The debate on the budgetary consequences of future EU enlargement to the Western Balkans, and the ‘Eastern Trio’ (Ukraine, Moldova and Georgia), often boils down to exaggerated fears over unsustainable costs and the large-scale redistribution of EU funds. However, evidence from previous enlargements and current estimates suggests a more nuanced picture.
Except for Ukraine, today’s candidate countries are small, and their accession would only have a limited fiscal impact on current Member States. Their combined allocations under the EU’s Common Agricultural Policy (CAP) and cohesion policy would amount to EUR 9.5 billion per year, which is roughly equivalent to what Poland would receive annually under cohesion funds (EUR 8.79 billion) or France under CAP (EUR 8.29 billion) within an enlarged EU.
Ukraine is a larger challenge given the size of its agricultural sector. According to estimates, cohesion payments for Ukraine wouldn’t exceed EUR 4.8 billion annually, which is less than what Italy (EUR 5.79 billion) or Spain (EUR 4.88 billion) would receive, and roughly half of what Poland (EUR 8.79 billion) would receive within an enlarged EU. But Ukraine could become a large beneficiary of the CAP. As in past enlargements, it’ll necessary to combine transitional periods, capping mechanisms and safeguard clauses included in the Accession Treaty.
Delaying or freezing accession wouldn’t eliminate financial costs, as the EU would continue providing significant pre-accession assistance and macro-financial support (estimated around EUR 99.4 billion in both grants and loans during 2021-27) without securing the broader economic and geopolitical benefits associated with EU enlargement.
This CEPS Policy Brief provides four recommendations on how the EU can steer a more informed and evidence-based debate on how to adapt the EU budget and EU policies before the next enlargement.
