E ASTERN E NLARGEMENT ?
6. The ideal extension of the EU
Although this question will, in the first place, be decided from a political standpoint, it is helpful to give it economic sense, too. The answer is usually sought on the level of the entry candidate countries and the Copenhagen criteria, on the basis of which the "readiness for accession"
of the candidates is evaluated. Although this dimension is important, in my opinion the answer to the question regarding the ideal geographical extension of the EU depends primarily on the tasks and organisation of the EU. The ideal expansion of a free trade zone is the world.
Geographical restrictions for the EU must therefore derive from additional steps towards deepening and tasks – this against the background of the principle that the acquis communautaire is to be accepted in all member countries (which is not always ideal for latecomers). The ideal size of the EU shrinks the more responsibility it takes on. The other way round: if restricting the re-distribution function and dismantling the CAP are successful, the ideal dimensions would be greatly extended. Progress towards fiscal federalism as well as a more efficient decision-making and organisational structure would increase the expansion potential of the EU even more.
In figure 2 the horizontal axis measures the extent (depth) of integration e.g. with or without monetary union. Deepening of integration requires compromises, i.e. expenses. The MC15 curve represents the marginal costs for the EU-15; the MC20 curve the costs for a community extended to 20 members. The gain in prosperity as a result of monetary union with an additional 5 Eastern European countries is expected to be insignificant. This increases greatly in the unchanged MB15 curve. The ideal depth of integration consequently decreases from D*15 to D*20. If the existing integration, as taken in figure 2, is at D15, there will still be the need for integration. However, if D15 falls to the right of D20, the danger of internal conflict will arise.
Figure 2:
7. Conclusion
Eastern Enlargement requires a reconsidering of integration goals and a restricting to the core tasks set down in economic and monetary union with the simultaneous revision of the CAP and structural assistance, a settling of tasks and a basic reform of the decision-making and organisational structure of the EU institutions. The more successful the EU is in reforming itself in this direction, the more success we can expect from Eastern Enlargement. The "readiness for accession" of the candidate countries is the other side of the coin, even if the EU also has to provide the most important contribution itself. Efficient expansion negotiations require precisely formulated entry criteria – the Copenhagen criteria do not go far enough here. The test, whether they will be fulfilled by the candidate countries or not, should proceed via as transparent a process as possible.
Besides the accession of Russia, the Ukraine and Turkey, the membership of no single European country would present the Community with a task that could not be overcome. The problem lies in
the large number of structurally weak accession candidates that are not politically established and have little purchasing power. How efficient would a Community containing not only central European countries, but also the small Baltic states, the medium-sized south-eastern European countries, the numerous successor countries of Yugoslavia, Albania and two Mediterranean island countries be? In addition, something that nobody wants to think too much about: what about Russia, the Ukraine and Turkey?
Is the theory that the nature, the style and the effectiveness of the Community would not suffer under a more than marginal Eastern Enlargement really credible? Would the integration process really not be impaired by Enlargement? Difficulties cannot be overcome with
"variable speeds" without having a negative effect on the way the Community holds together.
The starting points for a strategy of Eastern Enlargement suggested in this paper are the following (the larger the enlargement is, the more they should be observed):
• Eastern Enlargement can be justified politically, but it brings the Community no significant economic gain;
• Far-reaching reforms in the Community are vital for an efficient extended Community;
• However, the enlargement will make a further deepening of the Community more difficult and limit the equal participation of all member countries in deepening steps already carried out to an increasingly smaller circle. The development of the Community to a federal Europe would be slowed down by a "large" Eastern Enlargement, if not made impossible;
• The costs and risks are also considerable. In order to reduce these and to not provoke unfundable redistribution claims at the same time, the EU should confine entry to countries whose GDP per capita at purchasing power parity does not deviate from the EU average by more than 30%. This, above all, because political and structural indicators correlate positively with GDP.
The best way to help the entry candidates would be with a set of "club membership rules" that are as clear as possible and which would eliminate any suspicion of discrimination. The positioning in the queue to join would be given a clear direction and could follow a self-chosen timetable. This would give the decision-makers in the entry candidate
countries greater support and increased international credibility in putting the reforms into practice. According to me, this would be an acceptable expansion strategy for the Balkan countries as well as for Turkey, even with accession conditions ranging from the demanding to the hard.
8. References
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European Commission, "Agenda 2000. For a stronger and Wider Union", Bulletin of the European Union, Supplement 5/97, 1997.
European Commission, "Reform of the Structural Funds 2000-2006 – Comparative Analysis", DG XVI, 1999.
European Economy, "Stable Money – Sound Finances", No. 53, 1993.
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Giovannini, A., "Discussion" of the chapter written by Sala-I-Martin, X.
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