Sammendrag
This thesis attempts to explain the effects of the European economic integration on two
member countries, namely Greece and Germany. Based on their differences in relative factor
endowments, the bilateral trade pattern, the industrial structure and the product prices are
analyzed in a neo classical Heckscher-Ohlin framework. The process of continuous economic
integration puts pressure on the member countries for industrial restructuring in order for
efficiency gains to be realized. Hence, the industrial structure of Greece, Germany and other EU
member countries is also examined and reveals that member nations bear differences in their
endowments and have also increased their specialization level in industries that have a
comparative advantage over their EU counterparts.
Trade profiles verify the bilateral trade pattern predicted by the Heckscher-Ohlin although the
existence of intra-industry trade requires the adoption of New Trade Theory terminology.
Therefore, certain facts about the EU reality are confronted with the assumptions of the model
in order to evaluate the degree of its applicability. This is especially relevant for future deeper
and wider economic integration with forthcoming waves of enlargement and the
implementation of the EU Services Directive.