Disputable and Fruitful Eastern Enlargement of the EU

I. Introduction

Before the enlargement of the EU to 10 new member states (NMS) in 2004, there was a universal anxiety that East European countries’ affiliation would possibly slow down the pace of the EU. Nowadays, as three years passed and two new member states joined in following that ten, the anxiety seems being weakened.

Enlarging to East European countries, especially the eight countries which had belonged to former Soviet Union, was considered as a milestone for development of the EU, which bring the EU to a more special and diversified organization, setting a good example of regional integration to the world.

As we know, the process to overcome new obstacles emerged with enlargement was never a smooth or favorable one, on the contrary, it took a long transition and experienced success and failure.

The main objective of this paper is to analyze extrusive problems the EU encountering and then generalize solutions which were adopted and played important roles in the transition period.

Firstly, the background of the EU Eastern Enlargement will be described. Then three problems of challenges will be discussed, which separately refer to productivity gap, budget c and foreign and security problem. After that, pertinently, some solutions will be provided to show the obvious success of the EU to overcome the enlargement issues. Then future map will be expected and possible new problems will be brought forward. At the end, the author will put forward a new perspective to solve new problems, which is, keeping thinking to fusion instead of absorbing.

II. Background of EU Eastern Enlargement

Fundamental change of East European and disintegration of the SU (Soviet Union) indicated that the two-pole structure embodied with contending between the SU and the US was finally ended. In the new polarization and reshuffle of international political powers, East European countries belonging to former Socialism camp turned to the West step by step, establishing Multi-Partism system in polity and market economy, trying to cast of control of the Russia.

Reasons for that are the followings: firstly, establishment of Socialism was not out of East European people’s aspiration but under the pressed control by the SU; secondly, rigescent socialism pattern of the SU resulted in economic depression, political turbulence and unrecoverable social problems, on the contrary, under the EU framework, the West European countries not only solved economic and social problems such as economic crises, high unemployment and social inequality, what’s more, successful economic integration in the EU showed great influence to the East European countries.

New technical revolution combines every country in the world together, no matter its social system, method of production and development level, and enhances mutual dependence among every country and accelerates integrated development of the world[1]. Globalization is an objectively historical process, and Eastern Enlargement of the EU is acclimatizing this process.

III. Problems and challenges

The EU had made a good progress in enlargement during the last 50 years. However, it had never and impossibly been too smoothly successful. A series of complex questions and challenges were always circling it, especially when the EU began enlarging to East European countries, three main issues related with which will be discussed following.

1. Productivity gap between old and new member states

Firstly, there was a huge economic disparity between the EU-15 members and NMS. For example, the per capita income of Eastern and Central Europe, despite massive amounts of Western aid and investment over the last decade, is only 15-30 percent of the EU average. Countries farther east, beyond the Golden Curtain, are poorer still[2]. Anyone who has traveled in Eastern Europe knows there are still large areas characterized by abysmal living standards, high illiteracy rates, substandard housing, malnutrition, disease, low life expectancy, and other conditions associated with the Third World.

Secondly, the unemployment rate in the NMS is relatively higher. In 2004, the average of unemployment rate in the NMS is 14.3%, higher than that of EU-15, 8.1%.

Thirdly, industrial structure of the NMS needed to be adjusted. Although proportion of agriculture in the GDP of the NMS had a slightly descend and service industry ascended a little, compared with the EU-15, they were more dependent on agriculture, resource and manufacturing, facing the problem of transforming the first and second industries to the third one and adjusting population structure.

Fourthly, deepening degree of finance was too low. In 2004, finance capital of the NMS was 2.5-4.5 times of GDP, but the multiple of the EU-15 is 8. Development of finance intermediary organs was also too slow, and the finance system was too dependent on external investment.

The great productivity gap restrained the integral development pace of the EU.

2. Dilemma of the EU budget

The great gap brought an intractable problem to finance distribution system of the enlarged EU. Contractions on the EU budget between new and old member states became more and more stipulated, in this way, the EU finance legal system appeared relatively lagged in the process of integration.

The 2004-2006 budget of finance capital for NMS was concluded by Heads of every state in Copenhagen Conference held from 12th to 13th in December of 2002 (See the following table).

Table 1: The 2004-2006 budget of finance capital for NMS to join the EU[3]

Unit: Million Euros

Year Program	2004	2005	2006
Agriculture	1897	3747	4147
Structural Policy Fund	6095	6940	8812
Internal Policy Expenditure	1421	1376	1351
Management Cost	503	558	612
In total	9952	12675	14985

The income and cost structure of the EU budget is mainly decided by industrial structure and economic power, which results in imbalance between contribution and benefit of every member state. According to Table 1, agriculture and structural fund took up most part of the EU budget in NMS, so carrying out contemporary policies, the EU budget would be surely enlarged in great deal, which means, at the point of contributors of the budget, pure contributing states must give out more and pure benefiting states maybe become pure contributing states, and, at the point of benefiters, these states which had gotten plenty of profits from the budget reallocation will lost some of their benefit. In this way, Eastern Enlargement of the EU would perplex contradictions between “East-West” and “North-South”, even may intensify conflicts and cause crisis.

What’s more, the EU initially expected to improve its status in international political stage by integrating and arriving at “Speak in One word”, but unfortunately, as every member state had voting power in European Parliament and European Council, those member states whose separate interest were damaged usually keep a un-cooperation attitude in every voting within the EU, accordingly, a lot of decision could not be passed in time.

3. Negative influence to EU defense integration

Cold War was over, but the Europe still lacked security. Out of appetence of security, as NATO, the EU chose the orientation going ahead to the East, changing the former counterparties to friends, expecting which will bring security to itself. On January 1st, 2007, the EU absorbed Romania and Bulgaria as member, from then on, almost all the East and Central European countries belonging to Socialism Camp joined in this supranational organization. Eastern Enlargement brought in a series of influence to the foreign and security policies, which enlarged the area to defense and restrain the defense integration that the EU were implementing.

The negative effect can be summarized as the follows:

Firstly, security diversity within the EU was extended. There are 27 member states in the EU, that is to say, there are 27 kinds of national interest and 27 explanations and requirements to security. It is difficult and even impossible to amalgamate the different positions even following the spirits of “seeking similarity and keeping difference”. Cooperation in area of foreign and security policies are sometimes general and incompact, playing little importance in key moment.

Secondly, the imbalance between military power and military target was deepened. After enlargement, the EU got World First in economy and became one of the most important poles in polity. However, its military power did not match its international status. Enlargement to the east did not bring a more powerful armament, on the contrary, it increase security burden to the EU.

Eastern Enlargement caused a series of negative effects to the defense integration. However, as we know, transformation from economic power to military power needs a period of time. In this period, the EU may be tender and full of troubles, but after it finishing the integration, the EU would bring a far-reaching influence to the world.

IV. Improvement of problems

Since 2004 when 10 NMS joined in the EU family, a series of new policies and measures have been adopted. Even though not all the actions are successful, it still has made a good progress.

1. A good pace of economic convergence

Compared with the EU-15, economic convergence in the 10 NMS has made a good advancement, which mostly is represented in the following respects:

Firstly, economic strength has grown at a considerable speed. Calculating according to fixed price, the GDP of the NMS has increased by 4.9% in average by year during the last 5 years, while that of the EU-15 is just 1.6%. The increasing economy in the NMS has pulled integral increase within the EU.

Secondly, inflation has been effectively controlled. In November of 2005, the average inflation rate in the 10 NMS was just 2.8%, obviously descending compared with years before absorption.

Thirdly, trading volume has increased at good speed. Open rate of trade has increased from 32% to 48% during the last ten years, at the same time, that rate in Euro Area has just increased from 27% to 35%.

Fourthly, capital market has been fused and developed. The economic development in the NMS attracted a great deal of foreign direct investment and securities business is becoming amalgamated, for example, stock exchanges in Sweden, Fenland and other 4 states united and established the Nordic and Baltic Stock Exchange.

Overall, integration degree in the EU has run far away from any other organization in the world, even though there are still challenge waiting for the EU old and new member states. As Klaus Liebscher, the governor of the Austrian Central Bank, has said: “the full economic integration process between the old and new EU member states may be longer than monetary unification process, it will be a catching-up process.”

2. Reform of the financial system in the EU

The EU has made a good effort to improve budget dilemma, especially embodied on the Stability and Growth Pact (SGP), which pertains to the third stage of economic and monetary union (EMU), beginning on 1 January 1999. It is intended to ensure that the Member States maintain budgetary discipline after the single currency has been introduced. The SGP opens the way for the Council to penalize any participating Member State that fails to take appropriate measures to end an excessive deficit. Initially, the penalty would take the form of a non-interest-bearing deposit with the Community, but it could be converted into a fine if the excessive deficit is not corrected within two years[4].

However, up to now, effect of the SGP has shown not so obvious. The NMS are settled in a quandary: on one side, it is too difficult to improve supply conditions of national economy by reducing the tax, meanwhile there is a risk of finance reduction; on the other side, they are compelled to compress finance expenditure and reduce devotion of fundamental establishment, which deteriorates the economic environment.

Accordingly, to reform finance system of the EU, they should begin with amending the SGP. European experts advise that: finance integration should be carried out step by step; distribution of financial budget should follow the economic principle, avoiding from interference of national interest and political elements; there are still much work for the EU to do for bridging bifurcation and incompatibility among member states on the question of voting regime related with enlarged EU.

3. Adjustment of the foreign and security policies

The enlarged EU faces the new border, which bring it new posture and new challenge. There are three levels composing foreign policy of the EU. The first is relation with circumjacent states, which is divided into little circumjacent and big one. The former contains Balkan and East and Central Europe, while the latter includes Mediterranean and Middle East. The second is relation between the EU and the US, and the third one is globally foreign relationships.

The little circumjacent foreign policy, which consists of the following contents, is more related with the eastern enlargement of the EU. Firstly, the EU tried to maintain security and stability of the Middle East by eastern enlargement, weakening national state and establishing a new security structure. Secondly, actions are taken to carrying out stability and association policy to Balkan and facilitate “Color Revolution” in area between its NMS and the Russia. Thirdly, it started up negotiation with Turkey about joining as a member state. Turkey is a regional big country, whose foreign policy directly touches diplomatic, security and economic interest of the EU. Absorption of Turkey will produce structural influence to the EU’s future and establish stable relationships with Mediterranean neighbors and Middle East Islamic countries.

V. A new perspective: from absorption to fusion

In November 2005, a concept of “absorption capability”, which means capability to action, decision-making and executive on the basis of respect of inter-institutional balance and limited budget, was firstly brought forward in documents of the EU enlargement strategies.

On November 8th 2006, the EU Commission delivered an annual evaluation report of negotiation to join the EU, in which a new strategy was brought out for the EU to enlarge in the future. Outstanding of the new strategy is that a new concept of “fusion capability” was used to replace the concept of “absorption capability”. From then on, enlargement of the EU would be more cautious, slow and acceptation to the NMS would be decided according to fusion capability of itself. That is to say, three requirements should be fulfilled: first, the candidates must strictly perform conditions to join in the EU; second, enlargement must be considered with deepening of the integration process and healthy development of EU itself; third, communication with the people should be enhanced and comprehension and support to enlargement from European people should be obtained.

Fusion capability, which emphasizes more on bidirectional character of interest dependence between new and old member states, is a modification and improvement to the concept absorption capability.

VI. Conclusion

Successfully accomplishment of the EU Eastern Enlargement will push the integration to develop more deeply. After getting economic increasing, the EU has enhanced its self-determination consciousness and began to get rid of control and influence of the US and speak in its own words.

Although the EU stands at the same side with the US in maintaining Western value, there has been a great deal of differences relating to global economic interest between the two entities[5]. It is undeniably that the US is still an only super big country in contemporary world, whose economic and military power, technologies and political influence are all incomparable, but the EU, going with China, Russia and the Third countries, will surely restrain the US to build and preserve a "unipolar world" and promote the development of multipolarization.

Reference

Lucia tajoli, How Much Integration After the Enlargement? Working papers from Istituto Pee Glistudi Di Politicainternazionale . 2007.

Silke Roth. Opportunities And Obstacles-Screening The Eu Enlargement Process From A Gender Perspective. Loyola University Chicago International Law Review. 2004-2005. pp117.

Howard J. Wiarda. Where Does Europe End Now? Expanding Europe's Frontiers and the Dilemmas of Enlargement and Identity. Brown Journal of World Affairs. summer / fall 2005 • volume xii, issue 1.

http://www.europa.eu/index_en.htm.

Li Tao, Wu Hongjin, Li Li. A Hard Road of Eastern Enlargement. Journal of Dali University. November, 2006, Vol 5.

ShiYinhong, New Trendency, New Pattern, and New Criterion, Law Press. 2001.

ShouDe, HongYinxian. “Theory of International politics”. Peking University Press. 2000.

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[1] ShouDe, HongYinxian. “Theory of International politics”. Peking University Press. 2000. pp288

[2] The Brown Journal Of World Affairs, Summer / Fall 2005 • Volume Xii, Issue 1

[3] See Copenhagen Conference Document, EU Official Journal, 2002, pp3.

[4] See http://www.europa.eu/index_en.htm

[5] ShiYinhong, New Trendency, New Pattern, and New Criterion, Law Press. 2001.pp157-160.

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Innovation and the New Economy in the European Union

Chapter One: Introduction to Innovation
Main ideas:
From the world of contexts, everything is always changed. Not only the geologically and biologically changes that are changed extremely slow, but lead to human society is changed quickly, while many things had been created, changed or innovated.
The concepts of change and innovation are need to distinguished. The change is only altered or make differences base on exist thing, and it can be good or bad for the thing. However, innovation is an improvement process through analysis requirements, conditions and around environments, or an active attitude that always to overcome risks and pursue new changes, also it must be results oriented and positive change to products, technologies, processes and so on.

Innovation is concerning all fields, an example of technological that the model of innovation has improved from linear to interactive. There are many changed external factors to promote innovation, such as better social environment and higher education; quickly developing of economic and trend of globalization; new Technologies emerging frequently that expanding physical abilities as much as possible; improved Legal issues and all aspects of policies giving enough protection and promotion.
The innovation policy is a direction of how to improve existing things toward more quantity and efficiency. While the emphasis of innovation from what is produced into how to process, scientific research increasingly and technological development continually, especially force R&D more rapidly in business for long-term, more technology and knowledge based firms cooperating and playing important role in the network era.
Therefore, innovative firms are generated. These firms are efficient, creative and intelligent; employ workers who have higher skills, competencies and incentives; need much motivation and capital; and are influenced by business environment, such as competitiveness, economic factors and policies or regulations. The innovativeness of firms have four levels that are measured much capability from level zero to three. The features of successful innovative firms are more valuable skills of strategic and organizational, and productive abilities of technological and managerial. In addition, the new technology based firms which are more and more important in the innovation systems. The governments provide a regulatory environment and some policies to support and encourage innovative firms’ activities. Both of larger and smaller innovative firms need business support networks and services, administrative commitment, and a regulator way of supervising and responding to changes and opportunities, but the smaller ones are often limited by know-how, finance, information and business environment. So the firms cannot innovate alone but interdependent and regarding globalization.
Conclusions:
Innovation can focus not the products and services but the process, not technology but management and organization, not fixed on a formal way but an informal way, and not developing by doing but by using and interacting. It is also influenced by dynamic external changes and it tends to knowledge-base and new economy. The innovative firms play a main role in economic innovation and use all forms in their strategies for innovation of new knowledge which is protected by intellectual property rights and knowledge which is a core competitive advantage and competence.
Personal evaluation:
From this chapter, I’ve learned definition, trends, influential factors of innovation, characteristics of innovative firms, government’s attitude for innovation, and so on.

Chapter Two: System of Innovation
Main ideas:
In the real business world, each entity should be limited by the external environment. How these entities could keep themselves always competitive? They need to take advantage of their partners. But what should they do to make these become true. Hence, a System of innovation approach applied.
System of innovation is consisting of internal components such as relative organizations or institutions and the interacting relations between them that as a multiprogramming network is also affected by external environment.
These main components of the system are performed and interacted in designated procedures and formal frameworks with relative protection laws, innovation policies, and so on.
The main products of institutions are legal system, standard, etc. When the organizations want to perform some activities; they need to refer to those standards which related institutions draw up. This is the base relationship the above two entities need to follow.
In this chapter, we also find that the overall function of SIs: produce, diffuse and use innovations. Especially, Incubate new firms, Facilitate regulation, create and diffuse products, etc. are focusing on innovations.
In order to make a better use of the SIs, we define the SIs into three categories with Boundary are Spatial, sectoral and functional. The spatial boundarie of SIs is a very important level when it is implemented into national level, and it always has critical impact. In comparison to the sectoral SIs, the national SIs becomes inefficient caused by very little overlap with aeronautics. With the social capability and Technological congruence, the low income regions could grow faster than high income ones, we could know that how innovation so important to the world.
The SIs processes always change. No optimal or ideal SI could be determined. A better approach turns up while the market failure approach happened in traditional economics.
The sources of innovation are very diversity. some large countries which have enough capital to support scale and highly develop rate, some small one are flexibility and are short of capital but much depend on ICT which can facility delivery or diffusion and innovated by less cost.
All organizations such as governments, enterprises, universities that are play different roles of setting innovation policies. Innovation policies define the behaviors of innovation, promote innovations much efficiency and quantity and avoid failure of the system.
Conclusions:
In this chapter, we get the relationship between organization and institutions. Acknowledge the main function of SIs. Also get a basic understanding of the three categories of SIs
Personal evaluation:
We could not get the best SI, because of we always get a better one while we make failure in the market approach. The innovation policies always need to be improved while environment changed or new circumstance emergence.

Chapter Three: Innovation Policies in the new Economy
Main ideas:
The New Economy is also called knowledge-based economy that has a wide definition. Knowledge is the most important factor of product than ever before that covers all fields of economics, nature, clusters, etc. Codified knowledge is the basis of R&D and source of any changes or new knowledge. ICT as a new instrument to optimal the transaction costs and efficiently transmit information. The role of education and training is graduated important while innovation climate has been necessary condition to establishing knowledge-based economy in Europe. Innovation as recombination of varied codified knowledge to generate new.
We could define Knowledge-based firms which have really high percentage intangible assets. In Europe, the venture capitalists always do their investment according to the proven tracks records. Under the driven by knowledge economy, there are three key phenomena. One is Globalization that have three issues of European firms can implement technological activities and knowledge can exploited all over the world, the firms have much larger share of patents granted from foreign subsidiaries to continuing and delivering innovation activities, In order to be the best, firms of any nationality became partner in given industry. Go with above, policy considerations turn up. Second, Europe increase the size of service sector, but it don’t enhance the role of R&D in service filed which is much rely on experience and mind of persons and management routines.
Policy implication is facilitated exploitation and mobility of knowledge by use ICT and generates a European network which regard to produce renew or advanced technologies. The innovation policies has intervene almost areas and cooperation between them. Knowledge globalizations can rich information environment, especially, develop e-economy with ICT or other communicative tools.
Conclusions:
Turning to the new century, many MNEs and innovation activities are emerged, so setting policies to regulate them is necessary. The firms exploit knowledge as much as possible out border and apply them to local and boost cooperation.
Personal evaluation:
I think innovation policies are essential guidelines. It creates a frame of innovation activities and make sure everything can be implemented along with optimal direction.

Chapter Four: Intellectual Property Rights
Main ideas:
How to treat Intellectual Property rights? What we should do and to benefit the society or to protect them as secrecies by law? As to patent, it can be considered as a contract between the inventor and the society. The former disclose his workings and the latter give him a temporary monopoly to make economic benefits.
IPR policies play a more and more crucial role in the era of knowledge economy. Some organizations such as WIPO, EPO are established and judicial systems are improved to protect IPR. In this area, European countries have less comparative advantages than the US or Japan. There are some factors influencing the rates to patent in Europe especially for the SMEs. Sizes of firms determine whether they have enough resources to do research and develop new inventions. Larger firms have in-house patent offices, which tend to patent routinely, so SMEs have to adopt other business strategies such as doing business in high technology areas. What’s more, high costs for application and defense for their patents slow down the pace of SMEs, and preventing imitation and disclosure of information is also a headache for large firms. Patent as source of information is used to benefit both by SMEs and large R&D performing firms in different rates. There exists a dilemma between public and private interests, which cannot be overstepped. The inventors want the patent system to be better developed but the latter need more diffusion of knowledge. Anyhow, the Europe should adjust policies to establish a better system for resolving patent infringement cases, adopt a more reasonable patent fees system, make out medium and long-term policy to discourage misuses of the patent system, and provide better access to patent information.
Since 1990s, attentions have been paid to perfect IPR policy system, such as First Action Plan for Innovation in Europe (1996). IPR policies tend to arrive at two objectives: encouraging inventions and innovations, and assuring proper disclosure of technical information, for which are embodied in three areas: SMEs, public sector research and frontier technologies.
Conclusion:
In the new era of technology economy, intellectual property becomes a key factor for competitors to win in the global market. The European face the same pretty pass as the other countries. To take more comparative advantages than others, it should adjust IPR policies to balance the public and private interest on one hand, and catch up with the US and Japan to take up a more favorable status in the world on the other hand.
Personal evaluation:
In my opinion, intellectual property is sure to benefit the society, but at present, we should better emphasize the protection. If there is no perfect protect system, the basic rights of inventors may be damaged easily, in this way, their passions and motive to do more inventions will derogate. So the preoccupation for the European is to establish a consummate legal system to encourage inventions and innovations.

Chapter Five: European Union Innovation Policy Instruments
Main ideas:
Green Paper was issued in 1995. Its purpose is promote innovation and make a executable European strategy to measure performance of innovation at both national and community levels. Systemic view of Green Paper is enhance interaction between innovative firms and their external environment and make relative policies in all fields to improve competences of innovation.
The innovation of EU face many Challenges that procedure of innovation still like a linear model. The EU has much success on Science, however, overall performance of technology and commerce in high-technology fields has weaken in the past, advanced research and technologies hard to develop innovations and become competitive advantages, and effort of R&D is less than competitors all over the world, especially U.S. and Japan.
Situation of innovation is diversity in Europe. Member states have much different standards, procedures, levels, and so on. However, the governments give enough priority on policies of R&D and cooperation to promote convergence, insistence capacity of SMEs to absorb technology, and emphasize on regional level.
There are some Obstacles of innovation. Both the number of specialized persons and the amount of investment for innovation are much less than competitors, but lack of industrial research and participation. Moreover, some serious issues are inadequate education and training system, restrictions on human resources mobility; neglect financial factors such as imperfect innovation financing system, taxation system and in support of research funds; and use of protection rules is limited that due to firms have to increase cost if protect patents, also set standards for exist products, technologies and performance that go against innovation, complex administrative procedure is still used in firms, and without statute for firms that discourage interaction of innovation in the Europe. Subsequently, the EU made a Routes of Action to overcome obstacles and improve situation and conditions of innovation in Europe. For instance, develop technology supervise and forecast, increase investment or effort on research, encourage more abundant and more mobile human resources, promote benefits of much innovation to public, improve the financial condition and create fiscal regime, facilitate protection of IPR, simplify administrative manner, set up a optimal structure of legal and regulatory, and so on.
Then European commission established the 1st Action Plan which is guideline, measure and framework of innovation. It also adopted new actions that are both commission and member states have more practice on enhance atmosphere of innovation culture and guide developing of innovation on basis of the Green Paper.
European trend chart is an analytical instrument of innovation policy. There are three building blocks as sub-tools to help policy maker study other successful practices and adopt suitable way or experience for making further policy.
European research area is adopted at the Lisbon European Council, its purpose is to coordinate policies, resources and objectives of R&D in Member states, introduce or set a common research policy that balance different developing levels in EU, and promote technology progress and innovation in all fields and enhance interaction of them as a network. Moreover, it is measured by two quantitative indicators and pursues to achieve the goal of Lisbon Strategy. Building the European research area goes well beyond 6th and 7th Framework Programme as new instrument for R&D in EU.
Conclusions:
Promoting innovation and Building a knowledge-based new economy must with more ambitious policies and useful instruments for R&D that also improving competitive advantages and European convergence.
Personal evaluation:
I know about the situation of innovation in EU, the action which the EU adopted, and learned many new instruments that are good for making innovation policy and helping EU become the strongest competitor in the new economy era.

Chapter Six: Lisbon Agenda
Main ideas:
EU initiated Lisbon strategy in March 2000,set itself a new strategic goal for the next decade: to become the most dynamic and competitive Knowledge-based society, achieving sustainable development, creating more and better jobs, centralizing social cohesion, emphasizing environmentally sustainable growth, and Building a partnership for reform. The European social partners must take up their responsibility and actively participate in the implementation of the Lisbon strategy.
Achieving the goal requires an overall strategy, Firstly, “preparing the transition to a knowledge-based economy and society by better policies for the information society and R&D, as well as by stepping up the process of structural reform for competitiveness and innovation and by completing the internal market” ; Secondly, “a modernizing European Social Model relying on three key drivers that are making more investment in people and create more and better jobs, activating social policies and strengthening action against old, and new forms of social exclusion” ; Thirdly, “the coherent and systematic implementation approach combines European coherence and respect for national diversity. It defines the required European guidelines in each policy domain and identifying best practices and reference indicators. The open method of coordination aims to organize a learning process about how to cope with the common challenges of the global economy in a coordinated way while also respecting national diversity. The purpose of the approach is to establish a vast process of innovation, learning and improvement between European countries, in which commission may play a new role as catalyst, and to speed up European convergence.”
KOK report is a midterm review of the Lisbon strategy. The report of the High Level Group which concern with all three pillars of the Lisbon strategy include economic, social and environmental. It was given recommendations of disappointing performance of the strategy, challenges when facing enlargement, encourage member states cooperation, and purse to build knowledge based society.
After 2005, EU renews the Lisbon Agenda that encourage all members create employment opportunities as much as possible, promote economic development, increase research and development investment, reform state aid plan, etc.
As action lines that is common vision and strong consensus about what needs to be done. There are two main instruments: one is the community Lisbon programme as significant progress; another is the national reform programmes as main tools.
As the strategy is a medium to long-term agenda requiring implementation on the ground. This will require a major effort from both member states or civil society and the EU institutions.
Conclusions:
The Lisbon strategy is not an attempt to become a copy-cat of the US and far from it as an innovation. Lisbon is about achieving Europe’s vision of what it wants to be and what is wants to keep in the light of increasing global competition, an ageing population and enlargement. From view of future, Europe needs more economy growth and more people in work.
Personal evaluation
From my opinion, the Lisbon strategy is Sustained political determination, implementing the Lisbon agenda immediately impact on people’s daily lives and is not indiscriminate action. Member States must take their responsibility and take ownership of the process.

Chapter Seven: E-Europe
Main ideas:
E-Europe is part of Lisbon’s Strategy which aims to build a knowledge based on economy in Europe. It began with the E-Europe 2002 Action Plan and was updated to be E-Europe 2005.
The E-Europe 2005 Action Plan aims to develop modern public services and a dynamic environment for e-business through widespread availability of broadband access at competitive prices and a secure information infrastructure. This plan contains a series of policies such as Broadband, Public Service On-line, e-Business, e-Inclusion Benchmarking etc. Broadband provides fast access to the internet at cheap prices. Public Service On-line includes e-government, e-health and e-learning. E-Business stimulates the growth of e-commerce and the inherent re-organization of business processes to digital technologies. E-inclusion makes sure the information society is accessible to the largest number of citizens, overcoming geographical and social differences. Benchmarking is brought through visible and easier using indicators, more analysis of impact of measures undertaken on e-Europe and increased policy relevance of benchmarking. The contribution to Lisbon Strategy of this plan is to Shift emphasis from supplying to demand and measuring adoption to looking at impact.
I2010 is a European information society for growth and employment, which continues contribution to Lisbon Strategy. The I2010 program is the follow up of e-Europe 2005 and updated annually. I2010 focuses on comparatively few but concrete policy priorities (as we called three pillars):
Creating a single information space, this includes revising regulations, supporting content creation and broadband as well as security issues;
Increasing EU investment in ICT research, which includes trans-European demonstrator projects and actions for SMEs; and
Promoting an inclusive European information society, this includes better public services and quality of life.
Conclusions:
The evolution of this plan makes it more and more perfect and brings more benefits to the European people. The e-Europe ensure the EU fully benefits from the changes brought by the Information Society and its objectives are to bringing every citizen, home and school, every business and administration, into the digital age and online.
Personal evaluation
The E-Europe Action Plan is routed in the analysis and developments of the 'new economy' and its impact. This plan facilitates the EU to stay at a leading station in technology economy era and make a good example for other countries.

Chapter Eight: Patent Rights in the EU
Main ideas:
There is no unified patent regime at present in the EU, the existing regime of which can be considered as composed of four regimes in different level: national systems, Patent Co-operation Treaty regime, the European Patent regime and the Community Patent regime. This situation caused a disorder of the litigation procedures, that is, no specialized courts and insurance to cover litigation costs.
Compared with patent attorney fees, applicants own costs, extensions to other countries, agent fees, and translation costs, national patent filing costs are low.
The European patent regime is a bundle of nationally enforceable patents in the designated states, which is granted by the EPO under the EPC. It has a unitary and centralized procedure, and is conducted in three languages: English, French and German. Patent costs consist of patent fees payable to the EPO, translation costs and fees for professional representatives, which is much higher compared with that in the US and Japan. The grant duration is between three and five years. Typically, after filing date, there is 6 months before receiving the search report, 27months for the first communication from examination division, and 44 months for the patent grant. Applicants may request accelerated procedure to reduce search time to about three months and further nine months for examination.
The Community Patent Regime is a patent law measure being debated within the European Union, which is granted by Luxemburg Convention which never entered into force. The objectives of this regime are to eliminate distortions of internal market, to enable Europe to reap full benefits of research and to stimulate private R&D investment. The EU made efforts to adopt a Community Patent Regulation which is directly applicable to Member States and guarantee the Community Patent self full legal certainty but not successfully.
This system will coexist with existing national and European systems. The application is directed by the EPO and will be published in the Register of Community Patents or the Community Patents Bulletin or both. It adopted the same linguistic regime as the European Patent but the difference is that Community Patent directly and immediately valid for the whole of the Community. It is parallel with the patent systems of MSs which means applications can be initiated either to Register of MS or directly to the EPO. It will create a centralized Community IP Court to guarantee the unity of law and the consistency of case law.
Since Lisbon European Council Summit (2000), the EU has made a good effort for this regime but till now it is still not approved by the Council, for too many controversies between the MS.
Conclusions:
At present, four patent regimes are taking effect in the EU. At national level, every state has already established an integrated legal system which regulates patent rights and obligations with in the country. At the European level, the European patent regime also works fluently. However, at the European Union level, the patent regime has not been established yet. This new regime in intended to solve problems which the former two cannot resolve, but it seems to need a longer time before all the MS get a consensus.
Personal evaluation:
The EU is a good model of regional economic integration for other regions in the world. Even though there is a bottle-neck to build a unified patent regime for all over the EU world, I am sure as time goes on, this problem will be resolved at last.

Conclusion
To sum up, “The purpose was to define a European way to evolve to the new innovation and knowledge-based economy, using distinctive attributes ranging from the preservation of social cohesion and cultural diversity to the very technological options. A critical step would be to set up a competitive platform that can sustain the European social model, which should also be renewed.”
The "Lisbon Agenda" seems hardly to achieve its target and goals by 2005. One of the main reasons is members of the EU had not implemented their products and services market liberalization. Although fixed numerical goals in R & D doesn’t make economic significance, emphasize the role of innovation in growth is reasonable. Building on the achievements and on-going actions under renew Lisbon strategy and National Reform Programmes.
It is possible to achieve European knowledge-based economy and the goal of economy growth if adapt to support the research and innovation strategy. Europe needs a new paradigm of mobility, flexibility, and adaptability to allow R&D and innovation to support the strategy of Europe. There are some simultaneous actions are needed: creation of a market for innovative products and services; providing sufficient resources for R&D and innovation; improving the structural mobility of Europe; and building positive attitudes and a culture favorable towards entrepreneur risk taking. Therefore, much stronger commitment is needed to adapt European economy to the new, as innovation policies, IPR, patent protection, and so on.

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