Europe: the 1990s and beyond

Europe’s borders are not defined and the European Commission rejects a static definition. This paper looks at the Eastern enlargement of the European Union. It applies a political economy of reform based on a World Bank analysis tracing the paths of winners and losers from the transition. Most of the applicant countries have adopted a part of the necessary legislation to bring their monetary system in line with the requirements of the EMU acquis and the Maastricht conditions. Enlargement of the Economic and Monetary Union will most likely offer both static and dynamic prosperity benefits that are comparable to the long-term advantages of the introduction of the euro. The economic implications for the applicant countries tend to be significant, but the European Union will hardly be affected by the Eastern enlargement from a strictly economic point of view. Thus, the enlargement process seems more important politically than economically. The rationale behind the Eastern enlargement is not the economic effect, but the preservation of stability in Europe.