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The Economic Benefit of EU Membership

, by Tomaso Eridani
New study shows that the 10 countries who joined the EU in 2004 doubled their GDP per capita in the first fifteen years of membership and half of this increase was due to the EU

A study conducted by Basile Grassi of the Department of Economics at Bocconi University, reveals a considerable economic effect of adhesion to the European Union experienced by 75 million people across ten countries since their accession in 2004. 

This research, “The EU Miracle: When 75 Million Reach High Income”, shows that GDP per capita in 2019 is 32% higher than in 2004 thanks to the EU for the ten countries - Cyprus, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia, and Slovenia. 

Between 2004 and 2019 these countries nearly doubled their GDP per capita from $18,314 to $34,753. “The study shows the adhesion of these countries to the EU led directly to an increase in their GDP per capita of $8,400, which thus accounts for around half of their overall increase since accession,” highlights Grassi. “This is a very large positive effect due solely to related changes in institutions, policies, regulations, trade barriers, brought on by EU membership”. 

“The study also shows that this consistent positive effect of EU enlargement to the new members states had no adverse effects on the standard of living of citizens of the group of member states prior to the 2004 enlargement,” he adds. “This indicates that the enlargement was a positive sum game for all.”

Looking at drivers of this economic growth, the study highlights the contributions of capital and labor to GDP growth and, especially, of productivity gains - indicating that EU membership significantly boosted productivity through technological progress, better factor allocation, and reduced market frictions.

“In the context of further future potential EU enlargement, with 9 countries recognized as official candidates including Ukraine, this strong impact on economies, with potentially higher standards of living for citizens, provides a rational motivation for starting the adhesion process,” concludes Grassi.

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