ABSTRACT
The European Union (EU) is the most important development in modern Europe, which, among other things, is designed to promote economic and social progress, including guaranteeing fair and free competition in the internal market. Since its creation by six founding members over 50 years ago, the European Union has attracted a constant stream of newcomers, culminating in its historic expansion from 15 to 25 in 2004 and a further two countries in 2007, which united a continent split by the Soviet Union and Cold War for 45 years. Any European country can join, provided it has a stable democracy that guarantees the rule of law, human rights and the protection of minorities, a functioning market economy, and a civil service capable of applying EU laws in practice.1 Thus, this unique economic and political partnership currently comprises 27 member states. The majority of the member states in the EU are considered as small countries, with either a population of less than one million (such as Malta,2 Luxembourg3 and Cyprus4), which are also called micro-states,5 or a population of around five million people (such as Estonia,6 Slovenia,7 Latvia,8 Lithuania,9 Ireland,10 Finland,11 Slovakia12 and Denmark13), or with a population nearing ten million (Bulgaria,14 Austria15 and Sweden16). Small open economies quite often become economically integrated with their large neighbours and gradually disappear as national markets. However this is not the case for the Baltic countries, Slovakia and Slovenia. Their markets are not yet fully integrated and in most cases their markets can be identified as national markets. The first part of this chapter will focus on merger control mechanisms in Malta and Cyprus. Together with the Baltic states, Slovenia and Slovakia, Malta and Cyprus joined the EU during the biggest enlargement on 1 May 2004. Both Cyprus and Malta have small market economies. The difference is that the smallness of Cyprus and Malta is defined by their geographic conditions (as well as their population numbers), whereas, the Baltic countries were land ‘islands’ because of political reasons. This chapter will explore the introduction as well as development of merger control regimes in these countries. Jurisdictional, procedural and substantive issues will be analysed with the specific indication being placed on the pro-competitive effects of mergers – efficiencies. The second part of the chapter will briefly discuss
some of the ‘old’ member states with small market economies, that is, Luxembourg and Ireland and their merger control mechanisms. The final part will review the disadvantages experienced, and the challenges faced by, postCommunist countries with small market economies, namely the Baltic countries, Slovakia and Slovenia in their journey to the introduction and further development of merger control regimes in comparison with other ‘old’ member states.
