Thirteen applicant countries are presently engaged in the process: Estonia, Latvia, Lithuania, Poland, the Czech Republic, Slovakia, Hungary, Slovenia, Romania, Bulgaria, Malta, Cyprus, Turkey. Accession negotiations are under way with the first twelve, and the objective affirmed at the European Council in Göteborg is to complete them by the end of 2002 with those countries that are ready to join, so that they can take part as members in the European Parliament’s elections of 2004.
The benefits of enlarging the Union to include these countries are political, economic, and cultural.
The extension of the zone of peace, stability and prosperity in Europe will enhance the security of all its peoples. The addition of more than 100 million people, in rapidly growing economies, to the EU’s market of 370 million will boost economic growth and create jobs in both old and new member states. There will be a better quality of life for citizens throughout Europe as the new members adopt EU policies for protection of the environment and the fight against crime, drugs and illegal immigration.
The arrival of new members will enrich the EU through increased cultural diversity, interchange of ideas, and better understanding of other peoples. Enlargement will strengthen the Union’s role in world affairs – in foreign and security policy, trade policy, and the other fields of global governance.
Benefits are already visible. In Central and Eastern Europe, stable democracies have emerged, with
democratic institutions and increased respect for minorities. The economic reforms in these countries have led to high rates of economic growth (higher than the EU) and better employment
prospects. This process has been helped and encouraged by the prospect of EU membership, and by the EU’s financial assistance.
As a result the Union enjoys growing trade with these countries (€17 billion trade surplus in 2000), and this generates employment and growth in the member states.
Conditions for Success
To achieve these benefits, the conditions for a successful enlargement must be respected:
- The future members need to fulfil all the criteria for membership.
- The Union needs to prepare itself adequately to receive them.
The Commission makes regular assessments of the progress of the applicant countries. None are yet fully ready, but all have made remarkable progress in the last decade. The criteria for membership were fixed by the European Council in Copenhagen and Madrid: democracy, the rule of law, human rights, respect for minorities; a functioning market economy, and the capacity to cope with competitive pressures, the ability to take on the obligations of membership (in other words, to apply effectively the EU’s rules and policies).
The Union itself must prepare for the arrival of new members by: making the institutional changes necessary for enlargement. That means ratifying the Treaty of Nice; meanwhile, the applicant countries are already participating in the ongoing debate on the future of Europe.
Numerous economic analyses have concluded that the benefits of enlargement outweigh the costs. Although the benefits are relatively larger for the acceding countries, because they start from a lower economic base (their economies represent only about 6% of the GDP of EU-15), there are gains for both sides. Moreover, the future members, already exposed to the challenge of globalisation, will help the Union to surmount it.
A key academic study in 1997 by the Centre for Economic Policy Research estimated that accession of countries of Central and Eastern Europe would – even in a conservative scenario – bring an economic gain for the EU-15 of €10 billion, and for the new members of € 23 billion.
The latest analysis of business circles argues that there are ‘potentially huge economic and business benefits of taking applicant countries into the EU as soon as possible’.
A recent study of the Commission estimates that enlargement could increase the growth of GDP of the acceding countries by between 1.3 and 2.1 percentage points annually, and for the existing members it could increase the level of GDP by 0.7 percentage point on a cumulative basis.
Concerning the budgetary consequences of enlargement, the framework has already been decided by the European Council in Berlin, and includes a modest amount (less than 10%) for transfers to the Central and East European countries for the period up to 2006. In the longer term, after 2006, expenditure will depend on a series of decisions to be taken in fields such as agricultural policy, etc. The increase in the budget resulting from enlargement will be a political rather than an economic issue. There have been several analyses of the impact of enlargement on the labour market and migratory flows. An extensive study made for the Commission suggested that only about 335,000 people would move to the EU-15 countries from Central and Eastern Europe even if there were free movement of workers immediately on accession. In fact, the Union has now agreed on a flexible transition period of up to seven years for limiting the inflow of workers from new member states.
Costs of non-enlargement
Non-enlargement, or a delay in enlargement, would have costs both for the Union and for the applicant countries. Delay in enlarging the single market, and lower economic growth in the applicant countries, would deprive member states of economic benefits. For the applicant countries failure to join the Union would weaken the incentive for economic reform, discourage foreign investment and reduce economic growth. It could thus create political instability in Europe, and even undermine the process of democratisation, with potential repercussions for the Union. Without enlargement, the Union would be less able to combat the problems of organised crime, illegal immigration and terrorism. Disillusion with the Union in the applicant countries would feed
Euroscepticism in the member states.