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Europe

Verheugen: EU Expansion Brings Peace and Profit

On May 1, the EU will grow to a 25 member bloc of states. DW-WORLD content partner Tagesschau.de spoke to Günter Verheugen, who has been responsible for designing the current round of EU expansion.

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Verheugen's job may be over come May 1.

Günter Verheugen is the EU executive's commissioner for expansion. German public broadcaster tagesschau.de spoke to Verheugen about the fears, expectations and future of European Union expansion.

tagesschau.de: You are the architect of this EU expansion; for years you've been working toward May 1, 2004. What does this day mean to you personally?

Günter Verheugen: Gratification, relief -- but also a very muted feeling of concern or trepidation. It can be best compared with the feelings of a soccer trainer, who for the first time sees his team go play a match and asks himself whether they will all show what they have learned. Of course, I ask myself whether everything will work, if we really did do everything right, if we perhaps overlooked problems. But my basic feeling is satisfaction for having created this large and meaningful peace project.

Many Germans see it differently. According to surveys every third German opposes EU expansion. How do you explain this skepticism?

That's very easy to explain. As always when people are confronted by something that they don't know well, they react with fear. The problem is that there hasn't been any sizable and broad political debate on this topic. And that's why expansion hasn't really registered with people. Now that it's directly imminent it has an enormous media presence: Something's coming, but what is it? The problems that citizens pinpoint in the context of the expansion -- from cross-border criminality to competition problems -- are very real. It's just that they have nothing to do with the impending expansion. Instead, they are the consequences of the collapse of the communist world of states, the fall of the Iron Curtain. That's why European integration is neither a part nor the origin of the problem, rather the reasonable, perhaps also the only, possible solution to the problem.

Even so, many people are afraid that businesses will export jobs to the low-wage countries in the EU's new east...

They have already been doing that for a long time. That will also continue, but it doesn't have anything to do with the expansion either. For, the result of the expansion is that these countries will not remain low-wage countries. Through their EU membership, the competitive situation in the old member states will improve. From (the moment of) entry, the new members must assume our social standards, our environmental standards and our professional standards; they must observe our competition and subsidy regulations. That means that the cost advantages that they now have will decrease gradually. The outsourcing or migration of production components is a process that we have been observing for 40 years. It is not a result of European integration but rather a result of economic globalization.

What does the expansion offer Germans?

In the first place, it's a peace project. It creates peace, stability, and safety in the region of Europe that immediately borders Germany. People there have known for years what political, economic and financial results instability leads to. German soldiers are in Kosovo, German soldiers are in Bosnia… In Kosovo alone, for one million people, Europe raised €10 billion ($12 billion) to maintain the ceasefire. Peace pays off, after all. As Luxemburg's prime minister, Jean-Claude Juncker, said: A year of peace costs less than a day of war!

The second is an enormous economic profit -- especially for Germany. It arises from (the fact) that this economic area will be populated after all by 110 million people, if we include Romania and Bulgaria, and everywhere here there is an immense unsatisfied demand. We have very stabile, very robust growth rates in these countries, that are noticeably above the growth rates in the remainder of the EU. The export-oriented German economy profits particularly from this quickly growing market.

But initially the Germans will have to dig deeper into their pockets for the expansion. The European Commission has demanded more money for it, more than €37 billion will be pumped into the new countries in the coming years. How can you make that appealing to the taxpayer?

The financing for this expansion round was already decided in Berlin in 1999. We are spending around €15 billion less than was then calculated and will get by with a total of €40 billion until 2006. The new countries will pay €15 billion of that themselves. All in all, the expansion will cost Germany a net total of €2.5 billion in the first three years. On the other hand, Germany will have an enormous trade balance surplus. That's why viewed economically it's a win-win situation. It makes no sense to say that the expansion will lead to an additional burden for the Germans.

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