World Bank reveals cost of EU accession

Date: 17/04/1997

By Mark Turner

THE scale of the challenge facing countries clamouring to join the EU is dramatically highlighted in a World Bank report which warns that Poland needs to invest a sum equivalent to around half its gross domestic product to meet Union environmental standards.

The draft report suggests the leading contender for early EU membership will need to spend 30 to 45 billion ecu to bring its industry up to date and tackle serious problems of air and water pollution.

It also warns that Poland's outdated agricultural sector poses serious difficulties, and highlights other areas where reforms are urgently needed.

As the Union gears up to bring up to ten central and eastern European countries into its ranks over the next decade, the sheer size of the task confronting Poland is bound to prompt some serious reflection in national capitals.

The World Bank, however, stresses that the sums involved should not necessarily be seen as an obstacle to Polish accession to the Union. “The figure does not reflect the benefits that Poland would gain as a result of a more modern industry - and a large part of it would also need to be spent anyway as Polish national law is already quite comprehensive in this area,” said one bank official.

Furthermore, should Poland join the Union, it would probably be given up to ten years to bring its environmental laws into line with the West.

Nevertheless, the report underlines just how much more remains to be done to close the gap between standards in central and eastern Europe and those in the EU's existing member states.

Union leaders who firmly believe that swift enlargement is vital to the future stability and prosperity of Europe have until now tended to underestimate the task facing the applicant countries.

Both French President Jacques Chirac and German Chancellor Helmut Kohl have suggested that Poland could join the EU by the year 2000, although European Commission sources acknowledge privately that it will take at least two years longer.

The Commission is currently preparing its opinions (avis) on the suitability of Poland and the other applicants for EU membership, which are due for publication in July.

Although politicians can overrule its conclusions, as they did with Greece in 1981, they are widely seen as the acid test of Union enlargement.

Both the Commission and the World Bank agree that Poland needs to overhaul completely its public administration before it can effectively enforce single market rules, and must bring some sort of order to its financial sector.

“It is very clear that Poland will need very high levels of growth for a long time,” said a World Bank official. “There are tremendous improvements needed in its institution-building, there is enormous infrastructure investment required, and the financial sector needs a lot of work.”

The bank's report also warns that if Poland were to adopt an unreformed Common Agricultural Policy today, its yearly food bill could rise by up to 4 billion ecu - although officials stress any figures are hypothetical. “The CAP is a moving target. It makes figures very difficult to lay down in stone,” said one. But he added: “The whole question of agriculture and the CAP will be one of the most difficult ones to resolve.”

The report calls for more flexibility in the Polish labour market and stresses the need for improvements in its regional policy.

But it says the country's infrastructure has a relatively healthy future, with a lot of investment on the way, and World Bank officials are keen to highlight the positive side of Polish transition. “This is a good moment for Poland. EU accession is a challenge, but also an opportunity to modernise,” said one.