TH
ENLARGEMENT
PRO&CONS
IN THE NEWS
The purpose of this page is to outline major areas, questions, perspectives to be considered when trying to assess the effects of the Euro integration.
In the contex of spreading globalization it is without question that the accession of the applicant countries is bound to happen and is just a matter of time. It is also clear that it will have a profound impact for the European Union. The effects will be manifold and thus it is difficult to predict or assess the final outcome. The EU Commission General Romano Prodi, the French President Chirac and US President Bill Clinton
The estimation of the effects of integration of new member states also depends on the point of view. There are three perspectives that should be considered when trying to determine the net effect of the enlargement. The issue must be examined from the standpoint of:
- the member states of the European Union:
- the applicant countries
- the rest of the world
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SOME CONSEQUENCES OF THE ENLARGEMENT:
- Political
- Economic - PROBLEMS
POLITICAL CONSEQUENCES
The enlargement of the EU will help make the region more stable
as well as more powerful and influential on the world
scene. A step in that direction was recently made, when the
current EU member states decided to set the foundations of a
common military force.
For more information read "Europe Challenges US Hegemony" by
George Szamuely.
According to a recent study by Christian Keuschnigg from University of Saarland and Wilhelm Kohler form the University of Linz called "Eastern Enlargement to the EU: Economic Costs and Benefits for the EU Present Member States" the enlargement will have immediate positive effects on the economy of the EU. This is in contrary to the general expectaions that the integration of the new members will cause a shock to the economy. The researchers begin their study with the explicit assumption that the overall effect of the Enlargement largely depends on the specific EU country, its geographical sitation and the extent to which it trades with the countries applying for membership.
The researchers generalized one of the main consequences of the enlargement to be movement of capital from West to East and movement of labor from East to West. According to them increased foreign investment in the new member countries will result in the fall of GDP for the current EU member states. The flow of cheaper labor to the West will also cause fall in wages and increased unemployment.
The flip side of that is that cheaper labor will make the goods produced in the EU more competitive for the rest of the world and this will lead to an increase in exports.
Another impact of importance is the customs issue. It too is double-sided.
The positive implications of the enlargement on the customs is that there will be reduction of cross border transactions. This will result in less administrative work and thus in speeding up of the transactions. Also the absence of duty will make the EU goods easier to export.
The negative side is that the tariff revenues from customs duties (counting toward the common EU budget) will fall down. This will increase the individual countries contributions toward the EU and decrease the welfare.
PROBLEMS
The integration of the new countries will almost double the size of the European Union. This poses a lot of problems from administrative nature. It makes the decision-making process unwieldy and cumbersome.
The European Council in Nice held in the beginning of December this year addressed precisely this and several other issues like the majority quota and the veto rights of the countries. Yet instead of coming up with a constructive solution, the council revealed the increasing inability of the current members to reach consensus and to prepare the Union for the future enlargement.
Another issue of concern is the rising unpopularity of the enlargement among the citizents of the EU member states. People fear the flood of cheap labor which will decrease their wages. They feel threatened by the resulting increase in unemployment.
On the other hand the applicant countries, while eager to join the European Union which they view as a source of politcal stability and economic support, feel uneasy about some of the conditions they must fulfill in order to join. One problematic issue concerns the nuclear power plants that produce a large percent of these countries' electricity supply. For example Austria threatened to vote against the Czech's Republic accession unless it commits to not opening a brand new nuclear power station which took a lot of investment and capital.
For more information read the BBC article "Germany seeks workers' rights delay".
Another more general issue which arises from the previous one concerns the way the new and especially the smaller countries will be represented in the Union as well as to what degree they will be allowed to partake in the decision-making process. This also comes down to the question of national versus mutual rights and responsibilities and to what extend the newly integrated states will have to wield their national intersest for the sake of the Union's one.
For more criticism of the European Union, try the following links: www.corpwatch.org/trac/ http://www.keele.ac.uk/socs/ks40/ceghome.html - Critical European Group www.team-alliance.org