The planned enlargement of the EU to include the twelve candidate countries can be financed without any problems: this is the conclusion that the DIW Berlin reaches in its current Wochenbericht 36/2001. Nevertheless, the Institute calls upon current EU members to begin now with the reform of structural and agricultural policy in the run-up to enlargement. Such reforms are long overdue and would be more difficult to carry out following enlargement.
The DIW Berlin, in co-operation with the Institute for Agricultural Economics of the University of Göttingen and the Institute for European Policy in Berlin, studied the financial consequences of EU enlargement. They found the operative expenditures of the EU (for structural, agricultural and internal policy) to be currently at 90 billion EUR in 2007 and 86 billion EUR in 2013 if no reforms are carried out previously. In relation to GDP of the enlarged EU, this would be 0.92% and 0.78% respectively - thus, the expenditures would remain below the level that is planned now for an EU that has taken in six new members in 2006 (1.02% of the GDP).
A decisive reform of the agricultural and structural policy would cut expenditures of the EU by a good 22 billion EUR (to 0.57% of GDP) by the year 2013. The largest part of this would be achieved through agricultural policy reforms - the gradual reduction of direct aid. After the reform of structural policy, maximum aid packages would only go to those member states whose national GDP per capita is below 90% of the EU average. This would enable a redistribution of financial resources, with only the most needy member states receiving funding. The DIW Berlin draws the same conclusion in another study released today: its EU Enlargement Study for the Cohesion Report of the European Commission.
EU membership will cost every German 158 EUR per year after enlargement in the year 2013. If agricultural and structural policy is decisively reformed, it will only be 127 EUR. Without enlargement and without reforms, the EU would still cost every German 79 EUR in 2013.