EU Eastern Enlargement: Economic Effects on New Members 2000~2012

Jovanović, Miroslav N.; Damnjanović, Jelena

doi:2014.29.2.210

Journal of Economic Integration 2014 June;29(2) :210-243.
DOI: https://doi.org/10.11130/jei.2014.29.2.210

EU Eastern Enlargement: Economic Effects on New Members 2000~2012

Miroslav N. Jovanović, Jelena Damnjanović

University of Geneva, Geneva, Switzerland
Novi Sad School of Business, Novi Sad, Serbia

Corresponding Author: Miroslav N. Jovanović ,Email: miroslav.jovanovic@unige.ch.

ABSTRACT

The European Union (EU) has a splendid record concerning enlargement. Judging by the increasing number of EU member countries, enlargement has been the most successful EU policy ever. The economic side of its eastern enlargement is, however, a hybrid bag of effects for the EU’s eastern countries because membership in the EU is not a tide that lifts all boats. This article, as a statistical primer, provides consistent data for the period 2000~2012. Majority of data is from Eurostat, where the data on eastern EU member countries are scattered around in various parts of Eurostat database. In the effort to present the data in a consolidated and straightfoward way to reveal the real economic effects on enlargement on the new EU member countries, we took the task to cherry-pick the relevant data. It shows that economic growth, expansion of trade, and increase in foreign direct investment to the east of the EU are obvious gains for the new eastern EU countries. That said, it entails costs. The size of domestic and foreign debts have been accelerated to finance their successes. Our concern is that this debt burden stands a chance of suffocating the newly acquired economic vigour especially at a time when one is anxious about the future of the eurozone and the EU.

JEL Classification

F13: Trade Policy; International Trade Organizations
F15: Economic Integration
F50: General

Keywords: Enlargement | Old and New EU Countries | Debt | Mixed Blessing

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