EU enlargement: proof in figures

European Report, No. 3078                       Français

May 4, 2006

With nine heads of state and government from the Balkans region meeting in Salonika, Greece, on 4 May to enhance cooperation in South-Eastern Europe with a view to accelerating the prospect of a fifth wave of EU enlargement, the European Commission adopted a Communication unambiguously lauding the extremely positive consequences of the historic integration of ten new member states two years ago this week.

« Overall, enlargement has acted as a catalyst and a driving force for economic modernisation in the European Union, helping the economies of both the old and new member states to face up to the challenges of globalisation », according to the document. Economic and Monetary Affairs Commissioner Joaquin Almunia described this as « a win-win economic success ».

Rich Pickings

According to the Commission’s analysis, based on a 120-page working paper, not only have the ten new member states got richer (their per capita GDP which amounted to just 44% of the EU average in 1997, has risen to 50%), but the EU15 has also benefited, taking advantage of the opening of markets in Eastern Europe (the EU15 share of total trade in the 10 new member states increased from about 6% in 1993 to 62% in 2005). Farm incomes in the West have meanwhile remained table whilst revenues have sky-rocketed in the East (+70%), notably as a result of direct aid under the Common Agricultural Policy.

Limited migration

The Commission argues that many of the doomsday scenarios rolled out in the run-up to enlargement in 2004 have failed to materialise, not least predictions of hordes of migrants from the East invading labour markets in the West. Joaquin Almunia points out that « the impact of migratory flows has been relatively modest ». He welcomes the fact that four more EU15 member states have decided from 1 May 2006 to lift transitional measures restricting the mobility of workers from the new member states.

Another myth is also blown out of the water by this Communication: company relocations from West to East have proved much less problematic than anticipated, concerning between 1 and 1.5% of companies in the old member states, according to the Commissioner. Olli Rehn points out that in Denmark alone, 35,000 jobs have been created directly as a result of enlargement. Mr Almunia insists « this is not mere rhetoric » and that « these trends are borne out by statistics and economic analysis ».

However, neither Enlargement Commissioner Olli Rehn, nor his colleague over atEconomic and Monetary Affairs dared show similar enthusiasm regarding the impact of future enlargement, not least the integration of a huge economy like Turkey. This is much too sensitive a topic for the two Commissioners, who merely emphasised their belief that, in order to be successful, enlargement needs to be well-prepared.