Welcome Message from the Institute of European Studies' New Acting Director

Welcome to the new academic year at the Institute of European Studies at Berkeley. Professor Gerald Feldman, long-time director of the Institute, has been honored with a Humboldt Research Award and is on leave at the Wissenschaftszentrum in Berlin. I will be stepping in for him this year.

Introducing IES

	Barry Eichengreen, new Acting Director of IES

For those of you who are new to our campus community, IES is home to one of the leading concentrations in the United States of researchers and teachers on Europe. The Institute is a National Resource Center funded by the U.S. Department of Education (Title VI) to promote, develop and improve instruction, research and training in international and area studies. Created two years ago, the Institute represents the unification of the staff, resources, and programs of the UC Center for German and European Studies —which serves all nine UC campuses — UC Berkeley's National Resource Center for Western European Studies (CWES), the European Union Center, the France-Berkeley Fund, as well as six country programs: the French Studies, Italian Studies, Finnish Studies, Spanish Studies, Celtic Studies, and the Portuguese Studies Program. Bringing together these Centers and Programs promises to lend new visibility and focus to research, education, training, and information on Europe. Together, our programs offer a diverse menu of lectures, workshops and conferences on Europe on the Berkeley campus, as well as a variety of cooperative ventures with other US and European campus centers and universities, reflecting Berkeley's growing linkages with European Universities and the interdependence of Europe with the rest of the world. IES sponsors a student group of Europeanists and supports a thriving graduate student community. There is something for everyone interested in Europe, and we hope to meet you at our events. Please come to our "Fall Festival" on October 30 to greet old friends and meet our visiting scholars and new members of our campus "Europeanist" community.

The Research Focus: Europe's Changing Geography

Initiating, organizing, facilitating, and sponsoring research is the central mission of IES. "Europe's Changing Geography" is the focus of this year's research agenda. Europe's economic geography is changing, with the continued progress of the single market and the advent of the euro. Its political geography is changing, with the convening of an unprecedented constitutional convention to redefine notions of sovereignty and modalities of governance. Its cultural geography is changing, with impending enlargement of the European Union to the east and the consequent shift in the center of gravity of the EU's population. And, its strategic geography is changing in response to American unilateralism and the growing desire to formulate a common European foreign policy.

Europe is not the only part of the world where economic, political, cultural, and strategic geography is in flux. But the revolutionary changes underway make it a laboratory within which to examine larger global issues such as changing sovereignty and modalities of governance, changing models of capitalism, and the emergence of a new "tri-polar" world.

Economic Geography

Europe's economic geography is being transformed not just by the completion of the single market, the advent of the euro, and the anticipation of EU enlargement, but by technologically-driven market forces generally. The euro has had revolutionary effects on European financial markets, including the explosive growth of corporate debt markets and the development of a nascent equity culture. These events and trends raise difficult questions about the future of corporate governance and about the European "economic and social model." There are multiple centers of research on these issues on the Berkeley campus. For example, Professor Maurice Obstfeld and myself in the Economics Department and Professors Rich Lyons and Andrew Rose in the Haas School of Business have examined the impact on Europe and the world of the introduction of the euro. Professors Pablo Spiller of the Haas Business School and Gerald Feldman of the History Department have explored issues of corporate governance and corporate culture. This academic year Professor J. Nicholas Zeigler of the Political Science Department has organized a speaker series at the Institute on "Politics and Enterprise."

Parallel trends in labor markets, with the removal of barriers to the internal mobility of labor and the growing porousness of Europe's external borders, have heightened concerns about the regulation of immigration, legal and illegal alike. Berkeley scholars have joined with researchers throughout the UC system and Europe to study these trends in the IES research group on Comparative Immigration and Integration, led by Professor Philip Martin of UC Davis. Each year Professor Martin leads conferences and workshops on these issues and organizes a tour of the US-Mexico border near San Diego for European scholars and policy makers.

Europe has moved a long way toward a single competition policy, anticipating issues that now arise in discussions of harmonizing trade relations between Europe and the U.S. Professors Dan Rubinfeld and Andrew Guzman in the Boalt School of Law have worked extensively on the comparison. With their help, we hope to convene this year an IES workshop on U.S. and EU competition policies.

Enlargement of the European Union to the east raises a number of policy and research issues. For one thing, there are implications for Southern European countries (Spain, Portugal, Italy, Greece), which are major beneficiaries of the EU's redistributive programs, i.e. the Common Agricultural Policy (CAP) and Structural Funds. The entrance of relatively poor central and eastern European countries—several of which have large agricultural sectors—will redirect these resources away from southern Europe. Second, enlargement will further shift the center of gravity of the EU to the north and east. This is not only a change in economic geography; it is a change in political and cultural geography as well. EU enlargement is expected to reduce the voting power of the southern European bloc and, more intangibly, change the "cultural" character of the Union itself. Berkeley scholars met this summer with scholars from the University of Rome to discuss these issues.

Political Geography

The aforementioned developments also raise questions about the role of the state and democracy in the governance of the economy in an age of market hegemony. A research group convened by Professor Jonah Levy of the Berkeley Political Science Department brings together Berkeley scholars, experts from Germany and England, and academics from other North American institutions to contemplate "the state after statism." Political Scientists Bruce Cain of Berkeley and Russ Dalton of Irvine have formed an IES research team to examine the profound changes in democratic governance in a collaborative study comparing Europe to the United States. And, also as part of this initiative, IES will host a conference this fall, sponsored by the EU Center and the Portuguese Studies Program, entitled "The EU, the Nation-State, and the quality of Democracy: Lessons from Southern Europe."

That Europe's political geography is in flux is evident in the sound and fury surrounding its constitutional convention, itself a response to the perceived failure of the Treaty of Nice to resolve governance issues. It is agreed that the new Europe needs significantly strengthened political institutions to enhance policy efficiency and render policy makers more legitimate and accountable to European voters. But it is not agreed whether this implies the need for a stronger Commission, a stronger Council, an elected European executive, or appointed European executive. What is clear is that the European Union has embarked on an unprecedented political experiment redefining national sovereignty and pioneering new modes of political governance. Its task is made all the more challenging by the fact that the accession candidates of Central Europe are still consolidating their democracies and still attempting to determine the compatibility of their institutional arrangements with the acquis communitaires. Chris Ansell, David Vogel, Gerard Roland and myself, among others, are engaged with colleagues in the US and Europe in research on European Parliament politics and the governance of the European Union and the daunting task of policy harmonization.

Strategic Geography

In part the impetus for this political change is economic: the logic of a single market implies a single set of regulatory policies (or at least a more closely harmonized set of national policies), a single set of institutions to carry them out (witness the European Central Bank), and a more cohesive policy to hold those institutions accountable for their actions. But, in addition, the pressure for political reform is a response to American unilateralism and to the desire in Europe to develop a common security and defense policy. A fragmented Europe is unable to respond to American unilateralism and to offer a coherent foreign policy alternative. In response, Europe's strategic geography is changing. There is now both a commissioner for external affairs (Chris Patton) and a special envoy for foreign policy of the Council (Javier Solana). U.S.-European diplomatic relations are characterized by growing tension. IES has analyzed this process in projects on "The Future of European Security" and "The Debate over NATO Enlargement." Currently Professor Aaron Belkin of UC Santa Barbara is directing a university-wide research project on "Integrated Military Units and the Coordination of Sexual Orientation Policy in NATO."

Increasingly, European security has a Mediterranean dimension — witness the conflict between Spain and Morocco over the Parsley Islands. It also has an Asian dimension, as Europeans and Asians seeks to establish a common front as a way of "balancing" against the influence of the United States, and contend with the growing strategic and economic pressure emanating from China. IES has both a Euro-Med Project, directed by Beverly Crawford of IES, and a Europe-Asia project, to be co-directed by T.J. Pempel of the Institute of East Asian Studies (and co-sponsored by IEAS) and myself. Vinod Aggarwal in the Political Science Department recently organized an IES research project and edited a book on Europe-Asia economic relations, and currently, he has directs an IES research project on transregionalism, Europe's relations with other regional groupings in the international economy.

If social science research on these aspects of Europe's changing geography has a unifying methodological element that distinguishes UC Berkeley's interdisciplinary research focus and defines a "Berkeley School" of European Studies, it is that faculty research emphasizes institutional and behavioral analysis and applies insights from such analysis to European questions. Institutionalists argue that outcomes depend importantly on social, political, economic and cultural institutions, while behavioralists emphasize the importance of bounded rationality, social convention, and rules of thumb. To pick an example not entirely at random, in economics, my own disciplinary home, where game theory has long reigned supreme, it is now acknowledged — at least at Berkeley! — that more than the tastes, technologies and endowments of game-theoretic models matter for economic, political and strategic outcomes. History, culture, and institutions matter importantly as well. At Berkeley, this reflects the leading role of scholars like Oliver Williamson in the New Institutional Economics and George Akerlof and Matthew Rabin in the New Behavioral Economics. But the influence of institutions and behavioralism extends well beyond any one discipline. One can detect their influence in many of the research projects and activities that IES helps to organize and sponsor.

Hopefully, this has been enough to whet your appetite. Watch our web site for meetings, lectures, conferences, workshops, and working papers—now posted on the new California Digital Library web site—that publicize IES research findings on "Europe's New Geography." In addition, we will be holding and sponsoring two conferences this Fall: the October 31-November 1 conference on the Southern Europe and the European Union discussed above, and a conference organized by the Italian Studies Program September 13 and 14 on Italian and German colonialism.

By bringing our European programs together in the Institute, we are also creating a firm financial base for the study of Europe at Berkeley and throughout the University of California. In addition to our funding from the U.S. Department of Education (Title VI), the UC Offices of the President, the Chancellor, and the Graduate Dean's Office at Berkeley, we have received substantial grants from both the Daimler-Chrysler and Deutsche Bank funds of the Stifterverband der deutschen Wissenschaft. I anticipate providing more good news in the near future. In the meantime, we wish all the students, faculty and friends of European Studies at Berkeley a very happy and prosperous new academic year.

Barry Eichengreen, Acting Director