Gomulka, Stanislaw --- "Policy challenges within the (enlarged) European Union: how can economic convergence be fostered?" [2003] ELECD 32; in Tumpel-Gugerell, Gertrude; Mooslechner, Peter (eds), "Economic Convergence and Divergence in Europe" (Edward Elgar Publishing, 2003)

Book Title: Economic Convergence and Divergence in Europe

Editor(s): Tumpel-Gugerell, Gertrude; Mooslechner, Peter

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781843762416

Section: Chapter 26

Section Title: Policy challenges within the (enlarged) European Union: how can economic convergence be fostered?

Author(s): Gomulka, Stanislaw

Number of pages: 12

Extract:

26. Policy challenges within the
(enlarged) European Union: how
can economic convergence be
fostered?
Stanis-aw Gomulka
l

26.1. HOW LARGE IS THE DIVERGENCE
PROBLEM?1
Table 26.1 provides a selection of basic data on the eight countries which
are regarded in this chapter as the primary candidates from the Central
European (CE) region to join the European Union (EU) and European
monetary union (EMU). Enlargement will be a major institutional innova-
tion for them, as indeed it will also be for the present EU countries. Any
such innovation must entail adjustment costs. These costs will be related to
the divergence of the CE-8 from the EU-15 and to the magnitude of
enlargement. Both factors will determine the size of the `enlargement
shock'. The data in Table 26.1 provide a basis for an evaluation of the devel-
opment gap between the two groups of countries ­ one of several dimen-
sions of divergence ­ and of the size of the enlargement shock.
The CE-8 group is dominated by one country, Poland, which in terms of
population and GDP accounts for about half of the group's totals. This
makes the transition progress in Poland important for the success or failure
of the entire enlargement project. Using market exchange rates, the GDP
of the CE-8 group is only about 4 per cent of the EU's GDP, which means
that it is about half the GDP of Spain. By this measure, the prospective
enlargement will be ...