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| What Will Change After the Big Bang? |
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Posted Sunday, Oct.13, 2002; 16.04 BST
The effects of enlargement may not be as dramatic, or as immediate, as many people expect. But assuming the process isn't scuppered by this week's Irish vote, consumers and businesspeople in new member states will feel the winds of change swirling around them — though it could be a decade beyond 2004 before the full impact hits home. Here's what membership in an enlarged European Union could mean for people in new member states:
BUSINESS
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The biggest winners are likely to be multi-national firms, since the removal of remaining trade barriers and tariffs will ease distribution and make their goods more affordable
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Strong local companies should get a boost from access to the E.U. market, but uncompetitive and undercapitalized businesses may go bust
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GDP for the E.U. as a whole will probably rise modestly, by about 4.6%, while the average per capita GDP in the E.U. could fall by as much as 13%
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GDP for the E.U. as a whole will probably rise modestly, by about 4.6%, while the average per capita GDP in the E.U. could fall by as much as 13%
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Accession will further increase the appeal of candidate countries as sources of inexpensive labor
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Subsidies from Brussels should accelerate improvements in the transport, telecommunications and environmental sectors |
CONSUMERS
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If Common Agricultural Policy subsidies are extended in full to candidate countries, food prices may rise. But prices for utilities, services and durable consumer goods will probably fall as trade barriers and tariffs disappear.
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In the short term, income disparities between workers in new and current E.U. member states are likely to increase as a result of higher nemployment. The experiences of recent joiners like Spain and Portugal suggest that incomes converge as new members become fully integrated into the E.U. economy
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Over five to 10 years, purchasing power in new member states should increase thanks to higher growth rates and higher wages
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