Surprising as it may seem, enlargement will have only a limited impact at the economic level. True, the population will jump from 380 million to 455 million, with Poland, which has a population of nearly 40 million, accounting for much of the increase. But the combined gross domestic product of the 25-nation EU will be a mere 5 per cent higher. This is because the newcomers are relatively poor, with an average per capita GDP of just $5,315, compared with $23,380 for the present membership.
Enlargement will witness a sharp increase in the size of the single European market in terms of customers, but not of purchasing power. The 15 existing members are not looking, therefore, to the 10 new member states as a new and lucrative market for their products. On the contrary. As the EUs trade commissioner, Pascal Lamy, has pointed out, much of the economic effects of enlargement have been taking place since the early 1990s, when the process of trade liberalisation between the EU and the candidates for membership was set in motion.
The enlargement is, however, expected to make individual member states much more competitive in both their home and in global markets. German industry, for example, has been taking advantage of the much lower wages and social costs prevalent in the East European countries to shift production to them. Of course, the situation will change over time; wages will begin to rise, and the new member states will incur substantial costs as they adapt to EU regulations. For example, it has been estimated that Poland will have to spend nearly $1 billion to bring its slaughterhouses up to EU standards.
Meanwhile, Indian industry could follow the example of their West European competitors and establish a production base in the new entrants to the European Union. This would allow Indian manufacturers duty- and quota-free access to the richer EU member states. Otherwise, Indian garment manufacturers, for example, may well find themselves facing increased competition from the East European members of the enlarged EU, on the one hand, and China on the other.
Enlargement will also make it easier for nationals of the new member states to move to the older member states in search of jobs. Under the accession treaties, the latter can restrict full work rights for nationals of the new member states for up to seven years. The UK, in fact, has announced that it will allow workers from these member states to work and settle in Britain from 1 May, 2004. While not many of Britains EU partners are expected to follow its example, they can be expected to continue their current practice which is to turn a blind eye to the presence of immigrants, including illegal immigrants, who undertake jobs which their own nationals do not want (most taxi drivers in the EU capital, Brussels, are of North African origin today).
Enlargement will not stop with the entry of the eight East European and two Mediterranean island countries, who were invited to join the EU at the Copenhagen summit on Friday. Two of the laggards, Bulgaria and Romania, are expected to join the EU in 2007. And Turkey may follow them before the end of the decade. The fact is that Turkey was accepted as a candidate for membership in 1999, and it is taking part in the work of drafting a constitution for the enlarged Union, alongside the 10 new members. While Turkish hopes that negotiations could start next year have been dashed, EU leaders agreed in Copenhagen to set a date before the end of 2004.
However, opposition to membership for Turkey is widespread in the 15-nation EU. Crudely put, Turkey is viewed by its opponents as too populous, too poor and, above all, as an Islamist state, 95 per cent of whose population lives in Asia. Turkeys entry into the EU, in other words, would dramatically challenge its secular nature and its European identity. It should be added that a former Turkish prime minister did not help matters when he declared in Helsinki, in 1999, that Europes frontiers will inevitably extend more towards the east, towards the Caucasus, Azerbaijan, and finally towards Central Asia, and then the rest of Asia.
The fact remains that the Turkish threat to the EU is remote; indeed, there are those who believe it will never join the EU. Some years ago the idea was floated in Brussels that Turkey should be encouraged, in fact, to play a leading role in Muslim Central Asia as Europes representative, alongside Iran and Pakistan.
The real threat to the EU, as a political entity, comes from its enlargement to 25 member states. This is because the East Europeans see the EU as essentially an economic organisation; EU membership is important, therefore, because it can be expected to lead to economic prosperity. From their point of view, the relevant political and security institution is NATO (North Atlantic Treaty Organisation); hence their preference for Washington when political issues are at stake. These views are the exact opposite of those held by most EU countries, of course, for whom the process of European integration is driven by politics and is politically motivated.
The one notable exception to this is the UK, of course. Tony Blair, the British Prime Minister, according to some Europeans, strongly favours enlargement because it will diminish the political character of the EU, thus reducing its importance as a political entity. The outcome, sooner or later, will be the transformation of the EU into a free trade area, as favoured by Britain, instead of the federal Europe favoured by most of the other EU member states. Enlargem-ent, in other words, may mark the end of West European attempts to offer Asia, Africa and Latin America a political alternative to the US.