- International Monetary Fund
- Published Date:
- December 1990
Occasional Papers of the International Monetary Fund
74. The Impact of the European Community’s Internal Market on the EFTA, by Richard K. Abrams, Peter K. Cornelius, Per L. Hedfors, and Gunnar Tersman. 1990.
73. The European Monetary System: Developments and Perspectives, by Horst Ungerer, Jouko J. Hauvonen, Augusto Lopez-Claros, and Thomas Mayer. 1990.
72. The Czech and Slovak Federal Republic: An Economy in Transition, by Jim Prust and an IMF Staff Team. 1990.
71. MULTIMOD Mark II: A Revised and Extended Model, by Paul Masson, Steven Symansky, and Guy Meredith. 1990.
70. The Conduct of Monetary Policy in the Major Industrial Countries: Instruments and Operating Procedures, by Dallas S. Batten, Michael P. Blackwell, In-Su Kim, Simon E. Nocera, and Yuzuru Ozeki. 1990.
69. International Comparisons of Government Expenditure Revisited: The Developing Countries, 1975–86, By Peter S. Heller and Jack Diamond. 1990.
68. Debt Reduction and Economic Activity, by Michael P. Dooley, David Folkerts-Landau, Richard D. Haas, Steven A. Symansky, and Ralph W. Tryon. 1990.
67. The Role of National Saving in the World Economy: Recent Trends and Prospects, by Bijan B. Aghevli, James M. Boughton, Peter J. Montiel, Delano Villanueva, and Geoffrey Woglom. 1990.
66. The European Monetary System in the Context of the Integration of European Financial Markets, by David Folkerts-Landau and Donald J. Mathieson. 1989.
65. Managing Financial Risks in Indebted Developing Countries, by Donald J. Mathieson, David Folkerts-Landau, Timothy Lane, and Iqbal Zaidi. 1989.
64. The Federal Republic of Germany: Adjustment in a Surplus Country, by Leslie Lipschitz, Jeroen Kremers, Thomas Mayer, and Donogh McDonald. 1989.
63. Issues and Developments in International Trade Policy, by Margaret Kelly, Naheed Kirmani, Miranda Xafa, Clemens Boonekamp, and Peter Winglee. 1988.
62. The Common Agricultural Policy of the European Community: Principles and Consequences, by Julius Rosenblatt, Thomas Mayer, Kasper Bartholdy, Dimitrios Demekas, Sanjeev Gupta, and Leslie Lipschitz. 1988.
61. Policy Coordination in the European Monetary System. Part I: The European Monetary System: A Balance Between Rules and Discretion, by Manuel Guitián. Part II: Monetary Coordination Within the European Monetary System: Is There a Rule? by Massimo Russo and Giuseppe Tullio. 1988.
60. Policies for Developing Forward Foreign Exchange Markets, by Peter J. Quirk, Graham Hacche, Viktor Schoofs, and Lothar Weniger. 1988.
59. Measurement of Fiscal Impact: Methodological Issues, edited by Mario I. Blejer and Ke-Young Chu. 1988.
58. The Implications of Fund-Supported Adjustment Programs for Poverty: Experiences in Selected Countries, by Peter S. Heller, A. Lans Bovenberg, Thanos Catsambas, Ke-Young Chu, and Parthasarathi Shome. 1988.
57. The Search for Efficiency in the Adjustment Process: Spain in the 1980s, by Augusto Lopez-Claros. 1988.
56. Privatization and Public Enterprises, by Richard Hemming and Ali M. Mansoor. 1988.
55. Theoretical Aspects of the Design of Fund-Supported Adjustment Programs: A Study by the Research Department of the International Monetary Fund. 1987.
54. Protection and Liberalization: A Review of Analytical Issues, by W. Max Corden. 1987.
53. Floating Exchange Rates in Developing Countries: Experience with Auction and Interbank Markets, by Peter J. Quirk, Benedicte Vibe Christensen, Kyung-Mo Huh, and Toshihiko Sasaki. 1987.
52. Structural Reform, Stabilization, and Growth in Turkey, by George Kopits, 1987.
51. The Role of the SDR in the International Monetary System: Studies by the Research and Treasurer’s Departments of the International Monetary Fund. 1987.
50. Strengthening the International Monetary System: Exchange Rates, Surveillance, and Objective Indicators, by Andrew Crockett and Morris Goldstein. 1987.
49. Islamic Banking, by Zubair Iqbal and Abbas Mirakhor. 1987.
48. The European Monetary System: Recent Developments, by Horst Ungerer, Owen Evans, Thomas Mayer, and Philip Young. 1986.
47. Aging and Social Expenditure in the Major Industrial Countries, 1980–2025, by Peter S. Heller, Richard Hemming, Peter W. Kohnert, and a Staff Team from the Fiscal Affairs Department. 1986.
46. Fund-Supported Programs, Fiscal Policy, and Income Distribution: A Study by the Fiscal Affairs Department of the International Monetary Fund. 1986.
45. Switzerland’s Role as an International Financial Center, by Benedicte Vibe Christensen. 1986.
44. A Review of the Fiscal Impulse Measure, by Peter S. Heller, Richard D. Haas, and Ahsan H. Mansur. 1986.
42. Global Effects of Fund-Supported Adjustment Programs, by Morris Goldstein. 1986.
41. Fund-Supported Adjustment Programs and Economic Growth, by Mohsin S. Kahn and Malcolm D. Knight. 1985.
39. A Case of Successful Adjustment: Korea’s Experience During 1980–84, by Bijan B. Aghevli and Jorge Marquez-Ruarte. 1985.
38. Trade Policy Issues and Developments, by Shailendra J. Anjaria, Naheed Kirmani, and Arne B. Petersen. 1985.
36. Formulation of Exchange Rate Policies in Adjustment Programs, by a Staff Team Headed by G.G. Johnson. 1985.
35. The West African Monetary Union: An Analytical Review, by Rattan J. Bhatia. 1985.
34. Adjustment Programs in Africa: The Recent Experience, by Justin B. Zulu and Saleh M. Nsouli. 1985.
33. Foreign Private Investment in Developing Countries: A Study by the Research Department of the International Monetary Fund. 1985.
30. The Exchange Rate System—Lessons of the Past and Options for the Future: A Study by the Research Department of the International Monetary Fund. 1984.
29. Issues in the Assessment of the Exchange Rates of Industrial Countries: A Study by the Research Department of the International Monetary Fund. 1984.
28. Exchange Rate Volatility and World Trade: A Study by the Research Department of the International Monetary Fund. 1984.
26. The Fund, Commercial Banks, and Member Countries, by Paul Mentré. 1984.
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© 1990 International Monetary Fund
Library of Congress Cataloging-in-Publication Data
The Impact of the European Community’s internal market on the EFTA
/ by Richard K. Abrams … [et al.].
p. cm. — (Occasional paper : no. 74)
Includes bibliographical references.
1. European Free Trade Association. 2. European Economic Community. 3. Europe 1992. I. Abrams, Richard K. II. Series: Occasional paper (International Monetary Fund) : no. 74.
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The following symbols have been used throughout this paper:
… to indicate that data are not available;
— to indicate that the figure is zero or less than half the final digit shown, or that the item does not exist;
- between years or months (e.g., 1984–85 or January-June) to indicate the years or months covered, including the beginning and ending years or months;
/ between years (e.g., 1985/86) to indicate a crop or fiscal (financial) year.
“Billion” means a thousand million.
Minor discrepancies between constituent figures and totals are due to rounding.
The member states of the European Community (EC) and the European Free Trade Association (EFTA) have a special relationship reflecting a shared history and common values.1 They are also each other’s most important trading partners. For all of the EFTA countries, the EC is of overriding economic importance. Since the EC launched its internal market program, relations between the EC and EFTA have intensified. In order to enable the EFTA countries to participate in the economic aspects of the European integration process, the EFTA and EC are seeking to establish a European Economic Space (EES), providing for the free movement of goods, services, labor, and capital—the “four freedoms.” This paper provides an overview of the effects of an EES agreement on the EFTA countries. The emphasis is on the four freedoms. However, issues related to monetary cooperation and tax harmonization are examined as well.
This paper was prepared in the Northern European Division of the European Department. Its authors are Richard K. Abrams, Peter K. Cornelius, Per L. Hedfors, and Gunnar Tersman. Contributions were also received from Tilman Ehrbeck, Sami Geadah, and Thomas H. Mayer. The authors are most grateful for comments received from the EFTA secretariat and several IMF staff. In particular, we would like to thank Jukka Leskela, Steinar Juel, Sven Norberg, and Helmut Spindler of the EFTA secretariat, as well as Krister Andersson, Jagdeep Bhandari, Adalbert Knöbl, Donald Mathieson, Duncan Ripley, and Horst Ungerer, and colleagues from the Exchange and Trade Relations Department and the Western European Division of the European Department. The paper was edited by David M. Cheney of the External Relations Department. The opinions expressed in this paper are those of the authors and do not necessarily reflect the views of the IMF.