Disadvantages of EU membership for Eastern European countries

1. Structural change as the economy adjusts to new trade patterns. E.g. many industries will not be able to compete with lower costs in the West

2. With free movement of labour and capital, the most skilled and mobile workers may go from East to West to take advantage of higher benefits and wages. This could weaken the economy

3. Agriculture may need to be reformed because the EU will not want to give large subsidies to inefficient farmers in the East. This could cause problems in rural areas.

4. Difficulty of extending single currency as economies are not close enough

5. Loss of independence in many areas

6. The Legal and economic framework of the former command economies lag behind many EU countries however this is not an insurmountable problem.

 

Benefits and Costs for the EU of expansion

1. Increased Trade, This will be a small % of current GDP, but there is potential for growth and new markets in the East

2. Under current rules Eastern European would be entitled to net subsidies because they are poorer and have an inefficient farming sector. This would place costs on existing members. Alternatively they can adjust the rules

3. Increased levels of bureaucracy and more decisions would have to be made by QMV

At the recent Nice summit in 2001. lengthy negotiations took place to work out the details of expansion. The main issues discussed included

1. Changes to the voting system of QMV
2. The amount of subsidies and contributions to the East
3. Reform of the CAP

 

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