A Prototype Model of European Integration: The Case of Austria

Austria as an EU member state since 1995 has taken part in all subsequent European integration steps: deepening of EU integration via the Single Market and the Economic and Monetary Union (EMU) with the introduction of the euro and enlargement of the EU, in particular by the grand enlargements of the EU since 2004. Around the years 2014/15 Austria celebrates several anniversaries: 25 years of the fall of the Iron Curtain and hence expansion of new market opportunities through the opening-up of Eastern Europe; 20 years of EU and 15 years of EMU (euro) membership; 10 years since the start of the big EU enlargement towards Eastern Europe. With the Croatian accession in 2013, the EU now counts 28 members. In order to capture the integration effects of the last 25 years of Austria's integration into Europe, an integration model for Austria is estimated. It is able to reproduce the main integration effects theoretically expected from the regime changes since 1989. In this respect, the Austrian integration model could also serve as a prototype for other EU members states. Overall, the participating in all integration steps since 1989 has added about 1% to Austria's real GDP per year.