new neighbours
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Transcript new neighbours
Beyond enlargement: The
EU’s “new neighbours”
Ben Slay
Director, UNDP Regional Centre
Bratislava
UNECE Executive Forum:
Competing in a Changing Europe
11 May 2004, Geneva
Key challenges
after 1 May
For EU-25:
– Internal governance reforms
– Lisbon “knowledge society” agenda
For new EU states:
– EMU accession
Easy for Baltic states, not so for Central Europe
– Absorption of structural, cohesion funds
For both: Trans-border “new neighbour”
issues in Western CIS, Balkans
Who are the EU’s
“new neighbours”?
EU “hopefuls” in SEE:
– Countries now negotiating for accession:
Romania, Bulgaria, Croatia
– Preferential access to EU markets: these
countries plus Turkey, Western Balkans
Western CIS: Russian Federation,
Ukraine, Moldova, Belarus
– No “date for a date”
– No preferential access to EU markets
How do they compare?
Preferential No preferential
EU market
EU market
access
access
“Date for a
date”
No “date
for a date”
Bulgaria,
Romania,
Croatia
Turkey,
Western
Balkans
XX
Russia, Ukraine,
Belarus, other
CIS
How competitive are
these economies?
Potentially: very competitive
– GDP growth exceeds EU averages
Particularly in Western CIS countries
– Low unit labour costs
– Locational, logistical advantages
Key: preferential access to EU markets
– SEE countries have it, CIS countries don’t
Result: Different
patterns of integration
South East Europe:
– 60-80% of SEE trade with EU-25
– Since 2000 SEE has attracted significant FDI from
EU-focused multinationals
– Repeat of Central European experience? FDI-led
restructuring of manufacturing, energy, finance
Western CIS:
– Russian Federation is largest export market, source
of FDI (smaller levels)
– EU markets very important for Russia, but largely
for energy exports
It’s also about crossborder issues . . .
Migration:
– Legal (labour force growth)
– Illegal (trafficking)
HIV/AIDS, TB
– HIV prevalence rates much higher in Western CIS
than new EU members
Environment/international waters
– Tisa River basin
– Baltic Sea
Organised crime
. . . And about governance
State sector—Good governance means:
– Decentralisation, to empower regions,
municipalities, communities
– Public administration reform, to modernise state
structures, make them market friendly
– Tax reform, to broaden tax bases, reduce grey
economy, promote MSMEs
Private sector—Good governance means:
– Corporate governance reforms, to improve
investment climate
– Public-private partnerships (e.g., IT sector)
Conclusion: New
challenges for EU-25
Will “Schengen curtain” bring new barriers to
free movement of goods, services, people?
– Will “European anchor” move eastward?
Challenges for EU-25:
– Reduce de facto trade discrimination against
Western CIS countries
– Don’t close EU’s eastern border to labour flows
from “new neighbours”
Challenges for “new neighbours”:
– More reform
– Better governance