Enlargement In The Eu example essay topic

The European Union (EU) is at present facing one of the most challenging and significant opportunities in it's history, the issue of Central and Eastern enlargement. The implications of this unique expansion are very wide ranging, effecting the political, economic and social conditions of every state member and applicant of the EU. This enlargement has caused a lot a discussion among member states of the EU due to large amount applicant countries wanting to share the assumed benefits of EU membership. Some argue that the implications, such as stabilising eastern economies and enhancing peace and security for the EU will far outweigh the costs and drawbacks of the process. However, others argue that the only real beneficiaries are the Central and Eastern European Countries (CEEC's) who gain access to EU funds and new trade markets at the expense of existing member states. Through the course of this essay, the various benefits and drawbacks of enlargement will be discussed and analysed for both the EU itself as well as for the CEEC's.

In order to fully understand and comprehend the current challenge of eastern enlargement, a brief description of the history of expansion in Europe is needed. From the earliest stages, the European Community hoped to embrace the "whole" of Europe. This evident in the following statement demonstrating that Europe was. ".. determined to lay the foundations for an ever-closer union among the peoples of Europe, resolved to ensure the economic and social progress of their countries among common action to eliminate the barriers which divide Europe... (Preamble to the Treaty of Rome; El-Agraa, 1998, p 528). It can be seen that enlargement is a familiar process as the EU has enlarged several times since the European Economic Community was set up with six members in 1957.

Enlargements in 1973, 1981, 1986 and 1995 have brought the EU to its current membership of fifteen. Whereas the past enlargements have been relatively smooth in transition, the present round of expansion poses a unique and unprecedented challenge for the union in terms of scope and diversity. This is due to the fact that never before has the EU invited such a large group of countries that have had such a different social and economic system to the western countries. It was in 1993 that the Copenhagen European Council made the historic promise that "the countries in Central and Eastern Europe that so desire shall become members of the Union. Accession will take place as soon as a country is able to assume the obligations of membership by satisfying the economic and political conditions". (Nicoll et al, 2001, p 511).

However, these economic and political conditions are challenging for all the applicant countries, particularly difficult because these countries only recently emerged into democracy and a market economy. Therefore, the prospect of EU membership continues to offer the best incentive to the Central and Eastern Europeans to preserve with the political and economic transformation (Avery et al, 1998, p 177). The implication of enlargement into CEEC's have many benefits and drawbacks for the European Union. As was noted earlier, the benefits of enlarging are economic, political and social. Firstly, enlargement would present significant economic opportunities and benefits in the form of a much larger market to trade in. By adding the ten CEEC's who have applied for EU membership- Poland, Hungary, Czech Republic, Bulgaria, Latvia, Estonia, Slovenia, Romania, Slovak R and Lithuania- the market will create the biggest economic and trading area in the world.

Thus with the addition of more than 100 million consumers to the EU's existing market of 370 million people, the internal market will give a boost to economic growth as well as creating competition and jobs in both old and new member states (web). Another benefit for the EU is that on the economic front, as an enlarged and more competitive EU could challenge the USA for a larger share of the worlds market (Avery, 1998, p 148). In addition to the size of the trading arena, another important benefit is that traders and investors will only have to deal with a common external tariff and a common set of rules and procedures. The problem in the past was that investors were put off due to the fact that Europe was divided into two sections; one being the EU and the other being CEEC's.

If enlarged, the investors would benefit from lower factor costs and favourable exchange rates while still being based in the EU. The labour supply from the CEEC's countries are very good as they can provide very skilled and cheap labour (Avery et al, 1998, p 141). The hourly wages in these eastern countries are considerably lower than in the western countries, around a tenth of the cost in comparison to western labour (Jones, 1996, p 298). This can only add to the attraction of greater western foreign direct investment (FDI) which will not only benefit the EU but also boost the CEEC's economies and prosperity. In addition to the economic benefits of enlargement to the EU itself, the expansion process can also strengthen the EU's role in international affairs (Avery et al, 1998, p 144). This is both a social and political advantage as the enlargement process will consolidate the countries of Central and Eastern Europe into Western European structures thus enhancing security and stability (Avery et al, 1998, p 176).

By unifying all these countries together, there will be a better chance of peace and less need for expenditure on defence equipment (Jones, 1996, p 292). Another social factor that the EU would benefit from is the greater bargaining power the new enlarged EU will posses. This would be an advantage at international summits or WTO meetings where the EU would be in a stronger position to voice the EU's concerns over trade and security policies and over other fields of global governance like global pollution (web). Moreover, CEEC's environmental problems can pose a threat to Western Europe, as the Chernobyl nuclear disaster in 1986 showed, therefore the EU will have more powers to effect the actions by surrounding countries (Jones, 1996, p 292).

Therefore, it can be seen that the inclusion of applicant countries in the Union with their acceptance of its rules and policies will in fact, improve EU's capacity to safeguard Europe's living environment. Enlargement will increase effective co-operation in the fields of justice and home affairs, dealing with solutions to combat crime and drugs, as well as to manage migratory pressures (Avery et al, 1998, p 176). Without Central and Eastern Countries membership, the EU would be less capable to solve these problems. Though the economic, political and social facts explain the benefits of the enlargement project, they do not tell the whole story. There are also a variety of adverse effects for the European Union that would be a consequence of enlargement. These are generally related to the huge cost of enlargement, particularly its impact on policies such as agriculture and the structural funds.

Another disadvantage of enlargement is the institutional reforms that are needed for sorted out. Firstly, the main flaw of enlargement in relation to the European Union itself would be the huge risk and financial drain the whole process would amount to. The major problem here is the size and distribution of future EU expenditure. The Eastern applicants are all very much poorer- especially after the large falls in Gross Domestic Product (GDP) in the 1990's- than the EU average. Therefore, if the CEEC's were to join they would be absorbing around 30% of the structural funds thus causing a reorganisation of the available funds (El-Agraa, 1998, p 536). Furthermore, through enlargement the EU's population and total territory will rise by a third.

Yet at the same time the EU's average per capita income will fall by almost a fifth as the substantial disparities among applicant countries are made evident through GDP and unemployment rates (web). The European Commission stated in "Agenda 2000" that "The next enlargement... will inevitably provoke a deterioration in the budgetary positions of all the current member states. This cannot come as a surprise and should not give rise to claims for compensation" (El-Agraa, 1998, p 536). In addition to the huge drain on the EU's resources, it can be seen that there would be internal tensions when CEEC's gain membership of the EU as regional and development funds are shifted from the southern flanks of the EU to the Eastern flanks. Some 14 billion ESC had been reserved for the structural funds in Greece, Ireland, Portugal and Spain for 1993. One can only imagine the huge amounts of money that would have to reserved in order to bring the former Communist countries to the same level of economic development as the EU (Ham, 1993,201).

There are additional problems associated to the EU when enlarging into CEEC's. The topic of agriculture is very problematic, as many of the newcomers, notably Poland, are heavily dependent upon the sector. The Farmers in those countries are understandably keen to get their hands on the EU's famously generous subsidies given out under the Common Agriculture Policy (CAP). However, a recent study by Baldwin (1994) has shown that entry of even the most suitable CEEC's would be highly problematic (Jones, 1996, p 285). Baldwin goes on to state that the accession of the "Visegrad 4" (V 4) would bankrupt the CAP. Therefore, before any enlargement takes place, the EU will have reform the CAP in order to reduce costs.

Although attention in the enlargement debate is mainly focused upon these financially-related policy issues, a serious problem to overcome before enlargement occurs is almost certainly that of the reform of the European Union's political institutions. This is due to the increase in members which will have significant consequences for policy-making and decision-making procedures within the EU (Ham, 1993, p 202). One closely related problem would be the number of votes the new member states get in the Council. Is it fair to give Hungary the same amounts of votes as the Netherlands or Luxembourg? The enlargement process will certainly bring into the Union another large batch of small states and increased diversity of views is to be expected. This diversity in views might actually slow down further or even paralyze the decision-making process with consequent negative implications for the Union, especially in international negotiations (Avery et al, 1998, p 146).

Another institutional problem that EU must deal with is the EU ability to accommodate all these new members. By way of illustration, the Parliamentary building is presently nearly full and the linguistic and logistical staff are very hard to find. The existing 15 member states have 11 official languages and an army of interpreters and translators that are already kept at full stretch by the requirement of institutions such as the European Parliament. The cost of fixing these problems would be very high, as the skills are not really common - are not that many translators that can translate Estonian into Portuguese and then back into english. The last problems that would face the EU when considering the disadvantages of enlargement is the threat of mass uncontrollable migration and unfair competition for some particularly jobs.

As has been noted earlier on in essay, Central and Eastern European Countries generally have much cheaper forms of labour. When the EU opens up the market, these workers will be free to travel to any of the member states and settle down there. The problem is that it is very likely for CEEC's citizens to move to western countries as there will better wages and conditions of life. However, this creates a surplus of labour in that country and therefore could have an effect on the employment levels.

Having discussed the various advantages and disadvantages of enlargement for the EU and it's member states, a new perspective will now be used to look at why so many CEEC's seek entry into the EU. A summary of the particular advantages and disadvantages of membership of the EU will be examined. It is evident that most CEEC's are desperate to join the EU, as demonstrated when in 1993 the Hungarian Prime Minister, Josef Ant all stated "To us the EU is the most important target. We would like to join as soon as possible" (Ham, 1993, p 191).

The main advantage to CEEC's when joining the EU is the guaranteed access to EU markets (Jones, 1996, p 275). The removal of the trade barriers would boost trade between the EU countries, at the expense of trade with the outside world. In addition, enlargement will lead to a significant reduction in the applicants' external tariffs, which should increase the potential for FDI (Every, 1998, p 142). Therefore, it can be seen that EU entry is likely to boost inward investment, as previously seen in the increase of FDI in Spain and Portugal after their entry in 1986 (Jones, 1996, p 276) The CEEC's have done remarkably well in recent year with high rates in their economic growth.

This demonstrates that the west do have an interest in CEEC's, especially due to their skilled workforce and cheap labour. In addition to growth in the economy, the standard of living for citizens will also increase as a recent study by the Commission estimates that enlargement could increase the growth of GDP of the acceding countries by between 1.3 and 2.1 percentage points annually (web). Another benefit for CEEC's to join the EU is that they will be involved in EU's decision-making processes. This participation enables the applicant members to express their views and opinions and also to have a say in vital decisions that will effect their own nations economy (Jones, 1996, p 275). The CEEC's maintain that membership of the Union is required in order to stabilise their weak markets and their democracies. As a result, without membership into the EU, Europe will eventually be divided, thus separating the rich and poor nations.

Nevertheless, one of the main reasons for wanting to join the EU is to receive the economic aid and support of CAP and Structural Fund. As mentioned before, most of the CEEC's countries are a lot poorer than the EU members and a high proportion of their workforce is employed in agriculture. This makes them eligible for substantial aids and grants from CAP. With this aid the farmers could try new techniques and buy new equipment.

Moreover, CAP will try and help supply the latest equipment and the CEEC's will not have to do any research and development. The other benefits for CEEC's when joining the EU would be to gain environmental aid to modernise everything from industrial waste disposals to proper, clean water supplies. The long-term benefit would be less pollution, as at present the central countries generate a huge amount due to the loose regulations and the old technology. The final benefit would be socially as the enlarged Union would have to address the acute social problems of acceding countries such as unemployment and public health (Every, 1998, p 155). Both these benefits may not seem that important however, in the long run they are essential to ensure CEEC's are on the road to recover. It was noted earlier on in the essay that all the CEEC's did apply for membership of the European Union.

Therefore, it brings up the point of whether or not there is fact any significant disadvantages for the CEEC's when joining the EU. There are in fact a couple of small disadvantages of joining, but to be fair the benefits of the EU far outweigh them. Firstly, the CEEC's might have unrealistic expectations regarding the extent of Western assistance in the process of enlargement (Jones, 1996, p 292). The EU has no intention to provide an aid plan to Eastern Europe on the scale of the Marshall Plan. In addition, the willingness and capacity of Western countries to assist the reform process should not be overestimated. Secondly, although opinion polls show a majority of Polish citizens backing membership, plans to delay full EU subsidies for farmers for a decade have provoked a backlash over "second class" membership.

The European Commission's proposals to phase in direct subsidies to farmers over ten years, beginning with 25% of the full amount, have infuriated the farmers of these applicant countries, especially Poland. It is due to this point that might cause problems after the country has been accepted into the Union. The final disadvantage is the obvious loss of power, which is given the EU. These applicant countries now must try and emulate the existing members of the EU.

In conclusion, it is clear that there are many advantages and disadvantages when considering enlargement in the EU itself and for the CEEC's respectively. It is clear that Enlargement will bring benefits of enhanced security, stability and prosperity not only to the Union but to the wider international community, including the EU's major trading partners. However, it is also become apparent that one sides gain is often the other side's loss-certainly more gain in the case the CEEC's. Nevertheless, enlargement is still a huge challenge, with many problems but certainly many more opportunities. Words 2568

Bibliography

El-Agraa, A.M. (1998), The European Union-History, Institutions, Economies and Politics, London: Prentice Hall.
Avery, G., Cameron, F. (1999), The Enlargement of the European Union, Sheffield: Sheffield Academic Press.
Baldwin, R.E. (1994), Towards an Integrated Europe, London: Centre for Economic Policy Research.
Dinan, D. (1999), Ever Closer Union-An Introduction to European Integration, London: MacMillan Press Ltd.
Ham, P.V. (1993), The EC Eastern Europe and European Unity-Discord, Collaboration and Integration Since 1947, London: Pinter Publishers.
Hit iris, T. (1998), European Union Economics, London: Prentice Hall.
Jones, R.A. (1996), The Politics and Economics of the European Union-An Introductory text, Cheltenham: Edward Elgar Publishing Limited.
Nicoll, R., Salmon, T.C. (2001), Understanding The European Union, London: Pearson Education Limited.
Orlowski, L.T. (2001), Transition and Growth in Post-Communist Countries-The Ten year Experience, Cheltenham: Edward Elgar Publishing Limited.