On May 1, 2004, the European Union (EU) underwent its biggest-ever expansion when 10 new countries-Cyprus, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia and Slovenia-joined the 15 existing members, and collectively added about 75 million people to the European Union.
On May 1, 2004, the European Union (EU) underwent its biggest-ever expansion when 10 new countries-Cyprus, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia and Slovenia-joined the 15 existing members, and collectively added about 75 million people to the European Union. Their accession further ensures that the devastating wars that have so dominated Europe's backdrop for centenaries-two in the first half of the last one alone-will never again happen. The big question now is, "Does achievement represent a new big bang for Europe or will it simply be business as usual?"
All of the new member states lag the EU's average standard of living and are seeking to reap the economic rewards of EU membership. Membership also guarantees their security, the original ideas for which were embedded in the postwar Marshall Plan, which was instrumental in helping to guarantee Cold War security.
On the political front, much work needs to be done. With the systems for governance already failing badly, Europe's traditional fudge-and-posturing approach to the EU's managerial problems will simply no longer work now that membership has almost doubled.
From a business perspective, the benefits will translate into the free movement of goods and people. This will lubricate the way business gets done, and will both expedite transactions and encourage new investment opportunities. That these new member states are now part of a guaranteed safe and stable infrastructure will help minimize the risks of doing business there.
From a global perspective, the newly enlarged EU will have minimal impact on the economy, business decisions or as a collective threat to indigenous jobs compared with, say, the emerging regions of China or India. And even though costs in the new member states are relatively low, EU membership guarantees that they will not remain so for long. The collective size of the new members-one-twentieth that of India or China-undermines their impact as a potential new market.
That being said, the new member states, predominantly from the former Eastern Bloc, represent a significant achievement for both the existing union members and the newcomers, given that 15 years ago, most were trapped under the then-moribund communist planned economic structure.
Malcolm Penn is the chief executive officer of Future Horizons (Sevenoaks, England; www.futurehorizons.com), an industry analysis firm.