TIE OR TRY: INTRA-EU TRADE IN TIMES OF ECONOMIC CRISIS

Abstract

International competitiveness and extraversion is a fundamental prerequisite for the perspectives of countries and enterprise; yet, the synchronization of crisis in other regions as well reduces the prospects of this way-out. We used panel-data for 19 EU-member states in the period 2002-2012, inorder to estimate the significance and the sign of these impacts. Our main contribution came out of the country specific time dummies we used with respect to intra-EU exporting activity. In a globalized but still eminently imperfect world market, where international oligopolies and scale-benefits of large states dominate and shape the balances, the choice of small, medium-sized and emerging economies is the following: to bind to strong (trade-) partners and/or to be able to devaluate.