| Author (Person) | Banks, Martin, Chapman, Peter |
|---|---|
| Series Title | European Voice |
| Series Details | Vol.9, No.23, 19.6.03, p12 |
| Publication Date | 19/06/2003 |
| Content Type | News |
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Date: 19/06/03 By Peter Chapman and Martin Banks MANY people working in the EU's twelve incoming member states will be dead before their countries enjoy incomes similar to the Union's current 15 countries - even if their economies are well run - according to a report out this week. The message comes from a report Europe Enlarged: Understanding the impact by the Economist Intelligence Unit which aims to predict trends for economic growth in the new countries due to join the Union next May. It said the new members would catch up with average EU incomes in 56 years under a "benign" scenario of "sound policymaking and benefits from EU membership". A "baseline" scenario based on current circumstances and policies yields a catch-up time of nearly a century. And a worst-case scenario of "poor policymaking" coupled with low growth due to accession adjustments could even leave countries worse-off by joining the Union than they would be by staying out. The data are a warning to 100 million people joining the Union next year and in 2007 (Bulgaria and Romania's target date) not to expect a rapid rise in their standard of living. "The true impact depends not on the mere fact of adding countries to the EU club, but on the interplay between policy and the potential that enlargement creates," said Daniel Franklin, editorial director of the EIU, one of European Voice's sister companies. "Indeed, it is conceivable that EU membership could leave the accession countries worse-off than they would otherwise be, throwing the very survival of an expanded EU into question," he added. "So membership alone is no cause for complacency and policy choices will be crucial." But, the report states, some countries, such as Slovenia and Estonia, can expect to buck the trend, with faster growth, thanks to their dynamic economies. The report outlines four scenarios for how enlargement will play out, from a cohesive, thriving EU to a Union in crisis. The likeliest outcome, it predicts, lies somewhere in between, in the shape of a "patchwork" Europe but a relatively successful one. A survey of 315 executives linked to the report showed top managers are warming to EU enlargement, with 59% seeing it as a business opportunity, while 22% rate it as a major opportunity. Hungary and the Czech Republic are expected to lead the economic charge when enlargement gets under way - with Prague set to claim the title of business capital of the central European region of the new EU. However, the executives voiced fears about tighter regulations which they worry could be a drain on their balance sheets. They cited environmental protection, health and safety rules as a major headache. At the same time, they said many businesses in the EU's existing 15 member states could take a hit when enlargement takes place. Worst hit will be agriculture, the auto industry, consumer goods manufacturing, and mining and metallurgy, the report added. A report from the Economist Intelligence Unit suggests that it will take at least 50 years for incomes in the EU's accession countries to reach the level of those in the current EU Member States. |
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| Subject Categories | Employment and Social Affairs, Politics and International Relations |
