Inventories of the Economic relations regarding to the enlargement
Why believe in the Unification of Europe? First of all because it is a moral obligation; then because it answers a political need, it makes it possible to create a space of peace, safety, and defence of the European values; and finally because it constitutes a contribution from the economic point of view. But certain fears persist within the public opinion with regard to this last process of widening, in particular concerning the increase in the regional, territorial and social economic disparities, as the average standard of living of the ten countries joining the Union which is 40% lower than on the current standard of living average. Indeed, it’s the first time that widening is done towards as many country, in which live more than 75 million inhabitants, and who has moreover such difference in standard of living.
With widening, the difference between the weakest areas economically and the strongest areas passed from 2,6 to 4.That is not contradictory with the possibility for these countries to becoming engines of growth for Europe.
The second fear relates to the risks of delocalization of industries towards these countries. With the obviousness the risk is undeniable, but it is even stronger on world level. Indeed, the countries like China or India are much more competitive than the Central and Eastern European Countries (PECO) with regard to the cost of the labour (IBM has just delocalized its factories of the PECO towards China and India).
Moreover, recent surveys carried out within new entering confirm the fact that the people in age to work do not wish to immigrate towards the west to find a work better remunerated. In fact, the threat that would constitute these countries from the economic point of view is not real.
Quite the reverse, these countries are likely to bring to the UE some economic advantages. These countries have first of all a potential of growth definitely higher than ours. The studies of the European Commission show that until 2008, these countries can hope to profit from a growth of 4% while that of the countries of the UE -15 will undoubtedly be lower than 2%. This higher growth will incontestably attract industries. However these investments will also benefit to ours companies.
These countries showed these last years a undeniable economic dynamism and they already succeeded in redirecting their commercial flows to make to UE their privileged economic partner. Table 4 shows the increase of the exchanges between the UE15 and 10 new entering, a doubling in 10 years.
European Union must develop policies of economic cohesion. The correction of Spain, Portugal and Greece is partly due to this solidarity, which was favourable to Europe. These countries will bring to us their dynamism and we will bring them the techniques. But the extra economic should not either be forgotten, it is surely most important, a cultural exchange of a richness without precedent. It’s time to pass from widening to the deepening to reunify Europe.
The processes of adjustment which knew the new adherents countries were very expensive. Let us take the case of Poland which, since the beginning of the economic reforms, since 1989-1990, saw its standard of living to drop by 20%. Today these countries need modernization, because they were maintained within the framework of a heavy economy, planned and ineffective during a half century. It is not a question only of technological change but also of a social change, a change of life style. In Poland, the reorganization of iron and steel industry caused the setting with the unemployment of more than 150 000 workmen. Structural costs even heavier will have to be set up in the field of agriculture. It will be necessary that many farms disappear while offering possibilities work for the younger generations, whereas the rate of unemployment in Poland reaches 19 %, and even 35% in certain areas.
This painful process was perceived by the population as imposed by Brussels. But, as the UE is in economic crisis, it could not offer the same conditions as during preceding widening to the new members , in particular with regard to the annual contribution. The transfers of money towards the applicant countries will thus be limited. It is however absolutely necessary to invest in education and research, whose importance is undeniable and the rates dramatically low.
Moreover, the major part of the population of new entering (except Malta and Cyprus) was formed within the framework of the economy of State and thus is badly prepared for market economy. The unification of Europe consist in the unification of two Europe which have not only one history different but also from the different traditions of economic development. To exceed these divisions constitutes an immense challenge but the profits generated by peace will be always higher than the expenditure devoted to maintains this peace.
Rétif Jeremie