The new enlargement of the European Union: the financial framework and the new challenges ahead

Abstract:

The objective of this article is to shed light on the main financial elements related to the last enlargement of the European Union (EU), which is the largest in its history. In their methodological assessment and analysis the authors identify the main financial impacts, in terms of trade flows, and also expenditures and contributions to the EU budget, while they make estimations for financing needs of main EU policies in the light of the next financial framework. Negotiations of the next financial framework for the EU are going to be difficult, especially with ten new Member States joining in 2004. The authors are of the opinion that the financial pressures and also the need to sufficiently finance EU policies constitute the main factors which will determine the functions of the EU financial system in future. Enlargement poses also a severe challenge for EU structural and cohesion policies, the implications of which should be considered in designing the actions of the new financial framework from 2007 onwards.