with a bride (p. 35). The identity crisis that Anastasiaundergoes is caused by changes in the perception of death. She is mockedby the six British tourists who read her confession as a cheap love story. Also,Anastasia is dissatisfied with her new role of butchering humans in abureaucratic manner. She seeks to restore the higher meaning of herexistence. Nowadays, however, the Spiritual Death Department has beenclosed down and she has been made redundant. Death has become anindustry run by apparatchiks who plan, organise and run marketingcampaigns for products and are concerned only with the banality of death.Anastasia tries to uncover her authority and make the others shiver.Eventually, however, she is expelled by the almighty humans. Byzantinespirituality, or Death itself, becomes an exiled immigrant, an alien who isunwelcome in the world of self-assured western Europeans.Notwithstanding the observable moralizing, Stefanovski’s Everyman canbe seen in the context of the Byzantine legacy as perceived within theBalkans. Unmistakably, this legacy is idealized in reaction to the stalwartlyappropriated westernization. Yet the veneration of imagined Byzantium iscombined with an astute perception from a western perspective. Thus, therepresentations seem catachrestically twisted in both directions: no matterhow highly esteemed, Byzantine values are farcically represented as aredundant feature of the past, whereas the instructiveness of a westernmedieval ‘morality play’ is subverted into a lofty criticism of the present day. Itis perhaps possible to interpret this not as a vision of two conflicting worldsbut as an effort to see the lack within a single world; Byzantium belongs to thepast, yet the question is: Can it still illumine western civilization? Stefanovskiaffirms the Byzantine legacy as a precious and necessary axiological key, yethe perceives that it has been made redundant and even non-appropriable bytoday’s western society. To put it briefly, there are two concomitant forcesbehind this imagery: on the one hand Stefanovski protests a sense ofbereavement of deeper ontological and emotional worth resulting from theglobal surge of capitalism and liberal values; on the other, however, he spursa premonition of its inevitability.This conclusion calls to mind the American political economist Fukuyama(1992) who declared ‘the end of history’, meaning by this that liberaldemocracy represents “the end point of mankind’s ideological evolution” andan ideal which “could not be improved on” (p. xi). Drawing on G. W. F. Hegeland the interpretation of his work by the Russian-French thinker AlexandreKojève, Fukuyama claimed that the contradictions that characterised previous

Constructing Europe as a Global Power:50 From Market to Identity?forms of social organization (notably the dialectic of lordship and bondage)are being overcome in a secular free-market democracy. The latter providesfor both endless accumulation of wealth (by means of modern natural scienceand technology) and rationally balanced satisfaction of the human desire forrecognition. Therefore, this flow of events will not conclude but it will bedivested of evolutional meaning. Although Fukuyama defends thedirectionality of history, his reflection on the idea of the last man by FriedrichNietzsche lends an implicit pessimistic touch to his vision of post-history. Forinstance, Fukuyama observes that relativism “must ultimately end upundermining democratic and tolerant values as well” (p. 332). Also, he notesthat physical security and material profusion do not abrogate the humandesire to “struggle for the sake of struggle” (p. 330). No matter how inevitable,the end of history does not seem to beget a high level of personal satisfactionbut rather an emotional bleakness and “a purely formal snobbery” as a “chiefform of expression of… man’s desire to be recognised as better than hisfellows” (p. 320). Oddly enough, precisely this vision seems reflected in playsfrom the Balkans produced in the 1990s and early 2000s. Playwrights likeGoran Stefanovski, Biljana Srbljanović and others dramatize the thesis ofFukuyama, though not always wholeheartedly and often in direct contrast tothe Balkan context. It is worth adding, though, that Fukuyama (2007) seemsto divulge a sense of hope for reaching utopia in his later commentary,claiming that “the European Union more accurately reflects what the worldwould look like at the end of history than the contemporary United States.”From Tango to Soap Opera: Post-History and the Last EuropeanBiljana Srbljanović (1970) is one of the most celebrated Serbiandramatists today. She worked as a teacher at the Faculty of Dramatic Arts inBelgrade before moving to Paris in 2006. Her plays have been translated intomore than twenty languages and widely performed in Europe and the USA.For some of them she has won national and international awards, mostnotably one with a pan-European significance – The New Theatrical RealitiesAward – presented in 2007. The early plays of Srbljanović, written in thetradition of absurdist theatre, very often came to be read as an allegory of theoutburst of nationalism, autocratic and neo-fascist tendencies and moralcorruption during the regime of Slobodan Milosević in Serbia. However, in acouple of dramatic texts which alter her early thematic confines Srbljanovićdepicts various aspects of post-historical society: Supermarket (2001) and

Ivan Dodovski: From Xenophobic Fortress to Dystopian Supermarket,or How Balkan Playwrights Imagine Europe 51America, Part Two (Amerika, drugi dio, 2003) take as their themes theproblem of identity crisis and simulated satisfaction in the era of globalcapitalism.Fukuyama (1992) himself believed that the re-emergence of nationalismdoes not shelve his ‘end-of-history’ thesis as being a short-lived upshot ofpost-communist euphoria. Nationalism in eastern Europe, he says, is “anecessary concomitant to spreading democratization, as national and ethnicgroups long denied a voice express themselves in favour of sovereignty andindependent existence” (p. 272). Srbljanović does not share thisunderstanding of the nationalist upsurge, though her thematic shift may implythat she admits its transitoriness. In fact one can trace her figurativeannouncement of the transition to post-historicity. In her play The Fall (Pad,1999) the main character, called Übermother of the Nation, has a son calledJovan (“the only son of the Nation or National Bastard”) who falls victim to hisparents’ nationalism and idolatry of the past, but later resurrects and murdersthem (Srbljanović, 2000, p. 168). By so doing he symbolically renounces anyhistorical anchoring. He champions an erasure of all memory of his languageand country and also decides to change his sex. Finally, he invites everybodyto dance “a tango for new Europe” (p. 274). In her subsequent playSupermarket, Srbljanović develops the suggestive finale of The Fall into acritical vision of European society at the turn of the new millennium. The story,she explains, happens in “the post-emotional and post-sexual era” (cited inOstermajer, 2007).Based in a provincial Austrian town ahead of the tenth anniversary of thefall of the Berlin Wall, the dramatic story in Supermarket develops as arecurrence of a few motifs and situations which ultimately produce an imageof a society characterised by a zombifying social order, interpersonalalienation, and emotional bleakness. Leo Schwartz is the principal at animmigrant community school where he and two other teachers instruct twostudents: Dianna, the daughter of Leo, and Kemal Ģahiri, a youngster ofTurkish background. According to the author’s instruction, the stageresembles a vertical section of the school, which in fact appears as a shopwindow. Thus, we peep into a ‘social supermarket’ in which seeminglyrepetitive scenes occur in seven subsequent days. There is a sense that thecharacters always go through “one and the same day time and again”(Srbljanović, 2000, p. 168). While the children do boring physical exercisesunder the instructions of coach Müller and repetitive touch-typing in the classof teacher Mayer, Leo hopelessly tries to convince Mr. Brita, a journalist from

Constructing Europe as a Global Power:52 From Market to Identity?the local newspaper, to publish a sensational story of Leo as a former victimof the communist regime. However, as the story develops it becomes unclearwhether the identity of the characters is real or simulated. Before emigratingto the West soon after his wife left him, Leo had been known as LeonidCrnojević. (The surname is a direct and ironic allusion to the main hero of thenovel The Diary of Čarnojević - 1921 - by the celebrated Serbian writer MilošCrnjanski - himself, like his hero, a representative of an idiosyncratic exilicexperience.) Once in Austria, he forges his personal dossier and implores Mr.Brita to read and publish it, hoping that an image of him as a dissident fromEastern Europe will make him respected and grant him a “ticket to eternity” (p.207). However, the journalist claims that times have changed so he insists onan interview that will speak of the new reality of Europe. In fact, Mr. Brita hasinterviewed Leo at least twenty times in the past thirteen years, always puttinghim in the context of typical mistrust towards immigrants. The ambition of Mr.Brita is not to publish a story of a dissident, but to question whether schoolsfor foreigners are still necessary.Hence, as if in the very style of Fukuyama, the grand narratives of historyand ideology seem dismissed. The dramatic story brings to the forefrontfragmented trivial micro-narratives of individuals who simulate social roleswhile sinking into a moral and emotional gloom. Lady Müller has an affair withher colleague Mayer, but at the same time flirts with the impotent Leo, whileDianna has sex both with her teacher Mayer and her classmate Kemal. Thelatter, confessing to have been continuously abused by his mother, turns outto be a male prostitute, and Mr. Brita appears as his main client. Utterlydistressed by these facts, Leo attempts suicide by burning his dossier andstrangling himself on a heating radiator. However, the pipes burst and the fireis inadvertently stopped. Although the school is mostly in ashes, Leobecomes the front-page hero, all newspapers reporting that he risked his lifeto save the others. The closing scene of the play, called ‘Happy End’, revealsall the characters in a blissful embrace: Leo has accepted to be the best manof Müller and Mayer who are about to marry; Mr. Brita has adopted Kemal ashis son; while Dianna also tells of her plan to visit her mother in Englandbefore returning to her father to live with him forever.It is important to note that the action in the play is often interrupted by amusical accent and a freeze-moment, “like in soap operas at the end of animportant scene” (p. 131). Hence, the action itself is travestied within thesimulated genre of soap opera and its inevitable happy end. Asked in aninterview as to the intention behind the play, Srbljanović (2004) claimed that

Ivan Dodovski: From Xenophobic Fortress to Dystopian Supermarket,or How Balkan Playwrights Imagine Europe 53she primarily wanted to probe the dichotomy of true and simulated emotionsand to expose the genre of soap opera as a predominant form of boguscommunication in the present age. The implications, however, reach beyondher ambition of exploring in the artistic form.Supermarket, as one researcher observes (Jovanov, 2006), parodies twocontrasted narratives: “the subservient social subconscious of westernEuropean consumerist paradise” on the one hand, and “the mythical, pseudoheroicsuper-conscious of the Eastern European ‘free intellectual’”, on theother (p. 88). It presents an image of a post-historical society in which anxiety,violence and sexual aberration are symptoms of a deep identity crisis.Nothing retains meaning, everything is made relative: ideological conflicts areforgotten, education is reduced to physical exercise and technical skills, while‘Stranger in the Night’ replaces the Austrian national anthem at officialcelebrations. Equally, the individuals of this ‘supermarket’ carry on simulatingtheir traditional identity roles as faithful Catholics, industrious Protestants,diligent teachers, caring parents and loving children while being ignorant,phobic, and frustrated humans. If the early plays of Srbljanović seemed tomount criticism against the recurrence of national mythologies and neo-fascisttendencies in Serbia or the Balkans as a whole, then her later plays - andSupermarket in particular - focus the critique towards the all-winning westerncapitalist paradigm. If Europe is an imagined epitome of that paradigm, thenSrbljanović portrays it as a negative utopia: a system of simulated values,depersonalisation, and a constantly fabricated happy end. In other words,new Europe is a post-historical soap opera.ConclusionsTo conclude, we need to ask the following: Why would a playwright likeSrbljanović distance herself from issues which she holds dear in previousplays and which are frequently considered as typically ‘Balkan’, and then writeabout problems of western European liberal society with a sense of inevitablesurrender, as if to a fated end of history, along with a coincident scorn? Thequestion can be extended to Goran Stefanovski as well. In the postscript tothe published edition of Supermarket and America: Part Two, Stamenković(2004) describes Srbljanović’s shift towards ‘western’ themes as “utterlyunexpected”; moreover, he claims that this shift hails from her direct andpersonal encounter with the West (p. 214). Although these plays seem “lesssocially relevant than her previous ones”, concludes Stamenković, they reveal

Constructing Europe as a Global Power:54 From Market to Identity?“something which happens in our society or will occur soon” (p. 214). Why isthis so “utterly unexpected”? If the imagery stems from an encounter with thewestern paradigm and an insight into its far-reaching and imminent impositiononto the societies of the Balkans, then the thematic ‘evolution’ of a Balkanplaywright has a twofold rationale: it is both an emancipation from thebalkanist realm of imputed identity positions as well as a new frustration withthe consequences of acculturation which such emancipation brings.In fact, both Stefanovski and Srbljanović have not abandoned their earlythematic interests once and for all; their latest plays – Srbljanović’s Locusts(Skakavci, 2005) and Stefanovski’s The Demon of Debar Maalo (Demonot odDebar Maalo, 2006) – display a refined perspective on universal concerns,though the milieu relates to the Balkans. This is perhaps more obvious inSrbljanović’s Locusts, where she seems to revisit the world of her early plays(in particular Family Stories) yet through the lenses of America, Part Two.Despite his belief that American hyper-reality already anticipates all theanswers to previous dilemmas, Baudrillard (1988) does not seem toundervalue the experience of post-orgy: “What do you do when everything isavailable – sex, flowers, the stereotypes of life and death? This is America’sproblem and, through America, it has become the whole world’s problem” (p.30). The images of Srbljanović and Stefanovski speak of this ultimate globaluncertainty as if it were already an internalized (hyper)reality of the veryBalkans. Therefore, having entered a post-historical age, we ought to subvertthe point made in the succinct historical account by Mazower (2000) that“[t]he Balkans themselves occupied an intermediate cultural zone betweenEurope and Asia – in Europe but not of it” (p. 9). If to be the alien withinEurope meant to be stigmatized, then now to be finally of it means to bear asense of something utterly lost and only simulatively compensated.

Ivan Dodovski: From Xenophobic Fortress to Dystopian Supermarket,or How Balkan Playwrights Imagine Europe 55ReferencesBaudrillard, J. (1988). America. London: Verso.Buruma, I., & Margalit, A. (2004). Occidentalism: The West in the Eyes of ItsEnemies. New York: Penguin.Fukuyama, F. (1992). The End of History and the Last Man. London: Penguin.Fukuyama, F. (2007, April 3). The History at the End of History. TheGuardian, online. Retrieved October 7, 2007, fromhttp://commentisfree.guardian.co.uk/francis_fukuyama/2007/04/the_history_at_the_end_ of_hist.htmlIordanova, D. (2001). Cinema of Flames: Balkan Film, Culture, and theMedia. London: British Film Institute.Jovanov, S. (2006). Ugodne ravnoteže, opasna obečanja: nova srpskadrama, 1995-2005. Sarajevske sveske, 10-12, 81-96.Klaić, D. (1999). Close Encounters: European Internationalism. Theater, 29(1), 115-127.Mazower, M. (2000). The Balkans. London: Weidenfeld & Nicolson.Munk, E. (2001a). From an Interview with Goran Stefanovski, May 2000.Theater, 31 (1), 131-132.Munk, E. (2001b). Sailing from Byzantium: Goran Stefanovski’s Hotel Europa.Theater, 31 (1), 128-133.Norris, D. (1999). In the Wake of a Balkan Myth: Questions of Identity andModernity. New York: St. Martin’s Press.Ostermajer, T. (2007, May 3). Reč Tomasa Ostermajera o laureatu, 29. April2007, Solun: Glas Druge Evrope. Vreme 852, online. Retrieved October 8,2007, from http://www.vreme.com/cms/view. php?id=497029Rupnik, J. (1988). The Other Europe. London: Weidenfeld & Nicolson.Srbljanović, B. (2000). Pad, Beogradska trilogija, Porodične priče. Beograd:Otkrovenje.Srbljanovic, B. (2001). Beginning to Clear the Air: Biljana Srbljanovic,Interviewed by Erika Munk. Theater, 31 (1), 27-33.Srbljanović, B. (2004). Nove drame: Amerika, drugi dio; Supermarket: soapopera. Beograd: Otkrovenje.Srbljanović, B. (2005). Skakavci. Beograd: Jugoslovensko dramsko pozorište.Stamenković, V. (2000). Pojačana svest o savremenosti. In Srbljanović, B.(2000). Pad, Beogradska trilogija, Porodične priče. Beograd: Otkrovenje (pp.275-283).

Constructing Europe as a Global Power:56 From Market to Identity?Stamenković, V. (2004). Pogovor. Pogled na zapad: kritika ostvarene utopije.In Srbljanović, B. (2004), Nove drame: Amerika, drugi dio; Supermarket: soapopera. Beograd: Otkrovenje (pp. 214-220).Stefanovski, G. (1998). Euralien: Script for a Theatrical Event [Manuscript].Stefanovski, G. (2004a). Everyman: An Immorality Play/Sekoj: a-moralitet,bilingual edition. Skopje: British Council Macedonia.Stefanovski, G. (2004b). Hotel Europa, English/French bilingual edition. Paris:Intercult Stockholm and l’Espace d’un instant.Stefanovski, G. (2005). Prikazni od diviot Istok. Prikazni od diviot Istok.Skopje: Tabernakul (pp. 57-93).Stefanovski, G. (2006). Demonot od Debar Maalo [Manuscript].Stoianovich, T. (1994). Balkan Worlds: The First and Last Europe. Armonk,NY: M. E. Sharpe.Tiselius, H. (1998). Theatre Critic Henric Tiselius in the Middle of a Dialogbetween Chris Torch and Goran Stefanovski. Krasnogruda 8, on-line.Retrieved July 26, 2007, from http://www.pogranicze.sejny.pl/archiwum/krasnogruda/pismo/8/eural/torch.htmTodorova, M. (1997). Imagining the Balkans. Oxford: Oxford University Press.

Desislava Kraleva:EU Identity – Identities In Formation And Change 57EU Identity – Identities In Formation And ChangeDesislava KralevaAbstractThe European identity has been the topic of a significant volume ofresearch. Scientists focus on different identity aspects in an attempt tomeasure the establishment or viability of an EU identity. This paper,however, is going to take a different stance on the issue. It will take oneof the basic theories on the components of national identities (ascribedvs. voluntarist components, Jones and Smith) and use it as a magnifyingglass to examine those components. The theoretical framework will beenhanced by the findings on the role of symbols in generating nationalidentities. The coupling of these two theoretical propositions wouldprovide the apparatus needed for the examination of the degree to whichthe specific components are established and developed. The main thesisof the paper is that there is no single European identity to be studied. Onthe contrary – there are numerous variations. There are, however, twolines which signify that division. On the one hand, there is a clear-cutdivision line between old and new member states. Therefore, I claim thatthe European identities in old and new member states clearly vary. Thevalidity of this statement will be studied through the examination ofidentity components in Belgium, the United Kingdom of Great Britain andNorthern Ireland (UK) and Bulgaria. On the other hand, there aresignificant variations among old member states themselves. The EUidentity in Belgium is most probably different from the one in the UK. Thecomparison between data on the components of identities shall verify thetruthfulness of the supposition. After ascertaining the variations betweencomponents in the three countries, the paper will briefly elaborate onpossible causes for those variations. The conclusion will summarize thefindings of the research and make proposals for possible furtherapproaches to strengthen the EU identities.

Constructing Europe as a Global Power:58 From Market to Identity?Theoretical ApproachesThe theoretical approaches in the study of national identities follow twomain currents – those of historical sociology and empirical sociology. Whilehistorical sociology studies the construction of national identities as ahistorical process, empirical sociology tends to explain them with theattitudes, beliefs and opinions of citizens nowadays. The more commonlyused approach is that of historical sociology, and for this field we need tomention the name of Anthony Smith as one of the most prominentresearchers. He constructs a model of national identities which views them asa composition of civic and ethnic elements (Smith, 1991).The framework which I will use in this paper mostly builds upon themodel constructed by Smith. However, it has been adjusted by F.L. Jonesand Philip Smith (2001) in order to capture variations from the theory whichwere observed among respondents in mass surveys. The framework whichthe authors offer differentiates between ascribed and voluntarist elements.The ascribed dimension resembles “the concept of ethnic identity described inthe historical and theoretical literature” whereas the voluntarist is “closer tothe notion of civic identity” (Jones & Smitn, 2001, p. 103). As an example forascribed components the authors give birth, citizenship, language, religion.Law and feelings of belonging pertain to the voluntarist components.Building upon this framework and the fact that it was specificallydesigned to be implemented in mass surveys, I will examine both ascribed(currency and flag) and voluntarist (feeling of belonging) components. Theconsideration of both elements is done in order to give both elements equalweight and thus create a better picture of the formation of European identity.In addition to these considerations, the meaning of symbols for theconstruction of social facts and the creation of national identities is of greatimportance for this analysis. Unlike objectively existing facts, social facts needto be situated in a certain context and supported by the commonunderstanding of people who share them in order to exist. Dr. Kathleen R.McNamara argues in an article written in 2010 that “the EU is an institutionalor social fact, invented through our intersubjective understandings anddynamic in its manifestation” (McNamara, 2010, p. 133). She continues toclaim that “it has drawn upon its symbolic capital to construct itself and projectmeaning”(Ibid, p. 134). These observations, shared by a number of scientistsand the importance of which is ultimately expressed in the idea that “Symbolic

Desislava Kraleva:EU Identity – Identities In Formation And Change 59representation constructs reality” (Ibid, p. 133) reveal the importance ofsymbols for the construction of national identities. Given the specific nature ofthe EU as a non-state and non-international organization actor, it is of evengreater importance to consider such elements which allow it to establish itselfas a social fact. Michael Billig (Billig, 2004) argues that “the concept ofnationalism has been restricted to exotic and passionate exemplars…dailynationalism slips away from attention” (Billig, 2004, p. 8). What he claims isthat the “metonymic image of banal nationalism is not a flag which is beingconstantly waved with fervent passion; it is the flag hanging unnoticed on thepublic building” (Ibid, p. 8). Thus, the underestimated importance of thesymbols in daily life is crucial for the evaluation of the existence of an identity.The paper will consider the illustrated importance of symbols and willexamine the attitudes of citizens of different European states towards them.The aforementioned ascribed components (the common currency and theflag) can be viewed as symbols in themselves. To them I also add the viewsof EU citizens towards the draft EU constitution, which supplements a newsymbolic element in the perception of EU identity. These considerations add awhole new layer of meaning to the analysis of the components of nationalidentities.This theoretical framework provides consideration for both identitycomponents in accordance with a pattern, specifically designed to capturethe characteristics of mass survey responses. The additional account of theimportance of symbols provides an opportunity to fine-tune the findings andtarget them more precisely for the testing of the hypothesis of the paper.Country ChoicesThe above mentioned components are examined in three separatecountries, aiming to construct a comparative analysis between them. The ideabehind the choices is the main hypothesis of the paper, namely that resultswill vary in different countries and so will the dimensions of European identityin them.The specific country choices are Belgium, the United Kingdom of GreatBritain and Northern Ireland (UK) and Bulgaria. These countries are selectedas they would allow for a comparison between old and new member states ofthe European Union (EU), which I consider an important reason for variationsbetween the results. Belgium is among the founding states of the EuropeanCoal and Steal Community, established by the Treaty of Paris in 1951. The

Constructing Europe as a Global Power:60 From Market to Identity?UK, on its part, joined the European Economic Community in 1973. Thus, thecitizens of these two countries have either got accustomed to the EU, or havebeen raised with the given fact of its existence. By contrast, Bulgaria joinedthe EU in the last enlargement of 2007 and people there are still in theprocess of accepting the mechanisms of the EU, its daily presence in theirlives and ultimately of internalizing it.However, there is a difference between these two old member states,which is of importance to the analysis. The difference regards the attitudetowards the EU which prevails in the specific countries. Plentiful research hasshown that Belgium is generally more optimistic towards the EU and has amore positive perception of it. At the same time, the UK is considerably morereserved in its attitudes and has opted out of a number of policies of theUnion, including the common currency. This exemplifies another importantpoint - that even among old member states, there might be significantdegrees of divergence in attitudes which ultimately affect the identification ofcitizens with the EU and the EU identity in those countries.Thus, we could view the analysis as a comparison between three distinctcases: An old member state with generally positive attitudes towards EUintegration and the EU as a whole (Belgium); An old member state which is more reserved with respect to theintegration process and has refrained from joining certain aspects ofthe European union (the UK), and A new member state which is still in the process of internalizing thestructure it has joined and creating its attitude towards it (Bulgaria).The results of the analysis of the empirical data should show whether thealleged difference between identities in countries is a fact, or it is a fallacyreinforced by the individual path of relations of states with the EU.The DataThe paper uses information collected by the Eurobarometer survey,more specifically the Standard Eurobarometer issues 62 (published in 2005),70 (published in June 2010), 71 (published in January 2010), the Nationalreports for Belgium, the UK and Bulgaria (published in the autumn of 2004)and the Special Eurobarometer Barometric questions, published in February2005. The issues in question are the most recent ones which deal with theattitudes of European citizens towards the euro, the flag and the feeling of

Desislava Kraleva:EU Identity – Identities In Formation And Change 61citizens as Europeans. A new comprehensive study on National andEuropean identities is in the process of preparation and is due in 2013. Until itis published, however, this remains the most actual information.I am going to analyze the data on the different aspects in a sequence (forthe components under scrutiny) and I will examine the strength of thosecomponents in the countries in question.Attitudes towards the EuroIn the Eurobarometer survey issue 70, published in 2010, the euro wasthe second most often mentioned item when Europeans were asked what theEU means to them (survey question QA14 “What does the European Unionmean to you personally?” (Eurobarometer, 2010, p. 126). This is indicative ofthe importance European citizens attribute to the common currency and itsclose association with the EU. In light of viewing the euro as a symbol, thishas even more powerful meaning as it indicates that the euro is perceived asa metonymical expression of the EU.Thus, studying the attitudes towards the euro (refraining from talkingabout it in economic terms and analyzing it only from a symbolic point of view)could be a valid indicator of the degree towards which Europeans identify withthe EU. The euro was the most frequently mentioned item by Belgian citizens,57% of whom gave it as their closest association with the EU. This is thesecond highest result achieved by a country in the survey and is a clearindication of the overall positive attitude of Belgian citizens towards thisimportant EU symbol.By contrast, the UK (as well as Latvia) scored the lowest result in thiscategory. Only 11% of UK citizens identify with the euro. A valid reason forthis result is the fact that the country has opted out of the Eurozone, choosingnot to adopt the common currency. However, as the euro is undoubtedlyrelated to the EU, to a certain extent we can rely on this indicator as revealingthe attitudes of UK citizens to the EU as a whole.Bulgarians ranked the euro significantly lower (13%) than the EUaverage, which is 34%. This can be attributed to the fact that the country isnot in the Eurozone yet. However, given the fact that there has been anongoing discussion about the aspirations of the country to join the Eurozoneand that the population is fairly informed of the functions of the Eurozone andthe requirements and process of accessing it, we could assume that the

Constructing Europe as a Global Power:62 From Market to Identity?evaluations of the euro are still indicative of the overall apprehension towardthe EU.Thus we observe a very positive attitude towards the symbol of thecurrency in Belgium, contrasted by a fairly negative one in the UK. Bulgariaranks in between these two countries as well as below the EU average on theitem.Attitudes towards the FlagThe public opinion towards the flag of the EU was particularly discussedduring the debate about the Constitution of Europe. The draft Constitutionenvisaged the introduction of an official flag of the EU (12 golden stars onblue background) as well as an anthem. It was at this time that the issueabout the attitude of EU citizens to the flag was given specific consideration.The issue in which the results were published is “Eurobarometer 62Public Opinion in the European Union”. For the reasons mentioned above, thedata available is from the year 2005. Unfortunately, no more recent data ispresent and I have to rely on these findings for my analysis. The data is takenspecifically from the country reports, issued as a result of the research made.The overwhelming majority of Belgian citizens consider the flag of the EUa good symbol – 91% of the interviewees expressed this opinion, ascompared to an EU average of 82%. Moreover, the majority of Belgiansidentify themselves with the symbol – 54% compared with an EU average of50% (Eurobarometre 62, 2004, p. 25). This speaks for a high level of approvalof the flag as a symbol of the EU and, more importantly, for a high degree ofidentification with it.Interestingly enough, the UK national report includes no data on theperceptions of British citizens of the EU flag and the degree to which theyidentify with it. The annexed questionnaire reveals that the question wasincluded in the survey but findings have not been published. However, wecould tentatively depict the image of the EU in general that British citizenshave. The data on that question reveals that the opinions of the British areremarkably split between positive (32%), neutral (33%) and negative image(31%) of the EU (Eurobarometer, 2004, p. 28). Such distribution is untypicalof the majority of EU countries where we usually observe a tendency forsupport of one of the views. Taking into consideration this result, we couldpredict that the attitudes towards the flag of the EU would be split as well.

Desislava Kraleva:EU Identity – Identities In Formation And Change 63This shows that the British are unwilling to identify with an EU-wide symboland thus embrace such a sign of identity.Bulgarian interviewees expressed an overall positive attitude towards theEU flag – 78% of them think it is a good symbol of Europe (Eurobarometer,2004, p. 52). This result is remarkable, having in mind that at the time thesurvey was conducted, Bulgaria was not a member of the EU yet. This couldbe a reason why a significantly lower percentage of people identifythemselves with it – 34% (Ibid., p. 52) in comparison with an EU average of50% (Eurobarometer, 2005, p. 93). This could be an indication of a generallypositive attitude to the idea of an EU identity, but personal hesitation to relateto it.The above-mentioned findings are indicative of a trend which can beobserved in Belgium, the UK and Bulgaria. While Belgians have anoverwhelmingly positive attitude to the EU flag, British are divided in theirperceptions of the EU. Bulgarians on their part, as citizens of a country in theprocess of negotiations of accession (at the time of the survey), are generallypositive towards the idea of an EU flag but unwilling to identify with it on apersonal level. These attitudes towards one of the intrinsic symbols ofnational identity are indicative of the attitudes to the identity itself. Belgiansreadily embrace the creation of an EU identity and are willing to associatewith it. Britons are significantly more divided and reserved towards an EUidentity, while Bulgarians approve of the idea as such but still do not feel apart of it.Feeling EuropeanThe feeling of being European belongs to the voluntarist components ofthe national identity. It is an important indicator, as reaffirmed by theEurobarometer issue 71. There question QE3 states:”And in terms of beingEuropean, among the following, what do you think are the most importantcharacteristics?”. The biggest significance was attributed to the feeling ofbeing European, outweighing being born in the EU and sharing Europeancultural traditions.The examination of the degree to which Belgian citizens feel Europeanshows that 83% feel this way (Eurobarometer, 2010, p. 35). This is well abovethe average for the EU of 74%. The high degree to which Belgian citizens feelEuropean is an indicator of the strong sense of belonging and identificationwith the EU which they have.

Constructing Europe as a Global Power:64 From Market to Identity?At the same time, only 48% of UK citizens say that they feel European.Not only does this fall significantly below the EU average, but it is also thelowest percentage scored in the survey. This is indicative of a weak feeling ofbelonging and reluctance to identify with the EU as a whole.Bulgarian respondents were also tentative about expressing strongfeelings as European: 59% said they feel European, which places them at thebottom of the chart and way below the EU average. Even though more thanhalf of the Bulgarians say they feel European, the result is indicative of arelatively low degree of identification with the EU.The results of this component reveal an interesting state of affairs. Thefeeling of having an identity pertains to the voluntarist components of nationalidentity. Thus, it is important for the overall assessment of belonging or not toa certain identity, as well as to the strength of the identity in question among acertain group of people. The feeling of European-ness of Belgium citizens isconsiderably high, especially in comparison with the feeling of Britons.Bulgarian citizens are more reluctant to feel strongly European, but their resultplaces them in between Belgians and British. These conclusions would bevaluable for the overall assessment of the EU identity in the three countrieswith regard to the different identity components.Attitudes towards the Constitution of the EUAnother test as to the attitudes of EU citizens towards the EU identitieswas provided by research on their opinions of the draft Constitution of theEuropean Union. As mentioned before, the constitution is a powerful symbolwith significant importance for the creation and existence of a nationalidentity. A closer look at the research shows that Belgians are mostsupportive of the Constitution, with as much as 80% of interviewees declaringthemselves in favor (Special Eurobarometer, 2005, p. 13). Even though agenerally positive attitude is expected in Belgium as one of the foundingmembers of what is now the EU, the percentage is indicative of theoverwhelming support of the population for European integration.At the same time, the support for the Constitution in the UK ranks lowestamong all the EU member states and even below the candidate states. Just37% of the population are in favour of a possible Constitution (Ibid., p. 13).Bulgarians expressed slightly higher support than the British – 48% said “yes”to the idea of a Constitution (Ibid., p. 13). However, this is less than the EUaverage of 61%. At the same time, bearing in mind that the country was not

Desislava Kraleva:EU Identity – Identities In Formation And Change 65yet a member of the EU at the time of the study, we can say that the result isan average one, especially since it outweighs some older member states.When examining the reasons for these results and their relation to thetopic of the paper, it is useful to consider the reasons for support given by theinterviewees. The third reason in order of importance for people to support thedraft Constitution is that it “strengthens the feeling of a European identity” (thefirst two reasons given are of institutional and technical nature). This isessential to the purposes of this analysis, as it shows that a vast majority ofBelgians are highly supportive of an instrument to strengthen the Europeanidentity, the British are extremely reluctant towards it and Bulgarians aregenerally in favor, though not members of the EU at the time the researchwas conducted.This builds upon the observations already made with regard to thefeeling of belonging, expressed by Belgians, British and Bulgarians. Aconclusion can be made that the Belgians feel a strong sense of belonging tothe EU and are supportive of a further deepening of the integration process(81% measured in 2004 Eurobarometer), one of the main reasons being thatit would strengthen the feeling in question and eventually assist theconstruction of an EU identity. The British feel significantly less attached tothe EU and are therefore skeptical toward the undertaking of measures whichwould strengthen the feeling of that attachment (only 49% being in favour offurther EU integration (Eurobarometer, 2004, p. 13)). Among the interviewednationalities, they are the ones which are most reluctant to the adoption of anEU Constitution. Last but not least, Bulgarians express a strong feeling ofbelonging, while moderately supporting the adoption of the Constitution.Bearing in mind their candidacy status at the time of the survey, we canassume that the percentage of approval would be higher, were the survey tobe conducted now.ConclusionsIn the paper, I studied the dimensions of different identity components inBelgium, the UK and Bulgaria. The main hypothesis was that the dimensionswould vary between countries and differences would be observed on severallines. On the one hand, there would be differentiations between old and newmember states, namely Belgium and the UK, and Bulgaria. On the otherhand, there would also be variations among old member states themselves,exemplified by Belgium and the UK.

Constructing Europe as a Global Power:66 From Market to Identity?The research in the course of the paper has shown that these variationsare indeed empirically observable. Respondents show a clear tendency tofollow a certain pattern when sharing their views on the euro, the flag of theEU, their feeling of being European and the drafting of the EU Constitution.These four elements encompass both ascribed and voluntarist identitycomponents, which allows us to gain a fairly full estimation of the EU identitiesshared by the respondents. Moreover, three of these four elements (the euro,the flag and the Constitution) are of symbolic nature, which reinforces theirimportance with respect to signifying and measuring European identities.The conclusions which can be made are that old member states with agenerally pro-European stance (Belgium) are more willing to favour symbolsof European identity and to embrace such an identity. What is more,respondents expressed a favourable attitude towards deepening theintegration process and strengthening the EU identity. They had no fearsabout this process and readily identified with it.However, UK citizens are significantly more reluctant to identify with theEuropean idea. They do not consider the euro as an important symbol, areremarkably split in their views of the EU, are the EU member state which feelsleast European and the ones least in favour of an EU Constitution. This is aninteresting ascertainment which is indicative of their unwillingness to identifywith the EU and the weakness of the European identity among them.As a newly accessed member state, the results shown by Bulgarianrespondents are interesting in several ways. First of all, Bulgarians have agenerally positive attitude towards the EU. They favour its symbols andsupport further integration. However, fewer Bulgarians feel European incomparison with the EU average. This might be caused by the fact that thecountry has been an EU member for less than 5 years but at the same time itindicates a potential for a strong EU identity to build up among Bulgarians,having in mind that for most indicators they gave stronger responses thansome older member states like the UK.Thus, the EU identities vary – not only between old and new memberstates, but also among old member states themselves. These variations mighthave different explanations. Due to restrictions of the size of the paper and itsfocus, I will not dwell on them in detail. However, I will mention a few optionsthat might provide viable reasons for the variations observed. First of all, thereis the history of the relationship of the country with the EU. Belgium is atraditional proponent of EU integration, and as one of the founding members,is one of the propelling forces of the integration process as a whole. By

Desislava Kraleva:EU Identity – Identities In Formation And Change 67contrast, the relationship of the UK with the EU is far more uneven, marked byperiods of closer cooperation and more distanced relations. Bulgaria, as afairly new member, is still in the process of discovery of the real meaning ofthe EU and internalizing the Union, which can lead to lower degrees ofidentification. Another factor in this consideration is the perception about thegains for a country from its membership. Citizens of countries which perceivetheir states as gaining from EU membership are more willing to identifystrongly with the Union in comparison with citizens of states which feel theycontribute excessively without adequate return. Furthermore, the perceptionof the importance of the integration process would be another factor indetermining the attitudes of citizens. In addition to that, some states might feelthe deepening of the integration as a historical necessity whereas othersmight perceive it as excessive loss of national sovereignty. The mediapresentation of the EU is also an important factor for the perceptions ofcitizens of the EU and the formation of EU identities. Other reasons mightinclude the strength of the national identity, the presence or lack of regionalidentities, the specific national history of the state, the changes in the countryobserved as a result of EU membership and more. This might be a fruitfulrealm for further research, which falls outside the scope of the current paper.The careful examination of varying EU identities and the reasons forthose would provide an opportunity for much more specific policies at the EUlevel. Such research-based policies would consider the specificities of eachparticular country and provide for tailored approaches to cater for thosespecificities. The eventual result would be the overall strengthening of EUidentities. However, that should not be mistaken for the unification of thoseidentities. As shown, identities vary significantly among member states and itis highly unlikely that this would change. What is more, there is no necessityof aiming to unify the EU identities. One of the unique features and treasuresof the EU is its diversity, so efforts should be focused on strengthening the EUidentities with respect for the country specificities instead of unifying them.Such an approach would facilitate the existence of a rich, strong and uniqueEU with various dimensions of EU identities within it, united in its diversity.

Constructing Europe as a Global Power:68 From Market to Identity?ReferencesBillig, M. (2004)..Banal Nationalism. London: SAGE Publications.Jones, F.L., & Smith, S. (2001). Individual and Societal Bases of National Identity. AComparative Multi Level Analysis. European Sociological Review, 17(2), 103-118.McNamara, K. (2010). Constructing Europe: Insights from HistoricalSociology.Comparative European Politics (2010) 8,127–142. doi:10.1057/cep.2010.8Smith, A. (1991). National Identity, London: Penguin Groups.Eurobarometer, issue 62, Public opinion in the European Union (2005).http://ec.europa.eu/public_opinion/archives/eb/eb62/eb_62_en.pdfEurobarometre, issue 62, L’Opinion publique dans l’Union Europeenne, RapportNational Belgique (Automne 2004).http://ec.europa.eu/public_opinion/archives/eb/eb62/eb62_be_fr_nat.pdfEurobarometer, issue 62, Public opinion in the European Union, National ReportUnited Kindgom (Autumn 2004).http://ec.europa.eu/public_opinion/archives/eb/eb62/eb62_uk_nat.pdfЕвробарометър, брой 62, Общественото мнение в Европейския съюз,Национален Доклад за България (Есен 2004).http://ec.europa.eu/public_opinion/archives/eb/eb62/eb62_bg_nat.pdfEurobarometer, issue 62, Public opinion in the European Union, National ReportExecutive Summary Belgium (Autumn 2004).http://ec.europa.eu/public_opinion/archives/eb/eb62/eb62_be_exec.pdfEurobarometer, issue 62, Public opinion in the European Union, National ReportExecutive Summary United Kingdom (Autumn 2004).http://ec.europa.eu/public_opinion/archives/eb/eb62/eb62_uk_exec.pdfEurobarometer, issue 62, Public opinion in the European Union, National ReportExecutive Summary Bulgaria (Autumn 2004).http://ec.europa.eu/public_opinion/archives/eb/eb62/eb62_bg_exec.pdfEurobarometer, issue 70, Public opinion in the European Union (2010).http://ec.europa.eu/public_opinion/archives/eb/eb70/eb70_full_en.pdfEurobarometer, issue 71, Future of Europe (2010).http://ec.europa.eu/public_opinion/archives/eb/eb71/eb713_future_europe.pdfSpecial Eurobarometer, Barometric questions (2005).http://ec.europa.eu/public_opinion/archives/ebs/ebs_220_en.pdf

Ivan Arsenijević:The Limits and Possibilities of a European Identity 69The Limits and Possibilities of a European IdentityIvan ArsenijevićAbstractEuropean identity, as a common value, consists of diverse philosophical,historical and cultural elements, which are based on historical roots andare continually being supplemented with new elements. It is an identity,like any other collective identity, which is trying to produce unity indiversity. The values of identity are often expressed through a number ofits objectives and principles such as: peace, democracy, freedom,equality, justice, prosperity, human rights, social cohesion andenvironmental protection. Collective identity enables any society toestablish the necessary cohesion for living together in solidarity andmutual assistance, without erasing the differences among its members.The European Union aims, through its accession to the Union, to meetthese ambitious values in the lives of their peoples. It is a challenge andthere will be a need to engage all forces and resources in order to build astrong European identity.The concept of European identity has been introduced into politicaldiscourse and the European agenda during the last three decades. It hasalso been the subject of a number of treaties and official documents. Theconcept of European identity is problematic itself but it is still at thecentre of the debate in Europe. While the European Union crashesinterstate border and tries to establish the European Society, Europeancitizens and European identity; at the same time, it tries to reconcile thediversity of national identity under the common name - European identity.The history of the European continent had been full of bad memories.After the Second World War, the process of European unification was initiatedby common economic communities and political elites of the six foundingmember states – France, Germany, Italy and Benelux countries – through theEuropean Coal and Steel Community. These founding states had the

Constructing Europe as a Global Power:70 From Market to Identity?intention of establishing a close union of peoples, which was stated later inthe preamble of Treaty of Rome. The construction of a political communityand European identity in the European Union has been a highly contestedissue especially after the Maastricht Treaty in 1992. This Treaty introducednew forms of co-operation between the member state governments - forexample, on defence and in the area of justice and home affairs. By addingthis intergovernmental co-operation to the existing Community system, theMaastricht Treaty created the European Union. Since that time the EU hastried to initiate among the member states more and more different processeswhich focus on the realization of the project, called the “Union of Europeannations”. This means union in defense, economics, politics and social matters.Finally, the Treaty of Lisbon has brought a new formation of the EuropeanUnion which has raised new questions about European identity.The enlargement and the construction of “the new Europe” require adebate on European identity in the face of the present challenges. What ismeant by European identity and does it really exist? This is a highly debatedtopic regarding the ever-expanding European Union. As is commonknowledge, the EU is a unique economic and political partnership between 27democratic European countries which is continuously growing. Thefundamental aims of the founders (primarily Jean Monnet and RobertSchuman in 1950) of this union were to maintain and promote peace,prosperity and freedom for its citizens in a fairer and safer world.In the last decade or two, there have been many conferences organizedand books published on the subject of European identity, and so it is safe toassume that there are some perceived problems in this area. In an attempt toilluminate such problems, and even to provide some answers, we shall dealhere with definitions: What is collective identity? What might a Europeanidentity consist of? And how might it compete with national identity? In thisway some of the confusion surrounding this issue can be cleared away.The Question of IdentityAs a result of globalization, multiculturalism, global civil society andcosmopolitan political and cultural currents, societies are becoming more andmore pluralized and interpenetrating. The result of these major shifts inculture and politics is that national identities are changing.A European identity, actually new European identities that are beingshaped in the process of the EU enlargement and further development of the

Ivan Arsenijević:The Limits and Possibilities of a European Identity 71European integration can be best presented in relation to specific types andcategories of identities. The discussion on identity is very complicatedbecause of the presence of many dimensions of different approaches andvarious definitions of the term of identity and its constituent elements. It isdifficult to conceptualize European identity without identifying somecomponents of the concept of identity in general and collective identities orpolitical identities in particular. An identity consists of a set of ideas andvalues that enable an actor to determine “who I am -we are” (Wendt, 1994, p.385). It provides symbolic meaning to people’s life, by enhancing their “self”definition and their feelings of belonging. There are two possible forms ofidentities: an individual identity and collective identity. That is to say, anidentity could have an individual and/or collective feeling; one belongs to anentity or category which is determined by common characteristics. These twoperspectives are defined as ‘personal’ and ‘social’ identities in the literature. A‘personal’ identity refers to the single individual for whom identity meansrecognising oneself. On the other hand, the ‘social’ identity emerges from theconsciousness of a pre-existing group with which a number of individuals will‘identify’, and which they will together define.Essentialist concepts of collective identities take cultural variables suchas membership in ethnic groups as a given which then develop into nationalidentities during the process of nation-building. National as well as a possibleEuropean identity are seen as collective identities. “Identity” in this sense canmoreover be defined as a “feeling of belonging to a distinctive group or moreabstract social unit” (Bucker, 2006, p. 265). Usually, these are nation-states,but this definition also includes lower regional units – or an entity such as theEuropean Union.The political aspect of identity is generally considered to be “the mostimportant when thinking about the becoming of a European identity”(Schumacher, 2002, p. 8). “Political identity can be characterised as aprecondition for the legitimacy of democracy. It thus necessarily has to besupported in order to shape a European identity” (Meyer, 2004, p. 21).Additionally, it is political rather than cultural identity that can be shaped in theconstructivist sense. Political identity refers to the EU as a political unionrather than to the cultural and historic Europe where borders cannot bedefined clearly.To summarize, feelings of European identity, and their consequences, donot need to compete directly with national identity. Collective identity isconstructed, multi-level, and subject to change over time and place. European

Constructing Europe as a Global Power:72 From Market to Identity?identity, in the sense of feelings of Europeans, has existed widely for a verylong time, certainly since the Renaissance, but such feelings are not the sameas those which underpin national identity. In the sense of a collective identityat the European level which might justify the existence and operation of amodern state, or in this case a super-state, there has been a certain level ofactivity in the twentieth century, especially by the EU in its top-down activities.However, it would be hard to argue that a critical mass has been reached,and certainly the achievements are marginal or at best minor, compared tothe activities of nation-state governments and populations.A European IdentityThe European space has grown to the extent that it is no longer possibleto say what is national and what European. In Europe today, there is nonational identity that exists on the level of a simple collective identity, i.e., anidentity that is underpinned by a particular social group. All national identitiesare becoming more like societal identities, that is, broadly defined culturalcategories.People tend to get confused between the European Union as aninstitution and Europe as a continent. It is important to remember that not allEuropean countries are part of the European Union and this brings up theother question of whether a single European identity has been or rather isbeing created excluding those non-member states. The questions on thesubject of the European Union and European identity are never ending, but itis still too early a stage to come to any concrete and fully justifiableconclusions. This topic has come to light fairly recently, clearly researchersand theorists have been observing this phenomenon nearly for as long as theEU has existed; however, it is only in the last decade that more people haveactually been taking notice. This is probably due to the fact that identity is fardeeper a concept to analyze, people are usually born with an identity whichhas been given to them by their parents, but the case of a European identityis really quite unique.A European identity is in fact in the process of being created. The current27 member states constituting the EU have accepted the fact that one of therequirements has been the need to relinquish a degree of sovereignty to be apart of this single market. However according to surveys completed acrossthe European Union in different nation states not all people have been aseager to abandon their cultural heritage and to be part of the new European

Ivan Arsenijević:The Limits and Possibilities of a European Identity 73identity (Guibernau & Berdun, 2007). The European continent has alwaysbeen diverse, in the sense that each country within has had its own language,religion and culture and many of these countries, especially theMediterranean countries in the Southern part or Europe, have been and stillare very patriotic and to a certain extent still quite conservative. Therefore toexpect a strictly conservative society, such as in the case of Italy for example,to forget their heritage which they have been bound to for centuries is at thismoment in time highly unlikely (Bennhold, 2005).If we compare the European Union to the United States in somecircumstances we can conclude that the two are very different entities. Settingaside the differences in political structure and organization, the United Stateshas never had the rich and intricate history which the European countrieshave and it is for this reason that no matter what state people are from inAmerica they still refer to themselves as Americans. A close sense ofbelonging and unity, which are really the main factors which constitute identityas such, have contributed to America acting as the world’s superpower for thelast 50 years. Regarding European identity it is also important to mention thequestion of generation which plays a vital role in the acceptance of changealong with experience. Many of today’s generation are well-travelled and aretherefore more open to the option of seeing themselves as a part of a largersingle European identity. These people fall under the category ofthe ‘Erasmus Generation’ (Bennhold, 2005). The members of the EU havenot only benefitted from a single market free of trade tariffs, democracy andnational security, but the Union has also encouraged integration andcommunication among people from different countries, something that was farmore difficult to do in the past. The European Union has in a way erasedborders between countries making it easier for people to travel and movearound. Students are now able to study in more than one country, thereforegiving young people the opportunity to leave their home countries and liveand work elsewhere (Bennhold, 2005). That is why some people believe thatat this point it is a given to just call or refer to oneself as a European ratherthan Greek, Swedish or German seeing as one can technically live wherethey choose to and have to abide to a fixed set of rules and policies.Limits of European IdentityQuestions regarding the nature and content of European identity, butespecially the search for a new European identity, its relations with other

Constructing Europe as a Global Power:74 From Market to Identity?identities and a possible loss of national identities are frequently asked in thecontext of the European Union (Western Balkans) enlargement. Thesequestions are discussed and different views exist in all current EU memberstates. Initiated especially by opponents to the EU integration they arebecoming burning issues also in the candidate countries. The public opinionin these countries fears that their national identities will be lost or, at least,substantially weakened with their full integration into the European Union. Theenlargement of the Union has been criticized as distorting European culturalunity. Especially, the debates have been revolving around the question ofTurkey’s full membership. In this regard, it is claimed that Turkey which has avery different social structure in terms of religion and culture compared to theEuropean one, cannot be a part of Europe. Some authors also argued thatthat is not possible because of the incompatibility of Islam with Europeansecular values, while some others indicate that Turkish political culture andidentity is far away from the European one (Hurd, 2006, p.32).One major problem in the creation of a common plural European identityis the integration of traditional collective identities – such as ethnic, religiousand national identities. These collective identities are usually closed,exclusive and based on belonging to and being closely integrated withspecific communities. These collective identities based on belonging to aspecific community are traditionally strong and very present in the life of anindividual. Although this does not correspond to reality, these traditionalcommunities with which we identify are perceived often as homogenousentities. Among the numerous problems that are undermining EU legislation,identity is assuming a big part of politicians’ concerns. The concept of identityhas deep implications for questions related to currencies, languages anddemocratic deficits. A key debate in Europe concerns the possibility of aEuropean identity when language and currency are different amongEuropeans. Although one of these concerns, the currency problem, was partlysolved in 2002 with the introduction of a single currency in Europe, linguisticidentity, which was the core feature of past projects of territorial consolidation,poses a more intractable problem. It is not possible to consider the creation ofa unique European language for obvious reasons, but it is legitimate to askwhat language citizens will speak in a trans-territorial Europe, and therecognition, if not domination, of multiple languages.Another practical problem constantly undermining the function ofEuropean legislation is the “democratic deficit”. This kind of deficit refers tothe citizens’ lack of direct power in decision making. In fact many regulatory

Ivan Arsenijević:The Limits and Possibilities of a European Identity 75decisions that affect the daily lives of citizens of individual nation-states aremade in Brussels without their explicit consent. The general impression ofpeople is that political decisions may be less transparent and more difficult tocontrol in the EU than at the national level.Possibilities of European IdentityPromoting “unity of diversity” and respecting the “mosaic of cultures” arethe basics in the creation process of a European identity. It is certain thatmulticulturalism, as the right to be different and to foster one’s own culture,will be elementally asserted as the natural right of all individuals, whichnobody can abnegate.Building a new common European identity will require incorporation andcertain transformations of existing European identities. Europe contributedgreatly to social and cultural developments, made positive contributions toscience, technology and culture, but also to cultural diversity and richness.However, its negative impacts were substantial as well. Europe producedaggressive and hegemonic nationalism, colonialism, fascism, Nazism,concentration camps etc. Such negative phenomena can be avoided in thefuture only if they are known well and if people are aware of their possiblenegative consequences.This requires that we define positive contents of a new common,inclusive and pluralistic European identity and develop a comprehensivestrategy for its development. This strategy shall include also a plan ofconcerted action for all relevant factors, including education, science, mediaand politics that with their activities can contribute to the goal. Although it isnot very popular to speak about ideologies nowadays, the building of a newcommon, inclusive and pluralistic European identity does require a new“ideology of cooperation,” based on the inclusion, equality and recognition ofdiversity. This ideology shall show all advantages of equal cooperation andinclusion for the future development of Europe. Such a new ideology shouldcomplement the currently prevailing culture and ideology of competition andmobilize people to oppose and fight all exclusive political ideologies.A new common, inclusive and pluralistic European identity has torecognize today’s reality. European integration will not do away with nationstatesany time soon. It means that this new identity as a supranationalidentity has to complement the existing traditional national identities andpatriotism. Additionally, as Europeans we will need to develop a democratic

Constructing Europe as a Global Power:76 From Market to Identity?supranational patriotism, which is only possible if the democratic legitimacy ofthe European integration and its possible transformation into a Europeanfederation are ensured. This is the reason why issues of legitimacy anddemocratic deficit need to be addressed seriously (Banchoff & Smith, 1999).The Importance of European IdentityThere are two reasons why European identity is of such importance forthe future of integration. The first is expressed in the concept of “unity indiversity” and the second is in the idea of supranational democracy. Since theestablishment of the European Union, the European Commission has workedhard to promote its identity and public awareness, mainly because Europe asa “cultural space lacks affectivity, that is, emotional attachment” (Weiler, 1999,p. 329). The European Commission acknowledges that the absence of aEuropean people, and territory, is undermining the legitimacy of EU projectsand this is the main reason why it has invested so much in its campaign forEuropean identity (Shore, 2000).Each year over 500 million euros are spent on cultural policy, which aimsto promote the richness and diversity of Europe’s shared cultural heritage.“Unity in diversity” has become the official slogan for this policy. The idea ofthe unification or integration is necessary, for the EU commissioners, toprovide equal and guaranteed benefits that are not available at the domesticlevel, to all the member states. These are peace, economic well-being, whichis probably related to the creation of a larger and more competitive Europeanmarket, greater international influence, political stability, broader citizenship,etc.The second explanation of the promotion of European identity bases itsvalidity on the idea that a true democracy can exist at the European level onlyif a European territory and consequently, identity exist. For democracy to workthere must be people and territory, that is, a set of individuals who agree tomake collectively binding decisions under some democratic rules. If thebinding decisions are applied to individuals who do not recognize themselvesas members of the society taking collective decisions, then democratic ruleappears to become an imposition, a non- consented procedure (Sanches-Cuenca, 2000). In this way, the constitution of a territory is a precondition forthe development of a supranational democracy and for the future of theEuropean integration. The importance of territory is important in the context ofEuropeans’ opinions about their national-state and their identity. Europeans

Ivan Arsenijević:The Limits and Possibilities of a European Identity 77still feel attached to their nation states and they are not prepared to acceptdecisions by majority rule at the supranational level in crucially importantpolitical areas.Moreover, Europeans are not keen to observe the decisions taken at EUlevel simply because these decisions have been approved by a majority ofcitizens of the other member states. This negative feeling is held by thebiggest proportion of citizens of the northern countries and to a lesser extentby the citizens in smaller central Europe. According to this argument,supranational democracy is possible only if Europeans from very differentcountries begin to feel that, in addition to their current territories, they belongto a wider, supranational territory; the European Union. The main problem sofar is the dependence between the concept of territory and the feelings,shaped by history and culture, of each member state. Solving this problem isa big challenge for politicians supporting integration. Accordingly, theEuropean Union is trying to build up and re-enforce positive affect towards theUnion by specific actions to improve its visibility; those actions are mainlyinformation disseminated by the mass media and targeted communicationplans. In this line of argument, the fact that Europeans do not have any deepattachment to a supranational territory, and consequently do not have astronger European identity, are the main factors which prevent the creation ofa supranational democracy. As long as citizens do not think of themselves asEuropeans, European democracy is doomed. Consequently, the creation of asupranational democracy is only possible when citizens from differentmember states share a sense of being involved in a common project andforming part of a single community.In our belief, the development of the EU identity is a worthy and attainablegoal because Europeans share not only common values, a common history, butalso share a common future in the integration process. An identity is at theheart of the European integration project and the EU identity should beconsidered as “unity in diversity”. The EU identity as unity in diversity is a beliefin the common and a faith in the difference. Each country has its own nationalidentity but added to that one can choose the EU identity and let the EU identitybe a part of a member state’s identity. Therefore, the objectives of the EU’scultural policy have to protect and promote cultural identity at regional, nationaland European levels and to realize an open and dynamic European culturalspace which contributes to the EU identity. In the process of creating thecommon identity, there are certain things that need to be thought of and donelocally, traditions for example; for the other matters it would be more appropriate

Constructing Europe as a Global Power:78 From Market to Identity?to think and act nationally like cultural policies; for economic, foreign andsecurity policies, a European approach is much more suitable and a globalapproach is apropos for environmental and trade policies. In some fields suchas human rights, social policy and financial policy, the EU has gone towards thenotion of unity, union. However, if people want to feel European, they shouldmove towards the greatest degree of integration. They should try to abolish anyelements of nationalism that prevent Europe from achieving the so muchwanted union and try to reach a common cultural policy as well. It is importantto remind people that Europe is what its countries and people make. If peoplemake their country and society prosper, it also benefits Europe and the EU.Hopefully, we should believe in the positive outcome of this magnificent task.If a common European home is to be realistic, we urgently need the creationof a new, inclusive and plural European identity, based on the principles ofdemocracy, equality, recognition and respect of diversity and on the ideologyof cooperation. If the European Union continues to support the principle ofunity in diversity and the creation of common symbols like euro, Europeanflag, European-wide cultural or sport organizations, it may overcome theidentity question. For this end, we should undertake everything we can to startthe awareness raising campaign and to contribute our share in the building ofthis identity.

Ivan Arsenijević:The Limits and Possibilities of a European Identity 79ReferencesBanchoff, T., & Smith, M. (1999). Legitimacy and the European Union: TheContensted Polity. London, New York: Routledge.Bennhold, K. (2005). Quietly sprouting: A European identity, RetrievedFebruary 27, 2011 fromhttp://www.nytimes.com/2005/04/26/world/europe/26iht-enlarge2.htmlBucker, N. (2006). Returning to where? Images of 'Europe' and support forthe process of EU integration in Poland. In Kaina, Viktoria und Ireneusz PawelKarolewski (Eds): European Identity: Theoretical Perspectives and EmpiricalInsights (p. 265-294). Hamburg: LIT Verlag.Guibernau, M., & Berdun, M. (2007). The Identity of Nations. Cambridge:Polity, 111.Hurd, E. (2006). Negotiating Europe: the politics of religion and the prospectsfor Turkish accession, Review of international studies, 32.Meyer, T. (2004). Die Identität Europas. Der EU eine Seele? Frankfurt amMain: Suhrkamp, 21.Sánchez-Cuenca, I. (2000). European Union Politics: The Political Basis ofSupport for European Integration. London, Thousand Oaks CA, New Delhi:Sage Publications, 147-171.Schumacher, C. (2002). Konzepte europäischer Identität - Die europäischeUnion und ihre Bürger, Saarbrücken, 80.Shore, C. (2000). Building Europe: The cultural Politics of EuropeanIntegration. London: Routledge.Weiler, J. (1999). The Constitution of Europe: Do the new Clothes have anEmperor? Cambridge: Cambridge University Press, 329.Wendt, A. (1994). Collective identity formation and the international state.American Political Science Review, 88, 384-396.

Constructing Europe as a Global Power:80 From Market to Identity?European Social Model in the 21st CenturyBranko BoškovićAbstractDue to the fact that multiple ideologies and different social models existin the world today, with different consequences, it appears crucial for theEU to develop and sustain its model of economic and social regulation.This paper focuses on the way the European Union develops its socialmodel in the forthcoming decades. Different models in EU memberstates mean that it is not possible to have a unique model so the paperwill look at what the general approach should be. This work is dividedinto the following sections; the first section contains the theoreticalapproach to the social model and defines it; the second part is devotedto the European current social politics and the way the EU has beenworking in the field of social politics; and the third part looks more closelyat the changes going on in the EU, focusing on the problem ofglobalization and new trends, especially into the way families andintimate relations are changing. This is important because individuals,lifestyle and the changing nature of the family are crucial for socialpolitics. The fourth part is devoted to the new trends and expectations,especially after the Lisbon Agenda and economic crises, and to findingout the possible consequences they can have for the social model of theEU. A theoretical approach is combined with the available data so the fullnotion of the problem can be presented.The European continent has long been recognized as the part of theworld where citizens are empowered by different mechanisms enabling themto control their political elites. Democracy has been a hallmark of Europeespecially after World War II and the formation of the European EconomicCommunity which consolidated the pathway towards further integrations lateron. The welfare state was the product of these politics and has since beenpropagated strongly, in different manners, depending on the state.

Branko Bošković:European Social Model in the 21st Century 81This paper is focusing on the transformation of the European socialmodel, which has been observed lately, especially in the last decades due tothe changed conditions in which we now live. The focus is on implicationsthis shift has both on the causes of the change and the response of thewelfare state. It can even be argued that we are living a completely new lifecompared to a couple of decades ago because the world has become mushmore unstable and nothing seems to be constant as before. Therefore, thesocial model had to be adapted and accompanied by new policies which willcontribute to the wellbeing of its citizens.Problems of the European social model in this paper are discussed ondifferent levels and it is divided into sections. The first part presents the newcircumstances which we face. The second goes briefly through the dynamicsof the traditional welfare state, while the third section develops theoreticalimplications of the European social model. The next two sections go on withthe changes of the European social model in practice and the last part isdedicated to future expectations. A conclusion summarizes the debate.What Has Changed?The twentieth century has seen massive shifts in European politics,especially concerning the European Union. One of the key political issues atthe end of the last century was the fall of the communist regime which meantthat the EU had to change its political aims towards its neighboring countrieswhich had become independent. Therefore, a new course needed to beundertaken.In a little more than a decade after the communist breakdown the EU haschanged the borders and included twelve new members. Also, adoption ofthe Lisbon Treaty and all the changes that have been made have significantlyaltered the political position of the EU. In many areas today the EU stands asthe strong and influential actor, often acting more unitarily than before. Oneof the areas that have changed as well is the social policy and welfare. Butchanges in the social policy did not come only as a consequence of thepolitical factors but there have been many other effects. Among these the keyones are: globalization, new technologies and a knowledge based economy,lifestyle change and the new family relations. It must be emphasized herethat there are certainly more important factors but due to the limited spacethese will be mentioned only briefly.

Constructing Europe as a Global Power:82 From Market to Identity?Traditional WelfareAs Adnett and Hardy notice: “A distinguishing feature of economicintegration in Europe has been a concern for social, as well as economicdevelopment” (2005, p. xviii). Even from the very beginnings of EuropeanEconomic Community development, the welfare and care of its citizens wasone of the key issues. Before the actual introduction of the new social modelthere was a period of the traditional welfare state which set the model forfuture development. Suspicion of the market and its mechanisms as a meansto produce outcomes that would be acceptable for the majority of people, or atleast for the political elites in Europe, led to the formation of the traditionalsocial-democratic states. It is important to stress that Socialism in WesternEurope was never an acceptable ideology; however, many of its sources wereuseful in creating welfare states in Europe after World War II. “The economictheory of socialism has always been inadequate because it underestimatedthe ability of capitalism to reproduce, adapt end encourage greaterproductivity” (Giddens, 1999, p. 13). Combining elements of social policieswith democratic principles was the only acceptable way. It is important hereto outline the model of the traditional welfare state because it is the problemsand impossibility of implementing it in the new era that actually created thecurrent welfare programs.Certainly, one on the key figures of the theory was Keynes, who believedthat the state should be involved in the economy because the market cannotprovide acceptable outcomes. This actually meant that the state must carefor its citizens because otherwise their social position could be threatened.After the War it was necessary for the state to be more involved in theeconomy. Keynes was also suspicious of irrational characteristics of themarket and thought that it was necessary that it was controlled and the bestway to control it was by the state interference. Moreover, he was convincedthat the major industrial forces must be handled by the state because privateownership would negatively influence their dynamics and production.Allowing these industries to enter the market would maybe mean theirdeterioration and underperformance because the market would not be able tocontrol them. Among these, Giddens (1999) also adds domination of thestate over the civil society, collectivism, full employment, egalitarianism, onewaymodernization, internationalism and attachment to the bipolar world asthe main characteristics of classic social-democracy.

Branko Bošković:European Social Model in the 21st Century 83All of the previously stated could function while development of the stateand factors beyond the state were still underdeveloped. The first seriouschallenges to the classic welfare state were already present in the 70’s and80’ due to its inability to adapt to the new circumstances. Neoliberalism,strongly encouraged in the USA and UK was also pressing welfare in Europe,but the fall of the USSR, which brought along many insights and equallyimportant, globalization. This meant that the state needed much moreflexibility and was among the key factors that pointed to the need oftransformating the classic, traditional social-democracy in Europe.Defining Social ModelIt was necessary to present the traditional welfare state and its basic wayof functioning so it is easier to understand how the new welfare and socialmodels are formed and developed. The key issue in the European SocialModel is to have an economic growth coupled with social cohesion. Hay,Watson and Wincott imply that “there is, as yet, no commonly agreeddefinition. Indeed, a number of different senses have been usedinterchangeably and, as such, frequently conflated” (Hay, Watson & Wincott,1999, p. 14). As Jepsen and Serrano Pascual note, one of the firstdefinitions of the European Social Model (ESM) was presented in theCommission’s White Paper on social policy and it was defined as: “a set ofcommon values, namely the commitment to democracy, personal freedom,social dialogue, equal opportunities for all, adequate social security andsolidarity towards the weaker individuals in the society” (Jepsen & SeranoPascual, 2006, p. 26). A shift in the normative definition was seen in 2000when conclusions were made that modernizing the ESM was necessary andthese included: the need for education and training, lifelong learning, reformsof the social security systems and promotion of social inclusion (Jepsen &Serano Pascual, 2006). The key conclusion from comparison of the twodefinitions is that risk has become individualized and it is the individual thatmust deal with risks (Ibid.). Accordingly, the social model of the specific stateis based on specific policies and aims which are based in the welfare andsocial policy. However, it is not only the welfare policies that define the socialmodel but most often it comprises the wider circle of activity and isdetermined by the historical, political, economic, class and social relations.Due to the fact that since the very formation of the European EconomicCommunity in the 1970s there have been significant differences in social

Constructing Europe as a Global Power:84 From Market to Identity?policies and welfare, it was impossible to have a single and commonlyaccepted model. Such a policy has not been developed since and especiallynow that the EU now has 27 members, it appears even more difficult and isnot even preferable as a solution. However, some of the member states havesimilar systems which are at least based on the same pillars. Because ofthese differences and also common traits, it is inevitable to speak of regimesand models rather than specific or all-encompassing scenarios (Esping-Andersen & Myles, 2008).Conceptually speaking, Hay, Watson and Wincott (1999) made a fourfolddivision of the European social models. Firstly, the ESM comprisedcommon institutional architecture in Europe. Secondly, it means a complex ofdifferent national models which are identified in Europe. In third sense thetransnational aspect of the ESM is emphasized, meaning that national socialpolicies are no longer tenable but it is rather the transnational level thatdominates in formulating the social system. The fourth type comprehends thesocial model into wider political processes and integrations as the mostproductive means of developing the social policies (Hay, Watson & Wincott,1999). It is inevitable to have a certain overlapping in previous definitions butthese are the conceptual meanings of what the ESM actually embraces andhow much it is linked to already mentioned wider social circumstances.Esping Andersen made a three-fold division of welfare models, on thebasis of “degree of de-commodification and modes of stratification, or if youwish, solidarities” (Esping-Andersen, 1999, p. 74). The first is the liberalwelfare regime, commonly connected with the United Kingdom and the USA,and characterized by a minimal state, individualized risks and marketsolutions (Ibid.). Distinctive for this type of a welfare state are: socialguarantees mostly restricted to “bad risks”, narrowly defined “social risks”,and encouragement of market (Ibid.).The second cluster of regimes are social-democratic. These are Nordicstates. “Here, the historical corporatist-statist legacy was upgraded to cater tothe new ‘post-industrial’ class structure” (Esping-Andersen, 1990, p. 27).Crucial characteristics of this welfare type are extensive social coverage,state domination, egalitarianism, de-commodification of the state, nationalhealth care and full employment.Finally, the Continental Europe is dominated by the Conservative welfareregime. “The essence of a conservative regime lies in its blend of statussegmentation and familialism” (Esping-Andersen, 1999, p. 81). Esping-Andersen finds family relations one of the key aspects of these regimes and it

Branko Bošković:European Social Model in the 21st Century 85is “the security of the chief (male) breadwinner [that] assumes fundamentalimportance. The familialist bias is additionally reinforced by the dominance ofsocial insurance” (Esping-Andersen, 2002, p. 16). Due to the number ofsystems that fall under this regime, there are many differences but these aremostly characterized by corporatism, compulsory social insurance and widehealth insurance, strong influence of family and family relations on welfare.Giddens adds the fourth type to Esping-Andersen’s cluster and it is “theMediterranean one (Spain, Portugal, Greece), which also has a fairly low taxbase and depends heavily upon provision from the family” (Giddens, 1999, p.15). Besides, he adds, even a fifth model could be included today and thesewould be the post-Communist states which are trying to develop the WesternEuropean welfare model (Giddens, 2007).Adnett and Hardy (2005) also recognize the four models but label themdifferently, still defining each by the similar patterns as in the previouspassages: traditional-rudimentary model (present in Southern Europe), liberalindividualist(Anglo-Irish), Romano-Germanic (conservative-corporatist) andSocial democratic (Nordic states).Appreciating the differences among all the previously mentioned modelsor regimes, it is clear that one can hardly speak of a European Social Model.But, on the other hand, current shifts, especially globalization andhomogenization of the EU are creating the same problems for each of thesestates and all of them need to face the same challenges. This does not implythat they are going in the same direction but the welfare regimes are goingthrough a phase where rethinking is necessary. Besides, in each of theseregimes, the same policy will not always have the same results and hardly willit be implemented in the same manner, just due to the different social,economic, historical or political context.How is the European Social Model Changing?Knowing what the ESM means for European citizens now, what hasactually changed in it and what are the ascendants that define it today? It isclear that the previously dominating stability, both economic and political, hasnow swapped place with uncertainty, especially economic. One of the keydeterminants for such an alteration is globalization, which brought the entireworld much closer than it geographically actually is. Castells (2003) stressesthat it was only in the late twentieth century that the world economy hasbecome truly global due to the new infrastructure and information and

Constructing Europe as a Global Power:86 From Market to Identity?communication technologies, but helped with deregulation and liberalizationby states and international institutions. This is crucial for the welfare state andsocial politics because the state and its institutions were not able to fullycontrol the market and the internal economic structure. Rather, it was theconnectedness and interdependence that influenced social policy.The nation-state which used to be the only actor is not alone any moreand sovereignty as well does not have the same meaning it used to. Bordersare open and the new economic actors are entering the arena. Therefore, thesocial policy needs to be adapted to the new circumstances. Whendiscussing how the new social-democracy should look, Giddens stresses “[a]healthy economy needs well-functioning markets, but it also needs a welldeveloped public domain, in which the state retains its essential role”(Giddens, 2003, p. 7). It is then the new relation between the state and themarket, but also between the state and its citizens that must be developed inorder to establish the new welfare state. It is also crucially important to havea welfare model which is sustainable because it is evident at the moment thatthe previously unmonitored and careless spending inevitably led to financialcrisis and instability.The European Union today represents a political union of too manydifferent member states. However, ever since establishing the ECC it is onaccount of an appreciation of diversity and differences that, it can be said thatnew social model must also be based on this assumption. It is the promotionof what is acceptable for everyone that is crucial: regional or national sodifferences can be overcome. Also, Esping-Andersen (2000) adds thatarriving at common grounds in the EU would necessitate two basicassumptions around which there is already an agreed methodology: socialaccounting, so there is a common system of monitoring progress andobjectives and developing adequate measures for incomes and expenditures.Presidency conclusions from the Nice Summit in 2000 set the strategic goal ofthe EU “to become the most competitive and dynamic knowledge-basedeconomy in the world, capable of sustained economic growth with more andbetter jobs and greater social cohesion” (European Council, 2000, annex 1).The Commission’s Social Policy Agenda “seeks to ensure the positive anddynamic interaction economic, employment and social policy, and … [a]t theheart of the agenda is the modernization of European social model”(European Commission, 2000, p. 2).The new social model for Europe must combine three strategiccomponents: the state, market and family. More broadly speaking, it is the

Branko Bošković:European Social Model in the 21st Century 87role of these three factors that will determine how the new social model willlook. Consequently, having that in mind, there are specific fields which needconsideration and attention if we are to arrive at a conclusions that will beuseful for the new context for European welfare. This paper pays specialattention to already mentioned factors which define the European socialmodel (globalization, new technologies and knowledge based economy,lifestyle change and the new family relations). Globalization has beensketched already but it is its other effects that are important in the context ofthis paper. The new welfare state must be ready to cope with deregulationand flexibility that inevitably follow it. Held is discussing new socialdemocracyand adds its task is “promotion of those core values and principleswhich affirm that each and every person is treated, in principle, with equalconcern and respect” (Held, 2003, p. 147). If such is not the case, it is socialexclusion that will inevitably be the outcome of unsuccessful policies whichwill be discussed shortly.New Social Model in EuropeIf we are to define the new social model for Europe, it is necessary toredefine the concept of a welfare state in the context of risks. The classicwelfare states were organized to remedy the risk after it had alreadyhappened. For example, if a worker lost his job and is unable to find one for awhile, the state was there to provide social assistance and help him/her livewhile being unemployed. This was the concept of the static welfare which didnot act in advance. The consequence of such an approach was passivecitizenry: people who are not willing to invest in themselves and in theirhuman capital. Also, responsibility is in this manner transferred to the stateand citizens do not feel the need to improve their position because it is thestate that will provide and satisfy their vital needs.The new welfare state must be active and build citizens who are activeand responsible. In order to create a more just and equal society, the statemust find a means of intervention before problems actually happen and notafter them (Giddens, 2007) and make a distinction between the two types ofactivism. The first meaning is that “welfare services should be designed tohelp people help themselves” (Giddens, 2007, p. 100) and the secondreferring to social activism so citizens turn more to local and civil societyorganizations which can be helpful in delivering welfare programs (Ibid. p.102). Citizens should be turned towards their own social capital and

Constructing Europe as a Global Power:88 From Market to Identity?knowledge and not disinterested in obtaining needed skills. The state shouldact as the provider of services which encourage citizens to search for aworkplace that will enable them to escape poverty and create living conditionswhich are acceptable for them. Giddens (2007) discusses the enabling state,but believes that it is the ensuring state that is more encompassing and amore acceptable term. Shuppert uses the term the ensuring state to refer tothe redefined welfare state and for him “the ‘ensuring state’ emphasises theresponsibility of the state in areas where non-state agents play a dominantrole in the provision of public services” (Schuppert, 2003, 57).Before going into other aspects of new welfare it is the changing form ofa family that must be examined. The traditional family with the malebreadwinner who is responsible for the welfare of his family is no longerdominating the social structure not only in Europe, but elsewhere in the world.One of the key issues for such a change is the redefined position of women.Firstly, women have equal rights with men which inevitably contributed to thesecond issue of their potential independence from men i.e. from husbands.Thirdly, women who have jobs are financially independent which makes themmanage their own life independently of men. All of this implies that womenare no longer binded to the house only but are able to perform regular jobs.Consequently, it is not the housework that is their only obligation. Besides,raising children is no longer only the duty of mothers but it is also fathers whoare equally entitled to help with children and provide care. Women used toleave work after the child was born but today they are provided with parentalleave, as well as fathers. All of this significantly influenced welfare provisions.In the EU, these provisions vary considerably and it is not only the legalprovisions that define these policies but it is also the cultural traditions(Taylor-Gooby, 2001, p. 12).All of this is associated with another aspect of social life, which is thatstable families which endure for the whole span of life are losing their majorityto non-standard households. These include the non-married couple who donot step into marriage and single parent households (for different reasonswhich cannot be discussed here due to the limited space). Such a changehas important relations with welfare because the new circumstances alter theway the state replies to these changes. Whether it is non-working or oneincomehouseholds, there is a serious threat here of child poverty and one ofthe key aims of the EU is extermination of child poverty (EuropeanCommission, 2000). Child poverty can alter the position of the child and

Branko Bošković:European Social Model in the 21st Century 89significantly contribute to its disability to later provide the society to its fullcapacity.Also, young cohorts often do not have the smooth transition from theschool or faculty to work, this being the problem especially in SouthernEurope (Esping-Andersen, 2000). It is young families as well who do nothave stable jobs that can fall into the trap of poverty and find themselvessocially excluded. Battling social exclusion is another of the EU aims(European Commission, 2000) and it is a concept that is specifically related tothe new social environment, especially because it depicts the wider socialenvironment of the person. “Social exclusion is … defined as the state inwhich certain poor people feel obliged to live outside accepted social norms inorder to cope with poverty and to survive financially” (Walker, 2005, p. 79).So it reflects not only financial instability but also exclusion from the societyand an inability to get involved in a normal life, which often implies finding aproper job. Rumford (2002), basing his arguments on Procacci’s theorycriticizes the concept of social exclusion as too individualistic. But this is notthe full picture of the problem because this is exactly the social affair, oftenindependent of the individual.The new social model for Europe must embrace all the mechanisms atits disposal to combat social exclusion by policies which entail effectivemeasures. One of the key areas is certainly employment. Reducingunemployment is as well one of the aims of the EU for the forthcoming period.Efficiency often entails flexibility but European welfare regimes have alwaysbeen recognizable by their protective social policy, often repressing efficiency.The new social model must be especially friendly towards femaleemployment. It has already been emphasized how the family has changedand it is this issue that needs reconsideration. If we are to create a society ofequality and equal opportunities, the state must care for female workers andtheir domestic duties and therefore set conditions which are favourable towomen. Such policies will contribute to future generations because a “revisedsocial model requires a future-oriented perspective, and must therefore focuson those who will become tomorrow’s adults” (Esping-Andersen, 2000, p. 31).Workers have traditionally been empowered in Europe, especially incontrast to the USA for example, however, it is the state that must protectworkers and provide them with incentives for safer work places. This doesnot imply creating state funded jobs but creating a social environment whereopportunities for proper jobs are adequate. Adaptability to new circumstancesrequires flexibility and the social model must be created in a way that citizens

Constructing Europe as a Global Power:90 From Market to Identity?can receive necessary education. Changing jobs most often means staying inthe same field, but new knowledge and education is also necessary.Therefore, the state must fill the gap in this process and help its citizens whenthey are in transition within the labor market.A knowledge-based economy is one of the EU goals and theCommission’s Social Policy Agenda sets the development of humanresources, upgrading skills, life-long learning, and access to quality educationto be “of utmost importance in providing people with real opportunities toprepare for rapidly changing working conditions and the requirements of theknowledge-based economy” (European Commission, 2000, p. 31). However,this might be a dangerous step because there will remain a significant numberof people who will not be able to follow technological pace and stay in touchwith the ones who are qualified. This will especially refer to the elderly andpensioners, which is another field where the new social model must beadapted. Longer living today changed the concept or retirement and theespecially the retirement age which will probably move even higher to above70 in coming decades. Consequently, younger generations will find it moredifficult to have a full career which would begin just after finishing their formaleducation. Current high pensions and generally the well being of pensionersin Western Europe is a case because of the so called ‘golden years’ in theprevious century, but this does not imply that the same will remain. All of thiscan have a negative impact on youth because their work positions will bedifferent compared to a couple of decades ago, which can lead to differentliving conditions after retirement, often being negative. However, youngergenerations will probably adapt to new circumstances due to three factors:due to higher education and skills they will be more adaptive and able toretrain, they will be more healthy and will live longer and women’semployment will be more frequent and stable which will result in steadyearnings and higher earnings, inevitably leading to advantages afterretirement (Esping-Andersen, 2000).There are now different approaches to retirement varying from state tostate. Generally, there is a tendency of moving the retirement age to 65 andeven more, but it can even be argued that the retirement age limit could beremoved. One can support such a policy due to the already mentioned facts,the key being the one that citizens are often healthier than before and canwork longer in their life. Beside, welfare states are becoming too expensiveand any move towards lowering the burden of the state expenditures iswelcome. Also, many workers find it difficult to give up work simply because

Branko Bošković:European Social Model in the 21st Century 91they are used to a specific pace of life and often very much dedicated to theirjob. There can even be a combination of allowing retired persons to work parttime or even full time but in a way that the state subsidizes the earnings of theworker. The problem with this solution is that it can become too expensivenot only for the employer but for the state as well, no matter how acceptableand favourable it is for the worker.Lifestyle Change and the Social Model for the FutureAll of the previously mentioned changes, both in the functioning of thewelfare state and the life of the citizenry, tend to create a redefined socialmodel in Europe. The crucial alteration in the process is lifestyle change.People tend to have different lives in different social environments and thestate institutions, especially the welfare institutions, must change and adapt tothe new circumstances. Conditions for wellbeing are not any longer social butare much more individualized and the state must provide its citizens withbasic skills so they can live on their own. The social model must be adaptedto the cultural and historical background but it must also look into the futureand especially with the needs of children as future bearers of the welfare ofsociety. The key aspects of the new social model for Europe have beendescribed, and furthermore there are expectations concerning the future.Firstly, the state will just be less able to finance needs of its citizensbecause it is becoming unsustainable and often does not mean better livingconditions. Social exclusion often means withdrawal from the social worldand even if the social care is provided from the state it is not certain that theperson will have better living conditions. Therefore, the state will probably lookto provide basic needs, most often concerning education and necessarytraining but it will not be able to ensure social assistance for longer periods.Secondly, there will have to be greater coordination among the states,especially the EU members, so the control of the system is with theinstitutions of the members and the EU as well. Globalization tends todisplace control outside the borders and state institutions so it will be crucialfor the EU institutions to provide a model for acting before the crisis actuallyhappens. Examples of Greece and Ireland and probably some more states,Portugal being the major candidate, show that there have to be greatercontrols which will be pursued in advance because the remedy can never bea sure solution for the problem.

Constructing Europe as a Global Power:92 From Market to Identity?Finally, European states must turn to creating jobs and not only jobs thatwill provide workers with income but rather the workplace which will safeguardworker’s wellbeing and especially his/her family. Creating stable jobs forwomen especially will mean different relations towards children and whenapplicable, towards elderly who are in care. This will inevitably result ingreater social capital of citizens which implies active citizenship able to copewith changing life conditions. Field (2003) discusses different opinions andimplications of the social capital and its necessity for the citizens today addingthat social capital often contributes to greater performance of citizens in boththeir private and working life.All of this leads to the conclusion that the new European social model willhave to be reconsidered, not because it is not good or unacceptable, butrather because it has to be adjusted to new conditions. The EU has alwaysput the care for its citizens, especially the neediest, as one of its crucial aimsand it will have to remain the same. However, the competition is becominggreater than ever from different states in the world and many adaptations willhave to be made, probably many of these unpopular. It is the price that willhave to be accepted if the EU wants to stay competitive and an active actor.Careful considerations will have to be made but the European citizenry willhave the final word.ConclusionIt is inevitable that the European social model will, as many of thepolitical projects of European continent, be unique and even impossible to beapplied anywhere else. It is the specificities of the European political andsocial context in addition to stronger than ever input of the EU institutions andgovernance that actually enable such transitions. Despite the differences inthe member states, willingness and ability of European states to provide themeans of living and welfare for its citizens have been emphasized as cruciallyimportant. Consequently, diversity does not inevitably entail impossibility ofadaptation and implementation of certain policies.It is obvious here that the new European social model will embrace all ofwhat Hay ascribed to it, which was discussed earlier. It has differentmeanings and aspects and all of these must be carefully included andimplemented if we are to have a positive outcome. This will mean sustainabledevelopment coupled with growth. In order to attain this each of the threecomponents of the new social model: the state, market and the family will

Branko Bošković:European Social Model in the 21st Century 93have to be evaluated with special attention paid to the fluctuations that resultfrom changed living conditions.A change in lifestyle has been of one of the pressing moments for thenew welfare, especially coupled with other social transitions concerningfamily, jobs, children, in general terms, the welfare of the family. The newsocial model must be based on prevention of risks and encouragement ofcitizens to be active and involved in social life. It means that not only shouldthey work but try to find a proper job which will provide them not only with theincome but will put them forward in society. Therefore, the state must fostersocial inclusion through the policies which are directed to the neediest, butonly in a way that enables them to be involved in the process. Obviously,more than this will hardly be expected due to the higher than ever costs ofwelfare. The European social model for the 21 st century must be defined in away that it fosters equality and equal treatment for its citizens so they canperform in full operation and feel safe and satisfied with their life.

Constructing Europe as a Global Power:94 From Market to Identity?ReferencesAdnett, N., & Hardy, S. (2005). The European Social Model: Modernisation orEvolution? Cheltenham: Edward Edgar.Castells, M. (2003). Global Informational Capitalism. In Held, D., & McGrew,A. (Ed.), Global Transformations Reader. (pp. 162-177). Cambridge: PolityPress.Esping-Andersen, G. (1990). The Three Worlds of Welfare Capitalism.Cambridge: Polity Press.Esping-Andersen, G. (1999). Social Foundations of Postindustrial Economies.Oxford: Oxford University Press.Esping-Andersen, G. (2000). A welfare state for the 21st century. Report tothe Portuguese presidency, March, Lisbon.Esping-Andersen, G. (2002). Why We Need a New Welfare State. Oxford:Clarendon Press.Esping-Andersen, G., & Myles, J. (2008). The Welfare State andRedistribution. Unpublished papers. Gøsta Esping-Andersen officialhomepage. Accessed March 27, 2011, http://www.esping-andersen.com/.European Commission. (1994). White Paper – European Social Policy – AWay Forward for the Union. Luxembourg: Office for Official Publications of theEuropean Commission.European Commission (2000). Social Policy Agenda, June 2000. Brussels:European Commission.European Council. (2000). Presidency Conclusions: Lisbon European Council23 and 24 March 2000. Brussels: European Council.Field, J. (2003). Social Capital. New York: Routlege.Giddens, A. (1999). Treći put: Obnova socijaldemokracije. Zagreb: Političkakultura.Giddens, A. (2003). Neoprogressivism: A New Agenda for Social Democracy.In Giddens, A. (Ed.) The Progressive manifesto. (pp. 1-35). Cambridge: PolityPress.Giddens, A. (2007). Europe in a Global Age. Cambridge: Polity Press.Hay, C., Watson, M., & Wincott, D. (1999). Globalisation, EuropeanIntegration and the Persistence of European Social Models. ESRC OneEurope or Several? Working Paper, 3/99.Held, D. (2003). Global Social Democracy. In Giddens, A. (Ed.) TheProgressive manifesto. (pp. 137-173). Cambridge: Polity Press.

Branko Bošković:European Social Model in the 21st Century 95Hendricks, J., & Powel, L. (2009). The Welfare State in Post-IndustrialSociety: The Lay of the Land. In Powel, L., & Hendricks, J. The Welfare Statein Post-Industrial Society: A Global Perspective (pp. 3-19). New York:Springer.Iversen, T. (2005). Capitalism, Democracy and Welfare. Cambridge:Cambridge University Press.Jepsen, M., & Serrano Pascual, A. (2006). The concept of the ESM andsupranational legitimacy building. In Jepsen, M., & Serrano Pascual, A. (Ed.),Unwrapping the European Social Model. (pp. 25-47). Bristol: Policy press.Rosanvallon, P. (2000). The New Social Question: Rethinking the WelfareState. Princeton: Princeton University Press.Rumford, C. (2002). The European Union: Political Sociology. Oxford:Blackwell Publishing.Schuppert, F. (2003). The Ensuring State. in Giddens, A. (Ed.) TheProgressive manifesto. (pp. 54-73). Cambridge: Polity Press.Taylor-Gooby, T. (2001). Welfare States Under Pressure. London: Sage.Walker, R. (2005). Opportunity and life chances: the dynamics of poverty,inequality and exclusion. In Giddens, A., & Diamond, P. (Ed.). The NewEgalitarianism. Cambridge: Polity Press.

Constructing Europe as a Global Power:96 From Market to Identity?The Role of the European Unionin Conflict Management/Prevention in Kosovowith a Comparative ApproachÖzgür Ünal EríşAbstractThe changing concept of security threats after the Cold War and theirlikely eruption in the neighbourhood of the European Union made theEU member states more aware of their global responsibilities.However, the difficulties that come along with the role of a global actorcould be seen in the EU position in the events unfolding in the WesternBalkans, specifically in the recent Kosovo case. Having learned fromprevious experience in Bosnia and Macedonia the way the EU dealswith this case will be a good sign of its maturing foreign and securitypolicy as well as its leadership qualities. This article looks at the EU’spotential for having global leadership with a strong foreign and securitypolicy and makes an analysis of its disadvantages and likelyimprovements.IntroductionAfter the Cold War, the concept of security threats changedsignificantly. The risk of war between states had diminished, but that ofconflict within them had increased. Specifically the ethno-political conflictsoccurring in the European Union’s (EU) new neighbourhood, the WesternBalkans, seemed to be quite dangerous for the EU both in the short and longterm as they had the potential not only to disturb the physical security of bothindividuals and the state, but they could have consequences for the socioeconomicsecurity of EU member states as well. The means of fighting thesesecurity threats changed as well; security policy was now shaped to face theproblem of instability and insecurity in neighbouring regions. This specificallymeant fighting threats not only through defence and deterrence as it was

Özgür Ünal Eríş: The Role of the European Unionin Conflict Management/Prevention in Kosovo with a Comparative Approach 97during the Cold War, but through conflict prevention, management,peacekeeping and state-building.Because of the changing concept of security threats and the fact ofbeing close neighbours of the Western Balkans which produced this threat,the EU (the EC as it was called at that time) attempted to enact a pro-activepolicy of managing the ethno-political conflicts happening in the WesternBalkans. When Yugoslavia started to disintegrate violently in the beginning ofthe 1990s, the confident statements of the EU leaders showed that they reallybelieved the EU could solve this crisis. But soon enough it was revealed thatthe EU had in fact been conceived and developed primarily as an economicunion with an impact on low security but not on high security issues, thus itcould play a limited role in this newly emerging security structure (Wolff,2007).But the EU went through a serious learning process. In the early 1990sduring the fighting in Bosnia the Balkans were considered to be outside ofEurope; therefore the aim of the EU foreign policy was to erect a firewall thatwould prevent Balkan instability and insecurity from spilling over into Europe.During the Kosovo war in 1999, this kind of perception had changed to ‘theBalkans can no longer be separated from Europe and the European Unionwould have to accept responsibility for decent governance in the region’(Pugh, 2004).Following the Kosovo war in 1999 the EU became increasinglyinfluential in the Western Balkans region. The Balkans provided both animportant trigger and many of the prototypes for European Security andDefence Policy (ESDP), thus it was in the Balkans that the first civilian andmilitary operations were launched. The 77-day long NATO air campaignagainst Yugoslavia was still underway as European leaders in Cologne onJune 4, 1999, outlined the main elements of ESDP. By the time ESDP was upand running, however, international involvement in the Balkans was already atits peak. NATO missions were deployed to Kosovo, Bosnia and Herzegovinaand the former Yugoslav Republic of Macedonia. It was therefore logical thatthe first ESDP missions followed on from existing operations.The case of Macedonia was seen as a success story for conflictprevention and multi-ethnic peace throughout the 1990s. However, this didnot last long as armed conflict began in February 2001 with the emergence ofthe National Liberation Army. The Ohrid Peace Agreement signed on August13, 2001, stipulated a number of constitutional amendments such as therecognition of Albanian as an official language, decentralization of the

Constructing Europe as a Global Power:98 From Market to Identity?government and proportional representation of Albanians in the publicadministration. The aim was that through the Ohrid Framework Agreementand the process of implementing it, the norms pertaining to peaceful conflictresolution would strengthen and may contribute to overcoming the ethnicproblems. To help implement the Ohrid Agreement the EU’S first militaryoperation, Operation Concordia, was launched on March 31, 2003, takingover from the NATO operation Allied Harmony. As the EU at the time waslooking for an opportunity to test its crisis management capacity and theMacedonian conflict provided an easy case, one may question whetherdeployment of Concordia was initiated by Macedonian request or by EUambitions to test its new capacity (Björkdahl, 2005). Launched in December2003, Operation Proxima became the second EU police mission in theWestern Balkans after the police mission in Bosnia. Being completed onDecember 14, 2005, it was also designed to help implement the OhridAgreement.On December 2, 2004, the EU took over from NATO’s SFOR operationin Bosnia and launched the largest yet ESDP operation EUFOR Althea.Operation Althea was launched for securing the conditions for theimplementation of the Dayton Peace Agreement in Bosnia. Apart from theshort-term goal of ensuring a smooth hand-over period between the twoforces, Operation Althea had two further political objectives. In the mediumterm, the operation was meant to support Bosnia’s progress towards EUintegration, initially with the aim of concluding a Stabilisation and AssociationAgreement (SAA). This in turn, was to contribute to the long-term objective ofpeace and stability in the country and its eventual accession to the EuropeanUnion (Wolff, 2007).Finally, the EU’s currently largest ESDP mission, EULEX Kosovo, waslaunched on February 16, 2008, taking over a significant part of theresponsibility of United Nations. EULEX Kosovo consisted of more than 1700European and international staff and close to 1000 local staff deployedthroughout Kosovo and is a symbol for how the EU came to have a strongpresence in the Western Balkans through the ESDP in competition withNATO (Hallergard, 2009).However, it would be too optimistic to say that the EU has become avery influential actor in this region without any deficiencies in its strategies forthe prevention and management of the conflicts. In fact, the EU still hasseveral problems which prevent it from being the most influential actor in theregion. The identification and solution of these challenges now overlap with

Özgür Ünal Eríş: The Role of the European Unionin Conflict Management/Prevention in Kosovo with a Comparative Approach 99the presence of the most important piece of unfinished business in theBalkans: the final status of Kosovo, the southern province of Serbia, whichwas under international trusteeship since NATO’s intervention in 1999 until itsunilateral declaration of independence on February 18, 2008.Below there will be a detailed explanation about the conditions inKosovo, followed by the arguments supporting Kosovo’s independence andthe EU role in it. The rest of the article will deal mainly with the weaknesses inthe EU’s Security and Defence Policy in general and specifically in the case ofKosovo making a comparison with the EU operations in Bosnia andMacedonia.Solution of the Kosovo Problem: IndependenceRoughly, 90% of Kosovo’s population of some two million is ethnicAlbanian, and most of the rest of the population is Serbian. In Tito’sYugoslavia Kosovo’s Albanians enjoyed a significant degree of autonomy butin the late 1980s Serbia’s nationalist leader Slobodan Milosevic caused ethnicAlbanians to suffer repression and political and economic exploitation. EthnicAlbanians living in the Serbian province of Kosovo recommenced theircampaign for independence. The situation quickly degenerated into armedconflict between federal security forces and the guerrilla Kosovo LiberationArmy (KLA). Milosevic counterstruck by ordering a program of ethniccleansing of the Kosovo-Albanians and hundreds of thousands were forced toflee as refugees (Economist, April, 2006).Despite international pressure Belgrade continued its military tacticswhich included systematic expulsion of the civilian population. Thus, therewas no room for co-ordination and crisis management anymore and militaryintervention became necessary. On June 10, 1999, the UN Security Council(UNSC) accepted Resolution 1244 which envisioned the presence of aninternational peacekeeping troop presence as a guarantee of ‘substantialautonomy’ for Kosovo, the Kosovo Force (KFOR), without a deadline. Thesame day, NATO stopped its air strikes. On the basis of the UNSC 1244,United Nations Mission in Kosovo (UNMIK) was established in Kosovo as aninternational interim administration. The administration of the region wasunder the leadership of the United Nations (UN) and only the part of theprocess named Economic Construction, Recovery and Development wasgiven as a responsibility to the EU.

Constructing Europe as a Global Power:100 From Market to Identity?Anxious to scale back its obligations in the region and confronted withgrowing impatience among Kosovo’s population, the international communitygeared up for negotiations over Kosovo’s political future, as provided forunder UN Security Council (UNSC) Resolution 1244. Wanting to end thisprecarious status, the UN appointed former Finnish President Martti Ahtisaarito draw up a plan. Ahtisaari’s plan was drafted in February 2007, with thename Comprehensive Proposal for the Kosovo Status Settlement (CSP), andput forward a conditional internationally-supervised independence for Kosovo.The Serbs rejected this plan and Russia threatened to veto it. The Westernmembers of the UN Security Council then called for four more months of talksstarting in August between Kosovo’s Albanians and Serbia with the deadlineof December 10, 2007. However, while the talks made possible extensivediscussions between Belgrade and Pristina on status options, they revealedno prospect for mutual agreement.Following this, Kosovo’s parliament voted to adopt a declaration of theprovince’s independence from Serbia on February 18, 2008. Independencewas supposed to be internationally supervised, based on the detailed CSPdrafted by Martti Ahtisaari. The government in Pristine pledged to implementit, and the 70 countries that have recognised the new state have done solargely based on that commitment.A 120 day transition period was defined in the Ahtisaari plan, duringwhich it was mainly envisaged that the Kosovo government would prepare thelegal framework needed to govern, UNMIK would transfer all legislative andexecutive authority to it and the European Union Rule of Law Mission(EULEX) would deploy. EULEX Kosovo agreed by the EU General Affairs andExternal Relations Council through a Joint Action would be co-ordinated by anInternational Civilian Office (ICO) jointly led by the EU and the internationalcommunity, which is represented in this case by those countries whichendorsed the Ahtisaari Plan (ICG Europe Report No. 196).The constitution that was based on CSP and adopted by the assemblyof Kosovo on April 9 entered into force on June 15, 2008. The constitutionenvisaged a significant role of the European Union in Kosovo and providedthe ICO as an ultimate supervisory authority as set out in the CSP. Accordingto the CSP, at the end of the transition period UNMIK’s mandate would expireand all legislative and executive authority vested in UNMIK would betransferred to the governing authorities of Kosovo; the ICO, EU and NATO.The European Union Mission reached its initial operational capability in earlyDecember 2008, and its full operational capability finally on April 5, 2009.

Özgür Ünal Eríş: The Role of the European Unionin Conflict Management/Prevention in Kosovo with a Comparative Approach 101The gap between the time of the constitution and start of the mission’soperational capability occurred because, soon after the independencedeclaration, Russia insisted that any change of UNMIK operations required aSecurity Council decision. Thus, the UN suspended the handover ofresponsibilities and assets it had agreed to with the EU. The northern KosovoSerbs who live in the enclaves south of Ibar, under the instruction ofBelgrade, also refused to co-operate with EULEX and ICO, which they saw asagents for Kosovo independence, while grudgingly accepting UNMIK andKFOR.Another reason for the delay was that the international community hadinsufficient political will and failed to co-ordinate fully. In order to diminish thisbreakdown in international deployment and supervision, UN SecretaryGeneral Ban Ki-Moon circulated on June 12, 2008, a plan for UNMIKreconfiguration. The aim of Ban Ki-Moon’s reconfiguration was to finallyenable the European Union to enhance its operational role in the area of therule of law, make the EU gradually assume responsibilities in internationalpolicing, justice and customs throughout Kosovo, while the UN’s operationalrole was to shrink towards that of rapporteur, liaison and facilitator ofdialogue. There was no timeframe for reconfiguration, though 120 days wasinformally understood for handover to EULEX. Finally on April 6, 2009, theEULEX achieved its operational capability with the central aim to assist andsupport the Kosovo authorities in the rule of law area, specifically in thepolice, judiciary, customs areas, the protection of minorities, and the fightagainst corruption and organized crime. It was a technical mission which willmonitor, mentor and advise whilst retaining powers to investigate andprosecute serious and sensitive crimes; thus having full internationallyrecognized authority. With a mandate effective until June 14, 2012, theEULEX is today the largest civilian mission ever launched under the ESDP incomparison with Opertaion Concordia in Macedonia and Operation Althea inBosnia.Kosovo as an ‘Independent’ CountryThe US and its European allies have always defended the concept ofmulti-ethnic societies in the Balkans. The military interventions in Bosnia,Macedonia and Kosovo, the ongoing peacekeeping missions there, thehundreds of millions of dollars given annually in economic aid; thesesacrifices have been made to preserve the individual states that once

Constructing Europe as a Global Power:102 From Market to Identity?constituted a federal Yugoslavia and to prevent bloodshed among thenumerous ethnic groups that populate them. But in the case of Kosovo oneshould be realistic and let pragmatism triumph over principle: Kosovo shouldbe independent from Serbia.There are many arguments in support of this fact:1. Independence for Kosovo is the only option based on the fact thatthere is a lack of realistic alternatives and the relations between the Albanianmajority and the Serbian minority are extremely harsh. Throughout the areawalls of hostility divided ordinary Albanians and Serbs; the atrocities andinjustices of the past combined with the empowerment of the present made itall but impossible to envisage the continuation of Serbian sovereignty. Theformal separation of Kosovo from Serbia, instead, offered the best hope forrebuilding moderation and tolerance among ethnic Albanians, making it farmore likely that they will eventually live in peace with Serbs, Roma, and theother minority groups among them.However, though this argument has found many supporters so far it isnot a secret that Kosovo is still an emotional issue for the Serbian public.Based on their argument that ‘UNSC 1244 blocks independence the Kosovoproblem is actually Yugoslavia’s internal affair’ and ever since the declarationof independence it has evolved into a conspiratorial myth amongst Serbs oftheir mistreatment by the international powers, victimhood andblamelessness. One of the results of this widespread bitterness over theKosovo issue is the increasingly negative attitude towards the EU, which isseen as part of the ‘international community’ which facilitated Kosovoindependence. In that sense, it may be difficult to say that formal separationof Kosovo from Serbia is the best possibility for long-term peace.2. Kosovo will need serious financial assistance for the foreseeablefuture. However, for that to take place Kosovo needs a clear legal status andreduction of perceived risks in order to attract investors, and the ability of thegovernment to borrow for capital projects. However, one should be aware ofthe facts that one of the biggest economic powers, Russia, is totally againstKosovo independence and several of the EU members such as Greece,Spain, Cyprus, Slovakia, Bulgaria and Romania do not recognise this entityeither. Thus, even if Kosovo has declared itself an independent state it maynot be as easy as it seems to formulate sound economic relations with theoutside world.There are also several arguments against Kosovo independence. Thedetails of these arguments are listed below:

Özgür Ünal Eríş: The Role of the European Unionin Conflict Management/Prevention in Kosovo with a Comparative Approach 1031. The plan to grant Kosovo a sort of ‘supervised independence’ is hardto reconcile with universal principles: The big dilemma underpinning Kosovo’sindependence bid was whether or not to give precedence to the right to selfdetermination.The main opposition to this was based on the fact that thedeclaration of independence of 17 February, 2008, was a unilateral attempt tobring to an end the international presence established by the Security Councilitself, a result which it is said could only be effectuated by a decision of theSecurity Council itself. It has also been argued that a permanent settlementfor Kosovo could only be achieved either by agreement of all parties involved(notably including the consent of the Republic of Serbia) or by a specificSecurity Council resolution endorsing a specific final status for Kosovo.In order to clarify the situation on October 8, 2008, the UN GeneralAssembly passed a resolution requesting the advisory opinion of theInternational Court of Justice (ICJ) on the legality of the declaration ofindependence of Kosovo. The advisory opinion of the ICJ on theindependence declaration of Kosovo put an end to this debate by saying:…Security Council Resolution 1244 (1999) did not prevent or excludethe possibility of Kosovo’s independence. It does not create obligations underinternational law prohibiting the issuance of a declaration of independence ormaking it invalid. Actually the references, in the annexes of Security Councilresolution 1244 (1999), to the Rambouillet accords and thus indirectly to the‘will of people’ (see chapter 8.3 of the Rambouillet accords) of Kosovo,support the view that Security Council resolution 1244 (1999) not only did notoppose the declaration of independence, but indeed contemplated it. ….theCourt actually observes that Security Council resolution 1244 (1999) wasessentially designed to create an interim regime for Kosovo, with a view tochannelling the long-term political process to establish its final status. ThusResolution 1244 (1999) does not preclude the issuance of the declaration ofindependence of 17 February, 2008, because the instruments operate on adifferent level: unlike resolution 1244 (1999), the declaration of independenceis an attempt to determine finally the status of Kosovo.2. Albanians in Macedonia will want to join their brothers in Kosovo andso will Serbs in Bosnia. Macedonia strongly supports independence and wasone of the first countries to recognize it, so it is unlikely that Albanians inMacedonia will join Kosovo. In the case of Republika Srpska of Bosnia thedifference between Kosovo and Bosnia being that Bosnia was createdthrough ethnic cleansing and genocide while Kosovo underwent ethniccleansing and an attempted genocide of its people by the country that now

Constructing Europe as a Global Power:104 From Market to Identity?wants to rule them thus making it unlikely for the Serbs in Bosnia to want tobe integrated into Kosovo.3. Acknowledgment of Kosovo’s right to independence may open aPandora’s box of secessionist claims within the EU and fifty other regions inAfrica and the Caucasus. This is an argument mostly supported by theRussian government. They see Kosovo as a potential precedent-setting casethat could be applied to other secessionist entities in the post-Soviet spacesuch as Transnistria, Abkhazia, South Ossetia and Nagorno Karabakh(Socor, 2007). This view is also shared by some EU member states withminorities who have the same concern about the potential violation of theestablished international norm of safeguarding state borders; which also leadto their hesitation in supporting Kosovo’s independence. Though an importantcomponent of Kosovo independence being the will of people is supported bymost of the great powers, no other region will be able to follow Kosovo if aconsiderable mass of countries are not willing to recognise it.In the following section, the EU role for Kosovo’s transition toindependence and its conflict management strategies will be analysed indetail.The EU ‘Support’ for Kosovo’s IndependenceJust as the fact of new security threats in its neighbouring regions hadprompted the EU to be more active in crisis management strategies for itsown security and stability during the 1990s and right after the Kosovo crisis in1999, the same logic still applies for the EU to be a leading actor to coordinateKosovo’s transition to independence.Indeed, the EU initially demonstrated remarkable resolve and unity,when in December 2007, it explicitly pledged to ‘play a leading role instrengthening stability in the region and in implementing a settlement definingKosovo’s status and assist Kosovo in the path towards sustainable stability’.In addition to this, despite some member states’ hesitancy to recogniseKosovo, it committed to helping the new state and authorized EULEX. It wassuccessful as major violence has been avoided, 1.2 billion euros in aidpledged and the first tentative measures to produce effective statehood taken.All member states showed support by attending and not opposing the largeamount of money that was pledged to Kosovo from the EU budget.Member states clearly underestimated the challenges. During thecrucial transition period from mid-February to mid June 2008, the EU failed tomake any significant statements on Kosovo and EU deployments and looked

Özgür Ünal Eríş: The Role of the European Unionin Conflict Management/Prevention in Kosovo with a Comparative Approach 105to the UN to take the lead. It supported the plan to deploy the ICO andEULEX, but did little to push them through when they began to encounterobstacles in March, including the suspension of UN transfer of assets andresponsibilities against Serb resistance to deployment in Serb-majority areas.The EU only reasserted its commitment to play a leading role in June, whenwelcoming the UN Secretary-General’s intention to reconfigure theinternational civil presence.The handover of governing authority from the UN to the Kosovo state,and to a lesser extent other international forces was supposed to betransition’s key accomplishment. Since that transition took place later thanplanned, this cast doubt on the political will and unity of the EU andsignificant financial commitments to procure substitutes, if necessary, forassets not handed over by the UN. EU officials blamed others, especially theUN for their mission’s plight and used the alleged lack of suitable alternativebuildings in Pristine as an explanation for EULEX passivity. However, inreality the difficulties the EU was having in showing its leadership in thesolution of the specific Kosovo case is a proof that its security and defencepolicy is still far from being complete and needs improvement (Balfour, 2007).Below there are some general challenges against the EU’s ESDP which alsoappear in the specific Kosovo, Macedonia and Bosnia cases together withtheir possible solutions:Analysis of the EU’s Conflict Management Role1. For the post-conflict societies in the Balkans region one of the majorincentives under conflict prevention may be the perspective of EUmembership. Over the years the member states of the EU have come toshare a number of norms relating to non-violent and compromise-orientedsolutions to conflicts, democratic decision making processes and respect forhuman rights. A social constructivist perspective to develop the idea of theEuropean Union as a ‘norm-maker’ can also lead to the exploration of thenormative influence of the EU in its neighbourhood and how the EU canexternalize these norms guiding the interaction among its member states andin its relations with other states. Inevitably this process will lead to countriesincorporating liberal democratic practice, peaceful and compromise-orientedconflict resolution as well as practices of the rule of law in many states, andthus creating the potential for conflict prevention (Björkdahl, 2005).

Constructing Europe as a Global Power:106 From Market to Identity?The EU is in a strong position to exert a normative influence by way ofits vast number of approaches, through its massive financial support and itscapability to combine attractive positive incentives with harsh negativesanctions. A number of EU actors-the European Commission, the HighRepresentative for the CFSP, the EU Special Representative (EUSR), theEuropean Agency for Reconstruction (EAR), the EU presidency, the EUmilitary crisis management missions, the EU police missions, as well as theEuropean Union Monitoring Mission (EUMM) have been or are present inthese countries. However, the prospect of eventual EU membership as anincentive for peace, legality and democracy is future-oriented and includesvery long term plans. It is not certain how long the Balkan economies willhave to wait, wounded by war, sanctions and corruption on top of the legacyof a non-performing command economy (Smith, 2002).Initially when the promise of future membership was given by the EU’sleaders at the Thessaloniki Summit in 2003, many had hoped that thetransformative power which the Union exercised so effectively in its accessionprocess with the countries of Central Europe would be equally successful inthe Balkans. But experience has shown that success is much more difficultthan expected; affairs in the Balkans are more complicated. Moreover in theWestern Balkans we see the elements of both the EU’s common foreign andsecurity policy and enlargement policy have been following a dual track. Onthe one hand, the EU has been pursuing a strategy based on offering theprospect of accession, using the soft tools developed in previous enlargementrounds with the aim of transforming the countries of the region into potentialEU member states. On the other hand, it has been addressing challengesspecific to the region, which differ from those in post-1989 Central Europe. Ithas done this by deploying the harder tools of military and police interventionand by building protectorates specifically in Bosnia and most recently inKosovo, revealing a security-driven logic based more on Realpolitik than onthe aim of making the Balkan countries look more like EU member states.This dual strategy is mainly because countries in the region are still strugglingwith issues such as sovereignty, territorial integrity, and internal cohesion thatare often perceived as more important than EU membership (Noutcheva,2007). Also the most important tool available to the EU, the SAAs,conditioned by the achievement of co-operation and good neighbourlyrelations with other Balkan countries foresees that Balkan countries’ prospectof membership are clearly tied to the pursuit of regional co-operation. At theEU level, this double strategy of stabilization and association has meant a set

Özgür Ünal Eríş: The Role of the European Unionin Conflict Management/Prevention in Kosovo with a Comparative Approach 107of priorities and a jungle of conditionality that does not fair well for the clarityand determinacy of EU conditionality.Specifically for Kosovo the disadvantages related with potential EUmembership becomes a significant problem. In April 2005 the EuropeanCommission adopted the Communication on Kosovo under the title of ‘AEuropean Future for Kosovo’ which reinforces the Commission’s commitmentto Kosovo. Furthermore in January 2006, the Council adopted a EuropeanPartnership for Serbia and Montenegro including Kosovo as defined byUNSCR 1244. The European Partnership is a contractual relation with theWestern Balkan countries which, by identifying short and medium termpriorities the countries need to address, help the Western Balkan countries fortheir reforms and preparations for future membership. The EuropeanPartnership formulates actions to help implementation of the Standards forKosovo and the Stabilisation and Association Process Tracking Mechanismwas turned into a specific forum to discuss Kosovo’s progress inimplementing the European Partnership specifically in the areas of the rule oflaw, the fight against corruption, good governance and public administrationreform.However, given the serious problems on Kosovo’s status and future,the EU member states converge on the Kosovo question as securing stabilityon the European continent through embedding a final settlement of theconflict into the broader EU framework; a utility rationale that cannot beseriously challenged by the arguments of appropriateness or moraljustification which the EU had used for the Central European states. Thus,the challenge for the EU in the next half decade which did not exist in itsapproach to the Central European states remains; to find a way ofsimultaneously reducing unrealistic expectations and meeting them sooner.On the other hand, a comparative study on the influence of EUmembership conditionality shows very striking cases in Macedonia andBosnia. For example, in Macedonia the issue of EU membershipconditionality has caused co-operation and compromise between differentethnic groups on matters of domestic reform, whereas in Bosnia it hascoincided with a stark deterioration in ethnic relations and a virtual stagnationof reforms necessary to prepare the country for joining the EU. In other words,politicians in Macedonia adopted the policy and behavioural changes requiredby the EU because they perceived the benefits of doing so to outweigh thebenefits of maintaining the status quo. That Macedonia’s politicians wouldconsider EU membership incentives beneficial stems from their perception

Constructing Europe as a Global Power:108 From Market to Identity?that accession enhances core collective goals relating to autonomy, in thecase of Albanians, and security, in the case of Macedonians. Whereas inBosnia, EU membership incentives are seen to negate core ethnic goals byimpeding the realization of state unity, in the case of Bosnians and enhancedcollective autonomy in the case of Croats and Serbs. Moreover, in the case ofBosnia there have actually been suspicions regarding the willingness of theEU to incorporate a state with a large Muslim population in addition to theuneasy relationship it has between Europe and part of the Bosnianpopulation, in particular the Bosnian Muslims, owing to the absence of therole of the European countries during the war (Juncos, 2005).The observed malleability of Macedonian beliefs about how to realizeethnic interest as a result of EU conditionality next to the rigidity of Bosnianones is explained in terms of several factors: the alternative direction ofproposed power shifts in each country, the alternative frames through whichreforms were presented in each country’s political debates, the lock-in effectsproduced through the incumbency of a reform-oriented party in Macedonia,and the alternative modes of influence exercised by external agents in eachcontext (Vasilev, 2011).However, this does not mean that Macedonian society is incorporatingthe norms of the EU fully as there are several challenges to the liberaldemocratic norm. One is the patriarchal norms of Albanian society and theclose family ties. There is a widespread tendency, mainly among ethnicAlbanians, towards family voting, which restrains women’s right of expressionand partaking in political life. Corruption is an enormous impediment to theinstitutionalization of the norms pertaining to liberal democracy, the rule of lawand good governance as well as to the practice of democracy (Björkdahl,2005).2. In the Balkans, specifically in Bosnia and Kosovo, there areproblems of fragile societies being flooded by internationals, bothnongovernmental and intergovernmental organizations creating the risk ofestablishing a culture of dependency in a war-torn society. Getting that deeplyengaged inevitably leads to the criticism that peace building becomes not onlystate-building but also social engineering and sometimes an attempt to build aculture of peace from the outside (Smith, 2002). In addition to this, the EU isusing too many Westernized standards, specifically in terms of liberal marketeconomy, on countries that are actually significantly different. For example inthe economic sphere, these protectorates made macroeconomic stability a

Özgür Ünal Eríş: The Role of the European Unionin Conflict Management/Prevention in Kosovo with a Comparative Approach 109priority. International financial institutions were involved in shaping the postconflictpeace processes in each territory and delegated themselves a freehand to foster free trade and a market economy. However, in the peacebuilding and post-conflict transformation processes, the internationalinstitutions should be prepared to evaluate the legacies of the war economies,let alone debate the most appropriate economic systems for post-warconstruction.In the Balkans region even when international forces took upresidence, war entrepreneurs adapted well to the post-conflict period andinternational intervention. They perpetuated trafficking in weapons, goods andpeople in order to expand the shadow spaces still available. They wereactually inadvertently assisted in this project by the priorities of peace buildingand post-conflict protectorates as they presented opportunities for the winnersto reap further riches. So the adverse impact of the neo-liberal agenda(monetarism, privatization, deregulation and state withdrawal from theeconomy) in these war-torn societies has actually retarded peace building anddevelopment and led to flourishing of organized crime (Pugh, 2004). Thecase of Kosovo should be taken very seriously in this context because at themoment it is the poorest country in the region and specifically with respect touncertainty over its future status is a serious impediment to economicdevelopment. It has gender inequalities, ethnic hatred, nationalism, humanrights violations and criminality. Specifically Albanian criminal networks arevery influential, conducting illicit cross-border activities, especially trafficking indrugs, weapons and human beings.This condition can also be seen in the case of Macedonia and Bosnia.Normally in Macedonia the EU’s preventive engagement was found to besuccessful as ‘there was a coherent political-military approach, adequateresources to support preventive engagement and a plan for the restoration ofthe host country’s authority’ (Gounev, 2003, p.234). However the EU’s conflictprevention strategies to build durable peace did little to address organizedcrime, continued ethnic tension, sporadic rebel violence, and rebel attempts toassert control over certain parts of the country. Some analysts have arguedthat the conflict in Macedonia is actually a criminalized spill-over of the war inKosovo, that it was inspired more by Albanian criminal networks.The shadow economy in Bosnia is also identified as criminal as well;meaning avoidance of audited revenue payments otherwise available for localauthority and state distribution. In Bosnia major public industries, such ashydroelectricity, forestry, and metallurgy, fell into private hands. They were

Constructing Europe as a Global Power:110 From Market to Identity?commandeered and used to supply funds for the families of workers andcombatants. Other kinds of shadow activity included diverting and even taxingthe humanitarian aid that sustained an estimated 85% of the population, fuelsmuggling, customs duty avoidance and money laundering along the longborder with Croatia in the south. A new institution ‘mafia welfare’ trappedcommunities in a reciprocal relationship of intimidation and subsistence(Pugh, 2004).Frances Stewart (2001) argues that ‘individuals make rational,economic choices. The private calculus of costs and benefits depends on thegains from avoiding conflict in terms of potential economic rewards and stateprovidedservices in a peaceful environment. If the gains are low, thecalculation is more likely to come out in favour of conflict’. Unfortunately in thepresent environments specifically in Kosovo and Bosnia if more money andstability is to be gained from inciting ethnic violence, then criminals will seekto preserve or expand their interests by inciting ethnic conflict. The profitsfrom organized crime are usually so large that it is unreasonable to think thatregular jobs will be a likely alternative to organized criminal activities (Stewart,2001).The EU attempted to help this specific problem in the Balkans regionby becoming the single largest donor providing assistance. The maininstrument of its donor assistance was Community Assistance forReconstruction, Development and Stabilisation (CARDS) which since 1999totalled over € 1.1 billion. The European Agency of Reconstruction (EAR)contributed to managing the funds provided through the CARDS program.The initial aim was the reconstruction of conflict-affected areas and support toconfidence building measures to bolster the implementation of theagreements established with these countries and to ensure theinstitutionalization of its core norms. But critics have argued that the linkbetween development and conflict prevention is missing in these programs.Heather Grabbe and Kalypso Nicolaiadis (2000) suggest that programs likeCARDS were not ‘designed to achieve macroeconomic stabilization ordevelopment goals, but rather a set of advanced economic and structuralreforms aimed at encouraging convergence towards key economic andsocial-political characteristics of the EU, and compatibility with its legal base’.In addition based on its awareness of the seriousness of organized crime inKosovo, Macedonia and Bosnia one would have expected the EU to attemptto design CARDS in a way that emphasized development initiatives that wereaimed at reducing the social, political and economic inequalities and

Özgür Ünal Eríş: The Role of the European Unionin Conflict Management/Prevention in Kosovo with a Comparative Approach 111sustained organized crime. But this was not the case. CARDS did notenvision development programs for regions with high levels of inter-ethnicinequalities. It did not aim at creating employment opportunities formunicipalities with high levels of unemployed minorities. There were nospecific programs aimed at measuring the police’s ability neither to controlremote Albanian mafia hotbeds nor to tackle organized crime networks.Instead its objectives focused only on general police training or improvingpolice human rights records (Gounev, 2003).From 2007, a new instrument, IPA (Instrument for Pre-AccessionAssistance) has replaced all previously existing pre-accession instruments,including CARDS. IPA provides a general framework for financial support(11,5 billion euros between 2007-2013) for candidates and potential candidatecountries. It has created an overall structure for pre-accession assistance,and found a form of differentiation based on the individual capacities of thecountries concerned. A thorough and critical evaluation of IPA focuses on thefollowing problems. First, differentiation is a major obstacle against the rapidprogress of the potential candidates: due to the differentiation betweencandidates and potential candidates, the least developed countries have nodirect access to assistance in the most important fields of development. Dueto differences in management, there is no effective incentive for improving thefunctioning of the institutions of potential candidates. In addition, the amountsforeseen are not in line with the development needs of these countries(Szemler, 2008: 20-21).The current financial assistance of the EU to the mentioned countries isthe Pre-accession Assistance (IPA) within the Stabilization and AssociationProcess for the years between 2007-2013. The new IPA replaced all so-farexisting instruments, thus creating a single framework for assistance. Itsoverall objective is approximation to the European Union, with membership asa potential goal. Thus IPA beneficiary countries are divided into twocategories as either candidate countries (Macedonia belongs to this group) orpotential candidate countries (Bosnia belongs to this group). IPA focuses oninstitution building, regional and cross-border co-operation, regionaldevelopment, human resources development and rural development.Economic situations are not the only place where there are problems;there are problems in political conditions of these states as well. Creating astable, liberal democracy where hitherto there was large-scale violence andmonolithic Communist institutions is no easy feat, and the implementation ofinternational strategies is slow and stymied by various factors:

Constructing Europe as a Global Power:112 From Market to Identity?Firstly, the structure of civil society is problematic. In a desire to jumpstartthe reconstruction process and get democracy under way, theinternational community has often made decisions in haste, pushing forwardwith initiatives even if these lacked domestic support or failed to produceintended outcomes. Despite good intentions, such extensive but unfocusedinvolvement in the country’s civil society has created perverse incentives forinternational and local organizations alike (McMahon, 2004).The political parties also usually shared little more than a commoninterest in maintaining existing power structures and sustaining ethnicdivisions. The power of these parties has been sustained to some degree bythe international community’s willingness to continue working with theseindividuals, on the mistaken assumption that elected nationalist elites are theexclusive conducts between the population and the international community.The unintended result of the EU’s rushed, apolitical approach to politicaldevelopment was that moderate politicians were not given an opportunity todevelop a constituency and nationalist politicians gained even more controlover scarce jobs and housing.Instead of recognizing the consequences of such contradictory policies,the international community has seemingly let the task of challengingnationalists and transforming society in the hands of groups with fewerresources; NGOs created to foster democracy from below. Eager for funding,local NGOs modelled themselves on groups in the West and as a result,some NGOs lack a domestic following and do not genuinely represent theinterest of the societies in which they are established.3. In fact, military influence is very limited as the EU has shown itspreference for the promotion of long term structural approaches to conflictprevention, and has emphasized the importance of post-conflictreconstruction, undertaking economic, political and social building in theaffected areas. However this does not mean that the EU has not attempted toimprove its military structure. Nevertheless, even as Brussels has worked tobuild a military capacity, many remain sceptical of its value. The process ofthe CFSP/ESDP remains essentially intergovernmental, the instrumentsavailable to support collective EU action are fragile and not guaranteed andthe lack of any well-defined European interest as opposed to convergentnational interests can be seen as a major barrier to effective policy. Even ifthere are attempts to establish an explicit statement of EU interests applyingto CFSP/ESDP, the national preferences of member states will remain a

Özgür Ünal Eríş: The Role of the European Unionin Conflict Management/Prevention in Kosovo with a Comparative Approach 113crucial part of the equation when it comes to deciding positions and/or actionsat the European level. This is also a problem for enforcement of the EU policeforces on the ground. In the absence of a common EU-wide view on policinginstitutions and conduct, the ESDP police missions are faced with the spectreof implementing incoherent reforms which leads to long delays in working outa programmatic approach to mandate implementation (Smith, 2003).Specifically regarding the future status of Kosovo and whether it shouldbe taking the lead in supporting its independence, the EU is very muchdivided. Its member states have come to recognize that above all-for the sakeof the EU’s own future as a major political player on the global stage as wellas Kosovo’s good-they need to hold together and take responsibility for thecrisis. However while they are increasingly united and committed to thedeployment of EU missions, they have made much less progress in deciding,as they quickly must, what they want regarding Kosovo’s status and its pathto EU integration.In the case of Bosnia the most noticeable change was the sense ofsecurity that most Bosnians feel and that foreigners require for continuedinvolvement. Yet on closer inspection, the shortcomings of the militarysolution become apparent, especially when it comes to refugee returns andthe arrest of war criminals. Refugees were reluctant to return because thehouse they left no longer exists or because of housing shortages,unemployment and the presence of enemy nationalists in positions of power.The solution was ultimately the introduction of programs to allow individuals tosell their pre-war homes easily and stay put indefinitely, instead of forcingpeople to return. The military mission’s record is also mixed because of itsfailure to arrest more war criminals. In and of themselves the arrests areimportant but the apprehension of war criminals also affects refugee returns,economic development and respect for law and order.As a solution to this problem the EU needs to devise solutions that canensure that the ESDP has the in-built capacity to respond to a crisis not bylengthy deliberation, negotiation and preparation but by quick action on theground (Merlingen & Ostrauskaite, 2005). Most importantly it should find away to reach a more unified foreign policy.

Constructing Europe as a Global Power:114 From Market to Identity?ConclusionAfter the Cold War, concerns regarding security in the Europeansecurity landscape were not related to potential attacks on EU member statesbut to insecurity and instability in the neighbouring regions. The problems thatlie behind regional insecurity were in large part transitional problems ofsocieties attempting to move from command to free market economies andfrom single party governments to democracies; most of them in the context ofdisintegrating federal state structures as in the case of the Western Balkans.These economic and political deficiencies produced insecurity with directconsequences on the neighbouring EU members. In response, the EU’sstrategic security philosophy emphasized long-term responses to theseproblems with the recipe of efficient peace building, peacekeeping andenforcement strategies.These strategies did not become successful right away. In thebeginning the EU mishandled its engagement in the Balkans. It endorsed anill-formed peace process that created peace envoys who acted without thetools needed to compel peace, were forced to deal with too many parties, andwere undercut at each stage as countries outside the region intervened toprotect various warring parties. Only during the Kosovo crisis in 1999 whenEurope transformed itself into a power resolute on assuming more politicaland military responsibility along with the transformed NATO geared to thenew strategic environment, the EU could show some influence in the region.Taking into account the complexity of the situation the EU had and hasto deal with in the Western Balkans and the intensity of the crises it had tomanage, in post-Dayton Bosnia and in Macedonia, the Union hasdemonstrated that it has developed an institutional framework and a set ofpolicies that enable it to provide adequate funds and personnel, and to cooperateand co-ordinate activities with third parties in ways that enhance itscapabilities and maximize the chances of successful crisis management.However, as could be seen in the text this is not without problems.Specifically the solution of the Kosovo problem should be seen as showingthe world the benefits of resolving ethnic and religious conflicts in a peacefulway without resorting to violence. This mainly implies that there has to befurther improvement in the EU’s ability to prevent and respond tohumanitarian disasters at an early stage; conflict prevention. One of the mostimportant lessons learned from the events in the Balkans is that the EU must

Özgür Ünal Eríş: The Role of the European Unionin Conflict Management/Prevention in Kosovo with a Comparative Approach 115identify the causes of crises even earlier, adapt a preventive approachtowards the management of crises and whenever this is not successful, alsobe capable of containing and terminating them. Otherwise, it runs the risk ofallowing conflicts to spread and instability to spill over into other states andregions.Throughout the text several factors were outlined which impede thesuccess of the EU’s role in conflict prevention and several tips were givenwhich can influence its success positively. In summary, in order to take theleadership in the process towards Kosovo’s full independence and in order tofulfil its role of transforming the Western Balkan states through its programsand establish itself as a truly influential actor in the region, the EU shouldimprove its programs, approaches and tools, eliminate the otherdisadvantages that were mentioned throughout this text, formulate a strongforeign policy which makes it possible to speak with one voice, have close cooperationand harmony among its members and develop the political andmilitary instruments needed to assure its own capacity to act.

Constructing Europe as a Global Power:116 From Market to Identity?ReferencesAbramowitz, M., & Hurlburt, H. (2002). Can the EU Hack the Balkans? AProving Ground for Brussels. Foreign Affairs, 81:5, 2-7.Balfour, R. (2008). Balkans in Europe: Containment or Transformation?Twelve Ideas for Action. EPC Working Paper 31, 1-32.Bechev, D. (2006). Carrots, Sticks and Norms: the EU and Regional Cooperationin Southeast Europe. Journal of Southeastern Europe and theBalkans, 8:1, 27-43.Björkdahl, A. (2005). Norm-maker and Norm-taker: Exploring the NormativeInfluence of the EU in Macedonia. European Foreign Affairs Review, 10, 257-278.Dombey, D., Macdonald, N., & Wagstyl, S. (2007). Europe Divided OverKosovo. Financial Times, 23 January.Elbasani, A. (2008). The Stabilisation and Association Process in the Balkans:Overloaded Agenda and Weak Incentives? EUI, Working Papers 03, 1-31.Friedrich, W.U., Ischinger, W., & Scharping, R. (2000). The Legacy ofKosovo: German Politics and Policies in the Balkans. AIGCS, German Issues22.Gounev, P. (2003). Stabilising Macedonia: Conflict Prevention, Developmentand Organised Crime. Journal of International Affairs, 57:1, 229-251.Grabbe, H. & Nicolaidis, K. (2000). Fostering Social Inclusion ThroughInstitutional Transformation in Central and Eastern Europe: the Role of EUAccession Conditionality. World Bank, Working Paper 39.Hallergard, C. (2009). The ESDP has Developed in Response to Challengesin the Balkans. European Security and Defence Policy, Issue 9.Hilpold, P. (2009). The Kosovo Case and International Law: Looking forApplicable Theories. Chinese Journal of International Law Advance Access,January, 1-25.Hislope, R. (2001). The Calm before the Storm? The Influence of CrossborderNetworks, Corruption, and Contraband on Macedonian Stability andRegional Security (paper presented at the 2001 annual meeting of theAmerican Political Science Association, San Francisco, USA. March 2001).Kupchan, C. A. (2005). Independence for Kosovo. Foreign Affairs, 84: 6, 13-22.Merlingen, M., & Obstrauskaite, R. (2005). .ESDP Police Missions: Meaning,Context and Operational Challenges. European Foreign Affairs, Review 10,220-242.

Özgür Ünal Eríş: The Role of the European Unionin Conflict Management/Prevention in Kosovo with a Comparative Approach 117Noutcheva, G. (2007). Fake, Partial and Imposed Compliance: The Limits ofthe EU’s Normative Power in the Western Balkans. CEPS, WorkingDocument 274, 1-25.O’Brien, J. (2006). Brussels: Next Capital of the Balkans? The WashingtonQuarterly 29: 3, 71-87.Pugh, M. (2004). Rubbing Salt into War Wounds: Shadow Economies andPeacebuilding in Bosnia and Kosovo. Problems of Post-Communism, 51: 3,53-60.Radan, P. (1999). Yugoslavia’s Internal Borders as International Borders: AQuestion of Appropriateness. East European Quarterly, 33: 2, 137-155.Sjursen, H. (2004). Security and Defence. In C. Walter, H. Sjursen, & B.White (eds.), Contemporary European Foreign Policy. London: SagePublications.Smith, D. (2002). Europe’s Peace-building Hour? Past Failures, FutureChallenges. Journal of International Affairs, 55:2, 441-460.Stewart, F. (2001). Horizontal Inequalities as a Source of Conflict. In F.Hampson, & D. Malone (eds.), From Reaction to Prevention. London: LynneRienner PublishingSmith, M. (2003). The Framing of European Foreign and Security Policy:Towards a Post-modern Policy Framework? Journal of European PublicPolicy, 10:4, 556-575.Szemler, T. (2008). EU Financial Support for the Western-Balkans: Well-Suited to Real Needs? Using IPA and Other EU Funds to AccelerateConvergence and Integration in the Western Balkans. Budapest: Centre forEU Enlargement Studies.Vasilev, G. (2011). EU Conditionality and Ethnic Coexistence in the Balkans:Macedonia and Bosnia in a Comparative Perspective. Ethnopolitics 10:1, 51-76.Welfens, P. (2001). The European Union in the Balkans: Stabilisation,Transformation, and Integration Perspectives. AICGS, German Issues 26.Wolff, S., & Peen, A. (2007). The Reactive Crisis Management of theEuropean Union in the Balkans and beyond: Policy Objectives, Capabilitiesand Effectiveness (paper presented at the 57 th Political Studies AssociationAnnual Conference, University of Bath, UK, September 2007).Journals, Newspapers and Reports:Commission Staff Working Document: Kosovo (under UNSCR 1244/99) 2008Progress Report, COM (2008)674.

Constructing Europe as a Global Power:118 From Market to Identity?Economist, June 28, 2003.Economist, April 11, 2006.Freedom House Report, Freedom in the World, 2010 Kosovo: May 3, 2010,Received from http://www.unhcr.org/refworld/docid/4c0cea8c.Herald Tribune, August 12, 2007.Herald Tribune, September 24, 2007.International Court of Justice Advisory Opinion on Accordance withInternational Law of the Unilateral Declaration of Independence in Respect ofKosovo’, July, 22, 2010.International Crisis Group Europe Report 185: Breaking the KosovoStalemate: Europe’s Responsibility, August 21, 2007.International Crisis Group Europe Report 196: Kosovo’s Fragile Transition,September 25, 2008.Consensus Resolution adopted at the 120th meeting of the 64 th UN GeneralAssembly, September, 9, 2010.Press Releases:www.consilium.europa.eu/eulex-kosovohttp://waz.euobserver.com/887/30759http://www.dailymail.co.uk/.../Europe-divided-Kosovos-independence.htmlwww.delprn.ec.europa

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EU Business and Economyin the Global Context

Constructing Europe as a Global Power:122 From Market to Identity?Ricardo`s Effect: From Idea to ImplementationTome NenovskiAbstractIn international trade, countries should use their relative comparativeadvantages. They should specialize in production and export of goodsand services that compete with a lower relative cost of production inother countries and to exchange those products for other products forwhich home manufacturing would be more expensive. That is the theoryof David Ricardo, one of the founders of classical political economy.Although it is set back in 1817, today that theory forms the basis forexplaining the benefits of international trade, i.e. the incentives andmotives of national economies to trade with each other. At its core liesthe model of perfect competition. This model is the basis for today'sadvocacy for free trade within the EU, trade with no tariffs and no otherrestrictions.The end result of the Ricardo model of comparative advantage leads to agradual flattening of product prices which are traded between economiesbased on comparative advantages. If there is free trade between foreigncountries, it is clear that the products will move from areas with lowerprices, to areas with higher prices. The realization of such a theory todayis a plan within the EU. However, the practice opposes thesefundamental values of Ricardo’s theory because:- The model of perfect competition, to which EU aspires, practically doesnot exist today because today in the EU market structures that restrictcompetition prevail;- The model does not explain how countries that trade with each otherwill establish a balance in the trading price;- The model does not explain how to overcome the problem of differenttastes of consumers in different countries;- The model does not explain how to reduce transport costs as barriersto foreign trade.

Tome Nenovski:Ricardo`s Effect: From Idea to Implementation 123Eliminating such weaknesses will upgrade Ricardo’s theory and make itvalid in current economic conditions. That way it could really be effectivein realizing the vision of a “Europe without borders”.IntroductionIn mutual trade, countries should use their comparative advantages.They need to specialize in production and trade of goods that have a relativecomparative advantage, i.e. goods that are produced with lower cost incomparison to other countries; and to share them with other countries as well.It is the basis of free trade or trade without restrictions on export and importby the government. In addition, the encouragement of free trade depends onthe economy of scale, competition, diversity and number of offered products,efficient allocation of resources and international cooperation.This is the theory of David Ricardo, one of the founders of classicalpolitical economy. Although it was established back in 1817, today that theoryforms the basis for explaining the benefits of international trade, i.e. theincentives and motives of national economies to trade with each other. Thismodel on comparative advantages is a model for today's advocacy for freetrade. If there is free trade between foreign countries, it is clear that theproducts will move from areas with lower prices to areas with higher prices.However, the realization of such a theory today does not function in the EU.The fundamental values of the theory of Ricardo are opposed due tonumerous limitations and weaknesses in the implementation of this law ofcomparative advantages. Therefore a question is raised: is the theory ofRicardo valid under the current economic conditions? The opinion on thismatter varies with different economists. Most of them think that with someimprovements this theory can give the effects that were introduced by greatRicardo two centuries ago.Terms of TradeTheoretically, a closed (autarkic) economy does not communicate withother economies in the world. It is self-sufficient and does not depend onimport and export of goods and services. Today, there is no economy withsuch features and the economies of all countries are open.Open economy is an economy that freely communicates with othereconomies in the world. Mutual economic relationships of the modern

Constructing Europe as a Global Power:124 From Market to Identity?economies are established in two ways: by buying/selling various goods andservices on the world markets and by buying/selling of capital goods on thosemarkets.The countries export goods and services mainly for two reasons. First, insome cases the domestic market is unable to absorb (to buy) the entireproduction of certain goods and services. Companies are trying to sell thesurplus of those goods and services on the foreign markets where there isinadequacy of such goods and services or there is high demand for them, i.e.a specific country cannot cater to their domestic production. Secondly,domestic enterprises can evaluate foreign markets that provide betterconditions (prices) for the sale of their products and thus can achieve higherearnings. In that case, the conditions for exchange (trading) are favorable forthem. This process is known as the microeconomic aspect of monitoring andanalyzing the terms of trade (commerce) with foreign countries.Macroeconomic aspects in terms of international exchange, of course,are wider. They refer to the conditions under which the total national economytrades internationally. Moreover, it is always analyzed under the followingterms; whether the country exports more than it imports, what is the structureof the export and import, what is the coverage of import by export and, finally,what is the cost-effectiveness of foreign trade to the national economy.The answer to these questions gives the conditions under which theinternational trade is executed. The terms of trade with foreign countriesrefers to the quantity of imported goods that a country can get (pay) for theprice of the unit export good. They can improve or deteriorate depending onthe prices of goods and services exported and/or imported. If prices ofimported goods rise and prices of export goods remain unchanged or,perhaps, fall, the trade conditions of the particular economy deteriorate. Insuch situations the country needs to export more in order to buy the samequantity of import goods and vice versa. The events on the world markets inthe period 2007-2008 and in early 2011 testify to the significance of theconditions and changes in the terms of trade. Namely, developing countrieshave been major exporters of primary products for many years, and are facedwith adverse terms of trade. The reason for that was the long-term economicstagnation and decline in prices of primary products. That happened withagricultural and food products. This situation reduced the earnings fromexport and the developing countries needed to export more in order to importproducts with a high degree of finalization. These countries have faced poorconditions of international exchange for a long period of time.

Tome Nenovski:Ricardo`s Effect: From Idea to Implementation 125However, in 2007-2008 and in early 2011 the conditions changed. Due tovarious reasons, the demand for certain agricultural and food products(wheat, corn, sugar, etc.) sharply increased. The prices of these productsreached extremely high values. Suddenly the countries that produceagricultural products were in a much more favorable situation than in theprevious decades. Indexes of their export prices became much higher thanthe indexes of their import prices (Eurostat, 2011). Their terms of trade weresignificantly improved.Generally, there are factors that enhance and factors that exacerbate theconditions of trade. They can strongly influence the scope and pace ofexporting goods and services in some countries. According to Mankiw (2009,p. 692-693), the most important factors are the following: Tastes and preferences of consumers for domestic or foreign goodsand services; Domestic and foreign prices of goods and services; Exchange rate of national currency; Domestic and foreign income of consumers; Cost of transporting goods from one country to another; The foreign policy of the government.These variables change over time. Therefore, the conditions ininternational trade change as well. The previously described developments inthe prices of agricultural and food products convincingly confirm thisconclusion.Comparative Advantage in International TradeIn order to exploit the benefits of the terms of trade, a country needs tooffer goods and services on the world market in which it is specialized orwhich can benefit the country. In other words, in order to be a competitiveathlete on the world market, the country should offer products that can be soldat competitive prices on the world markets. Simultaneously, the country willparticipate on the world market by buying at lower prices and selling theproducts on the domestic market by higher price.There are differences in the availability of raw materials and otherfactors of production internationally. This leads to the existence of differencesbetween countries in terms of production costs of individual goods andservices. Therefore, countries should produce goods and services with the

Constructing Europe as a Global Power:126 From Market to Identity?available resources (that they have in large quantities and at low price) andthus the final products can be sold cheaply (more competitively) on the worldmarkets. To accomplish this, they should at least temporarily sacrifice theproduction of goods and services which are available to be produced, buthave no competitive advantage.The previous observations lead us to the term ‘opportunity cost’ ofproducing a product or supplying a service. Opportunity cost of producing aproduct or supplying a service is the quantity of other goods and services thatare sacrificed (not produced) in order to produce an additional unit of thatspecific product or service (Fiti, 2006, p. 456). We can take for instance aneconomy which is closed and which with the given resources can produceonly shirts and shoes. The more resources are used to produce the shirts,fewer resources will be used for the manufacturing of shoes. The opportunitycost of the shirts is the amount of shoes that are sacrificed (not produced) inorder to produce shirts.This legitimacy stems from the limitations (rarity) of resources.However, from it, the foundations (structure) of the international trade arise.Namely, if an economy can produce certain goods and services for a shorterperiod of time and with less expense of other factors of production, it canspecialize and concentrate just on the production of those goods andservices. Specialization itself will act on reducing the production costs ofthose goods and services. It will enable the (specialized) country to producethose goods and services in large batches and to realize economy of scale(production of large quantities of a product using the available resources andother factors of production). The economy of scale reduces fixed costs perunit of a product. As a result of specialization and economy of scale, thecountry is able to produce large quantities of certain goods and services withlower prices and to exchange them for other goods and services which, ifproduced at home, will cost more. Thus, the opportunity cost for theproduction of goods and services in the specialized country significantlydecreases.Specialization of certain goods and services for the particular countrymeans getting a comparative advantage in international commerce (Law oncomparative advantage). It may occur in the form of absolute or relative formof advantage for the production of certain goods and services. Both benefitshave been established and elaborated by the founders of classical politicaleconomy, Adam Smith and David Ricardo. Over time, the two theories haveevolved (changed) in certain parts, but remained (especially the theory of

Tome Nenovski:Ricardo`s Effect: From Idea to Implementation 127Ricardo of relative comparative advantages) as economic laws by whichcountries should act in the international trade in order to get greater benefit.The theory of Ricardo of comparative advantages is one of the basic tenets ofthe foundation of the single European market - the European Union (EU).Smith’s Theory of Absolute Advantage as a Basis for InternationalTradeThe theory of absolute advantages was founded by the Scottisheconomist Adam Smith (1723-1790) in his legendary work “The Wealth ofNations”. According to him, an elementary rule of good family maintenance isthat one family should not produce something that can be bought on themarket at a lower price. It is the same for the economy; it is profitable not toproduce goods that can be bought from abroad cheaply. Or, if a foreigncountry can supply the domestic country with a certain commodity cheaperthan we can produce it. Therefore, it is better to buy it with a certain part ofour products that are used in a way that we can achieve some advantage(Smith, 1904).How does the theory of absolute advantages work in practice? Supposethat countries X and Y produce shirts and shoes and that they trade with eachother. Country X has greater labor productivity in the production of shirts, andthe Y has greater labor productivity in the production of shoes. According tothe usual definition, labor productivity shows the effect of labor per unit oftime, i.e. the number of shirts and/or shoes produced for one day.In accordance with the theory of Smith, X for the same time can producemore shirts compared to Y (which means a higher labor productivity),therefore X has an absolute advantage in producing shirts. Conversely, Yproduces for one day more shoes than country X and Y has an absoluteadvantage in producing shoes. The two countries are paying to specialize inthe manufacturing of the product they have absolute advantage of. So, X willspecialize in the manufacturing of shirts and it will exchange the shirts forshoes from country Y. The country Y will specialize in the manufacturing ofshoes and it will exchange the shoes for shirts with country X. Both countrieswould benefit from such exchanges, or from the international trade.Why is this so? The answer can be found in Table No. 1.

Constructing Europe as a Global Power:128 From Market to Identity?Table 1: Absolute advantagesIf the countries do not specialize in producing products which they havean absolute advantage of, the total number of shoes produced will be 800units, and the total number of shirts produced 950 units. However, if countriesspecialize according to the principle of absolute advantage, the total numberof shoes produced will be 900 units (100 units more than the situation beforespecialization), and the total number of shirts produced will be 1.100 units(150 units more than before specialization).This theory however, is not giving answer to the question what wouldhappen if one country has absolute advantage in producing both products. Isthere a benefit from the international trade in that case? This dilemma isresolved with the theory of relative comparative advantages.The Theory of Ricardo of Relative Advantages as a Basis forInternational TradeThe theory of relative advantages in foreign trade was founded by theEnglish economist David Ricardo in 1817. According to this theory, countriesare specializing in production and export of goods and services that areproduced with lower cost in comparison to other countries.Ricardo proves that the countries can benefit from trade between them evenwhen a country has absolute advantages in the production of two or moreproducts. For Ricardo, the relative comparative advantages are morerelevant.The theory of Ricardo is presented with a hypothetical example in TableNo. 2. Ricardo gives the example when England and Portugal produce wineand canvas and Portugal has absolute advantage in producing both products.

Tome Nenovski:Ricardo`s Effect: From Idea to Implementation 129Table2: Relative advantagesAccording to the theory of absolute advantages, these two countries cannot trade with each other, because Portugal has absolute advantage inproducing canvas and wine production. However, Portugal has a relativecomparative advantage in producing wine within the borders of the country,because the wine is produced in 80 working days, and the canvas requires 90working days. When Portugal would not trade with England, 170 working dayswill be needed to produce two products.But what would happens if Portugal specializes in the production of wine,which has a comparative advantage in its area compared to the canvas? Inthat case, it will require 80 working days to produce wine for its own needsand another 80 working days to produce wine for export, or to exchange forcanvas from England. So, in this case, with 160 days Portugal will have twoproducts - wine and canvas and, in fact, will save 10 working days.Regardless of the fact that Portugal has absolute advantage in producing bothcommodities, it is good to specialize in the production of goods with relativecomparative advantage. It allows for the country to produce two productscheaper and with less labor costs.Using the same logic, England is better off to specialize in the productionof canvas in which it has a relative comparative advantage and to share itscanvas for Portuguese wine. If they so proceed, England will get two productsfor 200 days. Otherwise, if England does not trade with Portugal, in order toprovide wine and canvass, it has to spend 220 working days or 20 days more.It is obvious that the relatively abundant supply of a factor of productionmakes the expenditures relatively cheap to rent. Therefore, the goods whoseproductions are based on a particular factor of production will be relativelycheap. Those are the goods for which the country has comparativeadvantage. “States with scantily land, but with a high degree of skilled labor,usually have a greater share of industrial products in its exports, countrieswith land, but with few skilled workers, typically export raw materials” (Begg etal. 2000, p. 560). Therefore, countries are paid to specialize in the

Constructing Europe as a Global Power:130 From Market to Identity?manufacturing of products that have comparative advantages and to tradethose products for other products that would be more expansive if they areproduced domestically. The differences in relative productivity are the basisfor international trade (Begg et al. 2000, p. 553).Perfect Competition and Free TradeDavid Ricardo's theory of comparative advantage today is the basis forexplaining the benefits of international trade, i.e. the initiatives and motives ofnational economies to trade with each other. At its core lies the model ofperfect competition (at the time of Ricardo, market structures were close tothe model of perfect competition). This model is the basis for today'seconomists that are promoting free trade (with no customs and otherrestrictions).The end result of Ricardo’s model of comparative advantage leads to agradual flattening of the prices of products and services in the economies thattrade with each other, based on comparative advantages. Namely, if there isfree trade between countries and relevant economic and political cooperationamong the various nations within the EU with positive implications for theireconomic growth (a realistic assumption within the EU now), it is clear that theproducts will move from areas with lower prices to areas with higher prices.France, for instance, has an obvious comparative advantage in producinghigh quality cheese, and Spain has a comparative advantage in producinghigh quality men's shoes. Countries trade with each other within the singleEuropean market, de facto, without customs duties and non-tariff restrictions.Cheese, which is cheaper in France, may be placed on the Spanish market,and men's shoes that are manufactured in Spain may be placed on theFrench market. So the higher supply of high quality and relatively cheapFrench cheeses in Spain will cause a drop in the price of the cheeses in thiscountry. Conversely, a rise in imports of high quality men's shoes from Spainto France, and the increased supply of men's shoes on the French marketmay also cause decline in the price of that product in France.If such a trade relation between the two countries is established, theprices of the products in the markets in those countries will begin to convergeand become equal. Use of trade between two countries, thanks tospecialization in areas where countries have already gained comparativeadvantages, will have the citizens of Spain buy and consume less expensive

Tome Nenovski:Ricardo`s Effect: From Idea to Implementation 131French cheese and citizens of France buy and consume cheaper Spanishmen’s shoes.Such arguments are the basis for free or liberal trade from which all EUMember States would benefit. In fact, the validity of the theory of Ricardo ofcomparative advantages and the assessment of most contemporaryeconomists that all countries participating in foreign trade will benefit if it isfree are reasons for intensive exchange of goods and services between EUMember States. The mutual dependence on the economic cooperation ofindividual national economies within the EU economy becomes more andmore important.Trade between the EU Member StatesSo far, however, such conclusions are not fully realized in the mutualexchange of EU Member States. Analyses of statistical indicators show thatthe less developed “old” EU member states (like Portugal and Greece), andmost of the countries that have joined the EU since 2004, are still far fromrealizing the benefits expected from the activities of the single Europeanmarket. The low development of some “old” EU member states and the needto meet the Acquis communautaire, as a condition for membership of the“new” countries in the EU, are mostly aiming to remove the various customsand non-tariff barriers in relations with other Member States. That means theneed for their integration into the common European market is conditionalupon their increasing openness to the EU. The result of this is a growth in thesize of their foreign trade within the EU, but much more of the import than ofthe export.The following analysis confirms this fact. The analysis will be limited tothe volume of foreign trade of 10 countries within the EU which have adetectable and significant imbalance in trade relations within the Union:Bulgaria, Czech Republic, Greece, Cyprus, Lithuania, Hungary, Poland,Portugal, Slovenia and Slovakia (hereinafter referred to as Group 10).Table No. 3 shows that the share of intra export and import of goods andservices in the Gross Domestic Product (GDP) of Group 10 has beencontinually increasing in the period 2005 - 2008 (period before the beginningof the World Economic crisis). During that period some of those countries(Bulgaria, Czech Republic, Lithuania, Poland, Slovenia, Slovakia) recordedvery high dynamic of growth of their trade in intra EU trade.

Constructing Europe as a Global Power:132 From Market to Identity?Table 3Source: Eurostat, 2011 Available at:http://epp.eurostat.ec.europa.eu/portal/page/portal/statistics/search_databaseInsufficient development of some of the “old” EU members and the growingopenness of the newly admitted EU members led to a high dynamic of growth oftheir import from other EU member states. The accelerated pace of their importsfrom the EU caused increase the participation of Group 10 in the total import on

Tome Nenovski:Ricardo`s Effect: From Idea to Implementation 133the level of the EU from 8,35 percent in 2005 to 10,99 percent in 2008, whichindicates an increase of 31,6 percents (see Table No. 4).Table 4Source: Eurostat, 2011 Available at:http://epp.eurostat.ec.europa.eu/portal/page/portal/statistics/search_databaseThe increase of imported products from other countries within the EU isunderstandable. It is a way to offset the range of products which are notproduced at all or not produced in sufficient quantity on the domestic marketand thus to meet the growing needs and demands of domestic consumers.Moreover, probably a strong factor is the higher quality of these products in

Constructing Europe as a Global Power:134 From Market to Identity?relation to the quality of the domestic products, and in many cases, lower costof the foreign over the domestic products, previously established by theconditioned specialization and volume of these products in the exporting(developed) countries. Of course, import of goods and services from abroadhas a positive effect on the growing competition in the domestic market. Thusanalyzed, the value of the growing integration of Group 10 in the externaltrade of the EU cannot be denied. On the contrary, it should be welcomed.A problem appears on the other side of the external trade of the Group of10 on the European market - on the side of export. From the data in Table 6 itcan be concluded that the export of these countries in the observed periodhas increased, but neither with similar nor with higher pace than that at whichtheir import from other EU countries has increased.The reasons for this are different: greater integration of the developedcountries of EU in the world trade (and outside the EU), unsatisfactory qualityof the products of less developed member states, the decisions of developedcountries to import more intermediate goods (raw materials) from the lessdeveloped countries, goods which have low added value and thus arecheaper, but also frequent decisions of the developed countries to introducethe so-called non-tariff restrictions on imports of products from other areas ofthe EU to protect their own production and manufacturers of certain goods,especially those in the agricultural sector. These reasons caused the averageparticipation of Group 10 in the total export to the EU to increase at muchsmaller pace than their share in total import in the EU. Thus, from 10,38percents in 2005, export of Group 10 has increased to 12,83 percents, whichsignifies an increase of 23,6 percents (see Table No. 5). This leads to aconclusion that Group 10 has a low ratio of export/GDP, i.e. that thosecountries are still faced with some barriers in their operation within the EU,which hampers their opportunities at the expanded European market. That,ultimately, hampers those countries from increasing their exports on interEuropean market, which will have a favorable effect on the growth of theirGDP.Therefore, in the observed period (2005-208) the dynamic of importgrowth (31,6 percent) of Group 10 was considerably higher than the dynamicof growth of their export in the markets in those countries (23,6 percent). As aresult, the high trade imbalance in Group 10 with the EU is obvious.However, the conditions in the mutual exchange of goods and in themutual exchange of services between Group 10 and the EU are quite typical.

Tome Nenovski:Ricardo`s Effect: From Idea to Implementation 135Table 5Source: Eurostat, 2011 Available at:http://epp.eurostat.ec.europa.eu/portal/page/portal/statistics/search_databaseRegarding the exchange of goods, no significant imbalances betweenexport and import have been noted. According to Zamora (2009), EUcountries are more open in that part, which indicates that the internal marketprovides encouraging integration of the markets of goods. In fact, statisticsconfirm that the internal trafficking of goods accounts for about 18 percent ofthe EU GDP. Moreover, Group 10 and, especially, the newly admitted EUcountries, show greater openness (almost twice as big, about 35 percent of

Constructing Europe as a Global Power:136 From Market to Identity?GDP) than the “old” EU member states, which show about 17 percent of GDPin the exchange of goods on the domestic market.Despite the high openness to trade in goods, the openness of allMember States in the exchange of services is very small (about 6 percent ofGDP). Moreover, in the developed part of the EU there is a distinctiveorientation towards the much larger import of services from countries outsidethe EU. They, in particular, demand services from the outside world in thefield of financial services, information and IT services and constructionservices. A possible reason for this is the higher quality of the services whichare obtained outside the EU. However, in various analysis (Zamora, 2009) itis stated that the main reason for such relations in exchange regarding theservices are the still present high barriers that countries set for imports ofservices from the EU internal market. Knowing this, the EuropeanCommission in 2006 adopted Directive 2006/123/EC on services, which theMember States of the EU should have started implementing by the end of2009. The main objective of this Directive is to remove barriers from thesharing of services among the EU members, which will be a great benefit tobusinesses and consumers in all EU countries.Accordingly, in the commercial relations between Member States thereare still a number of limitations that do not allow significant improvement intrading conditions and equal identification of all Member States with a singlemarket.LimitationsIn practice these fundamental values of the validity of Ricardo’s theory ofcomparative advantage are often challenged. Actual limitations andshortcomings can be summarized as follows:a) The model of perfect competition within the EU today virtually doesnot exist. Today the prevailing market structures limit the competitiveness. Forexample, today there are oligopolies (more differentiated sellers who agree toact on the market). Such are, for example, clusters of cars, wine, grain, oil,etc. In some areas there are monopolies (the only manufacturer of a product).This is usually the case of phone service or computer software companies.Because of their presence neither the flexibility of prices and wages, nor themobility of production factors (labor, capital) functions, which are the basicrequirements of the model of perfect competition;

Tome Nenovski:Ricardo`s Effect: From Idea to Implementation 137b) Although efforts are made to appropriately establish free internationaltrade, in practice, it remains burdened by numerous restrictions. To protectthe economy, many countries used protectionist measures, such as variousquantitative restrictions on trade with other countries. The most illustrativeexamples are the various quantitative restrictions which individual Membercountries use in order to protect their products from competing products fromother Member countries which built powerful and competitive industries,especially based on comparative advantages arising from the relatively cheapand abundant labor.Simultaneously, in common use are the non-tariff barriers that somecountries have introduced for the protection and promotion of their products intrade with other Member States. Often the more developed Member Statesrequire extremely high safety standards for imported goods or bring muchbureaucracy to reduce the volume of goods entering the country. Forexample, unnecessary delays are introduced in the processing of importdocumentation or very high (often subjectively high) standards for health andsafety of the population. Or, to boost exports of their products, some countriesgrant subsidies which can be public (for example, approving grants orperforming other investment incentives), hidden (granting tax breaks forexporters) or exporters can even receive direct financial assistance to export(Nellis H. Parker, 2004, p. 318). The western parts of the EU often do;c) The theory of comparative advantage puts the developing countries(Bulgaria, Poland, Hungary, Lithuania, Portugal, Slovenia, etc.) in adisadvantage. These countries have comparative advantages in theproduction of raw materials and products with a low degree of industrialprocessing (finalization). The prices of these products are low compared tothe prices of products with a high degree of finalization of production whosecomparative advantages are on the side of developed Member States.Accordingly, there is an unfavorable relationship between the prices of rawmaterials and commodity prices with a high degree of processing. In otherwords, the terms of trade are unfavorable to the less developed memberstates. In the past decade, terms of trade became worse in less developedcountries because the prices of the products with a high degree of finalizationrose faster than the dynamics of growth of prices of raw materials andproducts with a low degree of processing. That means that less developedcountries are forced to supply larger quantities of raw materials to obtainsmaller quantities of industrial products. In that case the less developed

Constructing Europe as a Global Power:138 From Market to Identity?countries lose as opposed to the claim of the theory of comparativeadvantages that in the international trade all countries have benefit;d) The model does not explain how countries trade among themselves toestablish a balance in the trading price;e) The model does not explain how to overcome the different tastes ofconsumers in different Member States;f) The original theory of Ricardo of comparative advantage does notexplain how to reduce transport costs as barriers to foreign trade.Conclusions: Single Market for European IdentityIf the theory of Ricardo insists that foreign trade should be with strictobservance of the relative comparative advantages, that means that thetheory actually requires the preservation of present relations, or unchangedstatus (status quo), which obviously does not suit the less developedcountries within the EU. This means that comparative advantages of rawmaterials for production are on the side of less developed countries andcomparative advantages for production of industrial products are on the sideof developed countries. Therefore, the theory of Ricardo should be analyzedthrough its dynamic aspect, i.e. to take into account that the comparativeadvantages are not given once and for all, but that each country, withreasonable and well-established development policy, should create relativecomparative advantages in strictly selected economic sectors.That, in reality, of course, is possible. Typical examples are the countriesof Southeast Asia, which gained comparative advantages in the electronicssector, which they previously did not have. Or countries-producers ofagricultural and food products, which, as previously stated, fight for higherprices of their products on the world markets, which significantly improvedtheir terms of trade within the outside world.In addition to being an equal field for competition for all its members, theEuropean market should be more open than ever, and the measures whichwill be taken should lead to stimulation of the competition. This is possiblewith a greater integration of different (national) markets in a single market,and elimination, as much as possible, of the numerous restrictions which arestill maintained. In fact, one cannot speak of a fully integrated market if the“economic borders” between individual Member States are not eliminated.This particularly applies to the “old” member states, which by eliminating the

Tome Nenovski:Ricardo`s Effect: From Idea to Implementation 139remaining foreign trade barriers will contribute to improving the functioning ofthe internal market in the EU.The analysis confirms that Group 10 shows a much greater willingnessto trade in goods and services with other Member States. But the obvious isstill present: the resistances and constraints posed by the advanced (older)member states, especially in the exchanges of various forms of serviceswithin the EU. The European economy can be considered to be fullyintegrated only providing that the internal market guarantees freedom ofmutual exchange of services as well.Elimination of the previously mentioned weaknesses will upgrade thetheory of Ricardo and make it valid in the current economic conditions. Withinthe EU it is possible to have further liberalization of the trade in the MemberStates and further enhancement of their trade integration as a condition forestablishing and fostering sustainable economic development of EUintegration as a whole. In this case the theory of Ricardo could really beeffective in realizing the vision of a Europe without any borders, which wouldmean strengthening the single market that would be equally identified by allMember States.

Constructing Europe as a Global Power:140 From Market to Identity?ReferencesBegg, D., Fischer, S., & Dornbusch, R. (2000). Economics. Berkshire,England: McGraw-Hill Book Publishing.Eurostat (2011). Agricultural Commodity Price. Retrieved fromhttp://appsso.eurostat.ec.europa.eu/nui/show.do?dataset=prc_fsc_idx&lang=enFiti, T. (2006). Ekonomija. Skopje: Univerzitet Kiril i Metodij - Ekonomskifakultet.Nellis, J., & Parker, D. (2004). Principles of Macroeconomics. Harlow,England: Pearson Education.Menkiw, G. (2009). Principles of Economics (5 th ed.). USA: South-WesternCollege Pub.Smith, A. (1904). Wealth of Nations (5 th ed). London: Methuen.Zamora, R.A. (2009). How is Internal Market Integration Performing. Brussels:European Commission.Internal Market and Services DG, Horizontal Policy Development – ImpactAssessment, Evaluation and Economic Analysis, Unit B2.

Ninko Kostovski, Elena Klisarovska: Theories and Practices of Cross-CulturalManagement that Challenge Ethnocentrism within the European Union 141Theories and Practices of Cross-Cultural Managementthat Challenge Ethnocentrism within the European UnionNinko KostovskiElena KlisarovskaAbstractDespite the advocates of the common EU identity, many people andscholars do believe that the EU will not ultimately prevent them frombeing French, German, Polish, and so on. It is almost impossible to avoidrecognition of the opposing phenomenon of common identity, growingethnocentrism, particularly when the EU is seen from the perspective ofthe smaller countries and cultures. Many of them seem sincerelyconcerned about the prospects of the effective preservation of theircultural specifics within the EU common socio-cultural context, if everfully established. We argue that contemporary corporate managementtheory and practice can offer several concepts and cases that can leadto the desired achievement of a common identity, while not suppressingthe individual goals, values and cultural identity of the EU memberstates. The aim of this paper is to contribute to the project of futureEurope, by presenting an insight into the set of best-practices in thecross-cultural management within a selected group of big corporations,that can almost in their original form be transposed onto the areas ofsocial life and politics.“We are all angels with only one wing,only when we come together can we fly.”– Luciano De Crescenzo,Italian writer, film actor, director

Constructing Europe as a Global Power:142 From Market to Identity?A Common EU Culture?Do the EU common decision making and the defense policiesultimately lead to a common EU culture? Does the institutional EU referenceinduce a personal EU reference? Does a no-physical-borders policy reallylead to a “no borders” identity amongst EU citizens? Although the examplesof, apparently easily reached “consensuses” regarding these quandaries arequite numerous, it seems that the disagreements are even more frequent.For the sake of the truth, the advocates of the common EU identity arerare (Orakzai, 2006). People and scholars, in general, do not believe that theEU will ultimately prevent them from being French, German, Italian, and soon. Despite the efforts leading to a real Pan-European identity through stepslike: The 500 million EU citizens, but no borders; Euro - one currency; EUcommon policies, it seems that the national heritage, the local languages andthe various national identities will effectively obstruct the way to creation ofthe hypothetical United States of Europe. However, it is almost impossible toavoid the recognition of an emerging EU nationalism, if not a full-fledgedethnocentrism, especially coming from established EU members towards thenew EU members and the non EU cultures and peoples. They echo in thebackground of the emerging common EU identity, the “naïve” tendency tostigmatize some nations, as being more prone more “than us” towards, forexample tax evasion, binge spending or corruption could very easily get out ofcontrol and strongly damage the common EU identity idea. Bearing in mindthe concept of European dual identity, discussed in Bruter’s book Citizens ofEurope? (2005), and the ineffectiveness of the concept of “embraceddifferences” envisioned by the current multiculturalism in the EU countries, theneed for a different approach to the issue is obvious.To fulfill the three objectives of the EU institutional framework, asdefined by the Treaty of Rome and reemphasized in the Treaty of Maastricht(Gastelaars & De Ruijter, n.d.) will be one of the most challenging, if not thecritical issues that will ultimately determine the overall prospects of the EU. Itis becoming obvious that the objectives of Europe as an important factor inthe World, a Community that will serve as a model for human rights anddemocracy and a Society that will not only preserve, but effectively promotethe existing national states, will be an extremely challenging task. We arguethat contemporary corporate management offers concepts and cases that canlead to the desired achievement of a common identity, while not suppressing

Ninko Kostovski, Elena Klisarovska: Theories and Practices of Cross-CulturalManagement that Challenge Ethnocentrism within the European Union 143individual goals, values and culture. Even more, that the individual specificscan be used for the creation of an interchange of examples of best practicesand as a means to introduce concepts of continuous improvement in whicheverybody learns form the best in a particular area of social life, and that therich body of knowledge and experience of corporate management andorganizational science, can be applied to social and political life.What is Europe?Before even going deeply into the identity issues, a closer look atEurope and what it represents today might be helpful. Apparently, the EU hasbecome an extensive entity of little similarity with its Carolingian core (Ash,1994). With the regular border expansions the answer on the question whatEurope is becomes even more vague. Gstelaars and De Ruijter are amongthose who argue that it is increasingly hard to determine Europe culturally,historically and geographically. Since we need to define Europe for the sakeof identity, it is good to determine where Europe starts and ends and whetherEurope is discussed in terms of continents or a membership to the Union onthe territory of this continent. Attali (1994) sees two forms of Europe as a basefor European identity, the political which produces a super state and thegeographical, which greatly opposes the views that the persistency of thename is a condition of every “identity”. Belonging to a group and groups withno name, or a temporary one, creates a feeling that it is a temporarycommunity. Individuals find it hard to and unworthy of attaching to atemporary community (Balibar, 2001). In societies in which the language doesnot distinguish between words for nation, people, citizens, citizenship and/orethnicity find it hard to develop a particular identity because of the temporarynature that concepts with no name or a confusing name reflect in publicdiscourse (Popadic, 2008). Or to put it in other words; these societies willnever fully accept some super EU identity if there is no EU state with theregular national symbols (flag, anthem, coat of arms, national colors, etc.).The Lessons from Ancient RomeFor many sociologists and historians Europe, as we are trying to buildit, a crucial piece of the story of who we were and are is the Roman Empire.This idea and the idea of diversity management affecting organizations is

Constructing Europe as a Global Power:144 From Market to Identity?discussed and two case examples are given – The Persian and RomanEmpire in a study published in 2002.An interesting comparison is given between the Roman and thePersian Empire regarding the inclusion/exclusion of various cultural groups.While the Persian Empire was exclusionary, the Roman Empire wasinclusionary and, more importantly, based on merit, which led to increasedorganizational effectiveness primarily in terms of increased organizationalresiliency across time (Daniel at al., 2002).It is very interesting to explore the way in which the Roman Empirewas able to effectively manage the diversity on different geographical andcultural landscapes under its controlled. First of all, its central machine wasastonishingly light, in terms of the bureaucracy and military. Its componentparts were largely self-governing. In addition, members of the surroundingareas (provinces) had an opportunity to actively participate in the centraldecision-making. Even emperors were drafted from Spain, North Africa, theBalkans and the Near East.It seems that the culture, that of the elite and that of the masses waseffectively shared among the entire Empire. Rome established and spreadmany of the structures on which modern Europe as we know it depends.Moreover, it is an abundant source of various power and cultural models toimitate, even nowadays. To start with, four major organizational issues weresuccessfully resolved: (1) the legitimacy of power, (2) anti-corruption, (3)stability of the system, and (4) effective leadership (Daley, 1998). Further on,the facets of the regime were accepted as “organizational culture” by all strataof the society, almost equally. It also seems that the regime and the relatedlaw system effectively managed to fight with the corruption practices. It isamazing, but it seems that the Romans were able to establish a ubiquitous,yet light and effective state system (administration) and military.Last, but not least, the Romans were able to produce sufficientvisionary leadership, personalized in its emperors. The Roman Empireendured the effort to integrate these four elements: legitimacy, anti-corruption,stability, and leadership. Largely, this success represents a triumph of itsmanagement practice and concepts. Its features are shaping ourcontemporary management practice, too. Some indicate that the systemsimply made the rebellion of the parts more difficult. The center (Rome)received tax revenue from the regions and in return provided services,including security. The degree to which the central government could enforceits directives depended, most fundamentally, on the level of resistance from

Ninko Kostovski, Elena Klisarovska: Theories and Practices of Cross-CulturalManagement that Challenge Ethnocentrism within the European Union 145regional governments. The central governments used a common institutionalreform to gain control over the regions; specifically, they assumed the powerto appoint key regional officials and diffused authority among a greaternumber of officials. This set of reforms had the effect of increasingcoordination costs within the regional governments, thereby making rebellionand resistance to central directives more costly (Edvards, 2009).The Common EU Identity“Identity has become the watch word of our time” (Shotter, 1993,p.188) and since we will be limiting our identity discussion to the EuropeanUnion it is useful before stating the problem of European identity to specifywhat is meant by identity. In almost all theories of identity, the universalistic(Habermas, 1976), the sociological (Giddens, 1991) or the social-psychologytheory (Tajfel, 1981), the identity can be used with respect to individuals.However, the individuals do not act on their own, they rather associate ingroups and communities, and that fact greatly influences their identity.Moreover, the above mentioned theories of identity stress that it is not astatic, but a dynamic cultural process (Gstelaars & de Ruijter, n.d) and that iswhy it cannot be statically defined. The common or social identity is notindependent of the individual identity.Only individual identity determined by the forms of association exists. Itis not a question of setting a collective identity against individual identities. Allidentity is individual, but there’s no individual identity that is not historical, or inother words, constructed within a field of social values, norms of behavior andcollective symbols. The real question is how the dominant reference points ofindividual identity change over time and with the changing institutionalenvironment (Balibar, 1991, p.94).The argument that European identity has different meaning to differentpeople is neither surprising nor bad, because numerous efforts have beenmade to define European identity and all led to division between personal andsocial identity, civic and cultural identity, and patriotism versus nationalism(Caporaso & Kim, 2009). Bruter (2005) acknowledges the distinction betweencivic and cultural identity as the most important one. He explains that, whenEuropean citizens say that they feel ‘European’, they are referring to the civiccomponent of the European identity (European Union) and not the culturalone (Europe as a whole). This is important, because the ethnic diversity inWestern Europe has been rising constantly since the 1970s, as seen when

Constructing Europe as a Global Power:146 From Market to Identity?adding up to the migration data for the ex-colonial powers like France, Spain,the United Kingdom, Belgium or the Netherlands. Later, newly democratizedcountries in Eastern Europe became a target of migration as well as countrieslike Portugal, Spain and Italy, which in the 1990s got an influx of migrantsfrom Africa and Latin America (Castles & Miller, 2003). This resulted inwidespread ethnic diversity in almost all European countries. The overallresult is that, in practically every country in Europe, ethnic diversity hasbecome more widespread. The numbers show that in 1980, 3.3 percent of thepopulation of the European states, members of the OECD, were foreignerswhich increased to 5.3 percent in 2004. While in the 1980s, all EuropeanOECD countries, on average received 1,070,000 migrants, in the 1990s thiswas up to 2,000,000 every year (Hooghe, Trappers, Meuleman & Reeskens,2006). The diversity has been identified as a prime threat for increasednegative out-group orientations (Hooghe, Reeskens, Stolle, & Trappers,2006).The European Identity and the Issue of NationalismDetrimental nationalism was often the leading social mover thatdecided the fate of various social groups, ethnicities, even countries and theirvarious political and/or economical alliances. Consequently, it is fullyunderstandable why the most important question for the EU identity iswhether, or not this type of nationalism can be confined and even overcometo some degree, if not entirely, during the creation of the EU common identity.One option would be to balance ethnicity and identity, since according toPopadic (2008) those are the two “villains” of the identity-building process.The fact that, even in some political and academic discourses, the nationalidentity is confused with ethnic identity on terminological and conceptuallevels, leads to confusion in terms, and consequently in the understanding ofconcepts. Above all, national states in Europe often mix or equal ethnos anddemos, which leads to inner group tensions, fear and discrimination of themembers of the smaller ethnic groups (Stojkovic, 1993).The Projects of Future EuropeThe issue of strong cultural differences drives some to the conclusionthat culture is not a good starting point for a political project, at least not for aproject of integration. Instead, the building of common culture and identity

Ninko Kostovski, Elena Klisarovska: Theories and Practices of Cross-CulturalManagement that Challenge Ethnocentrism within the European Union 147should be the final success of an integration project based on synchronizationand the union of many aspects (Mokre, 2002). Despite the efforts leading to areal Pan-European identity through steps like: The 500 million EU citizens, butno borders, Euro - one currency, EU common policies, does it seem that thenational heritage, the local languages and the various national identities, alltogether, will effectively obstruct the way to the creation of a hypotheticalUnited States of Europe? According to some scholars, they will not. So far,the European Union has done a good job in laying the foundations of acommon EU identity and culture by establishing a common market, commoncurrency and abolishing national borders and not just traditions, commoncultural heritage and ethnicity (see e.g. Puntscher Riekmann 1998, p.21).However, the criterion of cultural identity also needs political determination.The European Commission acknowledges this in the Culture 2000 Program:If citizens give their full support to, and participate fully in the Europeanintegration, greater emphasis should be placed on their common culturalvalues and roots as a key element of their identity and their membership of asociety founded on freedom, democracy, tolerance and solidarity. A betterbalance should be achieved between the economic and cultural aspects ofthe community, so that these aspects can complement and sustain each other(Decision Establishing Culture, 2002, p.1).Still, this and other projects of future Europe raise many practicalquestions regarding the prospective EU identity, like: shall there be a newWE, a new people (demos) some sort of EU-neans, and shall the formation ofthese EU-unians be based on previous national identities or independent ofthem? Does a new form of ethnicity that is proper to Europeans emerge?(Balibar, 1988).Internal logic or explanation of the questions lies in the background ofthe problem. It will be useful to look at the goals of Europe from itsbeginnings. In the 1970s, the prime goal was to have a Europeanconsciousness. A political goal motivated by the notion of becoming a supranation.In the 1980s, although the market and the economic issues werepredominant, the identity as a goal was also there. In the late 1980s, Eurosymbolismwas the mark of the EU and the goal of the 1980s, and for the EUto become a single market came into effect in the 1990s. These goals wereaided by the Treaty of Maastricht and the introduction of the so-calledEuropean citizenship, which was in a way, the envisioned supra-national legalstatus.

Constructing Europe as a Global Power:148 From Market to Identity?Almost simultaneous to these projects of future Europe, threestrategies for EU identity were being executed:Common culturally defined European identity – common culturalheritage, political and legal background (Roman descent) symbols; flag,passport, education schemes (Erasmus)Treaty of Rome, basic rights legal system, free movement, Europeanparliament and OmbudsmanSupport outside the EU (Gastelaars & de Ruijter, n.d.).But, this common European identity definitely is not the end case of theoverall efforts of the EU. However, by forming this identity, some believe, thatthe EU will indeed become more stable and able to diminish the tensionsbetween dissimilar social and ethnic groups whose past testifies to numerousconflicts and hostile situations (Popadic, 2008). Eurobarometer tries tomeasure the so called European identity by asking the EU citizens: ‘In thenear future, will you see yourself as [nationality] only, [nationality] and thenEuropean, European and then [nationality], or European only?’ Although,most Europeans still think “Country first, but Europe, too”, Table 1 shows thatthe majority of the respondents do have some sort of, primary or secondary,identification with Europe. In addition, according to them, the European andnational identity seem compatible.Other Eurobarometer surveys show that the majority of Europeanssupport joint decision-making in the policy areas like foreign policy, currency,immigration, defense, and political asylum, but still prefer their government todecide in education, health and social welfare, culture, broadcasting, justiceand police (Caporaso & Kim, 2009).

Ninko Kostovski, Elena Klisarovska: Theories and Practices of Cross-CulturalManagement that Challenge Ethnocentrism within the European Union 149Ethnocentrism vs. PolycentrismEthnocentrism has been studied in social sciences for over a centuryand still no consensus about it has been reached. From some early works,like that of McGee (1900) and Sumner (1906, 1911) who agreed thatethnocentrism is a form of narcissism on a group level, up to some recentstudies like that of Bizumic, Duckitt, Popadic, Dru and Krauss who concludethat ethnocentrism includes terms like self-importance and self-centeredness,rather than just out-group negativity. According to some of them, the point ofethnocentrism is that the (own) group is (by default) more important thanother groups (Bizumic & Duckitt, 2008). Ethnocentrism in its extreme leadsto “ethnocratic” states in which single ethnically defined groups assume power(Yiftachel, 2004). This state will try to eliminate all identified with ‘minorities’who refuse to join to the “common” identity. Ethnocentrism is Popadic’s villain,present in many “crafted” or spontaneous (impulsive) identity projects.However, it has failed on multiple levels and so far it has not been seen as asuccess because it refuses and rejects any differentiated social positioning(Essed & Goldberg, n.d).The European Union does not aspire to any form of ethnocentrism.However, being a social project it is not immune to the presence of Popadic’svillain. We still need to monitor closely the trends in society in order to preventit. The EU has been already threatened by this undesired collective identity asFulton (2011, p.1) puts it “integration has been pushed to the forefront ofpolitical debate” because the scope and population increase constantly withevery enlargement. Moving beyond the goal of creating an economic freetrade area and a political entity, the process came to a point when it wasnecessary for an EU identity to be created, and the “villains” as side-effectshad already crawled in. The opening of the borders did create and promotefreedom of travel, but strong anti-immigrant sentiments also emerged thatcould easily threaten the whole project of future Europe.The anti-immigrant sentiment is dangerous also because it createssituations where there is no trust and no togetherness between various socialand cultural groups. Ethnic prejudices and ethnocentrism are detrimental forthe maintenance of social cohesion (Hooghe, 2009). The EU enlargementformed infra-regional tensions that eventually held back the civic integration ofimmigrants. The German Chancellor Merkel said recently that “Thismulticultural approach – saying that we simply live side by side and are happy

Constructing Europe as a Global Power:150 From Market to Identity?about each other – this approach has utterly failed” (“German multiculturalismhas failed,” 2010). These anti-immigrant sentiments are justified witharguments that the immigrants deliberately segregate themselves throughlanguage and culture and that they cost too much for the already burdenedstate budgets and that the differences in the language, customs, and religionare weakening the society as a whole.In contrast to these assumptions, many European economies werestrengthened, rather than weakened, by immigrants in the years following thefifth wave of enlargement (Fulton, 2011). Regrettably, the results of the EUidentity strategies are not far beyond common EU artifacts (flag, anthem, coatof arms, national colors, etc.) and separate queues at the EU entry points.This EU di-vison of the people and nations has nothing in common with theEU vision, but does add extra fuel to the fire at the EU skeptics’ camps, insideand outside the EU. Despite the efforts leading to a real Pan-Europeanidentity it seems that the national heritage, the local languages and thevarious national identities will effectively obstruct the way to the creation of ahypothetical United States of Europe.Some think that if common political values would be in front ofnationality, heritage and language, the detrimental effect of ethnocentrismwould be avoided. Mokre (2002) points out several important drawbacks ofcommon political values: European rulers are only partly accountable for theirnational policies and that there is not a clear-cut between the legislative,executive and judiciary branches of EU politics. Moreover, the EU Parliamentis not a legislator in the classic sense of the term and the Commission is not aclassic government. On the other hand, for a group identity to exist, thesmaller groups must see it worthwhile to be attached to the higher group.Creators of the future Europe might find it useful to study the case ofYugoslavia. That state naively tried to deal with the ethnocentrism of its unitsby stressing the class instead of the ethnic identity and by fostering theartificial Yugoslav identity. It was a way of cross-cutting that helped sootheethnic tensions (Popadic, 2008), although that social-engineering ended in avirulent inter-ethnic civil war.The research in the EU so far does not provide evidence for aEuropean identity at the group level. In spite of the fact that the majority of EUcitizens acknowledged themselves not just in terms of their nationality but asEuropeans, the proportion with primarily national identity generally increasedwhile that of European identity did not really change between 1992 and 2005.

Ninko Kostovski, Elena Klisarovska: Theories and Practices of Cross-CulturalManagement that Challenge Ethnocentrism within the European Union 151Identity is a complex concept and David Quammen, the Americanwriter and traveler born in Ohio, is right when he stresses that it is such acrucial affair that one shouldn't rush into it. Some answers to it and someexamples of good practices can be found in the corporate managementscience and practice which can aid this identity building process.Corporate Experience as a Source for Possible Ways of Dealingwith Integration and Cultural IdentityIt is becoming obvious that the objectives of Europe as an importantfactor in the world, a community that will serve as model for human rights,democracy, and a society that will not only preserve but also effectivelypromote the existing national states, will be an extremely challenging task.Contemporary corporate management offers concepts already used in thepractice of multinational companies that can be used as models forachievement of common goals, while not suppressing individual aspirations,values and local cultures.Globalization requires the big multinational companies actively to seekways how to adapt to the local cultures, while not changing the overall cultureand profile. Examples of companies like Coca-Cola who manage to putforward their product practically unchanged are rare. In many cases, theadjustments are unavoidable. It seems that a multi-domestic strategy is muchcloser to the realities of the modern world than the rigid global strategy. Andthis is not only a case of simple customization of the product and servicemixing terms of the local culture into the translation of the users manuals, butit needs substantial intervention into the “our way of doing business” model.Some companies learn the hard way and some use best practices toavoid making the same mistakes. The case of Disney teaches us howunwillingness to change anything even though there are many examples ofcompanies going abroad, and we are not referring to sacred symbols here,can lead to an unsuccessful integration. When Disney tried to move toEurope, Paris, in the beginning of the nineties, they lost $1 billion in the first18 months. The problem was that Disney did not consider the differences inEuropean and American culture. Namely, Europeans are not that strict aboutdress codes and management rules like Americans and employees found ithard to adjust. In addition, they did not account for the European tradition ofdining after eight or the tradition of wine drinking in France, which was banned

Constructing Europe as a Global Power:152 From Market to Identity?in this theme park. As soon as these changes were made, the park started tomake profit!Maybe one of the best companies to execute a strategy for success inevery country where it competes is Vodafone, a company successfullyoperating in 40 countries. The basis of its strategy, called “Partner MarketAgreements”, lie in their willingness to change since Vodafone allows variouslevels of brand association of products and services (McKee, 2012). OrMcDonald’s, who in the Indian market adapted its sandwiches by makingthem predominantly chicken and in the Balkans predominantly meat.Moreover, these individual specifics can be used for the creation ofdeveloping best practices, the concept of continuous improvement in whicheverybody learns form the best in a particular area of the social life.Consider, for example, Americans. Among the many cultural symbolsthat they have, American football might be the most sacred one for them. Itrepresents their culture; they are passionately attached to the NFL and theyhave numerous rituals surrounding the Super bowl. Some Americans go sofar that they organize their lives around this game. Nevertheless, Americanfootball, just like any other successful business, aspires to entering newmarkets. Seeing Europe as a suitable market, they tried in the beginning ofthe 90s to establish it there. After many failed attempts, football wassuccessfully established only in Germany. Why did it fail and why didAmerican football succeeded in Germany whereas it failed in Spain? This inmany ways is a cultural issue. The Spanish culture is represented bygrandiose and artistic spectacles of blood violence, danger and pride. Thebullfights, as a metaphor for Spanish culture, represent the same. InGermany, on the other hand, there was a success due to the fact thatGerman culture is based on rules and order, and American football is allabout stop-and-go pace timed to the second. Thus, the appeal of Americanfootball has varied from country to country due to cultural differences(Cavusgil, Knight & Reisenberg, 2008).Cross-cultural setting is a particularly significant aspect of modembusiness, directly influencing organizational competence and itscompetitiveness. Fast-paced globalization requires organizations to operatewith diversified workforce and identities. Management approaches from theperspective of people and culture let us comprehend the power of nationaland ethic cultures organizational functioning. Companies that see the value ofmulticultural teams invest in education and training for operation inmulticultural setting.

Ninko Kostovski, Elena Klisarovska: Theories and Practices of Cross-CulturalManagement that Challenge Ethnocentrism within the European Union 153The answer to the problem can be found in the concept of culturalsynergy. As a way to manage the impact of cultural diversity it involves aprocess in which managers from organizational policies, strategies,structures, and practices, based on, but not limited to, the cultural patterns ofindividual organization members and clients. This approach recognizes globalorganization as a composition of similarities and differences among thecultures that suggests that they do not ignore or minimize cultural diversity,but see it as a source in designing and developing organizational systems(Adler, 2002).The model of organizational cross-cultural competence formation andmanagement offered by Kristina Kersiene and Asta Savaneviciene, involvesfive newly stated organizational cross-cultural competence formationprinciples:1. Integrated network structure and geocentric approach are twoorganizational characteristics that influence the formation of organizationalcross-cultural competence;2. The ability to adapt in different cultural environment, the ability toabsorb spread and create knowledge, and the ability to execute successfulinternational assignments are organizational abilities that form cross-culturalcompetence;3. Cultural integration strategies and HRM oriented towardsorganizational cross-cultural competence formation are employed asmanagement instruments;4. The sense-making of different cultures is an organizational crossculturalformation process;5. Cultural synergy comes as the result of the successful integration ofthe entire organizational cross-cultural competence formation andmanagement.This model enables us to integrate and replace ethnocentrism, a beliefthat one’s culture is superior to that of others, with cultural literacy, a detailedknowledge of a culture that enables a person to function effectively within it,by understanding cultural differences, being culturally literate and localizingpolicies (Kersiene & Savaneviciene, 2009). In the words of Hofstede,Namenwirth, and Weber: “A system of values and norms that are sharedamong a group of people and that when taken together constitute a design forliving” (cited in Hill, 2007, p.94).Leaders of big companies (Jobs, Gates...) manage to convey clearvisions to a more diversified and larger work group than the EU setting. Some

Constructing Europe as a Global Power:154 From Market to Identity?politicians need to learn from managers’ simple yet clear ways ofcommunication (Steve Jobs presenting iPod for example). Businessmanagers are aware that a good product and service does not necessarilymean successful sales and a lot of attention needs to be paid to the ways ofbringing the new product to the customer. Politicians think that this can bedone with press-conferences at which reporters wait for hours in order to beconvinced of how hard the debate was, are sufficient for conveying an idea.In the corporate world, there is a strong and clear link between visionand mission. When Dell announced their vision to become number one in theworld of personal computers, the company also dedicated time and money toachieving this goal. Michael Dell has not achieved that goal yet, but clear-cutinstructions and operational programs which cover executing the main goalwere outlined. Not to mention the amounts of money, marketing, and timededicated to this idea. The question emerges: Will the EU be as successful asit wants to be in global declarations like: to become the most innovativeeconomy in the world (“The Lisbon Treaty”, 2007) if the programs andinstruments for realization still persist with being vague and overcomplicated.For example, in the sphere of small and medium enterprise (SME) support, uptill the Lisbon Treaty, the European Charter for SMEs was in act, which wassimple enough and down to earth, to be replaced by the Small Business Act(2008) which is too ambitious and over demanding for the majority ofEuropean companies, and not only for the small and underdeveloped. TheCharter had a practice for peer-review between countries creating bestpractices that were easily implemented, and that concept was abandoned asnaïve. On the other hand, all easy concepts can be labeled as naïve, but forthe business, it is not an obstacle for success, but an advantage.The Project Management has become a simple outlined routine for themajority of companies. However, this does not stop the Project ManagementInstitute, the World’s leading not-for-profit membership association with morethan half a million members and credential holders in 185 countries(http://pmi.org) from creating the world’s leading concept of continuousimprovement in the area of its competency.Nassir Nicolas Taleb (2010) is a popular American professor andfuturist who believes that in the following thirty years, only the simpleconcepts will have a chance to endure (basic cell phone, printed book,Facebook, or Tweeter). Nobody wants to be related with concepts toocomplicated and too difficult to comprehend, particularly not the new

Ninko Kostovski, Elena Klisarovska: Theories and Practices of Cross-CulturalManagement that Challenge Ethnocentrism within the European Union 155generations that adore the simplicity and the speed of the most popular socialnetwork today, Facebook.This is just a modest selection of the theories and the practices ofcorporate and organizational management that can be used in a search forthe answers to previously mentioned dilemmas related to building EUresistance to extreme ethnocentrism and polycentrism. It seems that the EUinstitutions and leaders can learn a lot from their colleagues in the corporateworld and the dedication, passion and leadership traits that they show. Anycommon social concept, as the EU is, should be able to demonstrate its abilityto effectively deal with any “disobedient” member (politician or state) if itstrives with others to be willing to consider their worthiness for attachment to it.ConclusionSo far, the European Union has done a good job in laying thefoundations for a common EU identity and culture by establishing a commonmarket, common currency and abolition of national borders and not justtraditions, common cultural heritage and ethnicity. However, the criterion ofcultural identity also needs political determination.We can learn a lot from thehistory of the ancient Roman Empire. First of all, is seems that the state then,was extremely open to including various groups, nations and cultures.Moreover, it was based on a merit system, not on other criteria like bloodlineage or political links. The Roman Empire had an extremely successfulmanagement of its cultural diversity. The central administration was simpleand based on limited tax burdens upon its constituencies.To summarize, the idea of this research paper is to discuss certainissues connected to EU identity and to answer the question of whether or notthe EU has a potential of becoming the most innovative economy in the worldand how that can be achieved? A few issues have been identified in thispaper as crucial for the EU project:Successfully fulfilling the objectives of the Treaty of Rome will, in thelong run, determine the prospects of the EU and it will make Europe animportant power factor in the world, once again.Even though there is no strong evidence that identity exists on agroup level not all efforts are in vain. As we already mentioned, identity is adynamic process and it should be a final success of an integration projectbased on synchronisation and union.

Constructing Europe as a Global Power:156 From Market to Identity?Anti-immigrant sentiments and out-group negativity as side-effects ofevery integration project should be approach with utmost importance andsensitivity because they silently lead to ethnocentrism and prevent thestrengthening of the economy through high net fiscal contribution, income tax,government revenue and labour force.The concept of cultural synergy, which is a way to manage the impactof cultural diversity, involves a process in which managers from organizationalpolicies, strategies, structures, and practices, based on, but not limited to, thecultural patterns of individual organization members and clients can be usedas a tool to aid the identity building process.Contemporary corporate management practices offer concepts alreadyused in the multinational companies that can serve as models forachievement of common goals, while not suppressing the individualaspirations, values and local cultures. Globalization requires the bigmultinational companies to seek actively the ways to adapt to the localcultures, while not changing the overall culture and profile. Examples ofcompanies like Coca-Cola who manage to put forward their productpractically unchanged are rare. In many cases, adjustments are unavoidable.It seems that a multi domestic strategy is much closer to the realities of themodern world than the rigid global strategy. And this is not only a case ofsimple customization of the product and service mixing local cultural termsinto the translation of the users manuals, but it needs substantial interventioninto the “way of doing business”. Some companies learn the hard way andsome use best practices to avoid making the same mistakes (Disney,Vodafone and McDonalds). Thus, the emerging question is answered: TheEU will be successful in becoming the most innovative economy in the world ifthe programs and instruments for realization cease to be vague andovercomplicated and become simple.In this paper we presented just a modest selection of theories andpractices of the corporate and organizational management through exampleslike Disney, Vodafone and McDonalds that can be used in a search foranswers to the previously mentioned dilemmas related to building EUresistance to the extreme ethnocentrism and polycentrism. Without apretension to claim that the corporate world is by default a better performer in“solving” the cultural and political ethnocentrism vs. the self-managementconundrum, (it has enough of its own illusions and inefficiencies to fight) itseems that the EU institutions and leaders can still learn a lot from theircolleagues in the corporate world. We are also fully aware that in the case of

Ninko Kostovski, Elena Klisarovska: Theories and Practices of Cross-CulturalManagement that Challenge Ethnocentrism within the European Union 157any comparisons between the political and corporate leaders, the formermight be the subject of discrimination on at least two instances. Firstly, theyare sometimes under a cruel scrutiny by the media and their mistakes andwrongdoings are often, in fact exaggerated, while their achievementsrelegated, particularly by their political opponents. And, secondly, the imagethat corporate leaders enjoy, could be in fact a result of their PR departmentengineering, rather than a result of their personality or public actions.

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Makedonka Dimitrova, Ilijana Petrovska, Marjan Bojadziev: Green EconomicsYoung Generations to Help Achieve Future Sustainability of Europe 161Green Economics: Young Generations to Help AchieveFuture Sustainability of EuropeMakedonka DimitrovaIlijana PetrovskaMarjan BojadzievAbstractThis paper seeks an answer about the level of awareness of greeneconomics/green jobs as a concept for sustainable growth among theyoung population in Europe. In order to provide a basis for sustainablegrowth we take into consideration the essential issues. Green economicsis an emerging field of economics combining knowledge from the naturalsciences and economy, thus offering unique insights into four areas:climate changes mitigation, businesses, political and moral. Theconclusions refer to the future needs for building awareness and creatinga solid base for knowledge sharing on sustainable development issuesamong the young population. In addition, recommendations for inclusivepolicy dialogue to facilitate such growth are part of the focus as well. Theresearch group targeted 30 people from five European and one Africancountry between 18 to 25 years of age. A method using qualitativeresearch combined with exploratory research has been used for thissurvey and its analysis.‘If everyone used energy and resources the same way wedo in the Western World, we would need three more earthsat least. And we have only one.’(Mona Sahlin,former Minister for Sustainable Development, Sweden;Institutionalizing Sustainable Development, 2008)

Constructing Europe as a Global Power:162 From Market to Identity?IntroductionThe practice, research and ongoing debates on the links betweensustainability on the one hand and green economics on the other have muchin common. Green economic development is essential to what sustainabilityadvocates. The effort is not to wait for green economics to become a prioritytopic as was the case with sustainable development which took over 20 yearssince the Brundtland Commission (96th Genaral Assembly Plenary MeetingReport, 1987 ) published its landmark report.Given the time and capacity needed to change the current decisionmakers’ domination, it will be more efficient to focus on the youngergenerations and their future responsible behavior. The EU education policyoffers opportunities to work and educate young people and thus elevate theircapacity to meet the growing demands of a comfortable life in line with theenvironmental challenges. In general, new concepts of various natures werealways better accepted by the younger generations. Once a concept becomesa lifestyle it is already imbedded in the practice. In cultures that make use ofthe concept of green economics, green jobs and carriers, as well as greendevelopment the society has a solid basis for achieving a greater level ofsustainability.In particular, we consider green economics, an emerging field ofeconomics combining knowledge from the natural sciences and economy andthus offering unique insights into four areas: climate changes mitigation,businesses, political and moral. The EU, reassuring the world of its leadershipposition in combating climate change (European Commission, 2008) is pavingthe way for other countries. But what shall Europe do to keep this leadershiprole?Approaching SustainabilitySustainability in simple but precise terms may be measured andobserved through the concept of the Ecological Footprint (Fiala, 2008) whichprovides an intuitive framework for understanding the ecological bottom-lineof sustainability. The Ecological Footprint (EF) is directly related to greeneconomics by stimulating an environmentally friendly approach both in thebusiness and housing sector. The EF concept stimulates public debate, builds

Makedonka Dimitrova, Ilijana Petrovska, Marjan Bojadziev: Green EconomicsYoung Generations to Help Achieve Future Sustainability of Europe 163common understanding and suggests a framework for action. The EF makesthe sustainability challenge more transparent - decision makers have aphysical criterion for ranking policies, project or technological optionsaccording to their ecological impacts (van den Bergh & Verbruggen, 1999).The EF indexing and formulas were changed, from the originals, in a way tobetter reflect an individual’s attitude towards the environment as a direct resultof the interest in this topics and the ongoing growth. Here, we may use greeneconomics as a tool to achieve a lower EF which in turn supports sustainablebehavior at many levels. That said, sustainability does not mean ‘giving up’one’s comfortable living habits.Our ‘Common Future’ reported on many global realities andrecommended urgent actions on eight key issues to ensure sustainabledevelopment, i.e. that it would satisfy 'the needs of the present withoutcompromising the ability of future generations to meet their own needs' linkingthe economy, society and environment (Strange & Bayley, 2008). These eightissues incorporate population and human resources, industry, food security,species and ecosystems, urban challenge, managing the commonenergysupply as well as conflict and environmental degradation. Once completelyintegrated they represent a well balanced approach to sustainable growth,especially in an environmental sense.There are numerous opportunities to approach sustainable growth.Speaking about younger generations, they can implement the lessons learntfrom many sectors such as food security by finding a way to grow food wherethere is a difficult climate or poor soil, process waste to hinder soil pollution orknitting rural development into the urban practices etc.Countries like Egypt may combine forces with EU in the area of greenjobs transfer know-how and creating thousands of green posts as an initialresult. Since January 2011, Kuraymat is hosting the first solar field of its kindin Egypt, or more precisely, the first modern one, as the world’s very firstparabolic trough was built in Egypt in 1912(Solar Millennium, 2010). The130,000-m² solar field designed by Flagsol is part of a 150-megawatt hybridpower plant that will use both solar energy and natural gas to generateelectricity. There are only three plants of its kind in the world, but the spillovereffect has great potential for the EU.Besides the practical approaches, the EU policy is strict and binding,offering alteration to a certain extent, i.e. the EU integrated energy andclimate change policy demonstrates its global leadership in tackling climatechanges while increasing the security of supply and strengthening its

Constructing Europe as a Global Power:164 From Market to Identity?competitiveness. New jobs and careers integrating the environmental aspectscomplement the policy (European Union, 2007). In additions, the EU’s ’20-20-20 obligations’ to cut on greenhouse emission gases facilitated creation ofgreen careers such as energy auditor (Business Dictionary, 2009), thermalsolar installer, photovoltaic engineer/installer and etc. These new trends alsoreflected on a cross sector level. The linguists had to add new words andexplanations to the dictionaries that did not list such terminology at all oroffered poor descriptions. This was the case with one of the world’s mostrenowned dictionaries for ex. solar panel - solar panel is a device thatchanges energy from the Sun into electricity (Cambridge Advanced Learner'sDictionary, 2003)Green economics may be observed by the aspects of advancedeconomies and economies in transition. The more developed countries likeUK, Ireland, Germany, Sweden etc., have the possibility and the resources toimpose stronger legislative framework to further influence the green jobsdevelopment. On the other hand, the countries in transition may take thepossibility for regional development and the cluster approach to strengthentheir sustainability prospective. In particular, Macedonia may combine itsresources with Albania, Serbia, Montenegro and more developed countriessuch as Greece and Bulgaria in the region to achieve a more competitiveeconomy in line with the environmental goals. In order to back up theapproach, we will focus on a green job, more precisely that of solar thermalsystems installer in the Balkans. The sun radiation in the region is similar andthe culture towards implementing new technologies is alike while the maindifference is the level of income and purchasing power. The issues may beovercome by a transfer of best practices and policy changes occurring in thecountries in the region that already have a high rate of installations includingknow-how, taxation mechanisms, educational modifications, and statesubsidies. The skills needed are the same across the region and offer avenue for frequent cooperation as the Macedonian market in legging behindBulgaria and Greece but they are better off in comparison to Kosovo, Albania,Serbia and Bosnia and Herzegovina. The adopted skills then may betransferred to the above mentioned countries. Similar to this one there are anumber of opportunities waiting to be promoted and to contribute to thesustainable development of the nations across the globe, yet there is noculture, social aspect or morale when it comes to environmental protection.The further development seeks a more comprehensive approach to meetaspects of sustainability.

Makedonka Dimitrova, Ilijana Petrovska, Marjan Bojadziev: Green EconomicsYoung Generations to Help Achieve Future Sustainability of Europe 165Green Jobs to Support Sustainable GrowthAs social justice is one way to achieve sustainability through higheremployment rates (OECD, 2003), it’s being addressed through theinvolvement of low-skilled as well as high-skilled workers that could thereforeplay a key social function in addressing Europe's unemployment crisis(Euroactive, 2010).The development of green jobs in the fields of wind power, solar power,organic farming, natural building, mass transit, hydropower, holistic medicine,green engineering, geothermal power, green automobiles, environmentalscience, conservation, clean energy, cellulosic biofuels, carbon/ CO2emissions, building and retrofitting represents a proper approach to climatechanges mitigation. The support to build upon these careers is more thanexpected from the European governments and finding schemes.A good practice to stimulate interest in green jobs is certainly therecently published book on ‘Green Carrier for Dummies’ (McClelland, 2010).The book gives a new light to the green jobs quest and the US experiencemay be quickly adopted and adjusted to the European setting.The USA set a good example to other nation, i.e. US Department ofEnergy was awarding $2B in loan guarantees to two solar companies allowingthem to scale up their business. This governmental policy is expected tocreate 5,000 new green jobs as announced by President Barack Obama atthe end of 2010.What is not obvious but very important for Europe in this actis that the technological support behind one of the deals was a Spanishleader on the market (Safani, 2010). This activity points to the greatimportance of continued European Union support to its member countries intechnology development. That said, there is a moderate utilization of EUfunding schemes for research, demonstration projects and best practicesreplication by the businesses and research institutions across Europe.Empirical FindingsFor the purpose of this paper, we have used a method of researchcombining both qualitative and exploratory research. A nine day behavioraland social observation of the group, followed up by ten closed end questionswere set as a base for the research. The sample group included youngpeople participating in a recent EC Directorate General for Education ‘Youth

Constructing Europe as a Global Power:166 From Market to Identity?in Action Program’ organized by the Green Economics Institute based inReading, United Kingdom (UK). Students’ average age was 22 years. FiveEuropean and one African country: Egypt, Macedonia, Malta, Italy, Ireland,and the UK were represented.The countries mentioned above are at different developmental stagesranging from highly developed to poor and transitional countries. This mayresult in contradictory answers that unfortunately, due to the research methodcould not be grouped by countries and grow into deeper research. As thegroup was small in size, it also affected the research findings and there arestill open issues to be considered in future research. We have taken intoaccount the shortcoming of the research method when discussing the resultsas well.Over 60% of the respondents’ educational background is in economicsmeaning they might not be fully aware of the pros and cons of climatechange. However, we assume that most of them are aware of the implicationof climate changes on the local and global ecosystems, thus affecting thedomestic economies. The recent Japanese catastrophic developments as aresult of ‘force major’ which had a major impact on the power system andeconomic damage to the country may have increased the awareness amongthe respondents in the meantime.The program offered exposure to green communal living and urbanlifestyles on a parallel. The way our lives are structured, it is more likely thatthey prefer the comfortable lifestyle having in mind the behavior alteration andadjustment required for going fully green. Therefore, the questionnairefocused mostly on student’s perception of green economics and sustainabledevelopment reflected in simple and closed ended questions. Below weoutline the questions and important insights to better justify the conclusionsand recommendations for improvements towards sustainable working andliving.The first question focused on the perception of the concept of greeneconomics. The UK program, offered an introduction to a great range ofgreen lifestyles including communal living providing a good starting point fordifferentiation of the lifestyles. The responses indicated that participants stilltend to relate the concept of green economics to sustainable living andworking; 90% of the group thought in this manner. (Chart 1, Annex 1).On the question ‘what the green economic is?’ (Chart 2, Annex 1), halfof the respondents said that it is only a tool to achieve sustainability, andthirty-five percent answered that it is a way to implement good environmental

Makedonka Dimitrova, Ilijana Petrovska, Marjan Bojadziev: Green EconomicsYoung Generations to Help Achieve Future Sustainability of Europe 167practice at the workplace. Only five percent from the respondents haveanswered that it is actually going back to the roots, to nature and growingyour own food. The results from the first and second choice narrow down tosustainable development but also reflect a misconception or poor conceptionof sustainability issues, which is another challenge for the young people tocommunicate both in their own countries and regionally.The following question (Chart 3, Annex 1), makes clear that youngpeople think that economic development is the main reason for climatechange, seventy-six percent agree and fourteen percent disagree. Theremainder was not decisive, probably as consequence of low awareness andknowledge of the particular issue. This is a good indication, even though amajority of the respondents have an economic, legal, or social educationbackground, they are still aware of climate changes impacts. This may help tobuild upon basic knowledge and implement green practices in their current orfuture careers. Moreover, they don’t believe that the current economic scienceshall be rewritten and as presented in the Chart 4 (Annex 1), but most of them(71%) are looking for changes. Twenty-four percent from the young people donot have enough knowledge to answer the posed question.In fact, this outcome was not our expectation at the beginning of theresearch, as the current economic science focuses on profit as a means forsocial welfare and a comfortable life, but the observations reveal that hugedifferences in the economic development of the countries may be the causefor this opinion. Also, the human development indexes point to a similar status(McGillivray, 1993). People in general believe that if one starts all over, thenew outcome may be different while the core remains the same, only thesurface changes. Therefore, there is no need to reshape the currenteconomic practices, just use less resources to implement green practicesleading to greater sustainability of the countries.As presented in the Chart 5 (Annex 1), half of the respondents knowand are aware about their personal carbon footprint while thirty –three percentare not aware and fourteen percent don’t know what it is about. This isindicating a negative tendency that might be caused by the complexity of thecarbon footprint calculations. Half of the young respondents are not aware oftheir behavior or how their own lifestyle reflects their surrounding, so itsuggests an immediate action to tackle the issues.The sixth question emphasizes the level of willingness for makingchanges and improvements in their lives towards a greener world orwillingness to make changes in the way they use natural resources in

Constructing Europe as a Global Power:168 From Market to Identity?everyday life. Chart 6 (Annex 1) is crucial to this research and the positiveresults that show a high level of motivation among young people justifies theneed to continue developing programs and support schemes for a youngerpopulation.In the next question (Chart 7, Annex 1) we are going back to the mainresearch question, but taking a deeper look at their perception of greeneconomics. Half of respondents look at green economics as a set of new jobsand careers and the other half as modifications to current practices. A verysmall percentage of the respondents think that they are related to urban orrural living.The last question regarding ‘What kind of countries could implementthe green economics?’ is answered with equal percentages, which meansthat there is no clear and unified opinion on the topic. A major misconceptionamong the respondents is that all countries have similar possibilitiesregardless of the level of development which does not reflect the reality at all.The upper findings indicate that there is a possibility for greeneconomics to make an alteration and improvements on the new way ofworking and living.ConclusionsIn summary, the strong economies have better options, power andtools to support the sustainable development through generation of new jobsand greening the existing careers while the others have only limited choices,mostly related to behavioral aspects. However, some strong economies, inlack of natural resources, invest in research and development and sell theknow-how to keep up pace with the others (the case of Austria vs. Macedoniain utilization of solar irradiation and export of solar thermal collectors’ knowhow).All responses have a tight relationship with green economics conceptsindicating that rural living is underestimated by the new generation. If it werenot for the rural areas our food supply would suffer and as a consequence theurban living would be influenced adversely with respect to technicaladvancement.However, it is obvious that these young people perceive sustainableliving and working as green economics. They have limited understanding ofthe people that have decided to commit to rural living and working. Theyindividually prefer more commodity and urban culture. In this respect, morecollectivist countries such as Macedonia, Egypt, Italy and Malta tend to urban

Makedonka Dimitrova, Ilijana Petrovska, Marjan Bojadziev: Green EconomicsYoung Generations to Help Achieve Future Sustainability of Europe 169and technologically progressive living. This is a good starting point for jobsdiversification and new professions development in order to better suit lifeexpectations. From a social perspective, it is quite possible that the personalagenda of many European countries and the exposure to new lifestyles mayhave played a role in enabling an environment which helps people to betterunderstand other people’s lifestyle preferences such as the UK and Ireland.That said, European institutions should try to diminish the differences both ineconomic and social aspects of living and work on a joint ground forsustainable development.Referring to the ecological footprint, there was a misconceptionobserved during the conversations and debates between participants duringtheir stay in the UK. The superficial knowledge on the matter contributes to anarrow understanding of the interrelation of various indicators includingeconomic efficiency, spatial equity, and environmental sustainability as a partof the concept. This may be the reason for understanding sustainability asisolated and not a cross border, regional or global effort.The increased attention to sustainable growth allowed improvements ina few green economic concepts among which are the emerging of greenprocurement procedures in the public sectors, introduction of new standardsto better reflect the production, and service industry commitments to cleangrowth (recently introduced ISO 500001 Energy Management). The humandevelopment was directed towards adjustments in the education sector. Newcourses and specialized training schemes for green jobs and relatedcertification schemes were offered mostly in the more developed EUcountries. The spillover effect towards the poorer countries in transition isalready being supported through the EU in particular country specific grantingschemes. The ‘Youth Pass’ or ‘Youth in Action’ program (Eduaction andCulture DG - Youth in Action Program) has also contributed to an exchange ofideas among young people in multicultural settings during the projectrealization in the UK and continued afterwards facilitated by the social media.Moreover, there is a need for a systematic approach to address the currentand future green jobs and carriers. The sectors of renewable andenvironmental protection are only to start with as there is an environmentaldimension related to all jobs.Only starting from the domestic behavior and younger generationsmoving on to continuous educational programs we may create leaders, policyand decision makers prepared to support the scientific progress withoutconditions for political compromises between countries. There has to be a

Constructing Europe as a Global Power:170 From Market to Identity?mechanism developed to facilitate the sharing of social welfare and advancedknowledge of environmentally friendly growth between the countries intransition and/or poor countries. The green growth of countries with scarcity ofnatural resources shall be innovatively supported with other available tools forsustainable development. In the process of overcoming the differencesbetween nations we shall allow the emerging green jobs and careerdevelopments to lead the way towards investments in the infrastructure andhuman capital needed for a sustainable economy. This requires a ‘Green newdeal’ but the results must be resilient and adaptable to change.Progressive economics would say that there is a need to practiceeconomy that allows us to prosper while encouraging other countries to adoptsustainable economic policies and to enter into effective internationalagreements where the economic policies will fit a foreign policy designed toadvance the vital national interests (Greeham, Johnson, Meadway, Seaford,& Wallis, 2011).Policy RecommendationsGenerally speaking, there is a need for policy restructuring to better reflectthe needs for sustainable growth of each country. The EU officials emphase thateven the high skilled workers of various professions demand further training andskill building to better adapt to the market demands in light of environmentallyfriendly growth. Along with this, green jobs also mean millions of low-skilled jobsbut we all need further education as to how to recognize them. The combinationof the empirical findings and the conclusions of this paper identified a few policyrecommendations among which are the following: Well structured education program on green jobs and possibilities toadvance in these careers offered by pioneers in the field, with supportfrom the Directorate General for Education (accompanied with realisticfeedback from the beneficiaries), Cross border platform to allow newly skilled workers to transfer theirknowledge and hinder the work force migration to stronger economies, Cross-sector research and development support to reduce the braindrainfrom weak economies or economies in transition, Social inclusion and justice to ensure all nations and people are treatedequally as a base for further human capital development, Extension of the EU financial supporting schemes to all players with aproven record of implemented best practices, and

Makedonka Dimitrova, Ilijana Petrovska, Marjan Bojadziev: Green EconomicsYoung Generations to Help Achieve Future Sustainability of Europe 171 Wider outreach, cross border public education campaigns on theemerging jobs and behavioral change required for achieving greatersustainability both al local and regional level.If realized, the recommendations above will enable tools to measure thesustainable development by nations (Moran, Wackernagel, Kitzes, Goldfinger, &Boutaud, 2008) and allow for additional support to the countries with a low levelof development.

Constructing Europe as a Global Power:172 From Market to Identity?References96th Genaral Assembly Plenary Meeting Report. (1987 ). 42/187. Report ofthe World Commission on Environment and Development. Zeneva: UnitedNations Department of Economic and Social Affairs (DESA).Bergh, V.D., Verbruggen, H., & Jeroen, C. (1999). Spatial Sustainability,Trade and Indicators: an Evaluation of the “Ecological Footprint”. EcologicalEconomics, 29 (1) , 61–72.Business Dictionary. (2009). Retrieved from www.businessdictionary.comCambridge Advanced Learner's Dictionary (Third Edition). (2003). Cambrige:Press Syndicate of the University of Cambridge.Eduaction and Culture DG - Youth in Action Program. Youth Pass. Retrievedfrom https://www.youthpass.eu/en/youthpass/youthpass/Euroactive. (2010, June 11). EU promotes green jobs: Way out of crisis.Retrieved from http://www.euractiv.com/en/climate-change/eu-promotesgreen-jobs-way-out-crisis-news-495118European Commission. (2008). Combating Climate Change - The EU leadsthe way. Luxembourgh: Eropean Communities.European Union. (2011, January 15). Climate Changes Action 2007.Brusseles, Belgium.Fiala, N. (2008). Measuring Sustainability: Why the Ecological Footprint isBad Economics and Bad Environmental Science. Ecological Economics,67(4), 519-525.Greeham, T., Johnson, V., Meadway, J., Seaford, C., & Wallis, S. (2011).New Economics. Retrieved May 6, 2011 from The new jobs plan: A newapproach to industrial strategy:http://www.neweconomics.org/sites/neweconomics.org/files/The_Good_Jobs_Plan_0.pdfMcClelland, C. (2010). Green Careers For Dummies. Indianapolis: WileyPublishing.McGillivray, M. A. (1993). Measuring Development? - Human Development .Zeneva: UNDP.Moran, D. D., Wackernagel, M., Kitzes, J. A., Goldfinger, S. H., & Boutaud, A.(2008). Measuring Sustainable Development – Nation by Nation. EcologicalEconomics, 64 (3), 470–4.OECD. (2003). OECD Employment Outlook 2010: Towards More and BetterJobs. OECD Publishing.

Makedonka Dimitrova, Ilijana Petrovska, Marjan Bojadziev: Green EconomicsYoung Generations to Help Achieve Future Sustainability of Europe 173Safani, B. (2010). 5,000 New Green Jobs. Retrieved fromhttp://jobs.aol.com/articles/2010/07/20/green-jobs/Solar Millennium. (2010). Retrieved fromhttp://www.solarmillennium.de/upload/Download/Unternehmen/Unternehmensprofil_Solar_Millennium_engl.pdfStrange, T., & Bayley, A. (2008). Sustainable Development. Paris: OECD.Van den Bergh, J. C., & Verbruggen, H. (1999). Spatial sustainability, tradeand indicators: an evaluation of the 'ecological footprint. EcologicalEconomics , 29(1), 61-72.

Constructing Europe as a Global Power:174 From Market to Identity?Annex 1Chart 1. Question 1 - The concept of green economics relates to greenlifestyle or sustainable living and working?The concept of green economics relates toResponsePercentResponseCountgreen lifestyle 10% 2sustainable livingand working 90% 19Chart 2, Question 2 – What is green economics?Would you say that green economics isPercentCounttool to achievesustainability 50% 10way to implementgoodenvironmentalpractice at theworkplace 35% 7going back to thenature andgrowing your ownfood 5% 1Other (please specify) 2

Makedonka Dimitrova, Ilijana Petrovska, Marjan Bojadziev: Green EconomicsYoung Generations to Help Achieve Future Sustainability of Europe 175Chart 3 – Question 3Would you agree that economic development is one of the reasonsfor climate changes?yes 76% 16no 14% 3I do not know 10% 2Chart 4 – Question 4Do you think we need to rewrite the economic science to betterrespond the current situation?yes 71% 15no 5% 1I do not know 24% 5Chart 5 – Question 5Are you aware of your personal carbon footprint?PercentCountyes 52% 11no 33% 7I do not know 14% 3

Constructing Europe as a Global Power:176 From Market to Identity?Chart 6 – Question 6Are you willing to change the way you use electricity/gas/ etc., collectwaste, at home/work?Percent Countyes 100% 21no 0% 0maybe 0% 0Chart 7 – Question 7Green economics is about?new jobs andcarriers 45% 9modifications tocurrent practices 45% 9urban living 5% 1rural living 5% 1Chart 8 – Question 8What kind of countries may afford sustainable development?poor 20% 4countries intransition 15% 3rich 30% 6hi-tech countries 25% 5countries withabundance ofnatural resources 10% 2

Zoran Sapurik:New European Union Consumer Protection Legislation and the Implementation in Macedonia 177New European Union Consumer Protection Legislationand the Implementation in MacedoniaZoran SapurikAbstractThe EU aims to achieve a high level of consumer protection for itsproducts and services. The sphere of consumer rights has an impact onthe identity of internal market, which with almost 500 million consumers,is one of the largest in the world. The EU legislation sets up generalsafety regulation for services, foodstuff and non food products. TheTreaty on the functioning of the European Union promotes a high level ofconsumer protection and underlines the importance of activities andmeasures in the field of consumer rights. According to the Treaty,consumer protection shall be taken into account in defining andimplementing other EU policies and activities. This papers aim toelaborate on the situation in the sphere of consumer protection and togive some recommendations for further activities. Also, the paper aims toinitiate a wide process of debate about the consumer policy andlegislation. The importance of the subject justifies it. Beside high level ofprotection, the European Commission annually receives more than 1500notifications of unsafe products. With the intention to create betterprotection, The Commission proposed a new Directive on consumerrights, that shall merge four existing directives.The Republic of Macedonia as a candidate state has been making effortsto improve its legislation and activities in the field of consumer protection.The last European Commission progress reports comments on thepresent situation in the field on consumer protection. In the future,Macedonia has to continue with the activities in the area of consumerprotection.

Constructing Europe as a Global Power:178 From Market to Identity?IntroductionThe European Union has been acting permanently to protect and toimprove the quality of health and quality of life of its citizens. One of the basicpillars of this engagement is the consumer protection matter. The internalmarket has a crucial role in building benefits for EU citizens. The identity ofthe internal market has a strong dependence on the consumer protectionregulation. Efficient and effective single market needs an EU level consumerprotection policy and legislation. Common legislation rises from the commonpolicy. Common activities and measures are core instruments for theimplementation of the policy and legislation in the area of consumerprotection. From year to year the EU has been making firmer consumerprotection regulation. The numerous Union institutions are working on theconsumer protection issues. Consumer protection legislation contributes tothe protection of the general rights of citizens.We can recognize the EU commitment to consumer protection in theTreaty on functioning of the European Union, which together with the Treatyon the European Union, has constitutional importance (The Treaty on theEU). In article 169 (ex Article 153) of the Treaty on functioning of theEuropean Union, it is stipulated that in order to promote the interests ofconsumers and to ensure a high level of consumer protection, the Union shallcontribute to protect health, safety and economic interests of consumers, aswell as to promote their right to information, education and to organizethemselves in order to safeguard their interests. The Union shall contribute toattain the objectives referred to consumer protection, through measures whichsupport, supplement and monitor the policy pursued by member states. Themeasures taken by member states must be compatible with the Union treaties(The Treaty on functioning). That clearly demonstrates the firm determinationto strengthen activities, policies and legislation on the EU level in the field ofconsumer protection. The Republic of Macedonia, as a state with anaspiration for membership in the EU, has a number of obligations fortransposing and implementing the EU standards and EU legislation in manyspheres. One of those spheres is the sphere of consumer protection, whereMacedonia has been acting toward improvement of consumer protection.

Zoran Sapurik:New European Union Consumer Protection Legislation and the Implementation in Macedonia 179European Union Policy in the Field of the Consumer ProtectionThe European Union consumer protection policy is a young policy. It hasa very ambitious agenda. The Union is dedicated to building a new consumerpolicy, which will be more coherent. The EU policy in the field of consumerprotection has a goal to enhance the consumers’ possibilities to make arational choice. It has significant impact on the strength of the internal market,as one of the largest markets in the world with almost 500 million consumers.The EU consumer policy aims to be proactive and to support theconsumer activities. That policy is interactive, promoting permanentimprovement and the consumer education, consumer interests and dialoguebetween consumers, business sectors, experts and all other relevant stakeholders. The process of adopting the EU consumer policy, strategies andother documents and legislation, needs to be transparent and open fordifferent attitudes and views. The aim of common consumer policy is toensure that the EU consumer draw maximum benefits from the existence ofan internal market (Moussis, 2006, p.193). The EU internal market gives theconsumer a wider choice at competitive prices (Weatherill, 2005, p.40).In our opinion the coherent consumer policy contributes to an increase inthe identity of the single market, and on the other hand the efficient internalmarket also contributes to better consumer protection. That shows theexistence of the interactive relations between the consumer protection andthe single market.Building common EU consumer protection policy is connected withadopting strategic documents. The first EU document with strategicimportance was adopted in 1975. The History of common consumerprotection starts with the Council Resolution from April 1975, concerningpreliminary programs for protection and information of the consumers(Mathijsen, 2010, p. 496). The next consumer protection strategies coveredvarious periods from 1981-2006. The last EU Consumer protection strategywas adopted for the period 2007-2013 (The Strategy).The last European Union Consumer policy strategy 2007-2013 promotesa high level of consumer protection together with permanent improvement ofthe consultations between consumers and the business sector. The Strategyrecognizes that the activities in the area of consumer protection are a bigchallenge for the quality of health and quality of life of almost 500 millioncitizens. This document underlines that consumer protection is an important

Constructing Europe as a Global Power:180 From Market to Identity?pillar of the single (common) market and in this context, there is a need formore efficient activities and stronger coordination on the EU level. Ourexpectations are that the stronger coordination will consolidate the commonactivities and to improve a common system of information.The Strategy promotes the firm integration of European Union consumerpolicy into other EU policies, such as economic, social, health, education,environmental and other policies. The place of the EU consumer policy will beat the heart of the next phase of the internal market. According to theStrategy, the consumer dimension of the internal market needs to bereinforced. It demonstrates the Union’s determination to raise the level ofimportance of consumer protection activities to one of the most importantpriorities of the common activities. It is important to comment that theconsumer dimension of the single market, after adoption of the Strategy hasbeen increased.The Strategy establishes the main priorities for the period 2007-2013.The Strategy determines that consumer welfare is the most important pillar ofa well functioning market. The Strategy makes serious efforts to enableconsumers to make an environmental choice. In the future we expect furtherEU activities in the direction of encouraging the consummation of theenvironmentally friendly products. That is a completely new approach in theconsumer sphere. We are convicted that in the future, the relation betweenthe consumer sphere and the sphere of the environment will rise permanently.According to our opinion, one of the top priorities of the new commonconsumer policy and legislation should be to eliminate overlaps between themember states and the EU consumer protection policy and legislation and toensure the closer coordination between the EU and the member states. Toreach this goal EU consumer policy has to build effective instruments forsystematic and permanent monitoring of the member states consumerpolices. The stronger monitoring will consolidate the common activities andimprove the common system of information, which will provide a high- qualitydatabase on the EU level, with the qualitative information and dates.The European Commission adopted a number of documents related tothe implementation of the EU Consumer protection strategy. One of the mostimportant documents is Green paper on the review of the EU consumeracquis (legislation). The Paper promotes the need of expanding publicconsultation in the area of consumer protection, which will help to determinethe current problems in this area (Green paper). With a goal to achieve thefirmer efficient consumer protection common activities, the Commission

Zoran Sapurik:New European Union Consumer Protection Legislation and the Implementation in Macedonia 181suggests numerous reforms in a field of consumer protection, includingreforms in the EU legislation. As a result of research and analysis made in theprocess of preparing the Green paper, the Commission proposed urgentchanges in the legislation. We can conclude that the Green paper has acrucial role for the beginning of the process of changing the consumerprotection legislation.Existing EU Consumer Protection LegislationThe consumer protection policy is a main base for drafting and adoptinglegislation in the field on consumer issues. The legislation is an important partof EU activities in the area of consumer protection. The Consumer protectionlegislation has a goal to ensure a higher level of protection for EU citizens, fairtrade competition on the internal market and free flow of information. Thislegislation is aimed to prevent unfair practices and to improve the interestsand rights of consumers. The existing EU legislation in the field of consumerprotection consists of numerous directives, regulations, decisions and otherlegal acts. The most important part of the existing EU legislation is based onfour directives:Directive 85/77EEC, to protect the consumer with respect to contractsnegotiated away from business premises;Council Directive 93/13 EEC, of 5 April 1993 on unfair terms in consumercontracts on unfair terms in consumer contracts;Directive 97/7/ EC of the European Parliament and the Council of 20May 1997 on the protection of consumers with respect to distance contractsandDirective 1999/44 EC of the European Parliament and of the Council of25 May 1999, on certain aspects of the sale of consumer goods andassociated guarantees.The Directive to protect the consumer with respects to contractnegotiated away from business premises (Directive 85/77), was the first largeeffort in building consumer protection legislation on the EU level. TheDirective introduced a period of a minimum of seven days for canceling thetrade contracts from the consumers, which was in that period a significantinnovation. This Directive is directed to the contracts under which the tradersupplies goods or services to a consumer and which are concluded: during anexcursion organized by the trader away from his business premises; during

Constructing Europe as a Global Power:182 From Market to Identity?visits by a trader to the consumers home or to the consumers place of workand where the visit does not take place at the express request of theconsumer. The Directive involves the right to withdraw the products, which isa serious effort for raising consumer rights. The Directive does not relate tothe contracts for supplies of food, drink and other goods for currentconsumption, contracts concluded on the base of catalogues and insurancecontracts, contracts for securities and contracts for construction. The Directivestipulates general provisions for consumer rights and gives opportunities tothe member states to adopt more favorable conditions for the protection of theconsumers’ rights in the area covered by the Directive, which openspossibilities for differences in the member states legislation. The Directiveinvolves opportunities for more coherent consumer protection on the EU level.The importance of the Directive is obvious, because it is the first strong stepin the long term process of building consumer protection legislation.The Directive on unfair terms in consumer contracts 93/13 EEC, knownas the “Unfair contract Directive” (Directive 93/13) aims to define contractterms and rights and duties of the contract parties. The Directive stipulatesstandard contract terms and makes efforts to facilitate trade transactions andto expand consumer rights in the area of standard contracts, which areprepared from the sellers, suppliers and performers of the services. Thestandard contracts usually favor sellers, suppliers and performers, who defineterms and conditions between the parties and put the consumers in a positionwithout alternatives. It is also a serious reason for precise regulation of thestandard contracts in EU legislation. The Directive introduces a well knownnotion, “good faith” and aims to prevent imbalances in the rights andobligations in the contracts. The experiences from practice confirm the logicalfact that unfair practices are mainly performed by sellers, suppliers andperformers. The Directive promotes interpretation of standard contracts,which will be in favor of the consumers. That clearly confirms that theDirective strives to protect the consumer’s interest. The Directive definesunfair contract terms as a significant imbalance in the parties’ rights andobligations, which shows the commitment of the Directive to protect theconsumer’s rights. The importance of the directive is huge, because it aimstoward stronger regulations of the standard contracts (that very often leavethe consumers in unfavorable position) on the EU level.The Directive 97/7 EC, on the protection of consumers with respect todistance contracts named in practice, as Distance selling directive, (Directive97/7) makes efforts to set interests of the consumers, who buy products or

Zoran Sapurik:New European Union Consumer Protection Legislation and the Implementation in Macedonia 183services through distance communication and distance contracts. Distanceselling is defined as distance communications between the consumers andsellers through catalogues, phone, fax communications, teleshopping, internetcommunications, etc. The Directive sets numerous rules for situations wherethe consumers and sellers are not in direct contacts. From the analyses ofthe Directive we can recognize a determination for enhancement of consumerprotection in distance selling and for minimization the consumer’s risks. In thisway the Directive stipulates the provisions that provide comprehensiveinformation before purchase, and gives to consumers opportunity to cancelthe contracts within a minimum of seven days, without giving the reason forcanceling the contracts and without penalty, except the costs of returning theproducts. In that context, the Directive provides the consumer protection fromfraudulent use of credit and other payment cards. This EU legal act makesefforts to put the consumers in the same or similar conditions, as consumerswho buy products and services in shops. The Directive introduces measuresfor the gradual consolidation of the internal market and stipulates that thetransactions in successive operations cannot be regulated differently inlegislations of member states. Those provisions are directly oriented toenhance the single market and its identity, as a market area which has a needfor regulation by coherent legislation.The Directive regulates that the consumers must be provided with allmain the characteristics of goods and services and that the price of productsmust include all taxes and delivery cost. We are assured the prohibition ofhidden items in the prices, contributes toward stronger consumer confidencein the internal market. The detailed rules for cancelling the creditarrangements, according to the Directive, remains under the competence ofmember states, which could also produce differences in the legislation on theEU and the member state level. The Directive provides articles related to strictrights of European Commission for controlling the implementation of theDirective in member states legislation. That creates a new stronger position ofthe Commission in the area of consumer protection. We can conclude fromthe above mentioned that the Directive introduces significant innovations. Itgives a big contribution for the coherency of common legislation in the area ofconsumer protection.The Directive 99/44 EC, concerning aspects of the sale of consumergoods and associated guaranties, regulates legal and commercial guaranties(Directive 99/44). The Directive provides legal protection for the purchasers

Constructing Europe as a Global Power:184 From Market to Identity?and promotes achievement of a high level of consumer protection andconsumers benefits from the internal market. It stipulates a strict obligationfor the seller to deliver goods to the consumer in conformity with theconditions from the contracts. In case of lack of conformity, the consumer mayrequire the seller to repair the goods or may require the seller to replace thegoods free of charge. Replacement or repair of the goods should becompleted within a reasonable time, or consumer has right to cancel thecontract. In case of product defects, consumer could ask for a reduction of theprice. It is very clear that the Directive also contributes to the coherency ofcommon legislation especially with the provisions that lead to the direction ofthe approximation.Besides the four mentioned directives it is important to underline, thatthere are numerous other directives and other parts of EU legislation which,directly or indirectly, regulate the area of consumer protection. The Directive2000/13on the approximation on the laws of the member states relatinglabeling, presentations of foodstuffs to the final consumers, hospitals,restaurants and similar mass caterers, regulates conditions for labeling,which must include name under which the products is selling, physicalconditions of the foodstuff, specific treatment (powdered, freeze-dried, deepfrozenconcentrated, smoked, etc.), information of weight in units of volume,date of minimum durability, condition for use and keeping, instructions forusing, etc. (Directive 2000/13). Also we can mention as an important part ofcommon legislation, some legal acts (mostly related to the food stuff) such asRegulation EC 1924/2006 on nutrition and claims made on food ( Regulation1924/2006); Directive 1999/10 EC, providing for derogations from theprovisions of article 7 of Directive 79/112 EEC, as regards the labeling offoodstuffs (Directive 1999/10); Regulation EC 509/ 2006 on agriculturalproducts and foodstuffs as traditional specialties guaranteed (Regulation509/2006) and Regulation EC 834/2007 on organic production and labeling oforganic products (Regulation 834/2007).Besides the above mentioned four main legal acts, the numerous otherlegal acts are parts of EU legislation which regulate separate sectors liketransport, environment, travel arrangements, energy, etc., and also havesome provisions related to consumer protection. These should be subjects offurther researcher. We can also strongly recommend for further research touse analyses from EC Consumer Law Compendium – Comparative Analyses(Shulte – Nolke, 2007, pp. 44-85). We can confirm that existing consumerprotection legislation still has been based on minimum harmonization that we

Zoran Sapurik:New European Union Consumer Protection Legislation and the Implementation in Macedonia 185can see from the analysis of the above mentioned EU legal acts. That actsbeside a number of provisions which make the serious efforts toward astronger coherency of EU consumer protection legislation still allows spacefor the differences in national legislation. Also we can widely see the problemsin the implementation of the common legislation into the member states fromthe analyses which are made in the EC Consumer Law Compendium –Comparative Analyses (Shulte – Nolke, 2007, pp. 95 - 140). The differenceson the level of consumer protection standards in the member states couldmake difficulties in the implementation of EU consumer protection legislation.It could affect the coherency of the internal market. Also we want to underlinethat existing legislation still has regulatory fragmentation: That is a seriousobstacle for efficient cross border trade and strengthening the identity of theinternal market. The Directives, as the largest part of the EU consumerprotection legislation, as a flexible legal instrument, in the future should buildcoherent regulation, which could be easily and in a short period transposedonto national legislation. That will ensure more coherent and harmonized EUconsumer protection legislation, and the implementation would be monitoredby the European Commission and other EU institutions without any obstacles.A policy implementation refers to the putting into effect of legislation,decisions, or policy formulated and agreed upon by the EU’s policy makinginstitutions (Cini, 2003, p. 349). Besides numerous positive effects, the EUconsumer protection legislation still does not constitute a clear positionbetween the EU legislation and the member state legislation. TheCommission must check to see that nationally implemented legislation isadopted in each of the member states and that it conforms with the directives(Oudenaren, 2005, p. 107). That produces the need for change and forstronger harmonization of the EU consumer protection legislation. It ispossible only by stronger competence amongst EU institutions.New European Union Consumer Protection LegislationThe main goal of the EU consumer policy and legislation is to ensurebenefits for consumers. At the beginning of this part of the paper we presentthe fact that 15% of consumers have returned a defective product in a periodof 12 months. Compared to 2008, the number of notifications has risen from1.866 to 1.993 dangerous products (Eurobarometer 252). That confirms theurgent need for adopting new consumer protection legislation. The most

Constructing Europe as a Global Power:186 From Market to Identity?important part of the new Union’s legislation in the area of consumerprotection is the European Commission proposal for a Directive on consumerrights (Proposal Directive). The Directive consists of provisions which willguarantee more harmonized protection of EU consumers. In our opinion theproposal Directive on consumer rights will ensure a higher level of consumerprotection and will establish a more efficient single market, making easier andless costly cross border selling and will provide the consumers with a largerchoice and a competitive price. The new EU consumer protection legislationwill set up higher standards of consumer protection, and will harmonize EUsafety, measures and activities, in the directions of protection andimprovement of the quality of health and life of the Union’s citizens. It willstrengthen the power of the consumers.The new Directive stipulates more efficient consumer rights related toremediation of defect products and services, i.e. repair, replace and reducethe price. The proposal Directive on consumer rights is a result of five years ofactivities of numerous EU institutions. The main bodies in the complexprocess of preparing and drafting the Directive have been the EuropeanCommission and Directorate General for consumer protection, which exists inthe structure of the Commission. The proposal Directive will merge four of themost important existing directives into one directive. The Directive aims atmodernizing exciting consumer protection regulation, and bringing it into linewith technological changes, like online auctions. The Directive strengthensprovisions in key areas where the consumers have had the most problems inrecent years. The Directive will extend to intangible goods such as computersoftware and cover online services, and put them in a similar position withphysical products. The Directive regulates the obligations for consumerinformation, such as main characteristics of the product, the price will have toinclude all taxes and expenses, terms of delivery, arrangements of payment,right to withdraw, after sales services, guaranties, duration of the contracts,consumer and trader obligations, etc.The proposal Directive resulted from deep analyses and debates thatincluded consultations with experts, consumer organizations and the businesssector. The Directive is devoted to protecting consumer interests which havenot been individually negotiated, such as the well known problem withstandard contracts. It aims to prevent consumer risks and in this directionmakes efforts for a precise definition of notions, such as consumer, trader,sales contract, service contract, distance contract, distance communication,off premises contract, good, product, producer, financial service, order form,

Zoran Sapurik:New European Union Consumer Protection Legislation and the Implementation in Macedonia 187commercial guarantee, intermediary, etc. The Directive provides obligations,in case of a distance and off-premise contracts, and regulates the right towithdraw, which is further regulated in separate annexes of the Directive. TheDirective emphasizes the traders obligations and in a similar manner trader’sliability to the consumer, in a minimum period of two years, if the goods arenot in conformity with the contract. The unfair terms are defined, as termswhich create significant imbalances in the rights and obligations of consumersand traders and they are precisely defined in a separate annex. The crucialelement of the new Directive, stipulated in article 4, regulates that the memberstates may not maintain or introduce in their national legislation provisionsdifferent from those laid down by the Directive. It clearly shows the firmdetermination to strengthen the coherency of the EU consumer protectionlegislation and makes assumptions for better perspectives of EU legislation.The proposal Directive on consumer rights provides simplification of theEU legislation and consumer acquis. As we mentioned above, the proposalDirective will merge four existing directives into one Directive. That willsimplify the process of the implementation of common legislation. Theproposal Directive has a goal to remove inconsistencies between the EU andmember state legislation and to close all gaps in regulation by expandingconsumer protection on the EU level. The proposal Directive attempts to draftmore precise definitions of the trader’s and consumer’s rights and obligations.When the Directive will enter into force, the traders who expanded theirbusiness in different member states will reduce the administrative costs,which in our opinion, opens the door for strengthening the internal market. Itwill give to the member states a clear framework for the adoption of themandates by each national legislation in the field of consumer protection,which will be fully harmonized with EU legislations. That will eliminate the lackof harmonization. The new Directive will introduce elements for strongermonitoring of the implementation of the EU consumer protection policy andlegislation.We predict that the new Directive on consumer rights will be adopted inthe first half of 2012. The debates in the European Parliament, confirm thatthe proposal Directive will be supported by all European Union institutions andthat it will be voted in by the European Parliament and the Council. We arestrongly convinced that the new Directive will improve consumer protection onthe EU level and in the member states. The new types of regulation that raise

Constructing Europe as a Global Power:188 From Market to Identity?the competency in the field of consumer protection will strengthen theconsumer’s confidence amidst the possibilities of the single market.In this part of the paper, very briefly, we will mention the new Consumercredit directive- Directive 2008/48/EC on credit agreements for consumers(Directive 2008/48). The Directive was adopted in 2008 and it should becompletely transposed onto all member states as of late. The Directive has agoal to create more precise obligations and rights related to lending. Itintroduces serious changes in the sphere of credit agreements and aimstoward better protection of consumers, involving the improvement of thesystem of information during the process of application. Under the newconsumer credit Directive, the persons who use the credit products andservices, will be supplied with more information and they will have strongerprotection, during the application and lending process. It is also import tomention that the Directive opens opportunity for early loan repaymentswithout penalty, which create new significant benefits for the consumer. TheDirective will enhance the lender and borrower rights and obligations and willfacilitate the procedures for credits. The directive will produce enhancementof consumer protection in the area of credit arrangements and simplifies thebanking transactions procedures.The Commission and other EU institutions now believes that no nationalrules to be more proactive than EU laws and the EU is moving towardmaximal harmonization of the consumer protection legislation (Howells, 2009,p. 65). The problems with fragmentation of consumer protection cannot solvethis fragmentation on the level of member states. It can be solved only on theEU level. These justify the efforts of the European institutions for building ofnew common consumer legislation and the need for further consolidation ofthe power of the EU institution.Implementation of European Union Legislation in MacedoniaThe Republic of Macedonia, as a state with candidate status, isexpecting a date for beginning negotiations with the EU. On the way towardEU integration Macedonia has obligations in many spheres. One of thespheres is the sphere of consumer protection, which has been growing inimportance in the EU. In this context, Macedonian over the last few years hasbeen making serious efforts for harmonization of the national legislation withthe EU legislation. The last EU Commission 2010, Progress report, related toMacedonia, in Chapter 28 underlines that there has been a little progress in

Zoran Sapurik:New European Union Consumer Protection Legislation and the Implementation in Macedonia 189the area of consumer protection. The report stressed that there is someprogress as regards product safety related issues and that the new law onmarket surveillance was enacted. Also the report advanced the furthercapacity building of the authorities with the competencies in the sphere ofconsumer protection. The report underlined that the competencies of thevarious inspectorates are unclear (Progress report).The report shows that Macedonia has to continue with the harmonizationof its consumer protection legislation and undertake the permanently intensiveprocess of transposing and implementing the EU consumer protectionstandards. The Macedonian legislation has to follow changes in the EUlegislation which are very dynamic. That insinuates the permanent amendingof the national legislation. The legislation must open possibilities forprevention of all kinds of unfair practice, especially in standard contracts, forenhancement of consumer organization, education of the consumers and forimproving transparency. The Macedonian legislation has to follow thedynamic path of EU legislation.The area of consumer protection in Macedonia is regulated in numerouslaws such as: The Law on trade; The consumer protection law; The Law onproducts safety; The Law on food safety; The Law on chemicals; The Law onelectronic trade, and numerous other laws and sub law acts, which regulatesome specific areas and some aspects of consumer protection. The numberof these legal acts shows that it is not easy to affect consumer rights. Thatclearly shows that Macedonian consumer protection legislation has tocontinue with the reforms. In the future there is a need to decrease thenumber of laws that regulate this sphere, following the efforts of the EU tomerge the more legal acts into a smaller number of acts. If we analyze theabove mentioned laws we can see that there are differences in the laws, indefining some notes, such as trader, consumer, seller, product guarantee,etc. (for example in the Law on product safety, in the Law on trade, etc.). Inthe future, Macedonian legislation has to create s firmer regulation related tothe product guarantees. The present product guarantees provisions especiallyin the Law on trade, but also in other laws, could create consumer confusionin cases of the violation of their rights. In the practice very often producers,sellers and importers throw past their responsibilities between themselveswith respect to product defects.The Macedonian consumer protection legislation in the future has toprovide stronger support for rising public awareness of the consumers and

Constructing Europe as a Global Power:190 From Market to Identity?strengthen the NGO sector in the sphere of consumer protection. Thestrengthening of the NGO sector will encourage the consumers to seek theprotection of their rights. There are only a few cases annually, initiated beforethe courts from the consumers (Progress report).Also we can see from theanalysis of the above mentioned laws, that there is a lack of an officialconsolidated version of the laws which are published in The Official Gazetteof the Republic of Macedonia. The official consolidated versions arenecessary after continuously amending the laws. That is a practice of the EUinstitutions. The official consolidated versions will enable easier practice of thelaws. The implementation of the EU consumer protection legislation andstandards will bring the Macedonian market closer to the single EU market.Expecting the implantation of the new EU consumer protection legislation,Macedonia has to take early measures and activities for preparation, in orderto be prepared for harmonization with new EU legislation.Conclusions and RecommendationsWhat can we conclude after the above mentioned discussion? The EUhas been acting permanently in the direction of improving consumerprotection. The area of consumer protection is crucial for the quality of healthand life and well-being of the citizens. The importance of common consumerpolicy and legislation has been growing continuously. The main directions forthe further common consumer protection activities are stipulated in the abovementioned EU strategic documents which are the core part of consumerpolicy. The current consumer policy recognizes the needs for strongerharmonization of the activities and legislation on the EU level. That is possibleonly with changes in EU legislation. More harmonized activities can providebetter consumer protection than the particular activities of the member states.But besides the permanent activities and improving the coherency oflegislation on the EU level, there are still many responses from theconsumers. This justifies the needs for further strong activities on the EUlevel.Consumer protection is significant for successful functioning of the EUinternal market. The EU institutions recognize the needs for further activitiesin the direction of closer cooperation between all 27 member states and theneeds for further expanding consumer protection activities on the EU level.The new EU consumer legislation will create conditions for betterprotection of the consumers. The relevant EU institutions have to continue

Zoran Sapurik:New European Union Consumer Protection Legislation and the Implementation in Macedonia 191intensive activities for adopting the proposal for a Directive on consumerrights. After coming into force, the Directive will be the core part of new EUconsumer protection legislation. The new legislation will raise the consumer’sconfidence with respect to the advantages and possibilities of the internalmarket. The new legislation will enhance the competencies of the EUinstitutions, especially of the Commission, and they could perform strongermonitoring on the process of the implementation of common policy andlegislation. Merging the four existing directives, which regulate some aspectsof the consumer protection into one Directive, will enable easier enforcementof common legislation.The Union has to continue with capacity building of the consumerorganizations, as a core pillar in the process of adopting and implementingthe consumer protection legislations. That will contribute to better consumerprotection. Also the Union has to give stronger support for the states withaspirations to become members of the European Union, which is the casewith Macedonia, in order to prepare them to face with the conditions of theinternal market.The harmonization of the legislation of member states with the EUconsumer protection legislation is very important for the aspirations of theRepublic of Macedonia regarding EU integration. Following the dynamic of EUlegislation is not an easy task. Macedonia has to act permanently in thedirection of adopting the high level consumer protection standards that arestipulated in EU consumer protection legislation. Also, after adoption of thelegislation, there is a need for practical implementation. The state’sinstitutions have to consider the consumer non-governmental organizationsas an important partner in the process of adoption and implementation of theconsumer protection legislation. The need for improving consumer protectionstandards is not only because of EU integration, but foremost it is for thebetter protection, health and quality of citizens’ life. The research and thepapers in the area of consumer protection in Macedonia are very rare, so thatis a wide field for further research in the sphere of consumer protection, fromlegal, economic, social and many other aspects. One of the goals of thispaper is to initiate further research, debates and other activities in field ofconsumer protection.According to our opinion it is possible to give some recommendations forfurther activities in the EU and in Macedonia in the area of consumer

Constructing Europe as a Global Power:192 From Market to Identity?protection. For the further development of the EU consumer policy andlegislation we can recommend the following: to continue with the activities for the fast harmonization of the EUlegislation, especially regarding the Directive on consumer rights. It willenable more efficient consumer protection of the EU citizens; to continue strengthening high level consumer protections standards; further expanding the competencies of the EU institutions, especially ofthe European Commission; to intensify the activities in the direction of building a firm partnership ofrelations between the EU institutions and member state institutionswith consumer protection organizations in the process of drafting,adopting and enforcing the EU consumer protection policy andlegislation; to strengthen the integration of EU consumer policy and policies inother areas such as economic policy, social policy; health andenvironmental policy and other policies; stronger EU support for Macedonia and other countries with aspirationsfor membership in the EU, in the sphere of consumer protection in anaim to prepare them to face the conditions and standards which exist inthe EU; Also we will give some recommendations for further activities ofMacedonia in the sphere of consumer protection: to accelerate the process of harmonizing Macedonian consumerprotection legislation with the EU legislation; to continue intensively with the capacity building of the institutions withcompetencies in the area of consumer protection; to amend the laws for making clear competencies between variouscompetent institutions, especially between the various inspectorates; to continue building a firmer relation between the institutions and NGOsector; to follow permanently and closely the process of adaptations of the newEU consumer protection legislation practicing “the preparingmechanisms” in the aim to be prepared for the implementation of thenew EU legislation in the short period.

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Constructing Europe as a Global Power:196 From Market to Identity?Does Cultural Heritage Affect Job Satisfaction:The Divide between EU and Eastern EconomiesNikica Mojsoska-BlazevskiMarjan PetreskiAbstractThe objective of this paper is to examine the factors influencing worker’sjob satisfaction aside the conventional factors, in the vein of the basiccultural values and beliefs, and then to put this into a comparativeperspective for the South-Eastern European countries (SEE) and forMacedonia, in particular. Cultural values are grouped into traditional vs.secular-rational values and survival vs. self-expression values. The mainresult from the study is that cultural heritage exerts considerable impacton job satisfaction in SEE with some determinants – like the importanceof work, religion and family – exerting stronger influence in South-Eastern Europe than in Central-Eastern Europe (CEE) and in westernEurope. However, cultural values are found to affect job satisfaction inMacedonia with less pronounced significance. Mainly traditional culturalvalues are found important in the Macedonian case, while from thesurvival group only trust is found to likely affect job satisfaction, and withthe effect being likely stronger than in the case of SEE, CEE and westernEurope.IntroductionDo workers in the eastern, ex-communist countries share the samevalues and beliefs as citizens of the western countries? What aboutMacedonians? Whereas economists are certain about the convergence ineconomic performance and the catch-up effect that eastern countriesexperienced in their accession to the EU, there is still only a small body ofliterature on the convergence of culture. In particular, there are two competing

Nikica Mojsoska-Blazevski, Marjan Petreski:Does Cultural Heritage Affect Job Satisfaction: The Divide between EU and Eastern Economies 197theories, the first stating that economic prosperity brings convergence incultures, the so-called ‘modernization theory’, whereas the opposite oneargues that traditional values persist despite the economic and politicalprogress (Inglehart & Baker, 2000). Given that almost two decades havepassed after the beak-up of the communist regimes, which is sufficient timefor any cultural convergence to the EU to take place, this paper seeks toexamine which of the two compelling hypotheses holds. There are few studiesin this area. In addition to their approaches, we provide additional insights,given that we sub-divide eastern countries into two groups: the Central-Eastern European countries (CEE) and South-Eastern Europe (SEE). Such adivision is intended to reveal any differences due to the different stages ofeconomic development at which these regions are, the possible effect ofgeographical proximity of the CEE countries to the western-Europeancountries, as compared to the SEE countries, as well as the prolonged periodof political instability in the SEE region which might have slowed down thecultural convergence of these countries into the EU. We also provideindividual-country estimates for Macedonia to check how it compares with theentire SEE group.Moreover, while there is a growing body of multi-disciplinary literatureinvestigating determinants of job satisfaction, ranging from human resourcemanagement, to sociology, psychology, labour economics, and so on, theissue of culture and its effect on worker’s well-being has largely beenneglected (Fragher et al. 2008). Indeed, Mueller et al. (2009) argue thatcross-national examination of job satisfaction has to go beyond the soleinvestigation of measurement equivalence of used measures, but to examinethe influence of culture and values on different job satisfaction levels acrosscountries.In this regard, the aim of this study is twofold. First, we examine factorsinfluencing worker’s job satisfaction aside conventional factors (like: personalbackground, individual labour-market characteristics, organizational culture,and so on) and introduce the basic cultural values and beliefs. The latter aregrouped into traditional vs. secular-rational values and survival vs. selfexpressionvalues. Second, we investigate the relative importance of culturefor job satisfaction in the (old) EU countries, CEE and SEE countries, and withan individual-country focus on Macedonia as an accession country. This issuehas not been investigated in SEE and Macedonia, which is the maincontribution this paper makes.

Constructing Europe as a Global Power:198 From Market to Identity?We continue with a brief literature review on the current studies in thearea of the impact of culture and values on job satisfaction. In section 3, weexplain data and in section 4, the methodology used. Section 5 presents anddiscusses the results, whereas section 6 concludes.Literature Review: Is There a Convergence of Culture?Culture can be defined as a set of interrelated values, attitudes andbehaviours that form a group’s, organization’s or country’s system of values(Mujtaba et al., 2009). Similarly, Guiso et al. (2006) define culture as“customary beliefs and values that ethnic, religious and social groups transmitfairly unchanged from generation to generation” (p.2). Both definitions havean implicit result that the common culture is (mostly unchanged) transferredfrom generation to generation, which implies that there is no convergence ofculture and values among societies over time. The latter, however, is an issuethat does not reach consensus in the literature.In particular, there are two compelling theories about the convergence ofcultures. The first – ‘the modernization theory’ - with Karl Marx being one of itsmost prominent representatives, argues that economic and politicaldevelopment brings about replacement of absolute norms and values withvalues that are rational, tolerant, and based on trust and which leads to widersociety participation. In other words, modern and developed countries showthe future for the less developed ones (Inglehart & Baker, 2000). However,until the second half of the twentieth century, modernization has been viewedas a process inherent to the western societies only. If this belief holds,modernization of non-western societies, including the ex-communist countries(or transition economies), would be made possible only if those countriesdiscard their traditional culture and values and implement the (believed to be,superior) western culture and values. This also implies a convergence ofculture and values of the new EU member states and the candidate countriesto the old EU (or the EU-15) countries. But then, some eastern countries,mainly East Asia, outperformed their western peers, violating the assumptionof western societies being a role model for the world.The opposite school of thought argues that traditional values arepersistent and independent of the broader economic and political changes(Roland, 2005; Inglehart, 2008). For instance, Roland (2005) asserts thatculture, along with the values, beliefs, and norms, is among the “slow-moving”institutions in the society, which are difficult to change and which impact the

Nikica Mojsoska-Blazevski, Marjan Petreski:Does Cultural Heritage Affect Job Satisfaction: The Divide between EU and Eastern Economies 199“fast-moving” institutions such as the political and legal institutions. Theimplication of this approach is that there would be no convergence of valuestowards some “dominant” model or set of values (present in the modern ordeveloped societies), and that there is perpetual effect of the traditionalvalues on cultural changes caused by economic and/or political changes(Inglehart & Baker, 2000).On the empirical front, Inglehart and Baker (2000) and Inglehart (2008)used nation-level data from more than 40 societies from the World ValuesSurvey and found persistent differences between values in low-income andhigh-income countries in the area of political, social and religious norms andbeliefs, hence questioning the modernization theory. Based on the findings,the author formulated two dimensions which reflect cross-national differences;these are: 1) traditional vs. secular-rational values towards authority, and 2)survival vs. self-expression values. The society that has low tolerance forabortion and divorce, respects parental authority, puts high importance onfamily life, and is relatively authoritarian and religious, is considered as atraditional society. The secular-rational society/values emphasize theopposite. Survival values include preferring economic and physical securityover self-expression and quality of life, traditional gender roles, distrust andintolerance. These distinctions are well rooted in the research literature (see,for instance, Inglehart & Baker, 2000). In addition, Fargher et al. (2008) arguethat culture and beliefs do not only influence worker’s job satisfaction, buthave broader importance given they affect economic behaviour as well. Thecross-cultural differences (once rooted by religion) become a part of the(distinctive) national culture and persist over time, fuelled by the family,education, local society, cultural institutions and media (Inglehart & Baker,2000; Fernandez & Fogli, 2005; Guiso et al. 2006). Moreover, as Inglehartand Baker (2000) argue, economic development leads to changes indominant values and beliefs, and, consequently, to a cultural change, but notnecessarily to a cultural convergence.While there is a growing body of multi-disciplinary literature investigatingthe determinants of job satisfaction, ranging from human resourcemanagement, to sociology, psychology, labour economics, and so on, theissue of culture and its effect on worker’s well-being has largely beenneglected (Fargher et al., 2008). Moreover, our study (similarly to that ofFargher et al.) investigates how job satisfaction is affected by the broadcultural values of a society, rather than by the organizational culture, and

Constructing Europe as a Global Power:200 From Market to Identity?hence adds to the current research literature which is dominated by the latter.This holds even more for transition economies where little research has beenconducted in the area of job satisfaction, or human values associated with thecorresponding economic behavior and job (Vecernik, 2003).DataTo pursue the objective to examine the role of culture for job satisfaction,the data of the fourth wave (2008) of the European Values Survey (EVS) areused. The entire sample includes 47 countries. The western-countries groupincludes: Austria, Belgium, Denmark, Finland, France, Germany, Greece,Iceland, Ireland, Italy, Luxembourg, Netherlands, Norway, Portugal, Spain,Sweden, Switzerland, Great Britain and Northern Ireland. The Central-EasternEurope (CEE) group includes: Bulgaria, Czech Republic, Estonia, Hungary,Latvia, Lithuania, Poland, Romania, Slovak Republic and Slovenia (the newEU member states). The South-Eastern Europe (SEE) group includes:Albania, Bosnia Herzegovina, Croatia, Montenegro, Serbia, Macedonia andKosovo (the candidate and potential candidate EU member states). This subdivisionaims to reveal any differences among the groups due to the potentialinfluences of, mainly, communist legacies as well as the different stages ofeconomic and political development at which these regions are and isconsistent with the suggestion in the literature (Inglehart & Baker, 2000) thatpost-communist economies are likely to be different cultural zones on theglobal cultural map. Moreover, we argue that the geographical proximity of theCEE countries to the western-European countries, when compared with theSEE countries, as well as the prolonged period of political instability in theSEE region made further cultural differences between the CEE and SEEcountries. This type of analysis seems suitable, given that we have the EVSwave of 2008, almost 20 years after the beak-up of the communist regimes,which is sufficient to analyze whether cultural convergence has beenoccurring in those countries over the preceding two decades.However, there might be some methodological problems when analyzingjob satisfaction, and work values, in general, given that all measures of valuesand satisfaction are obtained indirectly, through opinion or perception surveys(Blanchflower & Freeman, 1997; Vecernik, 2003). For instance, researchershave to accept the self-reported job satisfaction as a reliable measure forone’s job satisfaction. In addition, the data collection can undermine thecomparative research, given that cultural differences might lead to different

Nikica Mojsoska-Blazevski, Marjan Petreski:Does Cultural Heritage Affect Job Satisfaction: The Divide between EU and Eastern Economies 201understanding of the same questions and concepts across countries. In thesame line of arguments, different “survey literacy” of the population wouldlead to international inconsistency of the data. Besides these methodologicalcaveats, the data from EVS are generally accepted and used by researchesaround the globe in comparative studies in different areas, though with somedelayed interest by the economists.The dependent variable we include is the job-satisfaction as an orderedcategorical variable where 1 reflects complete job dissatisfaction, and 10complete job satisfaction. This variable corresponds to the question “Overall,how satisfied or dissatisfied are you with your job?” Note that as suchmeasured, the job satisfaction might reflect the satisfaction with a specific jobcontract or a workplace. However, we treat it as representing job satisfactionin general, despite the warning of Georgellis and Lange (2007a) that the lattermight differ from the former. Such a distinction is not available in the EVS.Then, several demographical variables are included: gender, marital status,education and income level, that control for key demographic and socioeconomiccharacteristics of surveyed individuals which are assumed toinfluence job satisfaction. The explanatory variables include severalobservations to distinguish traditional versus secular and survival versus selfexpressionvalues, as suggested by Inglehart and Baker (2000).A concern might be raised over “the use of single-item measures ofcomplex attitude structures” (Georgellis & Lange, 2007b, p.7), since values inthe EVS are measured and approximated by a single question. Still, Wanouset al. (1997) use a meta-analysis of job satisfaction studies and find thatsingle-item measures can be used in job satisfaction studies without thatbeing considered as a flaw.Data details are contained in Table 1.

Constructing Europe as a Global Power:202 From Market to Identity?Table 1 – DataMethodologySince the dependent variable is ordered categorical variable, an orderedprobit regression will be used (McKelvey & Zavoina, 1975). Within theregression, it is assumed that a latent and continuous measure of the

Nikica Mojsoska-Blazevski, Marjan Petreski:Does Cultural Heritage Affect Job Satisfaction: The Divide between EU and Eastern Economies 203dependent variable Si * follows the normal distribution with μi mean and unitaryvariance. It is defined as:Si * =β*zi + ei(1)Whereby zi is a vector of explanatory variables describing individualcharacteristics, β is the vector of parameters to be estimated and e i is therandom error which is assumed to be well-behaved. Then, the observationmechanism is:Si = j if τj-1=Si * =τj(2)For j=1, …, J, where J is the total number of categories.Given the constraints v l

Constructing Europe as a Global Power:204 From Market to Identity?Results and discussionResults are presented in Table 2. The first column represents theestimated coefficients for the entire sample, while the others for the differentsub-samples defined in the data section. Our focus is here put on the jobsatisfaction determinants in the post-communist countries (CEE and SEE)and then these results are put in a comparative perspective with westernEurope. Finally, estimates for Macedonia only are given.At the very outset, results suggest that males are less satisfied with theirjob in the CEE region, with the coefficient being similar to that in westernEurope, but no such differentiation for the SEE can be inferred, given theinsignificant coefficient. Also, this coefficient is insignificant in Macedonia,suggesting that job satisfaction is not different between the two genders. Theimportance of age for job satisfaction varies across the groups of countries. Inparticular, age is important for job satisfaction in SEE, but not in CEE. SEEresults are in line with those of the western countries. Moreover, a squaredterm is included to control for a convex relationship, which Clark et al. (1996)attribute to the personal circumstances in which individuals live, the life stageat which they are, as well as the factors outside employment that might affectjob satisfaction. However, in all cases, the rising job satisfaction with age afterthe turning point is likely to be small, given the small estimated coefficient.In all groups, the marital status displays a significant role for jobsatisfaction, suggesting that married people are more satisfied with the jobcompared to single people, but this is not true for divorced and widowed.Between groups, the satisfaction with marriage is likely to be higher in SEEthan both CEE and western Europe. In Macedonia, the marital status is foundnot to play a role for job satisfaction. Education level is highly significant in allcases except Macedonia. Results suggest that the higher the education, themore satisfied people are from their job; but, these satisfaction-differentialswith the educational level are pronounced in CEE and even more in SEE. Thesame applies for the income level, except for the case of SEE, whereby if theearner belongs to the high income group, then no statistical difference in jobsatisfaction can be inferred as compared to the base group. This can beattributed to the increased income inequality in SEE, whereby only a smallfraction of employees belong to the high income group.

Nikica Mojsoska-Blazevski, Marjan Petreski:Does Cultural Heritage Affect Job Satisfaction: The Divide between EU and Eastern Economies 205

Constructing Europe as a Global Power:206 From Market to Identity?Now, turning the attention on the variables which are of primary interestof this paper, we conclude that cultural values are of importance for theworkers’ job satisfaction in all regions. Results are consistent with the findingsof Fargher et al. (2008) for western Europe and CEE, suggesting that culturalvalues are reluctant to change in the short run (Farger et al. makes theanalysis on a previous EVS wave, conducted several years ago). This can beregarded as indirect but cautious support of the theory asserting that culture,along with the values, beliefs, and norms, is among the “slow-moving”institutions in the society, which are difficult to change (Roland, 2005).Results’ significance is found to be less pronounced in Macedonia, however.To test result’s robustness for Macedonia, we transformed the categoricalvariable of job satisfaction into a dummy variable, so that zero refers to jobsatisfaction from 1 to 5, while unity from 6 to 10 (columns 6 and 7) (1).However, results remained robust to this test, suggesting that, overall, culturalvalues affect job satisfaction in Macedonia only to a limited extent. Thesporadic significance of the cultural variables in Macedonia might reflect thedistressed situation on the labour market in the country, with anunemployment rate of above 30%, where workers, acting rationally, acceptnew jobs or stay at the current workplace even if it does not fit their skills,knowledge and preferences well, and because of the low probability of findinga new job. This would give rise to general job dissatisfaction in the country.Work is found to be important for job satisfaction in Macedonia, as wellas the other regions. However, on average, work is less important in CEEthan in the west and further less important in SEE than in CEE and west. Thismight be explained with the role that other factors have for job satisfaction inthose societies, like religion, family and friend ties. In Macedonia, though, thecoefficient is the largest, suggesting that, in an atmosphere of largeunemployment, the importance of having a job is very high. Overall, though,as in Farger et al. (2008), the effect of work importance on jobs satisfaction isstronger than the effect of income, which questions the current motivationalactivities (measures) of managers. Religion is found to be more important inSEE than in CEE and in the west, as expected, but not important inMacedonia. Also, family in SEE is found to be more important for jobsatisfaction than in the west. The coefficient is even more negative inMacedonia, suggesting that those who consider family as very important are,on average, less satisfied with their job, which can be likely justified by thepriorities set by people in their lives. This might suggest that achieving a workfamilybalance in Macedonia is difficult, which can be related to the low use of

Nikica Mojsoska-Blazevski, Marjan Petreski:Does Cultural Heritage Affect Job Satisfaction: The Divide between EU and Eastern Economies 207flexible work arrangements by Macedonian companies, and might be one ofthe causes for low labour market participation of females. The results on the‘petition singing’ are diverse. This is not significant for job satisfaction in thewest and in SEE, but is significant and positive in CEE and Macedonia,suggesting that people become more satisfied with their job if they havesigned a petition before. This probably articulates the importance of thedemocratic values for freedom of expression as a determinant of jobsatisfaction.In the survival vs. self-explanatory group of cultural values, somediversity is again observed across groups of countries. Notably, thiscontingent of values is less important in explaining job satisfaction inMacedonia. The more people are careful when trusting people, the more theyare satisfied with their job, with the coefficient between groups being likelysimilar (coefficients are not statistically different between groups of countries,although the coefficient in Macedonia is estimated to be larger). Hence, in linewith Farger et al. (2008), interpersonal trust serves as a particularly strongpredictor of job satisfaction for both eastern and western Europe. The beliefthat a woman needs a child to be fulfilled reduces job satisfaction, which isexpected given the satisfaction extracted from bearing and raising a child.Still, the variable is insignificant in Macedonia, which is unexpected given thepersuasion in the society related to having and raising children. Job security isonly significant in SEE, suggesting that if people place large value on jobsecurity, then they are more satisfied with their job. The significance in SEEmight be only a result of the fragile labour markets in those countries,whereby loosing a job is associated to large personal and social losses, butthis is not confirmed with the Macedonian case. Tolerance and respect inregard to teaching children are found not to be an important determinant ofjob satisfaction, while the justification of homosexuality is only relevant in thewestern world, expectedly, given the conservative attitude that easterncountries have (had) towards homosexuality. Overall, while the resultssuggest that there has been likely a cultural convergence in the SEE, thiscannot be argued for the Macedonian case.

Constructing Europe as a Global Power:208 From Market to Identity?ConclusionThe objective of this paper has been to examine the factors influencingworker’s job satisfaction aside the conventional factors (personal background,individual labour market characteristics, organizational culture, and so on) andintroducing the basic cultural values and beliefs, and then to put this into acomparative perspective for the South-Eastern European (SEE) countries andfor Macedonia, in particular. Cultural values have been grouped intotraditional vs. secular-rational values and survival vs. self-expression values.The main result from the study is that cultural heritage exerts considerableeffect on job satisfaction in SEE with some determinants – like the importanceof work, religion and family – exerting stronger influence in SEE than in CEEand in western Europe. This finding adds some evidence for the persistencytheory of convergence of values.The impact of cultural values on job satisfaction in Macedonia has beenfound to be only limited. Mainly the traditional cultural values have been foundimportant in the Macedonian case, while only trust from the ‘survival’ grouplikely affects job satisfaction and likely with the effect being stronger than inthe case of SEE, CEE and western Europe. Some of the differences in values(and their effect on job satisfaction) in Macedonia might be related to theoverall labour market performance, which is however not treated separately inthis research and might be a question for further research.

Nikica Mojsoska-Blazevski, Marjan Petreski:Does Cultural Heritage Affect Job Satisfaction: The Divide between EU and Eastern Economies 209Endnotes1 An approach implemented, for instance, by Torgler, B. (2003), in a case oflow variance of data for an ordered categorical variable measured on a tenpointscale.ReferencesBlanchflower, D. G., & Freeman, R. B. (1997). The Attitudinal Legacy ofCommunist Labour Relations. Industrial and Labour Relational Review, 50(3),438-459.Clark, A.E., Oswald, A., & Warr, P. (1996). Is Job Satisfaction U-shaped inAge? Journal of Occupational and Organizational Psychology, 69(1), 57-81.Fargher S., Kesting, S., Lange, T., & Pacheco, G. (2008). Cultural Heritageand job satisfaction in Eastern and Western Europe. International Journal ofManpower, 29(7), 630 – 650.Fernandez, R., & Fogli, A. (2005). Culture: An Empirical Investigation ofBeliefs, Work and Fertility. Federal Reserve Bank of Minneapolis ResearchDepartment Staff Report, No. 361.Georgellis, Y., & Lange, T. (2007a). Participation in Continuous, On-the-jobTraining and the Impact on Job Satisfaction: Longitudinal Evidence from theGerman Labour Market. International Journal of Human ResourceManagement, 18(6), 969-985.Georgellis, Y., & Lange, T. (2007b). Traditional vs. Secular Values and WorklifeBalance across Europe. Paper presented at the 2007 ISQOLSConference, San Diego, CA.Guiso, L., Sapienza, P., & Zingales, L. (2006). Does Culture Affect EconomicOutcomes? NBER Working Paper Series, No. 11999.Inglehart, R. (2008). Changing Values among Western Publics between 1970to 2006. West European Politics, 31(1-2), 130-146.Inglehart, R., & Baker, W. E. (2000). Modernization, Cultural Change, and thePersistence of Traditional Values. American Sociological Review, 65(1), 19-51.MsKelvey, R., & Zavoina, W. (1975) A Statistical Model for the Analysis ofOrdinal Level Dependent Variables. Journal of Mathematical Sociology, 4,p.103.120.

Constructing Europe as a Global Power:210 From Market to Identity?Mujtaba, B. G., Murphy, E. F., McCartney, T., Williams, A., Trumbach, A.,Reid, J., Greenwood, R., Teeple W., & Woodhol, M. D. (2009). Convergenceand Divergence of Values and Type A Behaviour Patterns BetweenDeveloping and Developed Countries. The Icfai University Journal ofOrganizational Behavior, 8(2), 6-34.Roland, G. (2005). Understanding Institutional Change: Fast-moving andSlow-moving Institutions. Working paper retrieved April 25, 2011, fromhttp://www.econ.berkeley.edu/~groland/pubs/gr3.pdf.Togler, B. (2003). Tax Morale: Theory and Empirical Analysis of TaxCompliance. Unpublished PhD, Universitat Basel.Vecernik, J. (2003). Skating on Thin Ice: A comparison of work values and jobsatisfaction in CEE and EU Countries. International Journal of ComparativeSociology, December 1, 2003.Wanous, J., Reichers, A., & Hudy, M. (1997). Overall Job Satisfaction: HowGood are Single-item Measures? Journal of Applied Psychology, 82(2), 247-252.

Elena Makrevska:Resilience of the Euro 211Resilience of the EuroElena MakrevskaAbstractThe European Union (EU) nowadays is facing the most severe debtcrisis. While Germany is rebounding very successfully from theeconomic recession Ireland, Greece and Portugal are faced withsignificant difficulties. The prospect of the single currency is drowningas a result of the debt and default fears that put a question mark overthe whole EU. This paper critically assesses the widely usedprojections of the EU and appropriateness of different budgetarystrategies in order to sustain the fiscal balances and stability of theEuro. This paper suggests that there are three possible solutions for“rescuing” the Euro. First, for the EU to continue with the strongenforcement of the rescue scheme. This is a serious step, having inmind that the burden of adjustment of the budget deficit will be inheritedin future generations. Countries need to achieve higher rates of growthand stability in the medium term in order to cover today’s losses.Second, elimination of the countries which are not in compliance withthe Maastricht rules. If the countries stay, they won’t have control overtheir monetary policies. If they leave the Euro zone, that will lead to anincrease of the interest rates on a higher level than today. Either theircitizens will face large declines in their living standards as theircurrency falls against the Euro or they will be demanding largerincreases in wage that will lead to high inflation. There are two sides ofthe solution, and neither of them is easy. Third, exit of Germany fromthe Euro zone or the division of the Euro zone into two sub-regions(one with a strong currency and the other one with an adjustableexchange rate). All the solutions are in favor of further sustainability ofthe Euro. But in modern market economies, market powers make thefinal decision.

Constructing Europe as a Global Power:212 From Market to Identity?IntroductionThe world was faced with the global financial crisis during 2007-2008,and in the years after the crisis (2009-2011) is still facing negativeconsequences. There is almost no country in the world that did not feel thestrike of the crisis. Even thought it started in the financial sector, it slowlyspilled over into the real and social sectors. The manifestation elements of thecrisis are still present. Growth is showing stagnant rates, liquidity is drying up,credit growth is constrained, public debt ratios are raising, unemployment ishigh and financial risks still remain. In order to sustain the stability and “getback into the track”, the world needs to reestablish the impaired external andinternal balance.The internal balance was disturbed as a result of the intensive fiscalstimulus that helped the countries to compensate the collapse of the privatedemand. The role of the growth initiator must belong to the private demandrather than budget spending. It is no longer maintainable that growth befinanced with government revenues. On the other hand, the externalrebalance must be made in the area of net exports. The situation with Chinaand other emerging markets is that they rely on their net exports and exceedhigh rates of growth and trade surpluses. On the contrary, advancedeconomies, rely on their domestic demand which create trade deficits. Thepositions should be switched. Emerging markets should orient towardsdomestic demand and allow greater exchange rate flexibility. This implies thatthe coordination of the macroeconomic policies should be made on a nationallevel, having in mind the effects taking measures on the rest of the world.The most severe internal and external imbalances are noticed amongstthe countries in the European Union. It seems that almost half of the memberstates of the European Monetary Union (EMU) are in debt crisis, whichendanger the future of the euro (Nenovski, 2010, p.127). In the past twelveyears, after the Euro was officially introduced (in 1999), the EMU has neverfaced so serious a problem like it does nowadays. The Maastricht criteria (thebase principles of the EMU regarding the level of budget deficit, rate ofinflation and level of public debt) have been violated for the first time by thePIGS countries (Portugal, Italy, Greece and Spain).The prospect of the single currency is drowning as a result of the debtand default fears. The high level of budget and public debts of the mentionedEU member states have prevented their ability to finance the economy on

Elena Makrevska:Resilience of the Euro 213their own. Financial help from the rest of the EU member states is needed.The only problem is that according to the Lisbon treaty, the EU countries arenot obliged to give financial help to one another, and can not make directinterventions (Sieberson, 2008, p.124). They can only approve loans to thecountries that need to be financed or give warranties so those countries cantake loans under favorable conditions. But, is that indirect financial helpenough?One of the problems lies in the lack of political coordination in the eurozone. Some authors (Verhofstadt, 2010, p.3; Grauwe, 2010 p.19) claim thatfollowing the Maastricht criteria is not enough for sustainability of themonetary union. What is needed is a strong political union. It seems that,Europe is about to make crucial decisions about the future of the EuropeanUnion.European Union Facing the CrisisThe current financial crisis is characterized by a long period of rapidcredit growth, low risk premiums that cause unrealistic high asset prices andthe creation of a real estate price bubble. After the bubble burst, the financialsector faced lower liquidity and lots of banks going bankrupt (Jackson, 2009,p.7). Problems in the financial sector overspill onto the real sector; causingcredit restrains and lowering the confidence of the investors and households.The cross-border transmission happened almost immediately, due to theintegrated financial system and globalization of the stock markets. Accordingto International Monetary Fund- IMF (2010, p.21) the world output wasshowing decreasing trends from 2, 8% in 2008 to -0, 9% in 2009. The mostaffected countries were the advanced economies (USA had 2, 6 negativevalue of its GDP and EU, economic growth of -4, 1% in 2009).In order to face the consequences of the crisis and not to repeat themistakes from the past (before the Great depression, it was supposed that themarket by itself will solve the problems), policy makers acted aggressively onthe market. Governments use (d) the fiscal stimulus to boost economicgrowth, and monetary authorities use (d) the method of quantitative easing(increasing the money supply by repurchasing government bonds and otherfinancial assets by the Central Bank) and qualitative easing ( the Central bankswaps high quality assets for poorer quality assets).The budget spending becomes the main driving force of the growth. In asituation when consumption and investment are low, the expansive fiscal

Constructing Europe as a Global Power:214 From Market to Identity?policy is creating the growth. But, the intensive level of budget spendingcauses a deepening of the budget deficit. In the table below, rates of thebudget deficit in EU countries for 2010 are given:Graph 1.Budget Deficit of Euro-zone Countries in 2010Source: Mauldin J. (2010) Europe Throws a Hail Mary Pass. Retrieved May 8,2011, from http://www.safehaven.com/article/16808/europe-throws-a-hailmary-passThe graph shows that even thought the Maastricht rules of the Euro zonepresuppose that the budget deficit should not exceed 3 % of GDP, almostnone of the EU countries abided by this rule in 2010.Having in mind the crisis it is understandable why these huge budgetdeficits are created. The question is why is there such a difference betweenthe volumes of the budget deficit between the countries. Some of them, suchas Greece, Ireland and Spain, reached level of budget deficit of over 10% ofthe GDP. The current economic crisis reveals weaknesses of the financialand economic system of these countries. If we take Greece for example wecan see that Greece joined the Euro zone on 1 January, 2001, as a 12 thmember after dramatically cutting inflation and interest rates, even though thebudget deficit has never been below 3% even in that period. Even though theGreek economy had positive rates of growth before the crisis (4, 1% growth of

Elena Makrevska:Resilience of the Euro 215GDP in 2006), the economy in 2009 contracted by 0.3%, and the nationaldebt has risen to €262bn, from €168bn in 2004 (Kolb, 2011, p.397). Thatdecreased the country rating from A to BBB+ which pushed up the cost ofborrowing. Also, other weaknesses of the financial system were revealed.Investment bank (Goldman Sachs) was accused of helping to cause the crisisby using derivatives contracts to disguise how much Greece was borrowing.Even though Greece took austerity measures that include freezing of thepublic sector pay and higher taxes (in February, 2010), the situation did notget better. The EU was forced to take some measures and help Greece withthe rescue package. In April, 2010, (European Commission, 2010, p.58) theEU agreed on a 30 billion Euro rescue package for Greece. That wassupported by the IMF pushing its bailout up to €45bn. The rating dropped toBB+ and Greece will need more help, beyond the 110 billion Euro that thecountry received during 2010. European leaders are preparing to let Greeceuse Brussels' emergency funding mechanisms, the European FinancialStability Facility (EFSF), to roll over its maturing debts. By august 2011, it is abig question of whether Greece needs additional money to solve its problemsor it is just a wasted effort to save the country.Ireland suffered from the economic crisis as well. Many flaws in thefinancial system, together with the decreased export (Ireland is an export ledeconomy) lowered the economic growth. Ireland has had almost 250,000 netjobs lost in the recession to date (Watson & Renglig, 2010, p.22). Measuresannounced by the Irish government since July 2008 equate to a cumulativefiscal tightening of almost 9% GDP between 2008 and 2011.These examples show that the EU authorities are trying to save thesecountries, by financial help and imposing measures for lower fiscal spending.The EU is trying to save the countries, because there are a number ofmechanisms that transmit crises from one country to another i.e. that causecontagion that can jeopardise the stability of the euro.The PIGS countries are in the Euro zone and face with macroeconomicproblems as it was explained (large budget deficit, high debt level...). Thatdecreases the investors` confidence, which lead into selling stock and bondsthat can easily cause financial systems in the countries to collapse. High debtlevels, low economic growth and low level of investors` confidence willdecrease the competitiveness of the whole region, and will depreciate thevalue of the Euro. That is why the EU authorities have to save the countiesfrom the debt problems that they are facing today. Some possible solutions

Constructing Europe as a Global Power:216 From Market to Identity?for saving the Euro especially with regards to the future of the indebtedcountries and the future of the Euro zone itself are elaborated below.Possible Solutions for the Surveillance of the EuroIn any possible solutions for the surveillance of the Euro, one is sure:the fiscal stimulus has to stop operating as the main driving force foreconomic growth. Consumption and investment now have to take the lead.However, the real situation is that consumption and investment are still low,even though the governments are trying to restore their confidence.Unemployment is high and barely decreasing in most of the Europeancountries. Unemployment is set to continue to rise until the first half of 2011 toa peak of more than 17 million people in Europe (European commission, 2010p. 35). Together with the fact of uncontrolled debt in countries such asGreece, Spain and Portugal, the value of the Euro has dramatically fall.Three possible solutions for “rescuing” the Euro can be suggested:First, for the EU to continue with the strong enforcement of the rescuescheme. The last launched “financial package” by EU and IMF was 720 billionEuros, in May 2010. The stabilization scheme agreed upon by EU financeministers and top officials after 12 hours of talks in Brussels consists ofgovernment-backed loan guarantees and bilateral loans worth up to €440bn($568bn) provided by Euro zone members; a further €60bn supported by allEU members through expansion of an existing balance of payments facility;and up to €220bn provided by the IMF. The EU also has a temporary specialfund called European Financial Stability Facility (EFSF), a rescue fund fortroubled member states worth 440 billion Euros. This fund will be replaced in2013 with the European Stability Mechanism that will increase the lendingcapacity to 500 billion Euros (Hall and Barber, 2010).It seems that the financial help is constantly increasing in order to savetheir problematic countries. EU is not letting counties face the crisis alone. Ifcountries do not bring down high post-crisis debt levels over the long run, theyrisk high interest rates, low private investment and growth, and fewer policyoptions to boost their economies in the face of another economic downturn. Inthat direction, the IMF reports that policies to reduce deficits will be a keyfactor in the projected decline in the overall deficit of advanced economies byabout 1¼ percent of GDP in 2011. That would mean according to my opinionthat the fiscal sector needs to be supported by reforms in the health andpension care systems, strengthening the fiscal rules and control over the

Elena Makrevska:Resilience of the Euro 217institutions charged with government budget spending. Economiccoordination and reforms in each economy is a main precondition for savingthe Euro zone. Fiscal consolidation (decreasing the rates of budget deficit) willdissimulate short term growth but, if it is followed by the reforms from theBasel Committee on Banking Supervision that would help financial marketsand institutions to offer support for the consumption and investment which isessential for medium and long term growth.This is a serious step, having in mind that the burden of an adjustment ofthe budget deficit will be inherited by future generations. Countries need toachieve higher rates of growth and stability during the medium term in orderto cover today’s losses. It seems that even though countries are aware of thecurrent situation, they are facing problems in order to cut the budget spending(reform problems, protests from the population….). So, it is more likely thatthe EU will continue to finance the indebted counties and try to stimulate thecountries to reduce their budget deficits (and force the measures for fiscaladjustment). That will help the individual countries (as well as the EU as awhole) to regain the competitiveness and achieve positive rates of growth.The second solution is that the EU instead of growing towardFederalization it will go a step back, transforming into a free trade association.That will bring back the old currencies and will leave the choice to themonetary authorities in each country. That of course, will be efficient in theshort term but it will make the EU less competitive in the long run on theinternational market. If they leave the Euro zone, that will lead to an increaseof interest rates on a higher level than today. Either their citizens will facelarge declines in their living standards as their currency falls against the Euroor they will be demanding larger increases in wage that will lead to highinflation. The most important thing is that that economic and political stabilityof Europe, can be destabilize.But if we look forward, it is logical to expect that the EU will grow into aFederacy. That can also be one of the solutions. In that case, the EU will havea unique fiscal policy. That also presupposes a unique external and securitypolicy. The most important thing in the process of federalization ishomogenization of the regulation and control of the financial institutions in theEU, regulations for the balance of payment and harmonization of the taxationsystem.What would be the use of this federalization? It would help with EUregulations, to have better enforcement of the structural reforms and hopefullybetter results. For example, structural reform for increasing the flexibility of the

Constructing Europe as a Global Power:218 From Market to Identity?labor market (in the region with same regulation) will increase thecompetitiveness of the region. In the history of monetary unions, there is anunsuccessful example of the Scandinavian Monetary Union- SMU, (formed bySweden and Denmark in May, 1873 and Norway 1875). Among the otherreasons, it seems that when Norway became independent, the irate Swedesdismantled the monetary Union (Sharp, 2005, p.7). The individual interest bitthe interest of the monetary union. That raises the question whether thecountries in the EU are ready to sacrifice their own interest for the sake of theUnion?Nonetheless, coordination is needed in the fiscal sector (consolidation ofthe budget deficits), and also in the area of monetary policy. The monetarypolicy should also be adjusted in order not to proceed with further quantitativeand qualitative easing (explained previously), but rather to be followed bybanking standards that will support healthy credit growth. In that sense, it isimportant to be proceeded by the financial reform: regulation of the process ofsecuritization, regulation of the “too big to fall” institutions, cross border issuesand other issues that were among the reasons that caused the financial crisis.So far, coordinated policy responses made progress into ensuringliquidity in the system and restoring the confidence of the investors andhouseholds. The challenge ahead is to be continued with the futurecoordination of the macroeconomic policies in order to return the growth ratesto the pre-crisis level. Whether the EU will be in the form of a free trade zone,monetary union or political union, coordination is needed.The third solution will be if the Euro zone split into two regions. Aneconomically stable core of Europe will be one region and the “profligate”countries in the Mediterranean will be members of the other region. Thestable core would consist of countries like: Germany, France, Netherlands,Belgium and Luxemburg. The other region of Mediterranean countries wouldconsist of Greece, Portugal, Spain and Italy. According to this solution therewill be a North- South divide, which will stimulate the Mediterranean countriesto reduce their budget deficit and to join the South region.But, where will Ireland belong? According to the economic performancesit belongs in the South, but according to the geographic location it is in theNorth. The separation of the two regions cannot be that easy even in theterminological sense. Growth in the Mediterranean economies and Ireland isforecast to average only 0.6% combined per annum over 2010-12, comparedto 1.8% in Germany, France and the Benelux. This compares to the five yearsprior to the crisis when Greece, Ireland, Portugal and Spain together grew at

Elena Makrevska:Resilience of the Euro 219an average rate of 3.5% per year while their northern neighbors grew by lessthan 2% per year (European commission, 2010, p.24). That shows that thegrowth in the Mediterranean countries was not based on labor productivity,but rather that the growth was based on higher borrowing and highconsumption. The main difference between the two regions, North and South,is that the Mediterranean counties and Ireland will have lower income levels.This divide will stimulate convergence in the prices in the following years, asMediterranean counties and Ireland reduce their deficits and improve theirperformance.Still, breaking up the Euro is not impossible but it is very costly. Leavingthe most indebt countries out of the Euro zone or dividing the EMU into tworegions is technically difficult and it will cause many expenses (it took threeyears to introduce the euro). Except that, it will bring economic cost in a sensethat there will be general panic amidst the population, and depositors will runon deposits which will worsen the situation in the banking and financial sector.The worst fear is that it will destabilize Europe (political risk).ConclusionAll three solutions have both positive and negative sides. Still, the finalconclusion is that budget spending has to stop being the main driving force ofthe GDP growth. Fiscal policy needs tightening during 2011. As we explainedin the text, the budget spending only “put oil to the fire” or in other wordsrevealed the weaknesses of the financial and economic systems of thecountries. Even though the countries hoped higher budget spending wouldhelp the economy to grow, that only brought high public deficit with nodevelopmental component. The fiscal consolidation has to be deliberateprecisely, in order to be able to sustain debt during the medium term.Along with the fiscal consolidation, coordination with the monetary policyis needed more than ever. That will help the economy to sustain and growhealthy financial systems that will create and support productive and qualityinvestments. Along with that, the economy will generate high rates of realgrowth. Coordination in the macroeconomic polices will also mean highbanking standards and financial reform in the areas that failed during theeconomic crisis (regulation of the process of securitization, regulation of the“too big to fall” institutions, cross border issues etc).In the meanwhile while coordination is achieved, it is more likely that theEU will continue to finance the indebted counties, and “hope” that they will

Constructing Europe as a Global Power:220 From Market to Identity?use that period to reduce their budget deficits (with measures for fiscaladjustment) and make structural changes in their economy in order to regaincompetitiveness on the market.According to my opinion, the EU will choose the first solution and willcontinue to financially support the member states. According to theexplanation for the third solution, breaking up the Euro is not impossible but itis very costly. It would bring many expenses and risks, and the biggest one isthe political risk for destabilization of the EU. In this way the EU will go a stepbackwards. Europe needs synchronized action of the fiscal and monetarypolicy (even if that coordination means federalization of the EU) in order tosustain the growth and the stability of the EU as a monetary union.

Elena Makrevska:Resilience of the Euro 221ReferencesEuropean Commission (2009). Economic crisis in Europe: Causes,Consequences and Responses. Luxemburg: European Communities.Retrieved fromhttp://ec.europa.eu/economy_finance/publications/publication15887_en.pdfGrauwe, P.D. (2010). Some Thoughts on Monetary and political Union.Belgium: University of Leuven. Retrieved fromhttp://www.econ.kuleuven.be/ew/academic/intecon/Degrauwe/PDG-papers/Contributions%20to%20books/EMU%20and%20Political%20Union-V.pdfHall, B., & Barber, T. (2010). Europe Agrees Rescue Package. New YorkTimes online. Retrieved fromhttp://www.ft.com/cms/s/0/f96a6c14-5b48-11df-85a3-00144feab49a.html#axzz1CpoUe0a8International Monetary Fund, (2010). World Economic Outlook: Recovery,Risk and Rebalancing. Washington D.C: International Monetary Fund.Retrieved from http://www.imf.org/external/pubs/ft/weo/2010/02/index.htmJackson, J.K. (2009). The Financial Crisis: Impact on and Responseby The European Union. USA: Congressional Research Service. Retrievedfrom http://fpc.state.gov/documents/organization/127015.pdfKolb, W.R. (2011). Sovereign Debt: From Safety to Default. Hoboken, NewJersey: John Wiley and Sons.Mauldin, J. (2010). Europe Throws a Hail Mary Pass. Retrieved fromhttp://www.safehaven.com/article/16808/europe-throws-a-hail-mary-passNenovski, T. (2010). Makedonija i svetskata ekonomska kriza. Skopje:Nampress.Sieberson, C.S. (2008). Dividing Lines between the European Union and itsMember states: the impact of the treaty of Lisbon. USA: Asset Press.Sharp, P.R. (2005). The History of Monetary Unions and the OptimalCurrency Criteria. Copenhagen: Institute of Economics, University ofCopenhagen.Verhofstadt, G. (2010). The Eurozone in Need of a Political Union. Brussels:European Comission. Retrieved from http://www.notreeurope.eu/fileadmin/IMG/pdf/EU2020-GV.pdfWatson, M. & Regling, K. (2010). A Preliminary Report on the Sources ofIreland’s Banking Crisis. Dublin: Government publication office.

Constructing Europe as a Global Power:222 From Market to Identity?Pan-European Pension System, Possibility or Fiction?Petar TaleskiAbstractToday Europe has different pension systems. According to the history offorming, there are some based on the Bismarck model, like in centraland southern Europe; and others on Beveridge’s model, like in UK,Ireland, Netherlands and Cyprus; and those based on the Scandinavianmodel in the Scandinavian countries. In the past two decades there arepension reforms that are conducted in the eastern European countriesbased on the World Bank model. Most Western European countries didnot reform their pension systems. In the past two decades they havemade only adjustments but not reforms.Some countries of the EU, like Greece, France, Spain and Portugal,have problems with the financing of their pension systems and also theyhave worker strikes over this issue. Conversely, Netherlands, UK,Sweden, Ireland and Denmark do not have those kinds of problems. Thequestion is what is the difference in the pension models that makes themodels of some countries to be more sustainable and others not. Whatare the differences in the models? On the one hand, some models canprovide better solutions for the elderly population and, on the other hand,some models are not enough suitable for the future retirees. If we knowthat the EU is a market that is based on the freedom of movement ofcapital, goods and labor force, the question is, if EU countries do nothave similar or connected pension systems, do we have a problem withfreedom of movement of the labor force within the EU? In a time ofcrises, it is notable that in the USA, for example, the equality of thepension rights made it easier for the people to move from one region toanother and to mitigate the effect of the crisis. Is it possible to have thesame situation in the EU? Do we have to think of a Pan EuropeanPensions System? What will be the features of that kind of system?

Petar Taleski:Pan-European Pension System, Possibility or Fiction? 223Pension Reform in EU as a Continuous ProcessThe pension reform issue is considered as top priority in EU memberstates. Reform of public pension systems commonly includes a limiting ofpublic expenses increment, second and third pillar reforms which arenecessary for the reform process to be successful and individuals to acquirean additional amount of pension for future pensioners.Most EU member states in the past two decades have implemented amulti – pillar model which unites public and private pension schemes. Everypillar is important, although first pillar acquires pension for most pensioners.Current systems of mandatory insurance are not capable of providing a highsocial security rate, that’s why the European social model, economic growthand EU stability is not possible without the significant reform processes.Necessary measures commonly are not pleasant, so politicians usuallywant to bypass them. But reality forces them to start thinking about reforms.Often, certain individuals or groups of interest try to transfer the burden ofreform to other generations. But, pension reform must be a process whichshould be adapted and implemented continuously. Gary Becker, Nobel Prizewinner from Chicago University, is calling pension reform the “mother of allreforms”. Reform solves main long – term problems of pension financing, andmoreover at the same time there are positive effects of capital price,employment increment and increment of GDP, which is the basis of economicdevelopment and a better life standard for citizens (Талески/Taleski, 2005,p.19).Need of Pension Reform in EU and EU Member States CandidatesDuring the 1980s and 1990s, the population aging issue, forced almostall countries – EU member states from western Europe to change keyelements of their pension systems, which were built on a PAYG (pay-as-yougo)solidarity basis in a period of rapid employment increment, young laborforce and low rates of dependence between the old and young population.Pension systems were founded in Europe at the end of 19 th century,usually as part of larger systems for social security. Their progressive build inthe first half of the 20 th century enabled large expansion after World War Two,ranging over the entire working population. All systems had similar goals: to

Constructing Europe as a Global Power:224 From Market to Identity?provide insurance against aging risks and initially range overall workingpopulation.As a parallel, another part of the social security system provides securityfrom unemployment risks, disability and so on. These systems were foundedon welfare theory, based consequently on “imperfections of market economy”(Hubbard, Judd, 1987, p.631) and the elimination approach which eliminatedcertain imperfections of society.Every pension system is the result of a delicate balance of economic,social and political power. Specific divisions which should describecharacteristics of western European pensions and social systems that existedbefore the reform are:Qualification - under certain criteria, all citizens are subject of pensioninsurance, usually based on equal amount of pension or in certain countries –pension based on earnings during individual’s career and specificprofessional (occupational) pension schemes which are based onparticipant’s status in it (profession);Financing - financed from taxes and contributions. Solidarity systems(PAYG) were based on received benefits from current contributions, whileother pension schemes with capital mechanism enjoyed benefits of thecapitalization of assets;System managing - centralized managed from public service or othersystems are highly decentralized with certain types of semi – publicinstitutions which are commonly functioning as autonomy agencies;More of western European pension systems evolved into mixed systemswith different elements based on defined benefits or defined contributions;with actuary or non – actuary components.Europe in the next few decades will be faced with significant populationaging, because of fertility decrement and prolonged life duration. Because ofpopulation aging, the rate of dependence of the elderly population from youngpopulation will increase. It is expected that this rate will double. MostEuropeans have pessimistic views for the pension system future, due toPAYG base, which is not sustainable on a long term basis. The first responseof this situation was increment of retirement age, in regards to the fact thatEuropean citizens spend around 20 years in retirement now, which in the 60’sof last century was on average 13 years. For the same reasons were raisedcontribution rates, but constant increment of the contributions in PAYGsystems is a question that cannot be discussed on a long–term scale. Theconclusion was to start a reform process of the pension system.

Petar Taleski:Pan-European Pension System, Possibility or Fiction? 225Regarding the problems, EU experts have changed the conceptual baseof their opinions. The trend is crossing from “social welfare theory” to“contractual approach”. While “social welfare theory” is focusing on expenses,“contractual approach theory” searches institutional rights through particularprocedures, ethical constellations, social security rights and fair play ruleswhich lead individuals toward reaching the right for pension. Welfareapproach permits greater liberty regarding the choice of contribution rate andlevels of future benefits, retirement age (O’Dwer, 2006, p.17).According to Vittas (2000), basic observation refers to goals that can beachieved with pension reform. It is important for pension reform to acquirehigher efficiency and economic growth as well as development of financialmarkets, but these should not be primary goals of pension reform. The maingoal of pension reform is acquiring adequate, decently evaluated andparticular pension benefits. Besides that, there are additional effects whichcause economy development and are not among the primary reasons forconducting the pension reform. The second main goal is establishing a strongrelation between contributions and benefits with the purpose of minimizingcertain unparticular distortions of labor market functioning and to be bypassedby unparticular redistribution. The third goal is forming of long – term savingswhich will stimulate capital market development. With it, the overall savingsrate is increasing.Pension reform may take three different forms: Parameter, NDC(notional defined contribution) and systematic form. Parameter reform meanscertain adjustments regarding retirement age, contribution rates, etc. NDCreform establishes a link between contributions and benefits and eliminatesdistortions of labor market. Neither parameter reform or NDC reform canstimulate long – term savings, which can bring direct effects for financialmarket development. Only systematic reforms that introduce fully fundedpension insurance may have such effects ( Vittas, 2000, p.2).From the 1980s, many western European countries (Austria, Belgium,Denmark, Finland, France, Germany, Greece, Portugal and Spain) introducedtheir parameter pension reforms which changed the basic parameters in theirsystems, commonly: retirement age, contribution rates, and amounts ofpension benefits and investment rules.Italy and Sweden established their NDC systems, while Great Britain hasmade structural reform moving toward an almost totally “fully funded pensionsystem” (O’Dwer, 2006, p.19).

Constructing Europe as a Global Power:226 From Market to Identity?Why Pension Systems are Reforming?Pension systems should provide three main goals – saving, redistributionand insurance. While public pension plans acquire surpluses for a populationthat receives pension benefits, the situation is under control. But with time,these systems mature and the financing problem is actualizing and surpluseswhich were created and accumulated in the past were slightly spent. Most EUcountries faced with these deficits and by the public pressure of the pensionreform process was introduced in many EU countries. Surely not all reformsenable permanent solutions for problems.According to Anita Schwarz and Asli Demirguc Kunt (1999, p.9) reformtypology is based on solving several criteria: how benefits are calculated andhow expenses are covered, how benefits are financed and who manages thepension system. According to the fact about what types of benefits exist andwhich are opportunities for their financing, governments approach variouspossibilities for pension reform conduct. Therefore the situation is totallydifferent if in the country was functioning just on a solidarity system-PAYG, orbeside solidarity system-PAYG were functioning also on fully funded pensionschemes.Minor Adjustments or Huge ReformsAfter reviewing all of these questions, two reforming options may beposed; minor adjustments and huge reforms.Minor adjustments are changes which can be implemented in the currentpension schemes, primarily – to be postponed by fiscal problems, andsometimes to correct existing non – particularities. Government institutionsmay change criteria for acquiring pension benefits, may change contributionstructure, structure of benefits and similar characteristics. Most of theseprocesses cannot be enough to solve problems in public pension plans, buttemporarily may solve fiscal crisis in pension insurance. As minor adjustmentsmay be mentioned: Change of qualification criteria. All EU member states have madecorrections of retirement age. Change of contributions structure: change of contribution rates orchanging the replacement rate. Most EU countries in the last twodecades increased the contribution rates.

Petar Taleski:Pan-European Pension System, Possibility or Fiction? 227 Change in benefit structure - change of pension amount calculation orchange of pension indexing. Some EU countries, like Portugal,changed the pension calculation method. Under real reform are defined the situations in which a defined benefitsystem is replaced with a defined contribution system or vice versa orswitching from PAYG system to a fully funded pension system or viceversa. Huge reforms which were accomplished in EU member statesare: From mandatory PAYG defined benefit system to: Combination ofmandatory PAYG defined benefit system or defined contribution –NDC system with mandatory fully funded pension system. Thesetypes of reform were conducted in countries which have accepted theWorld Bank model. From mandatory PAYG defined benefit system to: Combination ofmandatory PAYG defined contribution system (NDC system) andadditional fully funded pension system. This kind of reform wasconducted in Sweden and ItalyAlthough many countries declared that they are changing the pensionsystem, just about 25% of those reforms can be named “huge” reforms. In EUmember states, real reforms were conducted in central and eastern Europeancountries such as: Poland, Hungary, Czech Republic, Slovakia, Slovenia,Estonia, Lithuania and Latvia. In western European countries, real pensionsystem reforms were conducted in Sweden and Italy. Remaining countriesfrom EU have conducted reforms which have more elements of adjustmentthan real structural reforms (O’Dwer, 2006, p.21).Successfulness of Reform FunctioningCrossing from a solidarity system-PAYG to a combination of solidarity-PAYG and fully funded pension system can be graded through answers toseveral questions.May fully funded pension systems guarantee highest return rates?Reviewing the financial markets history in the last 30 years, it can be noticedthat the average return rate is moving from 4% to 7%. If we make a simplecomparison between return rates of solidarity-PAYG and fully funded pensionsystem, it’s obvious that a fully funded pension system has an advantage.But, a fully funded pension system has advantage if we compare only “purely

Constructing Europe as a Global Power:228 From Market to Identity?return rates” which brings two systems. But if we compare return rates withtransition costs, inflation rate, possible economic and financial shocks, fullyfunded pension system does not have “huge advantages”. Some authorsthink that fully funded pension system increases economic welfare, but otherauthor’s think that it does not, because of transition costs. Also, fully fundedpension systems can better endure the aging population issue, but sooner orlater, with decreased demand of stocks and bonds (because of decreasedpopulation), prices of financial instruments may fall.Also, analyzing the goals which bring pension reform may be reviewedfrom several aspects: Acquiring long – term fiscal sustainability for the next 50 years. If it will be necessary in the future to take minor reforms, will thereform cause political difficulties and non – particularities? Acquiring gains and economic efficiency from basic reform (what kindof gains and ways of acquiring)EU candidate members, such as Macedonia and Croatia have a need fora pension reform because of the aging population, as well as decreasedeconomic activity in the country. Pension reforms which these two countrieshave conducted are according to the World Bank model – crossing fromsolidarity-PAYG pension insurance system to combination of solidarity-PAYGand fully funded pension insurance (mandatory and voluntary).EU Pension System StrategiesIn all EU countries, expenses for pension systems were getting higherand higher. Expenses for pension, as well as expenses for healthcareinsurance, for social protection and unemployment could not continue withouthigh contribution rates. Current pension systems were non – transparent, rigidand did not respect basic economic functioning principles. Reform wasneeded. An extreme solution would be the absolute replacement of the PAYGdefined benefit model with a voluntary fully funded pension system withdefined contributions. But extreme solutions sometimes pose questions foreconomic sustainability of transition costs towards establishing that sort ofpension system and problems that will eventually arouse.Main questions which were shown in national strategies of EU memberstates for pension system reforming are: Way of financing of pension schemes (solidarity-PAYG or fully funded) Way of managing (public or private pension schemes)

Petar Taleski:Pan-European Pension System, Possibility or Fiction? 229 Obligatory function (mandatory or voluntary membership into pensionscheme) Benefits determining - schemes with previously determined benefits-DBor schemes with defined contributions-DC.What opportunities did governments have in various countries? Choiceof pension system of EU member states was not a decision in frames of EU,but every member state created its own pension system shape andconducted the pension reform in its own way. One thing can be concluded – amulti-pillar model is “mandatory” for all countries, but member statesindividually decide about combinations of founding it.Membership Contour – Mandatory or VoluntaryA problem of voluntary pension systems is that voluntary membershipdoes not acquire strictly defined contribution rates, which should be paid. Incertain countries, because of complexity of question and lack of information,as well as short – sighted (myopia) employees, beside the mandatorysolidarity-PAYG system were established also mandatory fully fundedpension schemes. Mandatory fully funded pension schemes were establishedin Poland, Slovakia, Hungary, Lithuania, Latvia, Estonia as well as Finlandand Denmark. For remaining member states, membership in fully fundedworkers unions and unions of employers. The state has an obligatory functionbecause the individual has no initiative to take care of his retirement days,and individually to acquire pension amount. From another point of view, it isimportant that individual contributions into fully funded pension systems whichwill mean decrement of contribution evasion which was a common case insolidarity-PAYG system.The third characteristic which propagates mandatoryfully funded pension insurance is risk diversification between mandatorysolidarity and mandatory fully funded pension insurance is under thesupposition that if one of the systems fails to acquire enough assets the otherwill.Way of Financing – Solidarity or Fully Funded Pension SystemDiscussion about solidarity-PAYG or fully funded pension systemsdemands serious attention in economic and political public. Crossing to aprivatized pension system in 1994 was proposed by World Bank and theInternational Labor Office. Investment schemes will be a solution for

Constructing Europe as a Global Power:230 From Market to Identity?demography and financing problems, as well as future contribution ratedecrement, and by competition increment the decrement of fiscal deficit in thestate would be managed. Private pension schemes favoritism was conductedin Great Britain, Ireland, Netherlands and Denmark. Commonly pensionschemes were functioning together with solidarity-PAYG systems, whichenables minimum rights. Expectations from fully funded pension schemeswere large. These pension schemes, although voluntary, are 90% financed bythe working population who were included in these schemes. AlsoScandinavian countries, Sweden and Finland dedicate great attention to fullyfunded pension systems for retirement.Remaining member states have private pension schemes, but untilrecently, their growth was not stimulated by the state. Pension schemes arebased on voluntary principles and include minor parts of a working population.According to the experience of many countries that have experience withfully funded pension systems such as Netherlands, Sweden, and UnitedKingdom, it could be concluded that one safe way for individuals to acquire asatisfactory pension level is to make additional savings.Schemes with Defined Benefits-DB or Schemes with DefinedContributions-DCOne basic principle of pension systems is the prediction of income afterretirement. By schemes with defined contributions that principle is not fulfilledand the amount of pension income could not be predicted. Simulations showthat the altitude of insured assets varies almost 30% compared to interestrates and salaries increment in the last 40 years. Most commonly PAYGsystems in Europe are based on defined benefits except in Sweden, Italy,Poland and Estonia, where the PAYG system is with defined contributions(transformation to NDC system).Fully funded pension systems in western European countries, usuallywere with defined benefits, but the tendency within the last 10 years is that,those systems have to be transformed into defined contribution systems.While fully funded pension systems in central and eastern Europe in theirmandatory and voluntary schemes established defined contributions system.

Petar Taleski:Pan-European Pension System, Possibility or Fiction? 231In EU member states, PAYG systems are publicly managed, while fullyfunded pension schemes are managed privately. Only fully funded collectivepension schemes of the public sector in western EU countries have elementsof public managing.In Great Britain, Ireland, Netherlands and Denmark every individualwhether he was employed or not, has the right to a minimum pension. InScandinavian countries there is guaranteed state pension of social amountwhether an individual was employed or not. Within the rest of EU memberstates, state pension has a value depending on paid contribution and years ofcontributing.Throughout the world there are solutions for public fully funded pensionschemes, but in EU member states these types of solutions do not exist.There are only possible combinations of solidarity-PAYG with fully fundedpension systems. Various options of functioning for the first and second pillarin frames of pension systems within the EU member states are provided inthe table that follows.Lisbon Strategy for Coordinated Pension System in EuropeThe Lisbon strategy, known also as Lisbon Agenda was concluded bythe European Council in Lisbon, Portugal in 2000. The European Unioncreated strategic goals, until 2010 to become the most competitive and mostdynamic economy in the world, founded on knowledge, capability ofsustainable economic growth with a greater number and more quality laborneed, as well as bigger social cohesion. It was an answer to globalchallenges, especially for USA development regarding the new economy ofknowledge and domination of informational and communicational technology.For accomplishing that ambitious goal Europe needs preparation along with aqualified policy, market development and modernization of the Europeansocial model. (Boromisa, Samardžija, 2004, p.200)According to Dekker, Ederveen, Jehoel, Gijsberg, de Mooij, Soede,Wildeboer, and Schut (2003), the Lisbon Agenda strategy is based on threemain goals: Productivity increment in EU economies (dynamic knowledge); increment of employment (accomplishment of full employment withpromoting labor market participation); increment of social cohesion (poverty decrement and decrement ofsocial programs);

Constructing Europe as a Global Power:232 From Market to Identity?On December 2001, the European Council found out that significantresults will be met with setting dialog and coordination of questions in relationto the pension system reform. It refers to goals of adequacy, financialsustainability, and adaptability of the working method based on coordinationbetween pension systems and policies-Open Method of Coordination.In 2005, a Commission suggested revision, and the Council approvedrevision of the Lisbon strategy for employment increment and revised“integrated guidelines”. Open method of coordination in social protection fieldand social participation matches with the Lisbon strategy. The Commissionalso has the intention to improve the level of coordination in the socialprotection field with strengthening the “Open method communication” aboutpensions, social protection and healthcare insurance in 2006.Reports of the Commission recommended to the EU member states toencourage older workers to stay longer on the labor market and to strengthenthe link between contribution and benefits, and to promote public and privatepension financing, in the context of long-term implications so that theindividual’s life duration increment may have postive influence on the livingstandard of the people. Until 2050, the European population will beinsignificantly decreased, but older in average.Beside the encouragement of older populations working and a betterrelationship between contributions and benefits as a means to reduce thepoverty, some EU countries in their strategies put an objective to maintainlevels of guaranteed minimal pensions. The Open method of pensioncoordination is based on 11 target groups, divided by adequacy, sustainabilityand modernization of pension systems. Detailed progress analysis towardthese goals is presented in the Second Round of the National StrategyReport. In these reports it was pointed out that the efforts for maintainingpensions system sustainability with reduction of public debt.The Joint Report for Adequate and Sustainable Pensions of theEuropean Commission from 2003 has four high priority issues, mentionedbelow: Encouraging individuals to work in elder years. Life cycle development and strengthening the relationship betweencontributions and benefits. Pension systems modernization to enable pension systems to beadaptable to structural changes. The Guarantee of minimum pension income. Additionally, two questions are placed with recent reforms:

Petar Taleski:Pan-European Pension System, Possibility or Fiction? 233 Acquiring private pensions with the purpose of partial replacement ofpublic pensions. Many EU member states establish private fullyfunded pension systems with the purpose of acquiring convenientpension income and maintaining a positive role regardingdemographic risk diversification between public and private schemes. Strengthening pension systems regulation. Periodic ad-hock pensionsystem revisions, as well as automatic and semi-automatic adjustedmechanisms need to be established in order to control pensionsystems.Differences between Pension Systems and the Process of TheirOvercomeWith the purpose of overcoming the differences which exist in EUmember states, and creating the mechanisms for coordination of the pensionsystems, EU institutions have brought acts and documents which regulatepension insurance issues. The EU council in 1993 declared resolution for aflexible principle of retiring which encourages the older population to be activein the labor force market. Flexible arranging of retirement policy is individuallydecided by each member state, but it is important for each country to respectthe principle of subsidiary. In the book “echo of demographic changes: Newsolidarity between generations”, the EU Commission warned about thenecessity of global debates on “social security systems” issues, surely withrespect to different measures that can bring various government institutionsand states. With these resolutions and recommendations, EU countries needto minimize the differences between pension systems of member states.European institutions (Commission, Council and Parliament) and otherindependent EU institutions (agencies, committees and partnerships) areseriously analyzing the situation of pension systems. For that purpose specificinstitutions have issued numerous recommendations, announcements andother optional justice acts which warn about the importance of the pensionissue, and to help another state towards solving current problems with itspension financing. The EU institutions, have limited influence on the EUmembers, regarding the pension issue, because every member state solvesthis problem individually. The question related to the free flow of labor force,services and capital are connected with the pension system question.Mutual social policy, which is necessary for EU cohesion, is broughtaccording to Lisbon Agenda. Numerous goals of pension policy, related to

Constructing Europe as a Global Power:234 From Market to Identity?mutual market and monetary union demand policy adjustments. NumerousEU acts treat the economic and social cohesion, but they do not interfere withthe pension model questions of individual member states. Member statesshape their pension models in their own way. Their responsibility is toaccomplish duties from certain EU bounding acts which refer to an agreedbenefit level of the pension systems. Beside EU level obligatory acts, the EUbrought various acts which refer to the income of pension systems. EU actsregarding the pension insurance system are as follows: Basic principles about free flow of labor force and transferring pensionrights which refer to mandatory pension insurance can be found in anEU council agreement for social system security using employedindividuals, self – employed individuals and their family members inEU frames (EC 1408/07). Directive referring to additional pension insurance rights for employedand self – employed individuals in EU frames (EC 98/49). TheDirective arranges the question for the protection of an individual’srights which are moving inside the Union or resettled, or have workedabroad and acquire additional pension insurance rights. The Directivesupposes that additional pension insurance benefits can be paid inother member states without additional tax or other transaction costs. Directives for activities and supervision of additional professionalpension insurance. EU Parliament directive and EU Council for workand supervision of institutions (EC 2003/41) refers to this issue. In theDirective are also added basic principles of capital investments andactivities at foreign capital markets, the possibility of contributionstransfer in occupational insurance schemes, as well as the economicand social development that results. This Directive is brought in orderto acquire larger competition regarding products at pension insurancemarket. Regarding Tax frames for professional (occupational) pensionschemes, the EU Commission has issued an Announcement for a taxframe referring pension which includes professional pension schemes(COM/2001/0214final). In the life insurance field, the EU Councilbrought three Directives (79/267/EEC, 90/619/EEC, 92/96/EEC,95/26/EC, 2000/64/EC, 2002/12/EC, 2002/83/EC).One of the basic themes of the Commission is resolving the olderpopulation problem in the EU, three reports have been instigated in relationto: demographic increment, acquiring equity between generations at

Petar Taleski:Pan-European Pension System, Possibility or Fiction? 235redistribution, financing of retirement pensions and health care expenses andnew income division between older and younger population, in addition toincome between active and non – active population (COM/2005/0094final).In the frame of reforms for social security systems, Commissions haveimplemented optional law acts that stimulate cooperation between memberstates and provide support in configuring their strategy. Pension systems inEU countries must be compatible and be directed toward realizing targetedgoals. The ultimate challenge of pension systems is its relation to capitalmarket. Beside healthy macroeconomic policy and structural reforms thatstimulate economic growth and employment, as well as public financesbalance, the governments should work on the public expenses field,especially pension system expenses from the national budget.States with independently owned development of the pension systemsmay find solutions by establishing mutual cooperation. Pension systems mayreach a higher degree of social safety through mutual cooperation. ACommission in the report labels as a “Backup of national strategies foradequate and sustainable pension system” (COM 2001/0362final) suggestingcooperation between states based on OMC (Open Method of Coordination) inthe pension reform field .By introducing the OMC system, member statescooperate and report about the strategies.The question of the efficiency of the OMC method is whether it can beimplemented in pension reform processes in various institutional structuresand political environments of individual member states. Related questionsabout suggested cooperation between states are numerous: whether currentdevelopment is moving in a direction of individual pension modeldevelopment, whether the OMC method is a primary tool for directing theprocess on the “right way” through commitment of individual member statesreporting; whether suggested models strengthen targeted goals ofsustainability and pension adequacy, as well as the modernization of thepension system; whether suggestions are exact so member states can easilyrespect them and whether suggestions are flexible enough to be adjusted to anational environment?David and Andros (2006) evaluate the OMC method through three views:normative, cognitive and processed. Member states in the last two decadesface a series of challenges, which in different systems are set on a differentpriority scale.The OMC method establishes the coordination of pension systemsnational processes and challenges are set in certain frames. Under a

Constructing Europe as a Global Power:236 From Market to Identity?normative view, OMC determines economic and social goals of pensionpolicy. From a cognitive view, it can be identified best through theimplementation of theory practically, approach and measures. The processedview acquires transparency of pension reform over the entire process.With EU member states pension reforms and through their coordination,adequacy of pension systems can be acquired after having fulfilled severalgoals: Protection from social distortions by implementing guaranteedminimum income level of the older population, as well as minimumguarantees for future income that will keep the older population out ofpoverty. Enabling people to keep living standards through acquiring pensionarrangements, public and private that can enable solid living standardafter retirement. A significant factor for achieving this goal isreplacement rates. Promotion of solidarity between generations and inside a generation,through sharing risk, pension indexation and decrement of incomeinequality at older population. Financial sustainability can be acquired through: Increment of employment rates that will increment the possibility ofpension system financing Extending the working duration and retirement date Establishing sustainable pension system in context of public finances Adjustment of contributions and benefits on a balanced way,maintaining fair balance between working and retired population Acquiring adequate and financially significant private pensions,through establishing a regulatory frame from this kind of pensionscheme. According to Synthesis report (2006), of Directorate-General forEmployment, Social Affair and Equal Opportunities of EuropeanCommission, modernization of pension systems is achieved through: Adaptation of more flexible employment that provides compatibility ofpension systems with demand of flexibility and safety of labor market. Facing aspirations for equality between men and women. Demonstrating the possibility for facing the pension systemschallenges.

Petar Taleski:Pan-European Pension System, Possibility or Fiction? 237Establishing a Pan– European Pension System – Potential Structureand Transitional QuestionsThe need of pension system reform is recognized in all EU memberstates. Demands for a mutual approach toward reforms do not enjoy mutualsupport. The European Commission, which on various fields sees the need ofcoordination and total harmonization has the role of issuingrecommendations, not Directives related to internal rules that will maintainmember states.An idea for a common EU pension system is supported by the Pan –European approach, in order to achieve a unity of the pension field and tocontribute to reaching set goals – bigger flow of products, services, laborforce, capital and accomplishing Maastricht criteria. The pension system muststimulate mobility between occupations and sectors, as well as betweenvarious regions and states. Different occupational pension schemesdiscourage people to change their working place and have negativelyinfluenced the labor market development. Also, transferability of rightsacquired from public pension schemes, as well as transferability of rights fromadditional pension schemes is significantly limited. One common pensionsystem will surely provide bigger mobility in capital market. Besideseliminating the differences between various pension systems, the differencesbetween social policies and programs are eliminated also.A Pan – European approach should lead toward a coordinated pensionstructure. Pension systems are treated as well as other social policyprograms. By national agendas the EU member states show low indicationsthat recognize opportunity for better harmonization and coordination.Introduction of a common currency is part of the European economicintegration, which causes implications toward member states budget. TheEuro has implications on other elements of national economies such asflexibility of labor market and fulfilling the gap of labor force in variouscountries with a higher proportion of elderly citizens. The Euro as a currencyenabled bigger budget expansion in particular member states because thereis no opportunity for independent monetary policy and that indirectlyinfluenced fiscal policy; inability to influence interest rates causesasymmetrical shocks that hit particular member states. The main instrumentthat can regulate the shock of decreased fiscal policy efficiency in a mutualmonetary zone because of transferring economic activity to other countries isthe flexibility of labor market, as well as flexibility of salaries and migration.

Constructing Europe as a Global Power:238 From Market to Identity?Empirical studies from other countries, as USA for example, show thatalthough salaries adjustment is important in solving regional crisis, the mainadjustment mechanism is migration from regions with lower economic activitytoward regions with higher economic activity. In the past in Europe, inter –regional mobility was very low because of rigid labor force market as well asbecause cultural and linguistic barriers. But with globalization and theintroduction of common values, these mechanisms should be strengtheningallowing adjustment and annulations of certain shocks of economic and socialnature. One important mechanism which can help the common currencyshock adjustment is the pension system. If it is coordinated, it can provideexcellent mobility of labor force between sectors and occupations as well asbetween states. In many European countries, different rules about the publicand private sector decrease mobility between sectors. Mobility between statesexists also for public pension schemes as well as for fully funded pensionfunds. The EU doesn’t have a coordinated or harmonized pension system,which is not characteristic for other economically integrated regions withcommon values as Australia, Canada, USA, and Switzerland. Theseconfederations or federations have huge differences on the level of state orprovince (including taxes or short – term social benefits), but have one thingin common – public pension schemes which refer to all states or provinces.The third major instrument for a more coordinated Pan–Europeanpension system refers to integration of labor market and bigger flexibility.European market is free for trade of goods and services as well as free flow ofcapital. By declaration, free flow of labor force exists but serious integration ofthe European labor force market also demands equality of pension rightsbetween the states.The long–term value of the Euro against other currencies should bedetermined from European countries development. Current balances ormisbalances of goods and services flow influence the relative prices ofcurrency under the globalization effect. Aging of the European population maycompensate partially with GDP increment effect of member states, as well asthe increment of productivity which refers to mechanisms for worker’sallocation toward sectors and regions of development. It means need ofmutual pension systems which will enable that possibility (Holzmann, 2004,p.33).A Pan–European approach suggests a pension system that will includemandatory NDC pension scheme and voluntary additional occupational orindividual pension schemes in second and third pillar frames. Pensioners

Petar Taleski:Pan-European Pension System, Possibility or Fiction? 239should receive guaranteed minimum pension which is not related tocontributions into the system. A suggested model will fulfill basic goals ofadequacy, financial sustainability and modernization of pension systemswhich will mean creating a Pan – European system: greater mobility of thelabor market, solidarity and redistribution and a simple transfer system fromone to another pension system. Establishing a NDC scheme is the simplestprocess in all member states because expenses incurred crossing to the newsystem, for most countries will be minimal. Fully funded pension schemes insecond and third pillar frames are familiar for most countries and that is whythis field needs small adjustment and coordination. Fully funded pensionschemes bring additional income for a period after retirement. Regarding aPan – European approach the economies should make a differentcombination of choices. One question is obligatory function of fully fundedpension schemes and the way of determining rights, simplicity andtransparency of schemes and regulative, supervision and taxing. According toHolzmann (2004), it’s necessary to be introduced as voluntary, occupationaland individual pension schemes based on defined contributions with a simplestructure, standardized processes and transparent. Relating regulative andsupervision, there are two possible approaches: a centralized approach ormutual rights recognition approach.According to David Natalli (2006), the recent process of pension policiesadjustment is called a “hybridization process”. It represents reform that leadsthrough mutual interference of individual pension systems, a model in whichtraditional instruments from one system type unite themselves withinstruments of another system type and the overall pension system willbecome hybrid. Hybridization of pension systems is a process that ishappening in EU member states. PAYG schemes interfere with fully fundedschemes, and social protection is offered from both the public and privatesector. Besides the existence of similar elements of pension systemhybridization, we cannot talk about their “fraternization”. It’s more usual to talkabout mutual revision of pension systems in individual states, but not about a“fraternization” process.

Constructing Europe as a Global Power:240 From Market to Identity?ConclusionThe process of establishing a pan-european pension system is veryimportant for the existence of the European Union. The compatible pensionssystems in the EU facilitate the free flow of people within the EU. In the USA,which consists of 50 states, the emigration of the population from one state toanother is 1,6% of the total population of the USA. In Europe it is 0,3% ofwhole population within the EU, and mostly the migration is from Poland,Romania and Bulgaria to some West European countries within the EU. As itis proclaimed, the free flow of people is one of the principles of the EU. By thelimitations that are created by language and cultural differences and also bylimitations based on differences of pension and fiscal systems, people in theEU are practically faced by strong limitations in their intention to move inanother member state. The most important thing in this kind of migration isthat in some situations when some regions (states) face local crisis, peopleusually migrate to another country where they can find a job or better job. Bythis process, the risk of spreading the crisis to another member states issmaller.The conclusion is that the unified structure of the pension system withinthe EU, will be of great importance in the process of stronger unification of theEuropean economy and in the process of stronger unification of the fiscalsystems in the member countries of the EU. That stronger unification willmean less risk in the spillover effect of a local crisis to another country andalso to the whole European economy. It is very rare to hear that some EUcountries like Netherlands and Sweden that have some problems in theirpension systems. From the other side it is very often to hear information thatfor example Greece, France and Portugal have big problems with theirpension systems. The point is how to avoid this kind of difference betweenpension systems, because that means that some countries in the EUpractically enlarge their public debt by having unsustainable pension systems.There are very large differences in the pension systems of the membercountries within the EU. Those differences are in the structure, retirementage, benefits and other characteristics. Another point is how to reduce thedifferences and also how to eliminate them in the long run.The further steps within the EU will have to be to make circumstancesfor the creation of a process of gradual unification of the pension systemswithin the EU accompanied with the process of fiscal unification. This process

Petar Taleski:Pan-European Pension System, Possibility or Fiction? 241will be very real within the EU after the debt crisis that some countries in theEU have faced recently.Most of the European countries are in a debate over the pension reformcharacterized by fiscal issues at the national or EU level. There is nodiscussion about moving toward a more coordinated pension system withinthe EU and how such a system may be created.There has to be a leader in a creation of that kind of system in the future.It could be the European Commission and the member states have toempower the Commission or this institution of the EU has to take such a leadin a process of upgrading the Open Method of Coordination in order toaccelerate the reforms in the member countries.Another approach could be adoption of a model by competitive approachacross EU countries. In that case the advantages and the lacks of thesystems have to be measured and documented in order to make imitations ofthese systems from one country to another (example adoption of NDCSwedish model in Austria and Germany. This could be a restricted and longlasting solution.)The third possible situation is to make a follow of leading example as acreated model that would have characteristics of most used pension systemsin EU countries. The creation of that kind of universal model has to bepresented by Economic Policy Committee of the EU which represents highlevelofficials from ministries of finance of the EU countries. This approachcould overcome only the fiscal consequences and to be focused on broaderstability of the pension system including mobility across the European Union.

Constructing Europe as a Global Power:242 From Market to Identity?ReferencesAdequate and Sustainable Pensions, (2006). European Commission,Directorate-General for Employment, Social Affairs and Equal Opportunities,August 2006.Boromisa, A.M., & Samardžija, V. (2004). “Hrvatska Lisabonska Strategija:Približavanje ciljevima?”, Institut za međunarodne odnose, Zagreb.Communication from the Commission to the Council, the EuropeanParliament and the Economic and Social Committee, The elimination of taxobstacles to the cross-border provision of occupational pensions, COM(2001)214 final.Communication from the Commission to the Council, the EuropeanParliament and the Economic and Social Committee - Supporting nationalstrategies for safe and sustainable pensions through an integrated approach.Communication from the Commission - Green Paper “Confrontingdemographic change: a new solidarity between the generations”,(COM/2005/0094 final).Council Regulation (EEC) No. 1408/71 on the application of social securityschemes to employed persons, to self-employed persons and to members oftheir families moving within the Community.Council Directive 90/619/EEC) on the Coordination of Laws, Regulations andAdministrative Provisions Relating to Direct Life Assurance, Laying DownProvisions to Facilitate the Effective Exercise of Freedom to Provide Servicesand Amending Directive 79/267/EEC.Council Directive 92/96/EEC on the Coordination of Laws, Regulations andAdministrative Provisions Relating to Direct Life Assurance and AmendingDirectives 79/267/EEC and 90/619/EEC (Third Life Assurance Directive).Council Directive 98/49/EC of 29 June 1998 on safeguarding thesupplementary pension rights of employed and self-employed personsmoving within the Community.David, A.R., & Andros, B. (2006). On the Financial Sustainability of Earnings-Related Pension Schemes with Pay-As-You-Go Financing and the Role ofGovernmnt Indexed Bonds. World Bank Policy Working Paper 3966.Dekker, P., Ederveen, S., Jehoel, G., Gijsberg, de Mooij, R., Soede, A.,Wildeboer, J.M., & Schut. (2003). Social Europe. CPB, Netherlands: Bireaufor Economic Policy Anamysis, Hague.

Petar Taleski:Pan-European Pension System, Possibility or Fiction? 243Directive 2000/64/EC of the European Parliament and of the Council of 7November 2000 amending Council Directives 85/611/EEC, 92/49/EEC,92/96/EEC and 93/22/EEC as regards exchange of information with thirdcountries.Directive 2002/12/EC of the European Parliament and of the Council of 5 March2002 amending Council Directive 79/267/EEC as regards the solvency marginrequirements for life assurance undertakings.Directive 2002/83/EC of the European Parliament and of the Council of 5November 2002 concerning life assurance.Directive 2003/41/EC of the European Parliament and of the Council of 3 June2003 on the activities and supervision of institutions for occupational retirementprovision.European Parliament and Council Directive 95/26/EC of 29 June 1995 amendingDirectives 77/780/EEC and 89/646/EEC in the field of credit institutions,Directives 73/239/EEC and 92/49/EEC in the field of non- life insurance,Directives 79/267/EEC and 92/96/EEC in the field of life assurance, Directive93/22/EEC in the field of investment firms and Directive 85/611/EEC in the fieldof undertakings for collective investment in transferable securities (Ucits), with aview to reinforcing prudential supervision.First Council Directive on the Coordination of Laws, Regulations andAdministrative Provisions Relating to the Taking up and Pursuit of the Businessof Direct Life Insurance.Holzmann, R. (2004). Toward a Reformed and Coordinated Pension System inEurope: Rationale and Potential Structure. The World Bank, Social ProtectionUnit.Natali, D. (2006). Pensions in Europe, European Pensions - The Evolution ofPension Policy at National and Supranational Level. Travail & Société (Work &Society), 64.O’Dwer, T. (2006). Europe Needs Saving-Defusing the Pensions Time Bomb.Stockholm Network.Schwarz, A., & Demirguc-Kunt, A. (1999). Taking Stock of Pension ReformsAround the World. The World Bank, Social Protection Unit.Талески, П. (2005). Нов пензиски систем, Македонска реч, Скопје, р.19/Taleski, P. (2005), Nov penziski system, Makedonska rech.Vittas, D. (2000). Pension reform and capital market Development: “Feasibulity”and “Impact” Preconditions. World Bank, Development Research Group.Škrlj, N. (2004). Pomen sistema, osnovanega na fiktivnih individualnih racun(NDC) vo okviru pokojninskih reform. Ekonomska fakulteta, Ljubljana.

Constructing Europe as a Global Power:244 From Market to Identity?Table 1: Approaches toward pension reformStatus Type of reform Measure of changeEligibility CriteriaRetirement ageService yearsContribution StructureCoverageContribution rateContribution baseSourceTaxation of contrinutorsBenefit StructureBenefit formulaPension baseIndexationMinimum pensionPayment formTaxation of benefitsAdministrationMinisterial authorityInvestment policyPAYG to Defined Contribution Public/Private mixfully fundedMinimum pensionOther guaranteesTransition periodTransition mechanismMinimum pensionMinor adjustmentMajor reformsPAYG DB to PAYG NDCOther guaranteesTransition periodTransition mechanismSource: Schwarz, A., Demirguc-Kunt, A., “Taking Stock of Pension ReformsAround the World”, The World Bank, Social Protection Unit, 1999, page 27.

Petar Taleski:Pan-European Pension System, Possibility or Fiction? 245Table 2. Types of pension reformsMinor reformsEligibilityCriteriaContributionStructureBenefitStructureMajor reformsPAYG toreformedPAYG andDefinedContributionfully fundedPAYG DB toPAYG NDCRetirement AgeService YearsContribution RateContribution BasePension FormulaIndexationCzech Republic,Estonia,HungaryLithuania, Greece, IrelandItaly, Portugal andLatviaGreece, ItalyPortugal, LatviaBulgaria, Czech Republic,EstoniaLatvia, Lithuania, PolandSlovakia, Slovenia, CyprusMalta, France, GermanyGreece, Italy, NetherlandsPortugal and SwedenFranceEstonia, Hungary, LatviaLithuania, Poland, DenmarkFinland, France, GreeceItaly, Portugal, Czech RepublicMalta, France, GermanyHungary, Lithuania, EstoniaSlovakia, Romania, BulgariaCzech Republic and SloveniaPoland, LatviaSweden and ItalySource: Schwarz, A., Demirguc-Kunt, A., “Taking Stock of Pension Reforms Aroundthe World”, The World Bank, Social Protection Unit, 1999, page 27

Constructing Europe as a Global Power:246 From Market to Identity?Table 3. Modalities of the functioning of the pension systems in EU countriesCountries first pillar second pillarConditions for retirementPAYG-DB/NDCadditionalpensioninsuranceAustria retirement age / service years PAYG-DB VoluntaryBelgium retirement age / service years PAYG-DB voluntary *Cyprus flat rate PAYG-DB VoluntaryCzech Republic flat rate PAYG-DB VoluntaryDenmark flat rate PAYG-DB ObligatoryEstonia retirement age / service years PAYG-DB / ObligatoryFinland flat rate PAYG-DB / ObligatoryFrance retirement age / service years PAYG-DB / VoluntaryGreece retirement age / service years PAYG-DB VoluntaryIreland flat rate PAYG-DB voluntary *Italy retirement age / service years NDC VoluntaryLatvia retirement age / service years NDC ObligatoryLithuania retirement age / service years PAYG-DB ObligatoryLuxembourg retirement age / service years PAYG-DB VoluntaryHungary retirement age / service years PAYG-DB ObligatoryMalta retirement age / service years PAYG-DB does not existGermany retirement age / service years PAYG-DB VoluntaryNetherlands еднаков износ PAYG-DB voluntary *Poland retirement age / service years NDC ObligatoryPortugal retirement age / service years PAYG-DB VoluntarySlovakia retirement age / service years PAYG-DB ObligatorySlovenia retirement age / service years PAYG-DB VoluntarySpain retirement age / service years PAYG-DB VoluntarySweden flat rate NDC voluntary *United Kingdom flat rate PAYG voluntary ** Obligatory by membership in work and trade unions.Source: Škrlj, N., Pomen sistema, osnovanega na fiktivnih individualnih racun(NDC) vo okviru pokojninskih reform, Ekonomska fakulteta, Ljubljana.

Petar Taleski:Pan-European Pension System, Possibility or Fiction? 247Table 4. Characteristics of the models of pension insuranceTraditional modelsPopulation ageingHighMaturity of the pensionsystemsHighLevel of benefits Lowering tendention StableUnemployment High LowEconomic development andincrement of salaries High LowFlexibility in finding job High HighIntegration of the financialmarket High HighLiberal modelsLow (risingtendention)Low (risingtendention)Source: Škrlj, N., Pomen sistema, osnovanega na fiktivnih individualnih racun(NDC) vo okviru pokojninskih rform, Ekonomska fakulteta, Ljubljana.

Constructing Europe as a Global Power:248 From Market to Identity?About the Authors

Constructing Europe as a Global Power:250 From Market to Identity?About the AuthorsHeinz Bongartz obtained a PhD in sociology from the University of Bielefeld,Germany. He has worked in various development projects in India, Indonesia,Nepal, the Philippines and Uruguay. He has also taught sociology ofdevelopment at various universities in Germany, Nepal and the Philippines,and published various books on the key issues of development in theunderdeveloped countries of Asia. Being on the staff of the GermanFoundation “Friedrich-Ebert-Stiftung” for the last 23 years he currently servesas the resident representative of the foundation in Macedonia.Matthias Waechter studied history and philosophy at the Universities ofBonn, Freiburg, Paris, and Rochester (N.Y.). He is director of the InstitutEuropéen des Hautes Etudes Internationales in Nice and an adjunct professorat the University of Freiburg. He has published on American history, Frenchcontemporary history, Franco-German relations and European integration.Representative publications: Die Erfindung des amerikanischen Westens. DieGeschichte der Frontier-Debatte (1996). Der Mythos des Gaullismus.Heldenkult, Geschichtspolitik und Ideologie (2006). Helmut Schmidt undValéry Giscard d'Estaing. Auf der Suche nach Stabilität in der Krise der1970er Jahre (2011).Ana Tomovska-Misoska currently holds the position of assistant professor atUniversity American College Skopje. She obtained her PhD in the field ofpsychology from the School of Education, Queen's University Belfast. Shehas been involved in a number of research projects in Macedonia andNorthern Ireland, most of which have been evaluations of different aspects oftheir respective educational systems. Her recent publications include: a bookpublished by Verlag Dr. Muller as well as an article published in the Journal ofPeace Education.Ivan Dodovski is dean of the School of Political Science at UniversityAmerican College Skopje. He studied general and comparative literature withAmerican studies, and obtained an MA degree in Macedonian literature andnarratology at Sts. Cyril and Methodius University in Skopje. He holds a PhDfrom the University of Nottingham, UK. His recent research in the field ofcultural studies is focused on identity representation in contemporary Balkan

About The Authors251drama. Dr. Dodovski has edited the volume Multiculturalism in Macedonia: AnEmerging Model (2005). He has also published academic papers, threepoetry books and a collection of short stories.Desislava Kraleva has a MA degree in European studies from the Centre forEuropean Integration Studies at the Rheinische Friedrich-Wilhelms-Universität in Bonn, Germany. Her BA in international relations she obtainedfrom Sofia University, Bulgaria. She has worked at the Bulgarian office of theFriedrich Ebert Foundation, where she participated in a large number ofconferences and seminars and edited a wide range of publications. Her mainfocus at the moment is on European Union issues.Ivan Arsenijević has a BA in economics in the area of banking from theFaculty of Trade and Banking at Brohters Karic University, Belgrade. Hefinished his postgraduate studies at the Alfa University, Belgrade in the areaof economic diplomacy. The title of his master's thesis was Relations Amongthe European Union and the Western Balkan Countries. In 2009 hevolunteered as an assistant at Alfa University in the areas of microeconomicsand international economics. Ivan has attended many internationalconferences and published scientific papers in Serbia, primarily on EUenlargement.Branko Bošković is a PhD student at the Faculty of Political Sciences inBelgrade, Serbia. He holds a BA in political science from the Faculty ofPolitical Sciences in Podgorica and a MA from the Faculty or Arts and SocialSciences in Maastricht, the Netherlands. He currently works as the assistantprofessor at the University of Donja Gorica, Montenegro on courses insociology and political sociology. He has participated in many internationalconferences and presented papers and has published several articlesconcerning changes and trends in welfare, modernity, family andglobalization.Özgür Ünal Eriş holds a BA in political science and international relationsfrom Boğaziçi University in Istanbul, a MA in European studies from theUniversity of Exeter and a PhD in political science from the Department ofGovernment at the University of Essex, UK. Though her PhD research was onGerman foreign policy’s influence on the Turkish quest for EU membership,her research interests now focus on new security threats such as energy

Constructing Europe as a Global Power:252 From Market to Identity?security and illegal migration, EU external policy, and specifically theEuropean Neighbourhood Policy, Eastern Partnership Initiative and EuropeanSecurity and Defence Policy. Eriş currently teaches the main courses in theDepartment of European Union Studies in the University of Bahçeşehir,Turkey.Tome Nenovski is a professor at University American College Skopje.Nenovski’s professional fields of work are macroeconomics, public finances,banking and monetary policy. He has taken part at numerous domestic andinternational conferences, symposiums, seminars and round tables. He haspublished 12 textbooks, among which are: “Money Order and Banks”,“Creating Prices of Products and Services of Corporate Banks”, “CreditPolicy”, “Structure of Public Finances in RM”, “Macroeconomics”, “PublicFinance”, and “Macroeconomics” – expanded edition. He has published 320+professional works and columns in various domestic and foreign newspapersand magazines. Nenovski was awarded the state awards “Mito Hadzivasilev –Jasmin” and “Goce Delcev”.Ninko Kostovski holds a doctoral degree from Sts. Cyril and MethodiusUniversity in Skopje and a Certificate in Finance and Management fromGeorgetown and the University of Wisconsin. His areas of interest aremanagement and entrepreneurship, industry clusters, and access to finance.He was involved in many development programs, implemented bycompanies, such as EDC Boston, Ecorys, WME, GHK, SINTEF and manyothers. He also serves as country representative at the International AdvisoryBoard of the European Business Competence Certificate and advises severalcompanies in Macedonia.Elena Klisarovska holds an MBA in management and a BA in Englishlanguage and literature. Her professional experience includes positions atTNS Brima-Gallup-Skopje, The Globe, SEC and a few NGOs. Currently sheteaches English as a second language; business terminology; report,proposal and business plan writing and business communication at UniversityAmerican College Skopje. Her areas of research interest currently areentrepreneurship in Macedonia and the EU, social factors influencingentrepreneurship, management in the ESL classroom, cultural diversity andentrepreneurial spirit among students in Macedonia.

About The Authors253Makedonka Dimitrova holds a MPPM from the University of Pittsburgh, isgeneral secretary of the Macedonian Center for Energy Efficiency andentrepreneurship instructor at the University American College Skopje. Sheworked for E3 International, EnCon Sevices, Booz Allen Hamilton, MPRI,EBRD and the Rendon Group. She is an educator, researcher and projectdeveloper. Her main areas of interest include sustainable development,innovation, energy and environment, energy education, competitiveness,communications and PR. She is part time consultant to the EBRD/EUWestern Balkans Sustainable Energy Financing Facility.Ilijana Petrovska, PhD, is an assistant professor and a head of the marketingdepartment at the School of Business Administration, University AmericanCollege Skopje, lecturing on marketing, marketing management, advertising,integrated marketing communications and e-business at undergraduate andgraduate level. She previously worked as a marketing manager in StopanskaBanka for six years, and was also account executive in the advertising agencyS Team Bates Saatchi & Saatchi for four years.Marjan Bojadziev is the CEO and the rector of UACS. As a leader of theorganization, he is monitoring and coordinating the academic andadministrative activities and is planning the strategic course of theorganization. While his role at the University requires much dedication, Dr.Bojadziev has remained very active in the academic community. He has beencertified as a management consultant by the MCA in 2000, is a member of theAcademy of Management, a member of the editorial committee of theRESITA Network and a member of the European Corporate GovernanceInstitute.Zoran Sapurik, PhD, is a lawyer with juridical exam and notary exam. He haspublished the books Decentralization of Power and Environment andSustainable Development, and the textbook The Structure and Institutions ofthe EU. He has also published more than 20 papers in Macedonia andabroad. He took part in the Local and state government program at JFKSchool - Harvard University. He is former mayor, former MP, and formerminister for environment and physical planning of Macedonia. At UACS heteaches environment and sustainable development, EU structures andinstitutions, local government and regional autonomy, and EU law.

Constructing Europe as a Global Power:254 From Market to Identity?Nikica Mojsoska-Blazevski joined UACS in 2005 and is currently dean ofthe School for Business Economics at UACS. Nikica obtained her PhD atStaffordshire University in 2006. Nikica worked in the Ministry of Finance ashead of the Macroeconomic Policy Department. She teaches at UACS bothon undergraduate and graduate levels and specialises in economics andquantitative modules. During her career, she attended several seminars andtrainings and published and presented several papers in journals andconferences. She won the Annual Award of the National Bank of Macedoniain 2011 for the best macroeconomic paper.Marjan Petreski joined UACS in 2008 and is currently research vice-dean ofthe School of Business Economics. Marjan earned his PhD inmacroeconomics at Staffordshire University. Marjan specializes in researchand teaching in applied macroeconomics. Formerly, he has been developinghis research experience within the Ministry of Finance and the National Bankof Macedonia. His research has been published in recognized internationaljournals and presented at international conferences worldwide. He has beenawarded the Young Scientist Award 2009 by the Macedonian Academy ofSciences and Arts and the Olga Radzyner Award 2010 by the National Bankof Austria.Elena Makrevska is a PhD student at Sts. Cyril and Methodius University inSkopje. She is an assistant at UACS on the Faculty of BusinessAdministration. She holds an MBA in finance and banking. Throughout theyears, she has participated in domestic and international conferences andmeetings and has also presented papers on different topics in her field ofresearch.Petar Taleski was born in Skopje. He graduated with a BA in economy in2000. The topic of his master thesis was “Financing of the ContemporaryPension Systems in EU and Macedonia”. His imminent doctoral dissertation’stitle is “Sustainable Stabilizing Fiscal Policy and the Case of the Republic ofMacedonia”. He started his career in 2002, as a loan officer in GermanMacedonian Fund, later he worked in NLB Tutunska Banka as a loan officerand commercialist for strategic clients. Today he holds the position ofmarketing and sales manager in NLB Nov Penziski Fond AD Skopje.

About The Authors255Stevo Pendarovski is assistant professor in international security and foreignaffairs in the School of Political Sciences at University American CollegeSkopje. In the 1990s he was an assistant-minister for public relations andhead of the Analytical and Research Department in the Macedonian Ministryof Interior Affairs. In the last decade he has served as national security andchief foreign policy advisor to two presidents of the Republic of Macedonia. In2004/5 he was head of the state election commission. His teaching andresearch areas include geopolitics, globalization, national security, US foreignpolicy, EU foreign and security policy, and small states in international affairs.

University American College SkopjeTreta makedonska brigada bb, 1000 Skopje, Macedoniawww.uacs.edu.mkConstructing Europe as a Global Power:From Market to Identity?This volume is published in partnership with:CIP - Cataloging in publicationNational and University Library“St. Clement Ohridski”,Skopje341.171(4-672ЕУ)(062)339.923:061.1(4-672ЕУ)(062)CONSTRUCTING Europe as a global power :from market to identity? / edited by IvanDodovski, Stevo Pendarovski. - Skopje :University American College, 2011. – 255 p.BibliographyISBN 978-608-4607-10-6а) European Union - ConferencesCOBISS.MK-ID 89860362CIP - Katalogizacija vo publikacijaНационална и универзитетскабиблиотека "Св. Климент Охридски",Скопје341.171(4-672ЕУ)(062)339.923:061.1(4-672ЕУ)(062)CONSTRUCTING Europe as a global power :from market to identity? / edited by Ivan Dodovski,Stevo Pendarovski. - Skopje : UniversityAmerican College, 2011. - 255 стр.Библиографија кон трудовитеISBN 978-608-4607-10-6а) Европска унија - СобириCOBISS.MK-ID 89860362Skopje, 2011