Positive and Negative Effects from the Integration of Bulgaria to European Union

The economic implications of liberalization of integration flows during the past ten years, and the prospects for the coming ten years are investigated. The conclusion is that only goods and capital flows have been liberalized, while labour flows are blocked and likely to stay blocked. This pattern of liberalization is unfavourable for the applicant countries. Several dimensions of asymmetries have been identified: between different integration flows; between timing of costs and benefits for EU members and for applicants: between timing of net effects; between timing of liberalization and access to EU funds; between treatment of the applicant countries for the Southern and the Eastern enlargement, etc. The EU countries first reap the benefits and only later incur costs. The opposite is true for the applicant countries. A major finding is that the overall net effects for the candidate countries are negative in the short- and medium term, and may evolve into positive effects only in the long term. For Bulgaria this period is 12-14 years. The overall net effects for the EU members are positive throughout. In order to assure the accession of well-prepared countries only, EU members and the applicant countries must identify an appropriate mix among the three key variables: deadlines for accession, pre-accession transfers and transitional arrangements. Under the presently expected deadlines for accession and meager pre-accession transfers most of the candidate countries will be ill- prepared to join during the coming 5-10 years. The accession preparation costs are unbearable for Bulgaria and other applicant countries if they are to comply with EU standards within 10 years. The decisions for accession must be taken only on the basis of solid economic fundamentals, supplemented by political considerations, and not vice-versa as was the case with the invitations for negotiation. Important recommendations are made to the Bulgarian government, the governments of other CEECs, to the European Commission and the governments of the EU members. The author substantiates a major conclusion, that Bulgaria and the other CEECs have no viable alternative to accession in the European Union.