Potential costs of EU expansion could reach hundreds of millions for Finland

With the geopolitical landscape shifting due to Russia's invasion of Ukraine, the topic of European Union expansion has reemerged as a pressing issue. The possibility of integrating up to nine new member countries into the EU during the next parliame

By: helsinkitimes.fi

May 22 2024
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Potential costs of EU expansio

With the geopolitical landscape shifting due to Russia's invasion of Ukraine, the topic of European Union expansion has reemerged as a pressing issue. The possibility of integrating up to nine new member countries into the EU during the next parliamentary term is on the table. According to a new report from the Kalevi Sorsa Foundation, such expansion could cost Finland up to hundreds of millions of euros annually.

The report, which explores the future of the EU through four scenarios, emphasizes the significant financial and strategic implications of expanding the union. Despite the costs, the report suggests that the benefits for Finland and Europe outweigh the expenses.

"Finland must prepare for the real possibility of EU expansion not just in Ukraine, but also in the Western Balkans, Moldova, and possibly Georgia," said Matti Niemi, co-author of the report and an expert on EU policy. "At its core, this is about the security of Finland and Europe. Promoting enlargement is essential, as closing the door to EU membership would drive applicant countries toward Russian influence."

Niemi argues that successful enlargement requires significant reform within the EU. This would include adjustments in decision-making processes, particularly increasing the use of qualified majority voting to prevent individual countries from blocking crucial decisions, as Hungary has done with support for Ukraine.

The expansion would have notable economic effects, particularly on the EU budget and the financial contributions of existing member states. The report estimates that full membership for all nine candidate countries could result in approximately 25 billion euros in net subsidies from the EU. For Finland, this could translate to an additional cost of around 420 million euros annually, or about 76 euros per capita.

Niemi stresses that the costs should not be viewed solely in monetary terms. "Achieving stability is not free, but past enlargements have shown that the price is worth paying. Finland and the entire EU would benefit economically from larger internal markets, and the value of increased security cannot be measured in money alone."

The report also discusses the potential for a phased membership model to ease the financial and administrative burdens of enlargement. This model would allow benefits and obligations to be implemented gradually, providing incentives for applicant countries to continue their reforms while easing the transition for current member states.

"Implementing enlargement in stages ensures that internal political reforms in new member states take root and motivates them to continue progressing. It could also mitigate the economic impact on current members and allow the EU to better prepare for new members," said Jelena Simić, co-author of the report and project manager at the Kalevi Sorsa Foundation.

The report highlights that the most positive developments in candidate countries typically occur during membership negotiations. However, inconsistent EU policies have sometimes stalled progress, diminishing support for EU membership in regions like the Western Balkans.

"For candidate countries, it's crucial that the required reforms lead to progress in membership negotiations. The EU has not always been consistent in this regard, which can halt positive developments in democracy and the rule of law. For instance, support for EU membership has significantly declined in Western Balkan countries where negotiations have been stagnant for years," Simić explained.

The full report, "Table for Nine: Four Scenarios for EU Enlargement and Reform," is part of the Kalevi Sorsa Foundation's research project on just ecological transition, funded by the Wage Earner's Foundation and the Consumer Cooperative Foundation.

Matti Niemi serves as the Director of Relations for the City of Turku and has previously worked as an advisor to Prime Minister Sanna Marin on EU affairs and as a political advisor in the European Parliament. Jelena Simić is responsible for the Kalevi Sorsa Foundation's democracy project in the Western Balkans.