w 109 long-run economic aspects of the european union's eastern ...

LONG-RUN ECONOMIC ASPECTS OF THE EUROPEAN UNION’S EASTERN ENLARGEMENTshould be expected to resolve most of these issues. The overwhelming incentive ofEU membership and of large-scale assistance (from multilateral, bilateral andprivate sources) justifies a degree of optimism. Little more can be said at thisstage.Secondly, ignoring all requests for transition periods up until 2006, or, as the casemay be, for three years or less, our survey identifies sixteen requests for longertransition periods in all chapters other than environment (but this includes severalrequests with unspecified periods) and 42 requests in environment. Of those sixteenrequests, a few are highly specific and not of a long-run concern. The restrictionsof the purchase of real estate by non-residents are also of little or no significanceto the internal market. The length of transition periods and the nature of thedeviation from EC law in areas such as preferential trade policy (customs union andfree trade areas), VAT and excise duties and financial services might affect the internalmarket by 2010.48Thirdly, it is no surprise that in the area of environmental policy the internalmarket is likely to remain incomplete by 2010 or so. How problematic is this?There are several legitimate approaches here. From a political perspective, it isentirely reasonable to see this as a temporary price to pay. After all, few wouldwish to maintain that the CEECs should commit themselves to huge investments,both public and private, crammed into the few years before enlargement. If allrequired investments would have to be made before accession – quite apart fromwhether this is technically and managerially feasible-, this would imply annualmagnitudes estimated to range from three to five per cent of GDP, dependent onthe country. Given the many other costs of transition and pre-accession, and giventhe imperative of catch-up growth, the case of gradualism in approximating theenvironmental acquis is extremely strong. Stronger still, one could argue infavour of larger Structural and Cohesion Funds dedicated to environmental cleanupand to other non-recurring costs to speed up the realisation of the acquis and tominimise distortions of the future IM. There is enormous scope for spending largerfunds on well-identified targets, and there is ample absorption capacity in thisarea. In this perspective, it would seem justified to criticise the lopsided fundingbetween 2000 and 2006 under Structural and Cohesion Funds, which benefitsrelatively rich EU countries and regions compared to much poorer CEECs.