The Eastern enlargement of the European Union
“the incumbent poor four” (Ireland, Greece, Portugal and Spain)
Towards an Integrated Europe
CEEC = Central and Eastern European countries
Read it all here
“One on hand, fixing exchange rates to a stable currency may boost credibility of the
monetary authorities, however it may also make the necessary adjustment of the real exchange rate very costly. Many economist view the current recession in Europe as the result of attempts to maintain a fixed nominal exchange rate with a country (Germany) that experiences an important real shock (absorption of East Germany) that was not shared by the others. Since the CEECs will be subject to real shocks for the next two or three decades that will be significantly different to those affecting the EU, they should be cautious about joining the EU’s monetary union.”
Northwest Enlargement in the 1970s
“When the UK, Ireland and Denmark joined, the EEC was not much more than a free trade zone with common external tariffs and some harmonization of sectoral policies. The most important of these was the Common Agriculture Policy and the Coal and Steel Community. The Treaty of Rome did allow for a common labour market.
The countries in this enlargement consisted of three fairly well off nations (the UK, Denmark and Norway) and one poor but very small country (Ireland, with 3.5 million people) that had close trade ties with another entrant (UK). Plainly, this enlargement did not significantly increase the economic diversity of the EEC. The EEC-6 consisted of three powerhouse economies (Germany,
France and Italy) and three small, rich countries (Luxembourg, Belgium and the Netherlands). The EEC-9 was made up of four big economies, four small, rich economies and one very small, poor economy. Ireland’s per capita GDP was about 50% of the EEC-6 average upon accession.
This enlargement, however, did greatly increase the political diversity of the EEC. It
introduced one of the great schisms that marks European politics. The original “Six” form the core of the “deepeners” (nations devoted to deep integration eventually leading to political union) while Britain and Denmark form the core of the “wideners” (nations preferring shallow integration limited to economics). “
Southern Enlargement in the 1980s
“Democracy was restored in Portugal, Greece and Spain in 1974, 1975 and 1977
respectively, although the political situation in Portugal remained unstable for several years. Greece applied for EEC membership in 1975 and Portugal and Spain followed two years later. Their returns to democracy were critical to allowing these countries to precede with applications for membership in the EEC. While democracy is a good thing in its own right, it is critical for membership in a body like the EEC. The point here is that member states must be able to make credible commitments to long-run policies. Authoritarian governments cannot do this. The government that follows their eventual downfall usually feels no obligation to carry through on the
promises made by the dictator. Of course, this is a problem even in well-functioning democracies, but it is much less severe. Greece was admitted six years after it tendered its application. The Community it joined bares little resemblance to today’s EU-12. The EEC-9 had a population in excess of 250 million.
There was also only one poor country among the incumbents. Moreover, although Greece was poor (its per capita income was only 80% that of Ireland and only 41% of the EEC-9 average), it had only 10 million citizens.
Thus as with Ireland, Greece seemed to pose only a minor burden on the incumbents. The EEC-9s’ desire to lock in democratic reforms in the ‘cradle of European democracy’ played a strong role in the decision to admit Greece.
Compared to the degree of integration implied by the Maastricht Treaty, membership did not involve a big step for Greece. The Single European Act (viz. the 1992 Programme) had not yet been conceived. As noted above, the EEC at the time was very little more than a Customs Union and the Common Agricultural Policy.
Five years later Spain and Portugal joined. This brought the EEC up to its current strength of twelve. These countries joined knowing that they would have to comply with the Single European Act. Since the Single European Act was an extremely large increase in the integration of all Community nations, Spain and Portugal faced a very large step to membership. However, this was not the first stage in either country’s integration with Europe. Spain had a free trade agreement with
the Community since 1970; Portugal was an exEFTAn.
Political Changes The accession of the Iberians created a block of countries – the ‘poor-four’ – that favours redistributive policies in the Community. This drastically altered EU politics. For instance, at each of the major steps towards closer integration taken since the poor-four (the Single European Act and Maastricht), the amount of transfers was greatly increased.
It is important to point out the implications of this change for future enlargements of the EU. It appears that many in Central Europe take heart from the accession of Greece, Portugal and Spain. After all, the reasoning goes, if Greece can do it, we can do it. The simple fact that Greece and the Iberians got into the EU is almost entirely moot for the CEECs. The Community that Greece, Portugal and Spain joined no longer exists. Their accession fundamentally altered it. In particular, by creating a block of countries that benefit enormously from EC largesse, the Southern
enlargement of the EC created a block of countries that will oppose the accession of more poor countries.
When Greece joined, Ireland was the only other poor country. When Spain and Portugal joined, the Greeks and Irish together accounted for only about 5% of the EEC population. Now the poor-four account for about one-fifth of the EU’s population. More to the point, they are very close to having a blocking minority in the Council of Ministers, so their political power outstrips their numbers (see Section VIII for more detail). “
Northeast Enlargement in the 1990s
“The most recent enlargement exercise began in 1992. It has gone smoothly and rapidly by all accounts (compared with previous enlargements). As it looks now, the accession treaties for Finland, Austria, Norway and Sweden (the ‘FANS’ for short) will probably be ready in 1994 or 1995. Given Europe’s general economic malaise and the tarnishing of the EU’s image by the Maastricht muddle and the EMS crises, it is less certain that the electorates of these four will allow their leaders to join the Union. Nevertheless, the economic climate in Europe appears to be
recovering as the recession ends, so membership should look like a better economic prospect. The political uncertainties in Russia are also likely to play an important role. The fear of what might happen if authoritarianism returns to Russia might persuade Austrians, Finns and Swedes to vote ‘yes’. Such arguments will carry less weight with Norwegians. Norway is already a NATO member.
The ongoing FANS enlargement is a straightforward affair. The acceding nations are rich, small and have agricultural sectors that are even more protected than the EU’s. Accordingly, their entry threatens neither of the two most powerful special interests in the Community: the poor-four and the farmers. On the contrary, both groups would probably be helped. The EFTAns entry would help incumbent EU farmers’ hold on to their beloved CAP because the new members would be net importers at the current CAP prices. The poor-four would be helped since the rich
taxpayers in the FANS will boost the EU’s coffers.
As enlargement talks go, the FANS enlargement is easy. One reason is that the vast
majority of the policy changes necessary to bring the FANS’s policies into line with the EU’s were already accomplished in the EEA agreement talks. The FANS had already agreed to accept almost all the Acquis Communautaire pertaining to the Single Market. This is shown in Figure 7-2 has an arrow taking the EFTAns into the EEA. The most difficult issues in the FANS’ accession talks
involve special payments to the FANS’ remote regions, special payments to Arctic and Alpine farmers, and several idiosyncratic issues such as environment standards, and health and public regulations. “
Summarizing the Historical Steps towards Integration
“In guessing how soon the CEECs will be ready for EU membership, it is easy to overlook just how hard it was for the incumbents to reach their current degree of integration. Moreover, the EU has committed itself to a radical deepened of its economic integration in the past ten years. This deepening has been so extreme that many incumbents have not been able to implement them. The final stage of economic integration, Economic and Monetary Union, is foreseen for 1996 or 1999,
according to the Maastricht Treaty. Few analysts believe that a majority of EU members can meet the convergence criteria by the earlier date. This is just too large of a step for many West European economies to take in such a short time. There is a growing number of economists and government officials who view even the 1999 target as premature. To them, the degree of economic and political integration that would be necessary to support a monetary union is not likely be possible for
quite some time. “
“The FANS Enlargement Turn first to the ongoing FANS (Finland, Austria, Norway and Sweden) enlargement. These countries had bilateral duty-free industrial trade with the EU for two decades before taking the next step towards integration. The European Economic Area (EEA) is the Single Market stage for the acceding EFTAns (see Section II for more details on the EEA).
This came into being in 1993. It is widely expected that the FANS will not be able to join before 1996, although the official target of January 1995 may still be met. This means that the FANS will spend two or three years at the Single Market stage. Indeed, since the FANS started adopting the Acquis Communautaire already in 1992, it might be more accurate to think of them having at least three or four years to adjust to the radical changes implied by adherence to the Union’s economic
laws. The move to a monetary union is supposed to occur by the end of the decade at the latest.
The Table assumes that all EU members will achieve this level of integration by 1999. Based on these assumptions, it will have taken the FANS 26 years to climb the integration steps that lead from a market economy to the European Union.
Spain spent 16 years at the equivalent of the Association Agreements stage. It skipped the Common Market stage jumping straight up to the Single Market step. Note however, that this jump up to the Single Market was very difficult for Spain. Evidence for this can be found in the fact that it was granted long transition periods for many Single Market measures. The pain of the radical economic changes that were necessary for them to integrate with the comparatively liberal EU was
dampened by very large transfers from EU coffers. In particular the European Regional Development Fund was substantially increased as part of the accession of Spain and Portugal. This is interesting since although Spain’s economy was heavily regulated by Western standards, Spain of the mid-1980s was very market-oriented compared to CEECs of just five years ago. Spain is in fairly good shape as far as meeting the EMU criteria is concerned, so there is some hope that it
would actually complete that in 1999. On this assumption, it will have taken Spain 29 years to climb the European integration ladder.
Portugal joined the EU when Spain did, however since it is an exEFTAn it had bilateral free-trade in manufactures only since 1973. Thus, Portugal spent 16 years at the first step. Like Spain, it skipped straight to the Single Market but did so with the help of long transition periods and massive transfers. The full climb will have taken Portugal 26 years, if it joins the EMU in 1999. It is not at all sure, however, that Portugal will be ready for monetary union by that date.
Greece had an Association Agreement for 20 years before it joined the Community. It
had five years of experience with the Common Market before adoption of the Single European Act.
Its parliament still has not adopted all of the Single European Act measures. Virtually everyone agrees that Greece will not be ready to take the final step to EMU by the end of this decade. Greece has not participated in the discipline of the European Monetary System’s Exchange Rate Mechanism. Its debt to GDP ratio is approaching 100% and in 1991 it ran a public sector deficit that was more than 15% of its GDP. Given the poor state of its public finances, it is no surprise that
Greek inflation and interest rates are way out of line with what would be required to meet the EMU convergence criteria. If, by some miracle, Greece does manage to join the EMU in 1999, it will have taken 38 years to reach Economic and Monetary Union.
Ireland, Denmark, UK
Ireland, Denmark and the UK joined in 1973 skipping the bilateral free
trade step. They spent 13 years at the common market stage and seven years at the Single Market stage. Ireland and Denmark have received massive transfers from the Structural Funds and the CAP. Ireland faces a serious problem in getting its debt/GDP ratio down to acceptable levels by 1999, however its low current deficit and inflation rate provide a positive signal. Twenty-six years will have elapsed between these countries’ first steps towards integration and the participation in the EMU in 1999.
The original EEC-6 nations spent almost three decades at the Common Market stage, seven years at the Single Market and six years getting to the EMU stage.
Optimistic Case for the CEECs
To illustrate the contrast, the last row shows the optimistic scenario for the most advanced CEECs. Some analysts assume that accession talks with the Visegrad group will begin soon after the FANS enlargement is completed in 1995 or 1996. Given the usual delays involved, even the most optimistic scenario envisions membership for the CEECs around the turn of the century. This would give the CEECs 8 to 10 years (depending upon whether one counts from the Interim
Agreements or the Europe Agreements) at the bilateral free trade stage. They would skip over the Common Market, the Single Market directly to Economic and Monetary Union. All this would take no more than a decade.
The lessons of history are vague since so many factors affect major political and economic events. Moreover, there is no hard reason to think that the number of years taken by previous EU entrants has any implications for how long it will take the CEECs to get in. One point, however, is indisputable. If the Visegrad nations manage to take the very large step to membership within a decade, they will be breaking all historical speed records.
Of course the current leaders of the CEECs are quite used to breaking records. In a few short years they saw the entire world order demolished. In a single year, the political and economic chains between East Europe and the USSR were broken. The political and economic strength of the Soviet Union was decimated and the mighty USSR broke up a large number into small countries.
It might be worth recalling, however, that it is much easier to set speed records in pulling down old structures than it is in building new ones.”
“EU incumbents that strongly favour enlargement are primarily concerned about instability in Central Europe. Germany, in particular, wants stable, secure and prosperous neighbours on its Eastern borders. For this sort of geopolitical reasons, it is probably fair to say that there is almost no chance that the first Eastern
enlargement would occur without Poland, baring any serious reversal or stagnation of the Polish transformation. A glance at the map goes a long way to explaining Poland’s status. The status of the Czech Republic is important for the same geo-political reasons. Slovenia borders Italy to the East and Slovakia will be part of the EU’s eastern border once Austria is a member.
If politics is the engine, economics is the brake. Insisting that Poland’s access be tied to that of its richer Visegrad partners would probably hasten Poland’s entry. Moreover, leaving Poland out of the first enlargement might greatly postpone her entry date. A first enlargement consisting of only, say, the Czech Republic, Hungary and perhaps Slovenia would give these nations (as full EU members) a veto over Poland’s accession! Each enlargement irrevocably alters EU politics. If an Eastern enlargement were simply a matter of economics, Poland might not be included; But if economics were all that mattered, an Eastern enlargement might not occur for a very long time. In other words, excluding Poland would remove much of the impetus for – as well as the economic difficulties of – the first Eastern enlargement. It would seem that the substitution of Slovenia for Slovakia would not be constrained by this reasoning. “
Who Pays the Bill?
“The burden of an Eastern enlargement is likely to fall mainly on the shoulders of the poor and the farmers in the EU. The logic of this statement is elementary. An enlargement by 2000 that included only the Visegrad 4 would require an increase of the EU budget of about 70%. This would force a combination of reduced EU expenditures in the incumbent member states and an increase in revenue
contributions from incumbent member states.
Consider revenue-raising possibilities. The member states have demonstrated great
resistance to revenue-increasing measures (witness the fight over the Delors II package).
Moreover, each member state has a veto on these fiscal issues. Evidence of the likely reaction of EU taxpayers to revenue-raising proposals can be found in Germany. This is extremely telling since the same voters overwhelmingly supported unification. Although the German politicians promised that unification would not lead to higher taxes, West German will have to pay more. German voters have so far refused the tax hikes that are necessary to pay for the budgetary costs of German unification. It is impossible to predict the exact reactions of EU voters in the coming years, however it seems reasonable to suggest that tax increases, or increases in national debts, to pay for an Eastern enlargement would not be hugely popular with the West European voters.
Consider the cost-cutting possibilities. EU expenditure consists mainly of subsidies to
farmers and subsidies to poor regions. Accordingly, any substantial savings would reduce the incomes of West Europe’s farmers and/or poor regions. These two groups wield enormous power in EU politics. It seems, therefore, that a coalition of EU farmers and poor countries would block an Eastern enlargement until the Easterners are much richer and much less agricultural.”
“Giving votes to new members can have important, unexpected and costly effects. The Cohesion Fund is a good example. To win the support of the EU’s poor-four (Ireland, Greece, Portugal and Spain) for the Maastricht Treaty, the EU-12 had to agree to double structural expenditure via a new fund (the Cohesion Fund) that can be spent only in the poor-four. It seems clear that without Spain and Portugal, Ireland and Greece would never have managed to force such a large change in EU spending priorities. No one predicted the Cohesion Fund when Spain and Portugal were admitted, but perhaps they should have. Iberian politicians would have acted
irresponsibly if they had not used their Council position to improve the welfare of the people that elected them.
Who can predict the consequences of granting CEECs the right to vote on Union matters?
One thing should be clear. As EU members, the CEECs will use their power to secure benefits for their electorates. France used its power to raise protection and subsidies for her farmers. Britain used hers to get a rebate on their contribution to the EU budget. Why should the CEECs be any different? As full EU members, the CEECs will have the right to vote on issues ranging from a common defense policy to reform of the CAP. Under current practices, members are accorded votes in relation to their populations; small countries have disproportionate number of votes. Since there are 100 million CEEC citizens (64 million in the Visegrad group) and most of the CEECs are small (eight of the CEEC-10 have 10 million or less, five of them with 5 million or less), the CEECs would have a important number of votes. This would have momentous implications for politics in the Union.
The analysis in this subsection serves to reenforce the belief that EU voting procedures must be overhauled before any substantial enlargement occurs. Indeed, there is serious discussion in the ongoing enlargement talks of changing the rules already.61 The complications this poses for the analysis are forbidding. For instance, one problem with the current system is that small countries in the EU have a very disproportionate amount of power (this point is documented below). Most CEECs are small nations with populations ranging from two to ten million, so they too would have disproportionate power. It is not easy to know what conclusion to draw from this. The most obvious rule-change might never occur, since reducing the power of small EU nations would require a unanimous vote. If small incumbent nations faced the choice between maintaining their own power and admitting the CEECs into the Union, the CEECs might never get in. In absence of a better approach, the analysis in this subsection assumes that the current rules will remain in place. “
EU Voting Rules
“The voting rules of the Council of Ministers (the main decision-making body of the EU) are fairly complicated (see Box 8-1). A thumbnail sketch of them is as follows. On very important issues, such as the adoption of the EU fundamental law (eg the Maastricht Treaty, and the Single European Act), enlargement and fiscal questions, the Council operates on the principle of unanimity.
The unanimity principle gives much power to all countries. It essentially puts every country, even tiny Luxembourg, in a position to scupper the deal. Accordingly, such issues are packaged with other issues. The package of deals is expanded until everyone is happy with it. When it came to the Single European Act, the poorer EU countries argued that 1992 would benefit the EU-Rich more than the EU-Poor, so that the package of deals should include “sweeteners” for the EU-Poor. In the case of the Single European Act, the sweetener took the form of a substantial increase in the transfers paid to the EU-Poor under the Structural Funds.
Many other issues are decided on a basis of a 71 percent majority rule. For such issues, a winning coalition does not have to “buy off” all the opposition, only enough to reach at least 71 percent. This suggests the very precise definition of power that is the focus of the formal literature on power that is discussed in Section III. Power is the ability of a country to turn a losing coalition into a winning coalition. This constitutes power, since a country that finds itself in such a pivotal situation can ask for lots of sweeteners as the price for its vote. The country can ask that the coalition members agree to a proposal that provides benefits to its citizens. For instance, if Poland found itself in a pivotal position on a series of votes (or on one crucial vote), the Polish representative could ask for more Structural Funds, or extra protection for its agriculture.
The analysis of the voting effects of an Eastern EU enlargement cannot focus only on the entrants. Adding countries changes the power of incumbents. Typically adding more countries, without changing the number of votes per incumbent, dilutes the power of the incumbents. Think about this in terms of how often a particular country might be in the pivotal position described above. The more members there are, the less likely it will be that any one country’s votes are critical. As we shall see in a sequence of numerical examples below, this dilution of power is not always true.
A final important consideration is that of voting blocs. On certain issues, the Central and Eastern nations that do join the EU are likely to have common views. For instance, if they are admitted while they are still poorer than average, they are likely to be for spending more Structural spending. They are likely to be for a strong common EU defense policy and since a much larger share of the GDP comes from agriculture (at least at their current levels of income), they are likely to be for a shift of CAP resources to their nations. “
Box 8-1: Voting in the Council of Ministers
The Council of Ministers is made up of a representative from each Member State, however, the number of votes cast be each representative varies according to the size (population) of the country. Currently the votes are as follows:
10 votes: Germany, France, Italy, UK
8 votes: Spain
5 votes: Belgium, Greece, Netherlands, Portugal
3 votes: Denmark, Ireland
2 votes: Luxembourg.
The total votes for the EU-12 is 76. It is likely that the countries currently negotiating
membership will get votes as follows:
4 votes: Sweden, Austria
3 votes: Finland, Norway.
Assuming that Norway will refuse entry, this would bring the total votes in the Council to 87.
Some critical issues, such as fiscal issues and modifications of the Treaty of Rome,
require unanimity in the Council. Other less important issues require only a qualified majority of 71%. For the EU-12 this mean 54 votes (on some issues the votes must come from at least 8 different members). For the EU-15, the number will be 62 votes.
The representatives on the Council are sent directly by their national governments. The
relevant constituencies, therefore, are the national electorates.
“The loss in power is not proportional. The numbers to the right of the bars show the percent reduction in the SSI power measures between the EU-12 base case and the EU-17 enlargement scenario. The biggest losers are Denmark and Ireland who have three votes each. In all the scenarios considered here, the entrants have three or four votes. Heuristically, we can think that the entrants provide the most competition in coalition building with the countries that have similar number
of votes. In some sense, the votes of the new entrants are close substitutes with the incumbents that have the same number of votes. “
Member state of the European Union 2020
EU-12, the poor-four have almost enough votes to block. Indeed, the poor-four plus Luxembourg could hold up any piece of EU legislation. The SAF (Sweden, Austria and Finland) enlargement would cut down their power by raising the votes needed for a blocking coalition to 26.
Consider how various Eastern enlargements would alter the ability of the EU poor nations to block a qualified majority under current rules. If either Hungary or the Czech Republic were admitted while they were still poor, the poor-country coalition would be only one vote shy of a blocking minority. If both Hungary and the Czech Republic got into the Union (and were allocated votes under existing rules), the poor coalition would have enough votes to obstruct all EU legislation. The addition of Poland and Slovakia or Slovenia gives the poor coalition a comfortable margin. If the political power of the new poor-four were added to that of the old poor-four, the
tone of the debate in the Council of Ministers would change quite a bit, to say the least.
In the past, higher spending in the EU poor regions has been paid for with a combination of increased revenue contributions and reforms of the CAP. Since many CEECs are also quite agricultural, and they produce the types of food products that are heavily subsidized by the CAP, one might guess that a poor-coalition with a significant CEEC component would demand that increased transfers not cut into CAP spending. The only alternative is higher net contributions by the rich countries. Of course, the rich countries do have the right to refuse such increases. However, if
the poor coalition promised to hold up all the measures that the rich countries wanted, taxpayers in the EU countries are likely to be asked to pay more. This line of reasoning suggests that the rich EU incumbents might fear a substantial Eastern enlargement. Of course, it cannot be both ways. If an eastern enlargement strengthened the hand of EU poor countries enough, the poor countries might
support it. In this case, the rich EU nations would be sure that an Eastern enlargement would result in higher tax bills, so they might oppose it. By contrast, if an Eastern enlargement only slightly increased the power of the poor coalition, the incumbent poor-four might oppose membership for the CEECs. The point being that the increased competition for transfers would not be fully compensated for by an increase in the EU total budget.
As with all the argumentation in this section, speculation and conjecture are unavoidable.
Nevertheless, the voting implications of an enlargement of the EU to the East are likely to be momentous. “
Size of Migration Flows
“The size of likely East-West migration is extremely difficult to estimate. One approach is to examine West Europe’s experience with South-North migration in the postwar period. Income differences in the EU have been as high as three to one during the 1970s and 1980s. The share of poor nations’ populations that have migrated within the EU range from 15% for Ireland’s to 1.4% for Spain. About 4% of Greeks and more than 9% of Portuguese live in other EU nations according to Eurostat figures.64 Since East-West income differences are not too far from this three-to-one figure, one could roughly project that 5 to 10 percent of Easterners might move West.
Considering only an EU enlargement to Poland, the Czech Republic, Slovakia and Hungary this 5% to 10% range implies that between 3.2 and 6.4 million people would migrate in response to existing East-West wage differentials. This does not appear to be an enormous number compared to the EU’s current population of 345 million. If the migrants decided to spread themselves evenly over the EU-12, they would pose few problems. Migrants, however, usually move to a handful of urban areas, with particular ethnic groups dominating small locales. Because of this tendency, even a relatively small number of migrants can create enormous political problems. The persistence of high unemployment rates compounds to problems. Of course some of this migration will occur whether the EU enlarges to East or not. “
“The political and economic issues for the Southern enlargement of the EU are similar to those for the Eastern enlargement. Politics was the engine; economics was the brake. Of course, one can argue that the consequences of instability in Central and Eastern Europe are potentially much more dire than those that were posed by instability in Spain, Portugal and Greece. However, it is probably fair to say that there is less consensus now about the urgency of CEECs membership than there was about Spain. The problems of Poland look quite different from Lisbon and Berlin.
Despite the greater consensus on the Iberian problem, Spain’s and Portugal’s applications in 1977 led to membership only in 1986.
Accession offered Greece, Spain and Portugal a means of securing their recent adoptions of democracy. For incumbent members, securing democracy was desired for altruistic reasons as well as to ensure stability along the Union’s Southern border. The problems of the Iberian enlargement are also analogous. Greece initially opposed the Iberian accession and incumbent farmers in Mediterranean areas felt threatened. There is a major difference, however. Back then, the poorcountry incumbents were much weaker and they had less to lose since structural spending was much lower. When the Iberians joined, the poor incumbents, Greece and Ireland, accounted for only 5% of the EU-10’s population, so the poor country coalition was quite weak. Moreover, structural spending was much, much less important at the time. Indeed, structural spending, viz. the European Regional Development Fund, was boosted as part of the Iberian accession. This was the so-called integrated Mediterranean policy (see Winters 1992 for details). Now, the poor-four account for about one-fifth of the EU population and 28% of votes in the Council of Ministers. Structural spending has tripled since mid-1980s and is set to rise much further.
To assuage opposition from incumbent farmers and workers in sensitive sectors, the EC insisted on long transition periods. For example, quotas on Iberian iron and steel were in place for seven years, and Spanish fruit, vegetables and vegetable fats will not have free access to the EU market until 1996. Furthermore, opposition from incumbent poor-countries was avoided since structural spending was increased substantially. Migration rights for Iberians were restricted for five years.
The increased structural spending served an important second purpose. While the Iberians received second-class treatment in terms of market access and the labour market, they were offered better than existing treatment on structural funds. This balanced the impression that Spain and Portugal were joining as second-class members. “
“Council of Minister votes are currently allocated on population, with small
countries receiving a disproportionate number of votes per citizen. Under current practices, the Visegrad group would receive more votes than the incumbent poor-four (Spain, Portugal, Ireland and Greece). This would drastically alter the EU decision making process. Clearly the problem increases the farther East the enlargement reaches.
A reform of EU voting is foreseen, however the nature of the necessary reforms will depend significantly on how soon, and how far, the Union enlarges to the East. The small incumbent member state may have to choose between accepting additional reductions in their own power, and endorsing an early Eastern enlargement.”
“Estimating East-West migration after an Eastern enlargement is very difficult. Much
would depend upon how rich the CEECs were when they gained the EU citizen’s right to, “move and reside freely within the territory of the Member States.” Section VIII suggests that no more than
three to six million Visegraders would move West. If they spread themselves thinly around the Union, few problems would arise. If they all show up in Germany and Austria, many problems would arise. “
“More than €250 billion were or will be spent since Poland joined the bloc with other former communist states in 2004. In today’s dollars, that’s equivalent to more than the US-funded Marshall Plan provided to western Europe after the second World War.”