The economics of enlarging the European Union: Policy reform versus transfers

While the European Union will hardly be in a position to receive new members without extensive policy and financial reform, the discussion so far has exaggerated the link between reform and enlargement. It has also tended to neglect the economic benefits to be expected from integrating the CEECs into the EU and has been dominated by concerns about intra-EU transfers. In an attempt to placate those member states which have complained that they pay too much, recent proposals could give rise to more inefficiencies and disparities within the Union. The author is grateful to Beuter, Frank Bollen, Veerle Deekmyn and Les Metealfe for their comments on a previous draft. The author alone is responsible for the views expressed in this paper.