Eastern Enlargement of the EU: How Much is it Worth for Austria?

CEPR Discussion Paper Series Number 1786

Posted: 8 May 1998

See all articles by Christian Keuschnigg

Christian Keuschnigg

University of St. Gallen – Department of Economics (FGN-HSG); CESifo (Center for Economic Studies and Ifo Institute); Centre for Economic Policy Research (CEPR)

Wilhelm Kohler

University of Tuebingen - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute)

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Date Written: January 1998

Abstract

We evaluate potential costs and benefits of Eastern enlargement of the EU. In addressing fiscal costs of enlargement in addition to tariff and non-tariff barriers, we arrive at important conclusions: 1) Overall, extending EU membership to Eastern applicants is more than worth its price to Austria. The (dynamic) gains from integration clearly outweigh the budgetary costs. 2) Somewhat surprisingly, the wage spread between skilled and unskilled labour is narrowed rather than widened. 3) Significant sectoral and intergenerational redistribution may nevertheless render EU enlargement difficult on political grounds, with the agricultural sector and the young losing out.

JEL Classification: C68, F13, F15

Suggested Citation

Keuschnigg, Christian and Kohler, Wilhelm K., Eastern Enlargement of the EU: How Much is it Worth for Austria? ( January 1998). CEPR Discussion Paper Series Number 1786. Available at SSRN: https://ssrn.com/abstract=74706

Christian Keuschnigg (Contact Author)

University of St. Gallen – Department of Economics (FGN-HSG) ( email )

Varnbuelstrasse 19
St. Gallen, 9000
Switzerland

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Wilhelm K. Kohler

University of Tuebingen - Department of Economics ( email )

Mohlstrasse 36
D-72074 Tuebingen, 72074
Germany

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

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