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Consequences of European Union Enlargement for Spain

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  • Jaime Turrión
  • Francisco J. Velázquez

Abstract

This article analyses the effects that EU Eastern enlargement will have on the Spanish economy. As opposed to the widespread belief that the major impact on Spain will stem from the reduction of Community funds received, the impact on two real variables is also analysed here, namely trade and foreign direct investment, and evidence is offered of the restructuring of economic activity in the enlarged Europe and its effects on the Spanish economy. In addition, the competition for Spain of the new partners in the Community market is also examined. One of the most noteworthy results is that the competition of the new members of the European market is becoming stronger, as they have a commercial structure that is becoming more and more similar to Spain's and with a greater technological content. This phenomenon appears to be the outcome of the activity of the multinationals, which are re‐organising their activity and transferring part of their production to Central Europe to capitalise on the cost advantages of the new members and their more strategic geographical situation. Furthermore, evidence is put forward that, if the criteria for eligibility for the Structural and Cohesion Funds are not altered, Spain will be one of the countries in which the budgetary situation will deteriorate most in the post‐enlargement EU.

Suggested Citation

  • Jaime Turrión & Francisco J. Velázquez, 2004. "Consequences of European Union Enlargement for Spain," The World Economy, Wiley Blackwell, vol. 27(6), pages 761-780, June.
    • Handle: RePEc:bla:worlde:v:27:y:2004:i:6:p:761-780
    DOI: 10.1111/j.1467-9701.2004.00628.x
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    References listed on IDEAS

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    1. Ben J Heijdra & Christian Keuschnigg & Wilhelm Kohler, 2014. "Eastern Enlargement of the EU: Jobs, Investment and Welfare in Present Member Countries," World Scientific Book Chapters, in: European Economic Integration, WTO Membership, Immigration and Offshoring, chapter 2, pages 37-83, World Scientific Publishing Co. Pte. Ltd..
    2. Hoekman, Bernard & Djankov, Simeon, 1997. "Determinants of the Export Structure of Countries in Central and Eastern Europe," The World Bank Economic Review, World Bank, vol. 11(3), pages 471-487, September.
    3. Marin, Dalia & Lorentowicz, Andzelika & Raubold, Alexander, 2002. "Ownership, Capital or Outsourcing: What Drives German Investment to Eastern Europe?," CEPR Discussion Papers 3515, C.E.P.R. Discussion Papers.
    4. repec:dgr:rugccs:200213 is not listed on IDEAS
    5. Michael Landesmann, 2000. "Structural Change in the Transition Economies, 1989 to 1999," wiiw Research Reports 269, The Vienna Institute for International Economic Studies, wiiw.
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    Cited by:

    1. Rodrigo Alegria, 2006. "Countries, Regions and Multinational Firms: Location Determinants in the European Union," ERSA conference papers ersa06p143, European Regional Science Association.

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