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Eastern Enlargement of the European Union: - A General and Partial Equilibrium Analysis -

Eastern Enlargement of the European Union: - A General and Partial Equilibrium Analysis -. Martin Banse Institute of Agricultural Economics, University of Göttingen. Table of Content. Introduction Description of the Partial and General Equilibrium Models

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Eastern Enlargement of the European Union: - A General and Partial Equilibrium Analysis -

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  1. Eastern Enlargement of the European Union:- A General and Partial Equilibrium Analysis - Martin Banse Institute of Agricultural Economics, University of Göttingen

  2. Table of Content • Introduction • Description of the Partial and General Equilibrium Models • Results of a combined modelling approach • Conclusions

  3. Economic Relevance of Agriculture in the CEC and the EU

  4. General Features of the General and Partial Equilibrium Models

  5. t-1 ... t+n Periods 1 Level of Agricultural Protection Level of Agricultural Protection ... ESIM 2 Macro-economic Results (factor prices, exchange rates, incomes) Macro-economic Results (factor prices, exchange rates, incomes) ... CGE-Models Links between ESIM and the CGE models

  6. Policy Scenarios • Accession in 2002 • No transition period • Reference Scenario: MEMBER / No CAP • AGENDA / No Direct Payments • AGENDA + Direct Payments

  7. ESIM: Development of CEC-4 Net Exports under Alternative Policy Scenarios (million tons)

  8. ESIM: Development of Budgetary Expenditure in CEC-4

  9. CGE Models: Impact of CAP Adoption on GDP and on Real Exchange Ratesrelative to MEMBER/No CAP, in percent

  10. CGE Models: Impact of CAP Adoption on Sectoral Value Added and Welfare in 2005relative to MEMBER/No CAP, in percent

  11. Conclusions • CEC accession leads to large production incentives • Introduction of CAP even without direct payments will increase total expenditure • Dramatic increase, if direct payments are included • Inclusion of direct payment will be and is the major obstacle in agricultural negotiations • CEC accession and CAP introduction will have macro-economic effects on all sectors • net trade position is crucial ('financial solidarity') • most consumers will suffer losses from extending CAP to CEC • However, further CAP reform before Eastern enlargement would minimise the negative effects

  12. Further information • The paper is available in PDF-Format under http://gwdu19.gwdg.de/~uaao/tanger/banse/listedv.htm or contact: mbanse@gwdg.de

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