The project examines “Financial Market Integration, Foreign Direct Investment, Structural Change and Economic Growth in the EU25.”

The justification for the project can be found in the perceived threats and opportunities for Europe that come with financial market integration and the enlargement of the Euro area. The focus is on financial market integration (banking systems and capital markets) and the effects on the level of the growth path and the growth rate/the progress rate. Moreover, problems of financial market volatility are also analyzed.

The project is particularly relevant today, because overcoming slow growth and an improved understanding of financial market dynamics and growth in accession countries are key policy issues for the EU25. There will probably be other enlargement rounds, therefore, it is quite important to understand the dynamics of the first round of EU eastern enlargement.

This study departs from both a theoretical and a practical point of view: It reveals, on the one hand,  the processes that are underlying the dynamics of financial market integration, on the other hand, it focuses on key aspects of economic growth among the EU25 - emphasizing to some extent enlargement aspects.

Each partner institutions were involved in each of the work packages as well as in the final international workshop which was held in Brussels in June 2008.