In a new piece for the Loop blog, Laszlo Bruszt and Julia Langbein argue that EU market rules, when applied to weaker economies, can trigger damaging side effects. Unless anticipated and managed, these risks threaten not just candidate countries but the European Union itself. Lessons from the 2004 enlargement are vital as Ukraine moves closer to membership.
In the post, the authors argue that EU market integration generates winners and losers. “In weaker economies, rule transfer often marginalizes less competitive sectors, fuels social inequalities and territorial disparities, and drives emigration,” they write.
The refer to their own research as showing that during the 2004–2007 Eastern enlargement, the EU stepped in to manage the fallout, creating a short-lived “Transnational Developmental State.” “During the Eastern enlargement, the Transnational Developmental State used transnational public power for the timely detection and management of major potential negative economic consequences of market integration,” they write.
With regards to Ukraine’s EU membership, they point out that it will be a stress test for the EU.
“There is a strong case for an updated Transnational Developmental State; if Ukraine’s integration produces economic instability or weakens democracy, the damage will extend far beyond Kyiv.”
Read the piece here.