Friday, April 28, 2006

The Big Benefit

During discussions in Berlin yesterday I was truly amazed about the level of ignorance even among well-informed Europeans about the enormous benefits of enlargement.

A well-established and respected academic argued that a problem with enlargement was that there were short-term costs while the benefits where more long-term.

This, he argued, made it difficult for the political leaders to argue for enlargement.

But this is pure – if I’m excused for the expression – bullshit.

The Eastern enlargement from Estonia to Bulgaria is probably the most succesful thing the process of European integration so far has achieved. Ten countries with a 100 million people have managed a change of system that has contributed to the peace and prosperity not only of their countries but of Europe as a whole.

If this is not a short-term benefit, I fail to see what a benefit could be.

This applies also in purely economic terms.

On my flight earlier today from Stockholm to Brussels I come across an interesting article on the subject in the Danish business daily Börsen.

It’s a report presented jointly by Danish Federation of Industries and the Danish Metalworkers Federation, and it is based on a study done by Katinka Barysch at the Centre for European Reform in London.

The conclusion is that enlargement has created approximately 35 000 new jobs in the Danish economy. While Danish exports in general have increased by 17 % since 2004, exports to the new member states have increased by 42 %.

What applies to Denmark would apply to an even higher degree to economies as the German and the Austrian one.

Not the least Austria – which in political terms has always dragged its feet over enlargement – has made enormous economic gains. Its economy has benefited very substantially, as can be clearly seen in the development of the Austrian stock market.

Other studies published in the last few weeks have shown the advantages of free labour markets.

Ireland has seen a very large influx of people from the new member countries – but unemployment has been sinking in spite of this. There has been a noticeable boost to the already impressive Irish growth rates as a consequence of its decision to go for the full benefits of enlargement.

That’s the way it is. The figures are clear.

Enlargement has been an enormous and immediate benefit also to the old member states.

It is high time that political leaders started to communicate this to their respective electorates.