Eu Enlargement

EU Enlargement Background The European Union (EU) is an frugal and political union of 27 member expresss which are located originally in Europe. The EU traces its origins from the European Coal and Steel Community (ECSC) and the European Economic Community (EEC), formed by six countries in 1958. In 1967 they merged into European Community. The Maastricht Treaty established the EU under its on-line(prenominal) name in 1993. The EU has grown its size by the summation of freshly-fashioned member acress. For example, on May 1st 2004, 10 clean members joined the EU and EU-15 became EU-25. In 2007 it became EU-27 when Romania and Bulgaria joined.It seems that the exaggeration leave alone continue and umpteen an(prenominal) people begin to consider whether the EU should admit more members. Countries should adjust the accession rules if they want to join the EU. According to the Copenhagen Criteria, a member state must be a stable democracy, respect human rights and consecrat e the rules of law and the protection of minority. In terms of the economic aspect, it should have a functioning market economy. In addition, the country needs to adopt the commonplace rules, standards and policies that make up the body of EU law. Body Commission regarded enlargement as the Unions just about successful foreign constitution instrument. Following? the? enlargements? of? 2004? and? 2007,? the? EU? is? now? the? largest? integrated? economic? area? in? the? world,? accounting? for? more? than? 30%? of? world? GDP? and? more? than? 17%? of? world? trade. New members can benefit more from enlargement than active member states (Neuder, 2003) * returns of new members * Strong economic growth * Benefit from the EU budget and access? to? EU? funds? * The 10 new members can expect to suck in up to 4% per annum of their GDP from the EUs structural and cohesion funds for projects aimed at improving their economic tructures. * e. g.? net? inflow? of? structural? funds? to? help? finance? foot? projects and? environmental? projects. * Increase in GDP from 3. 7% to 5% on average in the first two years since accession. * In the yen time, the acceding states could enjoy a rate of growth some 2% higher(prenominal) than that of the exist states (Neueder, 2003). * eastern hemisphere slowly catch up with the west. * Increase in trade * Most? of? the? new? EU? countries? were? already? closely? joined? in? trade? and? investment? terms? with? their? western? European? neighbors.? connective? the? single? market? as? deepened? this??? in? 2007,? almost? 80%? of? exports? of? the? new? EU? states? went to? the? rest? of? the? EU. * Increase in Foreign Direct investing * For the new member states, FDI is a key factor in the turn of economic modernization. New members can receive funds from foreign countries and engross the money to boost economy. * Enlargementlarger market and openness to trade. * Baldwin, Francois and Portes (1997) argue that joining t he EU will make the region substantially less risky from the hitch of view of domestic and foreign investors. * 191 billion euro by 2004 However, they seem to everywhere rely on FDI. FDI accounts for too large part (e. g. Hungary 70%). erst there is something wrong with some investors and do not invest them, for illustration the financial crisis, they will suffer tremendously. * The? 2009? crisis? may? persuade? Central and East European? Countries? to? reduce? their? dependence? on? foreign? direct? investments and? base? an? economic? growth? model? on? different? grounds. * Welfare * Farmers began to receive agricultural subsidies * Structural funds directed towards poorer regions (investment in infrastructure) * Benefit of existing members Enlargementmore people more consumersobtain more than 450 million consumers from Single European Marketcompanies could fatten up their businesses and benefit from experience and location economies scale * Larger labor market fill labor shortage in existing states with low-cost and highly- ingenious workforce, for example, UK and Ireland However, these skilled workers may replace the indigenous employees increase the unemployment * High growthincrease the purchasing powerstimulate the import crave of acceding states and export of member states * Imports and exports between new and existing members have increase considerablethe EU15 share of total EU12 trade increased from 56% in 1993 to 62% in 2005 * Because of theseGDP increase * Costs of enlargement * Drawback for new member state * Difficulties in complying with EU law restrict development of business in particular Small and Medium-size Entrepreneurs * Push umpteen producers out of business due to their incompliance with EU environment policies * Tax harmonization e. g.Estonia was forced to introduce new tax against imports from outside of the EU, adopt a number of non-tariff barrierssuch protectionisms increase the food scathe and lowered Estonians standar d of living * High unemployment still exists in many new member states (8% EU-15 14% EU-10, 2005) * Some high skilled workers or people with higher degree will move from east to the west, this promontory drain damages the host countries. * Drawback for EU-15 * Volume of enlargement costs will amount to about 15% of the EU budget (Germany 2. 3bn from its federal budget) * Migration tint about too much migration from east to west social problems and pull on social/medical/educational services. (e. g. ome countries even carried out policies to make the volume of migration) * Actually the percentage of EU-12 nationals and the resident population of each EU-15 piece state were relatively stable before and after enlargement. * Too many countries will decrease the efficiency of EU. * Conclusion Enlargement of EU has been the most successful policy. Although it has some negative effects on both existing and new member states, its positive influences far outweigh its negative aspects. change EFTA (European Free Trade Association) afraid that the Single Market Program would increase competitioncreate EEA (European Economic Area)1995, Austria, Sweden, Finland opted for European Accession, joined (growth+, unemployment-, largeness- Finland(1991-2000, 2006,%) growth 2. 0-5. 0 unemployment 12. 5-7. 7 inflation 2. 1-1. 3