What price enlargement?

The study focuses on the budgetary aspects of the upcoming enlargement, and the author warns, in particular, about the built-in weaknesses of the financial system when considering the long-term risk factors for European integration.

The study addresses some of the issues that need to be discussed and agreed upon before the end of 2006 when the current financial framework for the EU expires. It does so by investigating the long-term budgetary costs of integrating new members and the system for financing and allocating expenditure. The study then presents tentative proposals for how the system could be reformed in the direction of long-term sustainability.

The study finds that a significant share of the enlargement costs will come in the period after 2006, which is a period not yet under active consideration. However, the costs will be manageable and within the framework that the EU member countries envisaged at the start of the enlargement process.

However, for the author the main areas of concern are the built-in weaknesses in the financial system, which make the distribution of financial burden unequal. At the core of the problem is what the author considers an outdated system for estimating and distributing annual payments from the member countries, such as the financial advantages that were granted to the UK in 1984. This means, in the context of enlargement, that any increase in costs will have a proportionally larger impact on other net payers, as well as the new Member States and the current cohesion countries.