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Eastward enlargement: Benefits and costs of EU entry for the transition countries

Eastward enlargement: Benefits and costs of EU entry for the transition countries

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Costs and Benefits of Labour Mobility between the EU and the Eastern Partnership Partner Countries. Country report. Armenia

Costs and Benefits of Labour Mobility between the EU and the Eastern Partnership Partner Countries. Country report. Armenia

In the regard of the discussed issue in this paper the experience of the French Armenian Development Foundation that facilitating the repatriation of irregular Armenian migrants currently living in France 86 deserves our attention. While providing migrants wishing to return with orientation and training to support their inclusion into the local labour market and society upon their return to Armenia, FADF acts in close partner cooperation with Armenian Association of Social Assistance (AAAS) and the French National Agency for the Reception of Foreigners and Migration (OFII) and continues to support integration of returnees by addressing their needs in Armenia in cooperation with State Migration Service of Armenia, assisting in finding jobs, starting entrepreneurial activities (provided with the necessary equipment, materials and counselling). In the absence of formulated policies or mechanisms to facilitate the return of skilled migrants on a temporary or long term basis in Armenia, such experiences make sense in terms of effective return policies for migrants whose return to Armenia can have a greater impact on development than their stay abroad and the transfer of resources from abroad, i.e. money, technologies, and entrepreneurial knowledge and skills.
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EU Eastern Enlargement: The Benefits from Integration and Free Labour Movement

EU Eastern Enlargement: The Benefits from Integration and Free Labour Movement

a maximum of up to seven years. 2 Moreover, the accession treaties granted Austria and Germany the right to suspend the free trade of services also for a transitional period up to seven years. These transi- tional arrangements were utilised to protect certain “sensitive” branches like construction and cleaning. According to the so-called “2+3+2” formula, restric- tions on labour mobility and the service trade could be prolonged after an initial two-year period for another three years. A further prolongation for the last two year period requires that the respective EU member state sees serious imbalances in its labour markets or that introducing the free movement would involve the threat of such imbalances. However, not all member states applied transitional periods for the free movement of workers. When the eight new member states joined the EU, Sweden and Ireland had already opened their labour markets in 2004, while the UK kept only minor restrictions regarding access to the welfare system. The other countries maintained their restrictions on labour migration in the initial phase after accession, although some bilateral agreements for seasonal workers as well as quotas for a small number of migrants eased labour market access slightly. Step by step most EU member states opened their labour markets during the first five years after accession with the notable exception of Austria and Germany. Both of these countries, which attracted the majority of migrants from the new member states before the EU’s Eastern enlargement, applied the restrictions on the free movement of workers and the service trade until the end of the seven-year period. These restrictions fathered out in May 2011. As for Bulgaria and Romania, which joined in 2007, most EU mem- ber states maintained the restrictions on labour migration after their accession. Notable exceptions are Spain and most of the new member states which joined the EU in 2004. Whether the old EU member states will maintain their restrictions on labour migration from Bulgaria and Romania in the final phase of the transitional period starting in 2012 had not yet been decided when this article was written.
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Costs and Benefits of Labour Mobility between the EU and the Eastern Partnership Partner Countries. Country report. Belarus

Costs and Benefits of Labour Mobility between the EU and the Eastern Partnership Partner Countries. Country report. Belarus

Minsk 0.5 1.7 1.8 0.4 Mahiliou 1.2 7.1 14.1 0.6 Source: own estimates based on Census-2009 micro-sample (Belstat). In the case of labour emigration becoming a challenge for the domestic labour market in terms of labour supply, attracting immigrants may help meet the demand. At the moment the most evident experience is of a migration policy aimed at attracting immigrants to agricultural areas. The State Programme of Support and Development for Rural Areas for 2005–2010 and the State Programme for the Development of the Regions and Small/Medium Cities for 2007–2010 created new work places under the state’s order for building new houses and infrastructure, as well as possibilities for obtaining “better living conditions” in rural areas for immigrants. According to the State Programme for Demographic Security for 2010–2015, immigrants from abroad will receive a house in rural areas and financial support equivalent to about US$ 1,000 (at pre-crisis prices 52 ). Agriculture offers many low-paid vacancies. According to the “National bank of vacancies”, the number of unfilled vacancies as of May 1, 2012 was about 59,000, or 1.9 vacancy per each officially unemployed person 53 . During the last decade and especially after abolishing licensees for attracting immigrants for work and simplifying the procedure for receiving work permissions after January 1, 2011, seasonal regional labour migration from the neighbouring Ukraine and Moldova into agricultural sector, both private and state owned, has been on the rise. 54
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Regional policy in the Central and East European countries prior to the eastward enlargement of the EU, with special focus on regional policy developments in East Germany

Regional policy in the Central and East European countries prior to the eastward enlargement of the EU, with special focus on regional policy developments in East Germany

bringing the country up to the economic standard of the EU and, on the other hand, the goal of eliminating regional disparities (ibid: 314). In Hungary, the adoption of the law on Regional Development and Physical Planning marks a caesura in the development of a new regional policy (Downes 2000: 332). Regional policy measures did exist before 1996 but from a current perspective “were ad hoc, reactive and uncoordinated” (Horvath 1999: 95) measures, the responsibility for which was spread between various levels (ibid). The creation of a legal basis was followed by work on regional policy concepts. In March 1998 Parliament adopted a National Regional Development Concept. The following tasks were highlighted in the concept: a change of spatial structure to promote growth, innovation and competition, the reduction of regional differences in economic and social development opportunities, the campaign against social problems in the weakest regions, and the mobilisation of regional development potential (Horvath 1998: 36 f.). The stated medium term priorities were the elimination of regional crises and also the assistance of regions with positive development potential through the removal of institutional and technical barriers to growth and the establishment of industrial zones and industrial parks (ebd: 37). This dual approach of supporting both crisis regions and advanced regions is emphasised in the academic literature on the National Regional Development Concept (Downes 2000: 333). In 2000 the so-called Széchenyi-Plan for economic development was produced at national level. One of the features of the Széchenyi-Plan is a programme to develop the regional economy. This programme too reflects a combined goal of growth and equalisation in regional policy. The formation of networks is regarded as a basic principle of regional development (Széchenyi-Plan, 2000: 30). A National Development Plan is due to be completed (Regular Report Hungary 2000: 62).
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Costs and Benefits of Labour Mobility between the EU and the Eastern Partnership Partner Countries. Country report. Georgia

Costs and Benefits of Labour Mobility between the EU and the Eastern Partnership Partner Countries. Country report. Georgia

Despite recent economic woes, Europe, with the possible exception of Greece, will continue to be an attractive destination for Georgian migrants in the years to come. Per capita GDP (based on Purchasing Power Parity or PPP) in the main destination EU countries is 5-7 times higher than in Georgia. Thus, while most current emigrants probably lack proper documentation (no precise data are available), the discriminatory wages they earn in the secondary labour market are sufficiently high to serve as a powerful pull factor. Many migrants are able at some point to acquire residency rights, creating a bridgehead for relatives and extended family members. Increasing numbers of skilled Georgian workers, especially in the IT sector, are able to apply for jobs and receive work permits prior to their arrival in the EU. Despite the crisis, Greece still has by far the largest stock of Georgian migrants (mostly female domestic workers), though Italy may be catching up, as reflected in recent remittances data. Germany also attracts scores of students and labour migrants. However, the volume of remittances from Germany is not very high, suggesting that the majority of Georgian migrants to Germany are in fact students.
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Costs and Benefits of Labour Mobility between the EU and the Eastern Partnership Partner Countries. Country report. Ukraine

Costs and Benefits of Labour Mobility between the EU and the Eastern Partnership Partner Countries. Country report. Ukraine

added (Figure 3b): the share of people employed in agriculture fell from 19% in 2000 to 6% in 2010 13 while the share of service sector employment grew from 47% to 64%. The share of construction workers remained unchanged. The major difference between labour markets in Ukraine and other Eastern European countries is that, during the severe economic downturn in the 1990s, workers avoided massive layoffs. Instead, they were sent on unpaid leave, working hours were reduced, and/or wage arrears accumulated (Lehmann et al, 2005). Official unemployment remained low (Table 2), concealing the real picture and justifying the absence of retraining programmes. While workers were officially employed (but unpaid) and waiting for their enterprises to revive, they looked for temporary means to support their families. One of these was small-scale trade, either within Ukraine (e.g. buying vegetables in a village or town and selling them in Kyiv) or abroad (buying
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Costs and Benefits of Labour Mobility between the EU and the Eastern Partnership Partner Countries. Country report. Moldova

Costs and Benefits of Labour Mobility between the EU and the Eastern Partnership Partner Countries. Country report. Moldova

CASE Network Studies & Analyses No.465 – Costs and Benefits of Labour Mobility between...  The analysis of migration propensity and trends in recent years and the provisions of the visa-free regime with the EU prove that the pull factors for labour migration are overestimated for several reasons. Among these: i) a visa will imply the authorization of a stay in the EU for no more than 3 months within a 6-month period, therefore, the person is required to return to Moldova; ii) before crossing the border, Moldovans will be asked to provide all relevant documents justifying the purpose of their journey as well as their commitment to return after a certain period of time; iii) the capacity to verify the real purpose and duration of stay will significantly limit the possibilities of Moldovans to overstay and abuse the liberalized regime. Besides, it is important to mention that the intentions to live abroad declared in opinion polls are overestimated in the sense of migration.
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EU Eastern Enlargement: the case of the former 'second-wave' applicant countries

EU Eastern Enlargement: the case of the former 'second-wave' applicant countries

Expectations The situation after the start of the accession talks with the EU resembles the beginning of the transition to a market economy in Bulgaria in the 1990s. Both now and at that time, there are tangible discrepancies between the expectations and the real outcome of the processes. The expectations then were that privatization meant a heavy blow against the monopoly state ownership and the communist nomenclature; liberalization – a blow against totalitarian planning and totalitarian state; stabilization – setting hard budget constraints. Now, ten years later, it could be ascertained that none of these expectations materialized. What actually happened was a redistribution and ruining of national wealth (not privatization), persistent destruction of the economy through unfair competition and export of national capital, and a bureaucratic financial chaos. There is a positive (but not qualitative) change in the major participants then and now at the start of the talks with the EU. There are no new political forces, there is no exhaustive analysis of what happened during the past ten years, there are no sentenced criminals (except for some petty crimes) and there is no true market ideology. This leads to suspicions in the public about a new discrepancy between the announced advantages and disadvantages of joining the EU and the real outcome of it. In Bulgaria's recent history, there are several examples of mass lies with disastrous consequences for the people. Apart from the 'road to market economy' after 1989, these were the 'building of communism' (1960-1980), the 'developed socialism' (1970-1990), and Bulgaria with a 'qualitative new growth' (1985-2005). Consequently there follow disquieting analogies with the new aspiration to 'accession'.
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The consequences of EU enlargement for Central and Eastern labour markets

The consequences of EU enlargement for Central and Eastern labour markets

Some elaboration on the analysis is appropriate. Because candidate countries usually have to "get their house in order" in order to qualify to join, it is important to distinguish between accession (for- mal membership) and first application (the lodging of the formal petition for membership). Both dates of application preceding accession as well as accession itself were taken as indicators of regime change and as benchmarks for analysing labour market performance. The time between application and entry into the EU is variable, ranging from 33 months (Finland) to almost nine years (Portugal); this turns out to provide useful variation in the data for econometric estimation. In a first pass at the data, I present the average behaviour of unemployment rates and employment growth around dates of first application and EU entry. In order to control for business cycle factors, a cyclical component was removed from these data using conventional regression methods (15). The unweighted average of the results centred around application and accession dates can be seen in the panels of Figure 4. The evidence does suggest that countries experience the strongest increases in structural or equilibrium unemployment upon application, and that this rise continues after acces- sion. The most likely explanation is the structural change that joining brings, possibly also combined
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The Impact of the Recent EU Enlargement on Labour Migration Inflows in OECD Countries

The Impact of the Recent EU Enlargement on Labour Migration Inflows in OECD Countries

Italy and the Netherlands put in place special quotas for nationals of the new EU member states. This mechanism allowed the Italian government to apply a transition period, reassuring the public against a feared inflow of central European workers, while effectively opening access to the labour market. Italy established a quota of 36,000 work permits in 2004, 79,500 in 2005 and 170,000 for 2006. In 2004 (May–December), approximately 26,000 permits were granted (76 percent seasonal), whereas in 2005, 57,000 permits were delivered. As far as the Netherlands is concerned, a quota of 22,000 was set for 2004, which has been almost fully used.
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Who Wants Enlargement of the EU? Support for Enlargement among Elites and Citizens in the European Union

Who Wants Enlargement of the EU? Support for Enlargement among Elites and Citizens in the European Union

These developments might not be very likely, but the thread of the arguments should give rise to a substantial discussion of credible political strategies. In the light of this constellation of problems, the limited reaction of politicians to the survey results is not surprising. Instead of promoting the currently established affirmative majorities from country to country, political actors are banking on getting more information about accession in order to increase support and think it especially important to clearly explain the enlargement process to the citizens of the EU and the accession countries [Verheugen n.d.: 26]. But information campaigns bind the rhetoric of iden- tity to rational cost-benefit analysis. The more financial questions come to the core of the negotiations, the more clearly the burden expected from enlargement is put in figures, and the more important the reference to national advantages seems to be, the more the importance of cost-benefit-analysis will exceed the effect of political rhetoric. As long as the EU tries to keep negotiations with candidate countries be- hind closed doors, as long as enlargement remains the task of some diplomats and civil servants in Brussels, and as long as high-rank member state officials only meet to defend national priorities [Höltschi 2001], the credibility of enlargement rhetoric will remain under pressure and the readiness for redistribution is likely to go down. The rhetoric of collective identity may be understood as nothing more than rhetoric, and it may be put aside while calculating benefits will prevail.
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Measurement of Costs and Benefits of Accession to the European Union for Selected Countries in Central and Eastern Europe

Measurement of Costs and Benefits of Accession to the European Union for Selected Countries in Central and Eastern Europe

In Kwiecinski (1995) the co-financing requirement as a constraint upon major inward transfers was already taken into consideration in the estimation of possible inflows. Dorgai also takes into consideration the limitations imposed by the co financing requirement and his second approach (using the transfer/GDP ratios of three relatively poor EU countries) differs from the first one (using per capita and per km² data of the same countries) in that the second scenario reflects better the constraining effect of additionality. Calculating the costs of additionality and co-financing is particularly difficult because theoretically all EU-financed projects may be integrated into investment plans at the local, regional or national level. In this case, no additional burdens through co-financing emerge. However, at the other extreme, all supported projects may exceed the respective planned investment framework. In this latter case, co-financing necessitates the mobilization of new sources. Both cases are unlikely in their pure form, but certainly they indicate the extremes between which the burden of co-financing may move. No doubt, a situation closer to the former extreme is more advantageous, reducing the expenditures in the budget or facilitating the reallocation of expenditures, thus realizing more targets for the same (national) money. If the situation in real life is closer to the latter extreme, then either other spending programmes of the budget must be cut in order to reallocate sources for co- financing purposes or the expenditure side will be higher than originally planned with a deficit higher than planned. If both these options are impossible, the project must be dropped, cut back or, in a better case, merely postponed.
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The costs and benefits of European immigration

The costs and benefits of European immigration

world map of international migration. From a historical perspective, this is a relatively new phenomenon. In contrast to demographic realities, many Europeans still do not see their homelands as destination for immigration, nor do they assume that immigra- tion could turn into a permanent and possibly even necessary and managed process. Today, this contra-factual perception of demographic realities has be- come a major obstacle for the management of migration and the implementa- tion of proactive migration regimes. International migration is certainly in- creasing on a global scale, and the causes and underlying processes that have led to this shift from emigration to immigration in Europe are diverse. The most important causes are related to the considerable economic, social, and political imbalances that mark the gap between relatively rich, democratic, and stable but ageing societies in Europe and the much poorer, less stable, but youthful and demographically growing societies in neighbouring and other world regions. Despite this situation many EU Member States, so far, are characterised by an absence of pro-active immigration policies. Traditionally such immigration policies were associated with guest worker schemes implemented during economic boom periods or sectoral labour market shortages. More recently such policies also try to establish a preferential admission of high skill migrants. The lack of coherent pro-active migration policies is partly due to the con- cern that immigration may lead to a burden for the treasury and worries that immigrants might put a downward pressure on wages and native employ- ment. As a result, in many Western European countries, the humanitarian 4
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European integration and EU eastward enlargement process in international trade: using a gravity approach for exploring bilateral trade flows

European integration and EU eastward enlargement process in international trade: using a gravity approach for exploring bilateral trade flows

Empirical results of using gravity approach for exploring changes in the international trade pattern allow us to summarize that the knowledge resulting from law of nature is also applicable for exploring economic processes. The principles of gravitation could be used for estimating bilateral trade flows and analyzing regional integration in the field of foreign trade. Despite its simplicity, the gravity model explains the actual pattern of trade flows empirically remarkably well. The advantages of using gravity models to examine the international trade pattern are 1) data needed for the model are easily accessible and reliable, 2) theoretical considerations of using these models to explore international trade flows have been widely discussed and developed. The empirical studies certainly support better understanding and development of theoretical foundations of using gravity models for exploring economic integration, particularly in the conditions of interdependence between transition and integration processes of countries with different economic and political background. The latter is a typical feature of the EU eastward enlargement processes.
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Costs and benefits of EU enlargement

Costs and benefits of EU enlargement

Effects on Employment The topic “opening up the labour market for the acceding states” has negative connotations for the German public. Economic experts have almost unani- mously advised against restrictive transition periods for immigration. The reason is that, all in all, immigra- tion is benefi cial. The German government has nev- ertheless decided to request a seven year transition period, principally to prevent a possible abrupt rise in immigration, for example as a result of a slump in economic performance – thus more as a safety net in particularly diffi cult circumstances. After all, the rate of unemployment in Poland is almost twice that in Ger- many. If qualifi ed immigrants take up posts that would otherwise remain vacant, income and employment will rise in Germany: welfare will increase and higher tax revenues will be generated. If, however, unemploy- ment tends to rise as a result of immigration, these positive effects will not occur. This may be the case if work-seeking immigrants fail to fi nd employment or if they replace indigenous employees. In reality both ef- fects will be found at the same time.
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The costs and benefits of leaving the EU

The costs and benefits of leaving the EU

An alternative way to evaluate the impact of an exit and take into account part of these dynamic effects is to use the results of simple, less theory-based empirical studies of the effects of EU membership. Baier, Bergstrand, Egger, and McLaughlin (2008) find that after controlling for other determinants of bilateral trade, EU members trade substantially more with other EU countries than they do with members of the European Free Trade Association (EFTA). Their estimates imply that, if the UK leaves the EU and joins EFTA, its trade with countries in the EU will fall by about a quarter. Combining this with the estimates from Feyrer (2009) implies that leaving the EU (and joining EFTA) will reduce UK income by between 6.3% and 9.5%. These estimates are much higher than the costs obtained from the static structural trade model, implying that dynamic effects from trade are important.
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The environmental dimension of EU enlargement - The benefits from the implementation of the EU environmental acquis in the candidate countries

The environmental dimension of EU enlargement - The benefits from the implementation of the EU environmental acquis in the candidate countries

of an effective and ambitious “home-grown” environ- mental policy must be emphasised again. Effects on European Environmental Policies Many of the acceding states are better equipped in some fi elds for a strengthening of EU-wide environmental protection, especially in the fi eld of nature conservation. In general, though, their capability and willingness to raise European standards is lower than in most current member countries. Thus, it is feared that the enlargement will have negative mediumterm effects on European environmen- tal policy. Among other things, so far it looks as if several major elements of the environmental acquis will not be adopted in the next ten or even more years. The higher the number of countries and cases where EU members do not apply environmental law, the greater is the danger of a general loss of discipline. Especially the environ- mentally more active countries further fear that the new member countries will join the already existing coalition against stricter environmental standards in the European Union. New majorities may not only delay environmen- tal measures but might even lead to an environmental blockade within the EU, the possibility depending, among other things, on the future decision and voting structures. Furthermore, this might lead to a renationalisation of environmental policies with some environmentally ad- vanced countries implementing much higher standards
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Transition Countries on the Eve of EU Enlargement

Transition Countries on the Eve of EU Enlargement

The upcoming EU accession is fraught with some other uncertainties as well. For example, Poland is not yet ready, institutionally, to rec eive funds from the EU to which it is theoretically entitled already in 2004. It is therefore quite possible that the funds disbursed in 2004 will be smaller than planned. Other impacts of the accession, likely to materialize in 2004, include some additional inflation (due e.g. to higher costs of adopting some EU standards, regulations and indirect tax rates) and possibly some negative supply responses (e.g. over the closures of some production facilities – primarily in food processing – not meeting the EU standards). Mutual trade with the ‘old’ EU is unlikely to be much affected by the accession itself. But, some negative effects will follow from the adoption of the common external EU tariffs (which for many items, such as textiles, are lower than the current national ones). Also, the ‘suitcase foreign trade’ with Ukraine and Belarus (right now generating huge surpluses) may be reduced. Revenues of the central government will be diminished as the customs collected will no longer be appropriated nationally. In addition, one should expect higher administrative costs of managing the everyday communication with the EU authorities. It is also far from clear what size of labour migration to expect – especially as the EU countries are currently reconsidering their earlier decisions on opening their labour markets to workers from the acceding countries. Last, but not least, it remains to be seen what fiscal adjustments will be requested from the Polish government by the EU Commission.
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Eastward enlargement of the European Union and the identity of Europe

Eastward enlargement of the European Union and the identity of Europe

Development towards a politically integrated and geographically more comprehensive Europe appears to be irreversible. But the general dynamic of development offer fundamental options that have yet to be decided. One is the extent of political integration through European institutions. The central issue is how strongly the competence to make binding decisions is to be transferred from the nation states to the supranational regime of the EU. Another is the matter of the eastern border, the question which countries should belong to the EU. This is the point of reference for our study. Besides economic aspects, the question of the eastward enlargement of the EU is of strategic importance for the formation of a European demos. Every institutional arrangement of the EU needs to be legitimated, and the more strongly the decisions of these institutions directly impact the life world of the citizen, the greater is the need for legitimation. The addressee of this legitimation of a European regime and European politics is a European demos. For legitimation to be successful, a merely formal demos is presumably insufficient. Over and above legally defined membership, it should constitute a political community with a collective identity citizens can subjectively attribute to themselves and with which they can identify.
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