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The New European Economic Policy: An Analysis of the European Policy Mix and Structural Reforms Ferran Brunet Universitat Autònoma de Barcelona Abstract The new European economy, complete with monetary union, gave rise to the emergence of a New European Economic Policy (NEEP). Thus this paper analyses: i) The problems the new European economy has: cessation of the catching-up process of theAmerican standards, low employment rate, rigidity of the labor market, competition deficits in product and service markets, disparities among the European Union (EU) Member States (MS), ageing, and globalization; ii) The elements of the NEEP: Common policies such as those on competition, trade and agriculture, the pro-competitive structural reforms, the monetary policy, and the coordination of MSeconomic and employment policies; and iii) The new European policy mix and its performance. To confront its structural tendencies the European economy need to be considerably more competitive. In the prospect of the NEEP, reformations of the economic institutions must be realized by linking Europe, competition, and solidarity. JEL E61, F15, N24. Keywords: European Economy, Economic Policy, StructuralReforms, European Integration, Europe. Word count: 10,139 I. The New European Union A new EU is appearing: United in democracy and welfare there are five hundred million European citizens. There are freedom in politics, competition in economics, and solidarity in society. Despites the common rule of law, the suppression of frontiers and the liberty of movement for people, commodities and capital,and a high productive mass-consumption economy, there are some important risks: The dependence on oil, the delocation of production, the low employment rate, the ageing, the tendencies to corporatism, the disintegration of some modern European states, the crisis of the elites. Bigger and more complex, this EU have no the means of its own ambitions. The risk of this new EU is to die from its ownsuccess. A. From Common Market to European Union Peace, non-discrimination by nationality and free movements of merchandises, workers, capitals and services to competition, monetary union and political union, these are the mains steps the European Communitties follows. This is a successful story. All the elements were favorably disposed: i) in economy, a miracle developed mass-production andconsumption, limiting contradictions, enlarging wellbeing; ii) the failure of nazism, communism and totalitarianism, the triumph of liberty and democracy, and iii) the development of the European Economic Community in a EU of 27 MS, unifying Europe through the rule of law, and intensifying the European competences and policies in an emerging federal state form. In point of view of law, the journey from aCommon market to the European Union is paved by important juridical acts (Brunet 1999 and 2008a): • The treaty establishing the European Coal and Steel Community (TECSC, 1951-2), because it was the first, and a successful one. • The treaty establishing the European Economic Community (TEEC, 1956-7), because of it, the generalization of the common Market was possible. • The Single European Act(ESA, 1986-7), because it reforms the Rome treaty it transforms the Common Market into an Internal Market extending competition policy to services – two-thirds of the GDP - and it introduced the regional cohesion policy and structural funds. • The treaty establishing the EU (TEU, 1991-3), because it introduced political unity and the monetary union. The enlargements attest to the different EU changes.The first enlargement was the consolidation of the EEC as an integrative way. The second and the third opened the integration process to West European

Department of Applied Economics, University Campus, Building B, E-08193 Bellaterra, Spain. ferran.brunet@uab.es ℡ 34-3-581-4580. 1

Mediterranean countries. The fourth supposes the final task of West Europe integration. The fifth and the...