What enlargement could imply for the European Union’s budget

The potential enlargement of the European Union to encompass a number of eastern (Georgia, Moldova and Ukraine) and Western Balkan (Albania, Bosnia-Herzegovina, Kosovo, North Macedonia, Montenegro and Serbia) neighbours would involve significant net transfers to those countries under current EU budg...

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Bibliographic Details
Published in:Policy File 2024
Main Authors: Darvas, Zsolt, Mejino-López, Juan
Format: Report
Language:English
Subjects:
Budgets
Economic policy
Finance
Online Access:Request full text
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Summary:The potential enlargement of the European Union to encompass a number of eastern (Georgia, Moldova and Ukraine) and Western Balkan (Albania, Bosnia-Herzegovina, Kosovo, North Macedonia, Montenegro and Serbia) neighbours would involve significant net transfers to those countries under current EU budget rules. Moreover, if budget allocation rules remain unchanged, ‘cohesion’ funding that helps pay for economic catching-up in poorer parts of the EU would be reduced for many current EU regions. This could trigger fears about the budgetary impact of EU enlargement. However, myths about an excessive burden on current EU members, turning several current net beneficiaries into net payers (Kribbe and van Middelaar, 2023), should be refuted. In any cost-benefit calculation, the broader fiscal benefits that would accrue to current EU countries following the accession of new members should also be considered. To illustrate these points, we estimate the hypothetical impact on the EU budget of including these nine countries in the EU’s 2021-2027 Multiannual Financial Framework (MFF), treating them as if they were already EU members 1 . We apply the current EU budget rules with one exception: the overall upper limits on EU spending.