In the Working Paper “EU enlargement one year on: The Community and its affordability” (only available in German) the economists at Allianz Group and Dresdner Bank examine the impact of future enlargement rounds on the sustainability of the EU budget. The paper focuses on structural and agricultural policy, which alone gobble up almost 80 % of the EU budget.
EU enlargement: The growing Union and the question of funding
The next enlargement round is as good as sewn up: in all likelihood Bulgaria and Romania will join the EU in 2007. The level of prosperity in both these countries is well below that prevailing in the countries which joined the EU in 2004. With GDP per capita of around EUR 2,700, these countries are practically on a par with Brazil, Tunisia and Jamaica. Other potential candidates also lag well behind current EU member states in terms of prosperity. In addition, countries such as Romania and Turkey have a marked agricultural bias. This would pose major challenges for the EU. Without a reform of its promotional policies, the EU would soon hit the financial buffers. The economists see the greatest need for action in the farming budget which contributes little to overall growth and tends to delay rather than accelerate the urgently needed restructuring of the agricultural sector in many old and new member states.
only available in German
Gregor Eder
Tel.: +49.69.2 63 – 33 58
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