20 years after EU's Eastern Enlargement: was it an economic success?

Summary

The discussion highlights the significant economic transformation of Central and Eastern European countries following their EU accession two decades ago, with GDP levels rising from 30-45% to 70-85% of Western EU averages. Economist Susanna Savara explains that this growth was driven by institutional reforms and foreign direct investment. While the enlargement has generally benefitted both new and old member states, challenges remain, particularly in fostering innovation and addressing fears of competition and migration. The potential further enlargement, especially with Ukraine, revives similar concerns, emphasizing the need for careful policy measures to ensure equitable benefits.

Takeaways

• 😀 The EU's enlargement 20 years ago marked a significant foreign policy move, bringing in 10 new members, primarily from Eastern Europe.
• 😀 Many Eastern European countries have made substantial economic progress, reaching 70-85% of Western European GDP levels within two decades.
• 😀 The economic success of these countries is attributed to institutional reforms and significant foreign direct investment, particularly from Germany.
• 😀 Concerns arose among old EU members regarding competition and migration from new member states, echoing fears from past enlargements.
• 😀 EU cohesion policy plays a crucial role in addressing disparities and supporting those who may be adversely affected by integration.
• 😀 While the integration has benefitted both new and old members, challenges remain for CEECs to innovate and reduce dependency on foreign investment.
• 😀 Future EU enlargements, including potential membership for Ukraine and Moldova, may yield similar economic opportunities but also raise concerns among existing member states.
• 😀 Protests from farmers in Poland against Ukrainian agricultural products illustrate the ongoing fears related to competition within the EU market.
• 😀 The need for assertive industrial policies is emphasized for CEECs to enhance domestic enterprises and remain competitive globally.
• 😀 Overall, the integration process is seen as a positive sum game, but requires careful management to ensure equitable benefits across member states.

Q & A

What was the significance of the EU's enlargement 20 years ago?

The EU's enlargement was a bold foreign policy move that included 10 new member states, primarily from Central and Eastern Europe, marking a significant step in the reunification of Europe after the Cold War.

How did the economic conditions of new member states change after joining the EU?

Many new member states, such as Romania and Lithuania, experienced rapid economic growth, increasing their GDP levels from 30-45% of Western European nations to around 70-85% within two decades.

What factors contributed to the economic success of Eastern European countries after joining the EU?

Key factors included significant institutional reforms during the accession process, access to the single market, and inflows of foreign direct investment, particularly from Germany.

Did the fears of old EU member states regarding competition and migration materialize?

While there were concerns about competition from cheaper labor and migration, these fears were largely mitigated by EU policies aimed at cohesion and redistribution.

What are the ongoing challenges for Eastern European economies today?

Despite reaching substantial GDP levels, many countries still struggle to close the gap with Western Europe, particularly in fostering innovation and developing indigenous enterprises.

How can Eastern European countries enhance their competitiveness?

They need to adopt more assertive industrial policies that support innovation and reduce dependence on foreign direct investment, transitioning from a passive approach to a more strategic one.

What opportunities could arise from further EU enlargement, particularly with Ukraine and Moldova?

Further enlargement could create new market opportunities for both old and new member states, as well as strengthen economic ties and development in the region.

What concerns are being raised regarding potential new members like Ukraine?

Concerns include the impact on local agricultural markets, particularly fears from farmers in existing member states about competition from potentially cheaper Ukrainian products.

What lessons can be learned from the protests by Polish farmers against Ukrainian imports?

The protests highlight the uneven distribution of benefits and challenges within the integration process, demonstrating the need for policies that address the concerns of those who may feel threatened by competition.

What potential economic consequences could arise for Central and Eastern European countries if the EU expands further east?

Such an expansion could provide opportunities for these countries to enhance their value chains and serve as coordinators in economic networks oriented toward Eastern markets.