Where Is Europe Headed?

1. Is EU expansion necessary?

Yes, because it will overcome the institutional division of Europe that has continued for over a decade after the end of the Cold War. But more than anything, expansion will increase political and economic stability in Europe. The new member countries will be drawn into the complex negotiating process of the EU, whereby conflicting interests between states are worked out in detail through diverse legal and procedural guidelines, through alliances with other states, and through intensive multilateral cooperation on many different administrative levels. Conflicts aren't allowed to escalate into hostilities, because too many other common interests are at stake. The nature of the EU system is measured and temperate, and that's been having an effect on the new member states since the beginning of the expansion process. And it also hinders the likelihood that any of these states could fall back into an authoritarian system.

2. What economic advantages are to be gained from expansion?

The economic interdependence and the catching-up process that Eastern Europe is undergoing should have the effect of additional economic growth for the new and old EU states. Germany is profiting from trade in Eastern Europe. In 2001, exports to the region accounted for over 11 percent of German exports -- that's an increase of almost 17 percent from 2000. Exports to Eastern Europe now rival German exports to the United States. In the same year, Germany's trade balance with Eastern Europe amounted to almost €1 billion. According to the European Commission, eastward expansion will mean an additional 0.5 to 0.7 percent economic growth per year for the current 15 EU members. The countries that will profit the most are Germany and Austria: Here, the Commission reckons with a yearly growth increase of up to 1 percent.

3. What about the risks?

If the various governments aren't able to get the draft European constitution approved, then after expansion, the EU's decision making process could be paralyzed. In that case, the European integration process could increasingly be superseded by different forms of bilateral cooperation. And after all the past history of tension among some states, that entails big risks. Another risk comes from the populist parties and movements in Europe, who are using the eastward expansion to spread fear among citizens, and then mobilizing this fear for their own purposes.

4. How is expansion being paid for, and is it affordable?

Within the scope of the EU's budget for the years 2004-2006, expenses of €40.85 billion have been earmarked for the new member states. Germany's share of the EU budget for the years 2000-2006 averages at about 23 percent, so Germany has to bring about €9.4 billion to the table to help finance expansion. This sum is affordable, especially if you view it in terms of the expected economic growth that will result from expansion. An expected growth of 1 percent of Germany's gross domestic product is equivalent to around €19.82 billion. However, the financing for expansion beyond 2006 has yet to be decided. If one were to simply extrapolate and transfer the EU's current spending policies to the new member states, there could be an enormous increase in costs beyond 2006. The direct payment of subsidies to farmers in the new member states that was agreed on during accession talks is especially problematic. The new and old states need to come to an agreement on a future financing of the EU that both reflects the political priorities of European integration and is in accordance with the EU's principles of solidarity.

5. How will expansion affect everyday life?

In the old member states, people will hardly notice a change because the new freedom of movement will only be introduced after a transition period of two to seven years. Similarly, the border controls will only start to be lifted after a longer transition period. Even as a tourist, in years immediately following expansion, you'll still have to pay with the old national currencies in the new member states. But thanks to harmonised EU standards on quality, consumers of European goods will be guaranteed better products.

6. How will expansion affect unemployment?

Structurally weak border regions, low-skilled laborers and wage cost-intensive branches will have to reckon with increased competition from the new member states, and increased unemployment. But these effects aren't solely the result of eastward expansion. They're primarily the effects of globalization generally, and would have happened with or without expansion. On the other hand, the expected growth in trade could create, or at least maintain jobs in other branches or regions. Economists predict that the EU's trade balance with Poland, Hungary, the Czech Republic and Slovakia will have the immediate effect of securing around 65,000 jobs (44,000 in Germany) in manufacturing industries, and could indirectly secure as many as 114,000 jobs (77,000 in Germany). A 'wave of labor migration' from Eastern European countries isn't expected, not least because of the transition period where there'll be no free movement of labor. It'll be primarily highly skilled workers and specialists, as well as workers from border regions with limited immigration status who will be trying their luck on the labor markets of the western European states. And this is hardly expected to have a large impact on the German job market.

NEXT PAGE: PART II

7. What will happen to wage levels in an expanded EU?

Since labor migration from the new member states will be relatively low, and because the economic power of the new states will be rather limited, wage levels in the current EU states aren't really going to be affected by expansion. In the border regions, in sectors that are wage cost-intensive, and when it comes to low-skilled workers, there will however be more competition, and with it, more pressure to lower wage levels. In the new member states, there could be slight increases in wage levels due to increased productivity levels.

8. Will there be a massive migration movement?

The amount of migration depends on how large a gap there is in living standards between Eastern and Western Europe, as well as on the labor market status in both the country of origin and the destination country, and of course, the way potential migrants perceive their future prospects. Expansion will have a positive influence on all three of these factors, and so, to a certain extent, it will limit the potential for migration.

9. Do you think expansion will strengthen Europe's position on the world stage?

Yes, because expansion also means expanding the European domestic market by about 170 million citizens, that's about 45 percent of the current EU population. Whether Europe utilizes this potential though depends on whether the member states are able to develop common foreign, security and defense policies.

10. Is there a chance that organized crime will go up as a result of expansion?

A connection between expansion and the rate of organized crime exists only so far as expansion causes living standards to rise, because that could have a mitigating effect on organized crime. The new and old member states have already started to work closely together on areas such as security and crime-fighting. The adoption of the Schengen Treaty provisions, the strengthening of EUROPOL as well as the transfer of financial means and know-how, are all helping the new member states to be more effective in the fight against organized crime. The border controls between the old and new member states will only be relaxed when the new states are in a position to effectively control their part of the EU's new external borders.

11. How is expansion being viewed by super-powers such as China, the U.S. and Russia?

The U.S. is in favor of expansion because it's seen as an important way of bringing stability and democracy to Eastern Europe. Additionally, the new member states are helping to strengthen the transatlantic dimension of NATO. The U.S. has also repeatedly encouraged the EU to accept NATO-member Turkey into the fold. Whereas Russia has traditionally viewed NATO expansion with a degree of skepticism, it hasn't raised any objections to EU expansion. China sees the European Union as one of the most important poles in a multi-polar world. EU expansion is in China's interests because it wants to have more economic cooperation with Europe.

12. How many more members could the EU possibly take on?

For one thing, this depends on whether the current EU states are in a position to reform the EU's institutions and decision-making processes to the point where a union of 25 members or more is still functional. In order to achieve more functionality, more areas of policy need to be decided according to the principle of majority rules, and the European Commission should in the future ratify its resolutions with the double majority of states and population, as suggested in the EU constitution. In addition, whether the EU undergoes further expansion depends on the strategic and political sense of such a move. For example, extending the possibility of membership to the Balkan states is a useful tool to promote democracy, peace and stability there. A southeast expansion seems like a sensible undertaking for the further development of this region. At the same time, the EU should consider creating a "special neighbor" status, that would provide interested candidate countries with some of the benefits associated with member status. Then, countries such as Turkey or Ukraine would have a convincing alternative to full membership in the EU.