Germany to benefit from EU expansion

3rd May 2004, Comments 0 comments

3 May 2004 , BERLIN - Germany, Austria, Sweden and Italy are western European countries standing to reap major benefits from addition of eastern European countries to the European Union, according to a study unveiled Monday. Authors of the study by Goldman Sachs investment bank predicted eastward EU expansion would initially boost these countries' economic growth by as much as 0.4 percent a year. On 1 May, ten mostly Central and East European countries joined the EU, bringing the number of its members to 2

3 May 2004

BERLIN - Germany, Austria, Sweden and Italy are western European countries standing to reap major benefits from addition of eastern European countries to the European Union, according to a study unveiled Monday.

Authors of the study by Goldman Sachs investment bank predicted eastward EU expansion would initially boost these countries' economic growth by as much as 0.4 percent a year.

On 1 May, ten mostly Central and East European countries joined the EU, bringing the number of its members to 25. The new E.U. member states are Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia, and Slovenia.

The study's authors have identified five primary channels of impact on growth in the old EU: "the smooth functioning of the single market; labour mobility; increased trade; official transfers; and (foreign direct investment) flows."

But the study cautions that utilizing this potential won't be easy.

"Politics stand in the way of reaping the full benefits. While most of the positive effect would come from the single market, labour mobility and trade integration, the single market is still poorly implemented throughout the EU, particularly in Italy and France, and labour mobility has been delayed by up to seven years for domestic political reasons in all but three countries (Britain, Ireland and Sweden)."

The study has also identified the potential losers in the enlargement process.

These are the current recipients of the largest share of EU transfers - Spain, Portugal and Greece.

Italy is expected to be in both camps: While enjoying a positive impact from enhanced trade, it will lose out on the subsidies as its share of EU transfer funds will decline.

DPA

Subject: German news 

 

 

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