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The Frontiers Fall, Facts, Fears, Forecasts.
Facts Cyprus – The Czech Republic – Estonia – Hungary – Latvia – Lithuania – Malta – Poland – Slovenia: What do all of these countries have in common? On 1 May 2004 they became a member of the now enlarged EU. Apart from Malta and Cyprus they were formerly part of the Eastern bloc. This symbolically contrasts with the initial foundation of the European (Economic) Community back in 1957, when 5 West European countries (Belgium, France, Germany, Luxembourg, The Netherlands) and one South European country (Italy) joined forces. 47 years on, and we finally have Eastern European countries joining in as well. This also symbolises the end of the Iron Curtain, and therefore the end of the division of Europe into East and West. Fears What are the consequences brought about by the enlargement? First of all, the biggest fear concerns, as so often, the costs of this historic step. According to the calculations of the European Commission, however, the enlargement cost every EU citizen only € 25 for the year 2004. And: “Compared to the EU’s GNP in 1999, its total expenditure on enlargement in 17 years [1990-2006] amounts to less than 1%, and the average annual expenditure to just around 0,05%.” 1 Irrespective of how high the costs really are going to be, the economic benefits are expected to exceed the costs immensely, with the EU now being the biggest single market in the world with its 450 million consumers. “Independent research estimates that the accession of the Central and Eastern applicants will boost UK GDP by £ 1.75 billion.” 2 But there are other fears and anxieties: with a population growth of 20% and a GNP growth of only 4% the question of a growing disparity between rich and poor arises; people fear rising competition and rivalry between labourers for jobs; 3 with 25 members it will be even more difficult now to reach unanimous decisions. Forecasts The positive prospects are a growing economy, hence economic prosperity, a larger internal European market, and a politically and socially stable European Union in the West and the East. And one question occupies many of us business trendspotters and tipsters: which of the new countries are looking the most promising, which three members – out of the 10 new ones – are going to succeed? My tips are: the Czech Republic, Hungary and Slovenia.4 Slovenia is one of the most prosperous new member states. It’s strong on the export side, with exports higher than imports. On the other hand the inflation rate stood quite high at 7,5% in 2002. Slovenia is sound in automobiles, engineering, chemical products, and tourism. For several years the economy in Hungary looked very promising indeed, but unfortunately this positive development has come to a halt over the last couple of years. Companies such as IBM and Philips closed their sites in Hungary, and the unemployment rate in Eastern Hungary exceeds 15%. Nevertheless, once Hungary has overcome teething problems, it stands a very good chance of becoming the “engineering powerhouse” of Europe with a focus on high tech and biotechnology industries – due to its emphasis on high educational standards. The Czech Republic offers a good infrastructure, qualified workforce and reasonable labour costs. The inflation rate remains low at 2%, and the economy in the Czech Republic has been growing since 2000. The strongest branches of the economy are the automobile industry and tourism. And let’s not forget it’s a Czech tradition to brew beer! Cheers! Or as the Czechs say: Na zdraví!!
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