ECONOMY

Dangers of enlargement

In a few years’ time European Union member states will number 25 – compared to 15 today – and a bit later, 27. The spreading of the European idea from the Atlantic to the borders of Russia will mean a far cry from the realities of 20 years ago, when Greece entered a 12-member club. Our position in the new Europe will undoubtedly be much better than if we had not already been a member all these years. And it will be even better thanks to our participation in the eurozone. According to the trends noted in the last three years, it seems that in an enlarged Europe, Greece will find itself in a group of countries such as Spain, Portugal, the Czech Republic, Cyprus and Slovenia. As the new members are poorer than the present EU average, the per capita income of the EU citizen will fall. As a corollary, the average Greek income will narrow the present gap from the EU average. This, however, does not mean that by the same token we shall automatically have become richer and more productive. The danger from the certain enlargement of the EU community is dual. One side, of practical significance, is related to the need for a redistribution of available resources for structural funds, farm production, boosting employment and the development of technology. Assuming that the contributions of member-states to the Community budget, as a percentage of their domestic income, remain stable and that the new members will not pay more than they receive, the famed EU development subsidies of which Greece receives a lot will dwindle. This, of course, does not mean that this country will cease to be a candidate for funding. But only parts of it will be eligible. Certain areas, which will remain poorer, will be able to hope for some subsidies. The money that we now receive for a significant part of agricultural production will disappear. There will, of course, be funds for supporting certain advanced sectors and special activities considered necessary for Europe to win the game of competitiveness vis-a-vis the USA. This is the second side of the danger of enlargement. For Greece to continue hoping for EU enlargement, it must have convincing business plans, high-quality human resources, effective administration and functional infrastructure. It is absolutely reasonable that in a war, such as the one continuing in the globalized economy, you do not entrust precious resources except to those you believe most capable of attaining the desired result. In other words, in the era of enlargement, Greece will have to have covered the distance which now separates it from the countries of the European center. The real difficulty in this new national endeavor is not quantitative but qualitative. We can indeed improve our per capita national product in relation to the EU average, from 57.4 percent in 1990 to 72.5 percent this year. However, in the era of enlargement, a rise in income will not come because Europe will continue supplying us with new funds. It can only come as a result of the more productive use of the resources already in our hands.