The enlargement for Italy: constraints – opportunities

DISCLAIMER: All opinions in this column reflect the views of the author(s), not of EURACTIV Media network.

The enlargement for Italy: constraints – opportunities

The discourse on the enlargement of Europe has obviously evolved during the last months. There are not only the AGNELLI foundation reports presented three weeks ago or from the Direction General of the budget of the European Commission on the impact for the Member States but more and more publications consider the enlargement rather as an opening up of opportunities beyond the constraints implied for the Member States that benefit from Community support policies.

In the same sense, the Institute of Economic Research ISAE*, presented today its conclusions from the report carried out by professor GRASSINI of Florence University for the account of the Commission, on a cost / opportunity evaluation for Italy, considering a membership of 10 applicant countries at the 2004 horizon.

In introductory notes, the experts put into perspective the financial cost of the enlargement, estimated at 0,2% of the EU GNP, in a contribution scheme of the member States equivalent to 1,27% of the GNP (against a current level of 1,08%). However, if the access to agricultural supports is considered only in a gradual way and if structural funds cannot exceed a flow equivalent to 4% of the GDP of the benefiting States – limit quickly reached in the case of the Baltic States – the enlargement will have, besides the additional receipts, an undeniable “Big-bang” effect on European Community support policies and implies that new priority zones of support regarding structural funds will have to be defined.

In terms of economic dynamics for Italy, the enlargement is not without positive effects because of a strong transalpine presence in a region with a potential growth that should, on the medium term, be superior of 2 points to the Community average. To some extent, the integration of the applicant countries in the EU market, a wider range of products of their traditional industries, being also a kind of platform for de-localizations, constitute as many positive factors that stimulate Italian exports (equivalent in 2001 to nearly 10% of the total Italian world sales). Besides the dynamic of demand in the CEEC, the removal of residual tariff barriers should play in favor of Italian sales.

In fact, the optimistic scenario of this study is based on the industrial complementarities between Italy and the candidate countries. Indeed, Italy sees in the enlargement a competitive source of supply for intermediate goods but also a growing export market for its traditional industries (mechanical engineering/machine tool/electrical equipments).

However, this simulation based on an economic model with sector-based complementarities, did not dissipate doubts about the negative effects of the enlargement:

A certain number of regions, part of the objective 1, of the South of Italy should see their available income being reduced because of a foreseeable reduction of structural funds.

According to some experts, economic repercussions after 2004 are limited, as Italy has already got foothold on CEEC markets for a long time.

The economic austerity, to which the applicant countries will be subjected, in particular from the point of view of their entrance in the Euro zone, could have a negative effect on the demand.

The Italian debate integrates today, in prelude to 2004, geopolitical considerations:

More than only enlarging to the East, it is a matter of reintegrating in the EU block countries that have been separated for almost half a century.

The enlargement to the East and, in the long term, the South with Turkey, strategically repositions Italy giving it a pivot role, a fortiori with the assumption of a third wave on the Balkan zone.

For more analyses see the

enlargement website of DREE.  

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