Effects of EU Expansion
Effects of EU Expansion
The possibility of reuniting Europe on new values founded in democracy, rule of law, respect for minorities as well as competition is a particularly tempting prospect, which has inspired the EU for over a half a century to seek greater integration and new membership. But the consequences of continuing expansion of Europe have raised fears brought on by the massive economic disparities between the current member states and the accession countries, coupled with the sheer scale of accession. Is further expansion still a source of strength or is a liability?
This essay attempts to establish the effects of the growing size of the Union as well as the importance of the Copenhagen Criteria in ensuring the positive effects of integration are ensured. Background The European Union was formed in the wake of the Second World War to meet the desire of member countries for a lasting peace, reconstruction of the European countries which had taken a battering from the effects of the war as well as ensuring social, political and economic stability and order. One way of attaining this was through integration.
Six European countries, among then Germany, Luxembourg, France, Belgium as well the Holland and Italy hit out on the road to integration with the signing in 1951 of the ECSC treaty in Rome, setting up the European steel and coal community. This was bolstered in 1957 with the setting up of the European Economic Community as well as the polling together of the several areas of the economy. In 1967, the three, ECSC, ECC as well as EUROTAM were merged into one and the joint European commission was formed together with a parliament.
The Union received the United Kingdom, Denmark and Ireland before the first direct general elections to elect the members of the European parliament. A time table for the single market was set out in the 1980’s which was established in the following decade with the creation of the largest trading area in the world, where factors of production were allowed to move freely. The Maastricht treaty in 1993 not only established newer areas that Union wide cooperation including defense, home affairs among others but it also set up a time table for the introduction of a single currency and the formation of an economic and monetary union.
In 1995, the Union welcomed Finland, Austria as Sweden and on the first of January 2001, the euro was adopted by all European Union countries except the United Kingdom, Sweden and Denmark. The road for a larger European Union was paved in 2003 with signing of the treaty of NICE which would determine the size and working of the EU institutions. In 2004, 10 more members mostly from central and Eastern Europe joined the EU with more countries scheduled to join up. Copenhagen Criteria
Following the collapse of the Soviet Union, the European Union was flooded by requests for membership from the many a country that were formally under the Soviet Union. Given, this reality and the fact that the community had not before received more than three member countries at a go, a necessity arose to define a criteria for accession to the European Union. In 1993, a European council meeting held at Copenhagen reached a land mark decision paving the way for the fifth enlargement of the Union.
The meeting decided that Eastern and Central European countries could become members of the European Union if and as soon as candidate countries are able to undertake political and economic reforms to meet the set standards and a criteria was laid down for accession to the EU. The set conditions were as follows; The political criterion which required stable institutions that would guarantee the rule of law prevails, democracy, human rights as w ell as the respect and protection of minorities.
Democracy would ensure the participation of citizens in the decision making at every level of government, free and fair elections by secret ballot, rights of access to the free press, freedom to form Unions and political parties among others. To ensure that government power and authority could only exercised within the set criteria which are equally determined by a set procedure, rule of law must prevail. In addition, individual human rights as laid down by the United Nations must be protected as well as the respect of ethnic minorities and the right to keep their culture including language, practices among others without discrimination.
The economic criterion provided for the existence of a functional market economy, able to deal with the stiff competition within the Union. This required that both pricing and trade in general is freed from government controls as well as forces of monopoly, within a workable legal framework guaranteeing property rights. Privatization, a vigorous financial sector as well as macroeconomic stability were important in transforming former command economies into viable market economies.
Prospective countries were also expected to respect and adhere to the political, social and economic objectives of the European Union, the laws of the Union were not just to be adopted but had to be keenly enforced as well. The Madrid council reinforced the criteria, further providing that candidate states must develop appropriate conditions for their integration by expanding their administrative infrastructure which was meant to guarantee mutual trust between member states by ensuring that the adopted laws were accordingly enforced. European Union Expansion
In 2004 alone, the European Union grew by 24 four new states mostly from central and Eastern Europe and negotiations are well underway for more countries to join up. Although expansion is hardly a new concept, but the scale and the consequences that would stem form from the economic disparities between the existing member countries and the candidate states have raised concern. For instance Turkey one of the candidate states ranks bottom in the human development index at 0. 724. The balance of payments stands at -4. 9 compared to the highest in the Union which is over 13.
Turkey’s GDP per capita stands at $5890 compared to the highest in Europe, Luxembourg with $ 53780, Inflation has hit over 58%, and Unemployment is at 8. 3%. These disparities characterize all the applicant countries among the Bulgaria and Romania. With further expansion, the European Union would consist of small countries with gaping disparities in wealth. In the year 2000, the GDP per capita for 15 member countries was $ 22603, compared to the 25 now members which was at $ 19661. The new members’ GDP per capita was only 48. 2% of the combined membership.
In addition, an upwards of 105 million residents of the applicant nations live in places whose GDP per capita is over 75% less than the combined membership as against over 96 million residents of the 15 European union Countries who live in regions with GDP per capita of over 65% above the combined mean of all the 25 members which makes them ineligible for Union funding. Expansion of the Union rose the regions whose GDP per capita was 75% less than the combined mean to over 85 regions with over 30% of the total European Union Population and a GDP per capita averaging at just 53% of the combined mean.
Given that the neediest countries became entitled to lion’s share of social funds at the expense of similarly poor regions within the initial 15 members of the European Union in countries such as Spain and Greece. The European Union’s budget for regional assistance soared hugely to better accommodate the new members. Free movement of labor was always anticipated not least because free movement of factors of production is one of the implications of a free market.
The expansion of Union has resulted in migration of workers from new, relatively poor Union members to those that are richer. Poland with unemployment of 16% has witnessed massive outflows of workers to the Netherlands where unemployment is just over 3% which has raised social as well as political tension. The East to West migration of workers will only grow with growing expansion of the union. In the United Kingdom alone, over a million Eastern European migrants have arrived mainly to seek employment in low skill jobs.
Thus, the unemployment in new member states, which is in fact higher than the mean in the Union, has and will result into movements of labor in search of greener pastures abroad and since there is hardly evidence that unemployment would come down following the accession to the Union, the high rates of unemployment would impose massive costs on new members, these costs will both be social and economic resulting in bulging trade and fiscal deficits among other such effects. The costs of expansion are well known and the concerns raised are more to do with politics than anything else.
The common agricultural policy, which has always been controversial, has continuously raised concerns since this policy would apply to the new kids on the block, which in the main, are rural economies. In 2000, over 21 % of the labor force in candidate countries was employed in agriculture as opposed to a mere 4. 1% of those in the 15 member countries. The policy includes measures like subsidies and guarantees top farmers for a minimum income thus growing membership of the Union would increase the budgetary contributions of members to the union. Regional aid is another particular concern for old members of the Union.
Besides the GDP per capita, new members hardly fair better in other measures, for instance the human dev elopement index, this index builds in indicators for literacy, education, GDP and life expectancy among other factors. This disparities would result in two fold effect to the old European Union member countries namely; an increased contribution to the union’s kitty as well as a reduction in aid that they were initially entitled to. The increase in funding necessary to sustain transfers under CAP, if there would not be co financing by individual countries has occasioned a massive redistribution of wealth, with old members crying foul.
Even though arrangements have been made for the phasing out of the European Union subsidies to agricultural sectors in accession countries, it remains necessary that unless changes are undertaken in the provisions of the common agricultural policy, would spawn difficulties. For one, direct transfers to farmers will be problematic with the world Trade Organization; secondly the rise in food prices in individual accession countries due to CAP would only exacerbate the already gaping income disparities in those countries.
Institutional difficulties and increased bureaucracies which already plague the manner and process of decision making in the European Union could just grow worse with the further expansion of the Union. With the current arrangements as regards voting and other such decision making procedures make any possible accession by a new member raise the possibility of political as well as regional coalitions sabotaging, filly bustering or downright blocking of decisions.
As it stands at the moment, coalitions between relatively poor, newer members of East as well as central Europe have been at logger horns with their well heeled counterparts from the West. This was brought to the surface when the French, Dutch and Irish voters voted against the adoption of the treaty establishing the European constitution even after 18 countries had already ratified the document. These institutional difficulties are here to stay.
In addition, there are fears that the new European Union countries would lack the relevant systems as well as standards to meet the cut by Europe. There are Union wide regulations on production in agriculture, environmental protection, and food and hygiene standards among others. The challenge to the candidate countries are mostly financial, in that raising standards would require money, which can only be availed through high taxation and or borrowing. The legacy left by the fall of the Soviet Union will has cast a particularly long shadow on the former member countries too.
They are faced with challenges not only adapting to the free market but catching up with the growth and development of established members as well. In addition, lawlessness that followed the collapse of the Soviet Union which has been known to have spawned organized crime syndicates in Russia as well as elsewhere in Eastern Europe presents a particular security problem in a borderless Union. Transnational organized crime can gain entry into the Union through porous borders on Eastern European members and making it across Europe.
The disparities between the member countries would potentially transform the pattern of specialization with labor intensive industries continually fleeing to poorer member countries at the expense of blue collar workers in richer member countries. However, this is hardly a given outcome. Trade liberalization already opened up markets to accession countries and the European Union is already the biggest trading partner of many of potential members of the Union.
As such opening up of the markets would result in a negligible rise in imports while the new markets would unlikely have an impact on pricing and production decisions. In fact, so far only the polish metal industries, as well as the car industry in Hungary have ever benefited from substantial economies of scale enough to have an effect on the Union. Adoption of the free market principles is one of the Copenhagen criteria and as such would help reinforce the benefits of integration. Other positive aspects of the expansion of Europe include increased economic growth.
In the former European Union members, increased membership is estimated to create over 300,000 new jobs with increases trade as well as investment both abroad and into the countries. New member States will have by way of reforms to systems and structures as well as the transformation of their economies into market economies which have associated efficiency and productivity benefits, in addition to an access to a wider market availed by the union. Poland and hungry are geared for a trade boom arising from increased efficiency but also from its adoption in common with other CEEC of the external tariff system of the European Union.
To the newly democratic countries rising from the shadows of the former Soviet Union, decades long conflicts, genocides, the membership to the European Union would have a massive impact on political and economic stability. Built into the Copenhagen criteria is the requirement for stable institutions that would help foster and guarantee democracy and rule of law among others. As candidate countries reform their institutions to facilitate the accession process, attainment of democracy would ultimately result in stability.
Stability in turn is crucial to ensuring investment and economic growth. Ethnic cleansing like what took like what happened in Serbia, Bosnia and other human rights violations would be guarded against if the Copenhagen criteria adhered to in the accession procedure to the Union With increasing European Union expansion, comes a global presence and muscle in influencing international affairs and policy. The European Union has a population of over 500 million people, rivaled only by china and India and way over the populations of America and Russia.
This makes the European Union an important player in the world as opposed to individual members. Greater business confidence for EU companies in dealing with their counterparts in Eastern, and central Europe. Not least because adherence to the Copenhagen Criteria ensures that not only the right laws are in place but they are effectively enforced as well as opposed to the lawlessness in some parts of the Eastern Europe. Lawlessness has the effect of driving away businesses as well as investments.
The Madrid council meeting which reinforced the Copenhagen Criteria requires that candidate countries make certain that they enact legislations to render their own laws compatible or similar to the laws of the European Union. New members would also have access to funds as well as aid from the structural fund of the European Union. The structural fund is meant to take resources from surplus regions to the poorest regions of the Union. The funds are made for development of infrastructure which is a pre requisite for economic development as well as development.
Thusly, new members develop as a result of increased aid while old members benefit from increased new trade from investments in the new members. The suggestion thus far is that there is a flawless application of the Copenhagen criteria in accession talks and smooth membership is being ensured. Although the criteria are clear, their application tends to vary on a case by case basis which great difficulties arising from the rule of law and the state of legal systems in different countries. The varied report by the EU commission, are evaluated and merits established before membership can be determined.
Difficulties in applying the Copenhagen Criteria would further threaten the positive results attained by accession to the Union and a taste of this is already evident with the case of Cyprus. The Greek Cypriot republic is well on course to EU membership and when this happens its relations with the Turkish part would be strained irreparably. The tension on the Island may result into war not only between the north and south but possibly between Greece and Turkey both of whom may in fact be twin members of the Union.
Thus, the illusion of stability will remain as such for most countries into the EU for it. The possible membership of Turkey deserves a separate mention in discussing the effects of further expanding the European Union. Turkey differs from many if not all the EU member countries as regards it culture, geographical size and location as well as its very low economic credentials. Accession of Turkey into the EU will not only divide it, but also transform the social and cultural profile of the Union completely.
In addition, the enshrinement of the rights and freedoms of ethnic minorities in the Copenhagen criteria hardly guaranteed that the minorities any security or rights in accession countries let alone in the European Union itself. The Basque separatist movement in Spain continues to wage war against the Spanish government; the Ulster as well as Corsica remains problematic with Britain, France as well as Ireland being members of the Union. This is in part because the European Union is not a political Union but a common market or regional body and as such its ability to deal with conflicts is heavily undermined.
Conclusion Apart from the geographical situation in Europe, candidate member countries are assessed on their fulfillment of the objectives set out in the Criteria. The formation of a political and economic Union is fraught with difficulties and brings with disadvantages as well benefits. In order to limit the disadvantages and enhance the positive aspects of accession, it is important that the criteria are adhered in accession talks. The growing size comes with greater challenges as well as opportunities, but what will determine the success or failure of expansion are the challenges and the ways of dealing with.
Conflict among member countries could to be a real possibility especially with Turkey and Cyprus accession of the Union. Reference: Anthony Gidden & Patrick Diamond, Global Europe, social Europe, Polity, 2006, 215. Associated Press, “EU says Turkey not ready for accession talks,” October 7, 2002. p 21. Baldwin Rigley. Et al, “EU Reforms forTomorrow’s Europe”. CEPR Discussion Paper #2623, 2005, p 46. Bianca C. Hostetler, The European Union: expand, shrink or status quo, Nova Publishers, 2006, p 62. Christian Friis & Frandsen Soren et al.
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Peter Luff, Keeping the door wide open: Turkey and EU accession: seventh report of session 2007-08, Volume 2, HC (Series) (Great Britain. Parliament. House of Commons), 2007-08 367 I-II, HC; 367. Roger Clarke & Eleanor Morgan, New developments in UK and EU competition policy, Edward Elgar Publishing, 2006, pp 234-6. Robert Geyer, Andrew Mackintosh, Radcliff Publishing, 2005, p 22-4. William A. Maloney, Jan W. van Deth, Civil society and governance in Europe: from national to international linkages, Edward Elgar Publishing, 2008, p 56.
University/College: University of California
Type of paper: Thesis/Dissertation Chapter
Date: 3 October 2016
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