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By Stanley W. Black

Of their transition from the legacy of Communism, significant and japanese eu nations (CEECs) are looking for to minimize the source of revenue hole that continues to be the key barrier to complete ecu integration. The essays during this quantity derive from a convention held on the American Institute for modern German reviews in Washington, DC, on might 15-16, 1995, and current basic equilibrium calculations of the area vast results of exchange liberalization among CEECs and the eu Union (EU) on actual wages and welfare; research of exchange in "sensitive" sectors; and dimension of Germany's function within the transition.

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Additional info for Europe's Economy Looks East: Implications for Germany and the European Union

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More realistically, of course, the removal of tariffs (and NTBs) in an EU-CEC agreement would almost certainly be phased in over a period of years. If information were available for the different phases, the model could in principle be solved sequentially, taking into account the barrier reductions in each time period. In addition to the sectoral effects that are the primary focus of our analysis, the model yields results for changes in total exports, total imports, the terms of trade, the overall level of welfare in the economy measured by the equivalent variation, and the economy-wide changes in real wages and real returns to capital.

5 Conclusions The conference papers depict clearly the substantial potential as well as some of the difficulties associated with the enlargement of the European Union to the East. The Brown, Deardorff, Djankov, and Stern paper shows the substantial gains that would accrue to the CEECs and the smaller gains to EU members from further trade liberalization as well as the negligible costs. It is clear that reforming the CAP, while not analyzed by the Michigan model, would increase those potential gains.

Germany seeks to accommodate ethnic Germans from the East, France seeks to control the rate of immigration of ex-French colonials. Both seek to prevent illegal immigration. German policy toward her eastern neighbors takes the form of temporary work permits, which can be adapted to labor market conditions in Germany and which also facilitate training and experience of CEEC workers who will upon return home have increased rapport with German firms and interests. A major focus of the paper is to estimate gains and losses to the German economy from such migration.

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