tstart: 1642385432.8052
economy EU Timo Baas News

Report: The vast majority of “Old EU” states benefited from the EU’s expansion in 2004

Accepting the new states in 2004 was beneficial for all

editor: REMIX NEWS
author: Forsal/PAP

Timo Baas, professor of macroeconomics from the University of Duisburg-Essen, carried out some research where he prepared a few alternative scenarios in which 13 countries – Bulgaria, Croatia, Cyprus, Czechia, Estonia, Lithuania, Latvia, Malta, Poland, Romania, Slovakia, Slovenia and Hungary – did not join the EU.

These scenarios were then compared to the current European Union.

The differences in the scenarios depend on hypothetical trade deals between the countries of the old and new EU.

The first scenario assumes that the EU is comprised of its 15 old members and maintains close trade ties with the new 13, just as it does today with Norway and Switzerland. The transaction cost of trade and migration costs are higher than today, which would lead to lower trade circulation, lower migration and lower GDP in the majority of old EU states.

Baas pointed out, however, that such a scenario would be unlikely given the example of Brexit. After all, there could be situations in which both sides would be unable to reach a trade agreement which would increase transaction costs.

A second scenario was based on the idea that there would be no trade agreements. Trade between the EU and the “13” would be conducted on the World Trade Organization’s rules. In the case of the old EU states, apart from Belgium, trade turnover and migration are lower and GDP is lower than compared to the first scenario.

In both of these scenarios, Germany and Luxembourg are the countries which benefited the most from the accession of the “13”, followed by Belgium, Denmark, Austria, the UK and Sweden.

There are various reasons as to why the 2004 accession benefited the older states.