The analysis explains why international companies should actively participate in the EU’s eastward enlargement. The authors give two main reasons:
- All of the Eastern European economies have the potential of becoming Europe’s most dynamic growth areas and therefore represent business opportunities.
- Economic integration could fail without the prospect of enlargement.
The authors point to several risks in the process of enlargement that could have destabilising effects on the new democracies, notably poverty. The European Bank for Reconstruction and Development (EBRD) has estimated that the number of poor has quadrupled since the beginning of the transition. They warn that economic reforms may exacerbate this situation, adding to the discontent.
The analysis also warns that enlargement will upset the EU’s system of transfer payments, especially in the areas of the Common Agricultural Policy and structural funds. It says the EU will have to find new compromises so that the enlarged Union can continue to function. It warns that a larger and more complex EU may lead to a reduction of co-operation among Member States.
Paolo Cecchini, Erik Jones and Jochen Lorentzen, European Business Forum
For an in-depth analysis, see