The Impact of EU Enlargement on Member States: a CGE Approach

Abstract

This paper seeks to analyse the impact of European Union enlargement on accession countries and current EU as a whole, using a Computable General Equilibrium Model. Our aim is to provide an assessment of the impact of enlargement on the size and efficiency of firms and the varieties of products offered to consumers on the one side, quantify the macroeconomic effects in terms of welfare and factor prices (in particular wages) and gauge which sectors will be most heavily affected and in which countries production is more likely to relocate. We find that, all in all the impact on current EU members is negligible, whereas accession countries will face huge, and not always beneficial consequences. We also find that Copenhagen CAP agreements will play a crucial role.

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