2. 3. 200918:57

EU Enlargement – 5 years after: Concluding remarks

delivered by Alexandr Vondra, Deputy Prime Minister for European Affairs, Prague, 2 March

Ladies and gentlemen,
It is my privilege to make some final remarks as the host of this important conference. We have heard here today an interesting group of people who have a lot to say: former Commissioners, who led the grand debates of the 90´s, such as Mario Monti; representatives of the current Commission, like President Barroso, Joaquín Almunia or Vladimír Špidla, who are shaping the European policy today; former ministers, such as Ivan Mikloš, Vladimír Dlouhý, and many, many others.
I would like to thank Quentin Peel, who has done a tremendous job in moderating this conference. A big thank you goes also to the chairs of our three workshops, for streamlining the debate and generating conclusions on achievements and the challenges of the enlargement with regards to financial stability, the internal market and labour mobility within the European Union. To wrap-up this fruitful day, as a non-economist I will restrain myself just to adding some ”political lining“ to the economic wisdom that you have heard. The priorities of the Czech Presidency are the “three E´s” – Energy, the Economy, Europe in the world, but today I would like to draw your attention to three C´s: convergence, crisis and commitment:

If I was to choose just one conclusion to draw from all the studies prepared for this conference, then it would be the statement that ”convergence is a reality“. The differences between the new and old, East and West, North and South are diminishing:
- The differences in standards of living and economic performance are decreasing. Income per capita of the new Member States rose from 40% of the old Member States’ average in 1999 to 52% in 2008. The price dispersion in the EU as a whole decreased from 38.7% in 1995 to 24.5% in 2007 for comparative goods. Real convergence has been accompanied by progress in nominal convergence of inflation rates, interest rates and government deficits.
- Also, the new Member States are increasingly integrated as they participate in the same platforms of European integration as the old Member States, be it the Eurozone, Schengen or others.
- Last but not least – and perhaps most importantly – there is no dividing line between the new and the old anymore in terms of success in tackling structural reforms – some Member States reform more, some reform less, some manage the crisis better, some less well. But it is not the East-West divide anymore that draws the line between the former and the latter, but the soundness and the responsibility of domestic policies. The EU economic and policy framework gives us instruments to achieve a level playing field in 27 countries. But the speed and level of convergence depends very much on how / whether we are using them. Well-adjusted domestic policies and sufficient political will are the best recipe for success in the macroeconomic and structural area. The responsibility for the impacts of enlargement lies in our own hands, in the hands of the political leaders of each and every EU Member State.

Vulnerabilities recently displayed by the economies of some new Member States from Central and Eastern Europe have cast some doubt upon the enlargement and its impacts. Two things ought to be said here.
First, the economic crisis is a test for, not a consequence of enlargement. We do have instruments to face the crisis. The single market is our ”hen laying golden eggs“, the source of European prosperity, as Commissioner Kroes rightly pointed out recently. If we manage to protect the principles on which it is founded, the single market is our safe way to the harbour from the stormy seas of the economic crisis. Fiscal policy can contribute significantly to maintaining macroeconomic and financial stability – in this respect compliance with the revised Stability and Growth Pact is of crucial importance. The Lisbon strategy, that fosters structural reforms, remains clearly EU´s key to increasing competitiveness and thus coping with the recession. Last but not least, the past weeks have shown, that coordination between the 27 is of crucial importance. More diversity requires more coordination. Yesterday’s informal meeting of the Heads of State or Government sent out a clear message of unity and commitment in this respect. So far, the EU has been doing quite well in the stress-test of the economic crisis, which proves the robustness of the enlargement project.
Second, we need to distinguish. Central and Eastern Europe is not a homogenous area. The extent to which unchecked domestic credit has grown, fuelled by foreign borrowing and causing overheating of the economy varies very much and is a function of domestic policies, not geographic location. One thing is clear: the EU membership provides protection and stability. Without EU membership those Member States with difficulties would be having much harder times today than they do.

So far, every EU enlargement has been a success. New members – no matter whether they were less or more economically developed, have always brought new opportunities and value-added to the club – economically, strategically as well as culturally. It is legitimate to expect that future enlargements harbour the same potential. Therefore, we need to stay committed – we need to stay on track with the Western Balkans and we need to continue talking to Turkey – not only because the cost of non-enlargement would be too high for them, but first of all, because it would be an excessive price to pay for ourselves. EU´s enlargement policy has always been driven by a sort of enlightened self-interest – the economic crisis should therefore clear rather than blur our sight in this respect.

Ladies and gentlemen, distinguished chairs and speakers, allow me to thank all of you once again for your participation and for helping this conference happen. We all have to be grateful for enlargement – for Central and Eastern Europe becoming members of the club has once and for all altered our economic as well as historic trajectory for the better. The purpose of this conference was to highlight our firm conviction that the same is true for the old Member States. And that we should keep the door open to those countries who wish to become members of the club, but are not there yet.

Thank you for your attention.