The Eastern Enlargement of the European Union: Clear Challenges, Unjustified Fears

On 1 May 2004 ten more economies joined the European Union. The treaties provide for the introduction of the euro some time in the future, but an exact timetable has not been laid down. Eight of the accession countries are in central and eastern Europe: Estonia, Latvia, Lithuania, Poland, the Czech Republic, the Republic of Slovakia, Hungary and Slovenia. They have undergone farreaching economic and social transformation since the political change. Although macroeconomic growth in the accession countries has been faster than that in the EU for a long time the income gap is still considerable. Membership of the EU is expected greatly to stimulate the catching-up process. However, it will be accompanied by accelerated structural change. By contrast, the need for adjustment in the EU-15 is relatively small.