May 01, 2004

What's in the mind of the average European, now that the EU is bigger?

MABB is a registered TM.

The average citizen of the "old" member countries (EU-15) have lots of questions about the EU enlargement process. Here are some of the questions.

    Q1. What does the enlargement mean for the EU-15?

    A. The enlargement means that, as of 12:01, 1 May, 2004, 10 new countries are members of the EU. These countries are: Estonia, Latvia, Lithuania, Poland, Czech Republic, Slovakia, Slovenia, Hungary, Malta and at least the Greek part of Cyprus. The new EU will encompass 25 countries; it will have around 450 million people; there will be 21 languages spoken and it will have around 40,000 Km of sea coast.

    Q2. Will there be a massive East-West movement of people?

    A. Bigger than it already is? No. Most of the "old" EU countries (at least the ones seen as most attractive, Germany, France, Italy, England) will still keep tight restrictions protecting their own labor markets. However, according to EU rules, starting 2011, all labor markets in the union should be open to any EU citizen.

    Q3. Who is paying for the enlargement?

    A. All EU member countries must pay, per year, 0,045 per cent of their GDP for the enlargement process. The new members will get, until 2006, Euro 65 billion. This money should be used to further the unification process (infrastructure, justice system, administration, etc.).

    Q4. What will happen with EU companies? Will they move to the East?

    A. This has been happening already. Companies Europe-wide have moved their operations to the new member countries citing economic grounds. A worker in the new member countries costs, on the average, between 1/4 to 1/5 versus a worker in Germany, for example. Experts expect the business environment in the new member countries to become more stable, thus creating more incentives for firms to move. However, it remains to be seen, whether or not firms choose to move.

    Q5. When will the Euro replace the currencies of the new members?

    A. First, the new members must fulfill the Maastrhicht criteria (planned government deficit must not be more than 3% of GDP and gross debt must be no more than 60% of GDP). Second, according to exchange rate rules, members can introduce the Euro at the earliest, 2007. Nevertheless, experts estimate that the economies of the new members won't be ready until 2009.

    Q6. What would be an immediate benefit for a citizen of the "old" member countries?

    A. Tourism and shopping. Due to the strength of the Euro, European tourists can still take advantage of difference in prices.

    Q7. Which language will, the average European citizen, speak?

    A. Most likely, English. Around 80 per cent of the people living in the new member countries say they can speak "at least a little English."

    Q8. Will an investment in the new countries be safe?

    A. According to the rules, banks and insurance companies of the new countries will be able to compete in the new enlarged market. Finance experts say, these companies will probably entice new investors with higher interest rates. Additionally, EU rules provide with an insurance of up to Euro 20,000 for each investment.

These are just some questions being provided as information throughout the European media by the media.