IMF Working Papers

Economic Benefits from Deep Integration: 20 years after the 2004 EU Enlargement

By Robert C. M. Beyer, Claire Li, Sebastian Weber

February 21, 2025

Download PDF More Formats on IMF eLibrary Order a Print Copy
More formats on IMF eLibrary Order a Print Copy

Preview Citation

Format: Chicago

Robert C. M. Beyer, Claire Li, and Sebastian Weber. "Economic Benefits from Deep Integration: 20 years after the 2004 EU Enlargement", IMF Working Papers 2025, 047 (2025), accessed March 25, 2025, https://doi.org/10.5089/9798229001960.001

Export Citation

  • ProCite
  • RefWorks
  • Reference Manager
  • BibTex
  • Zotero
  • EndNote

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

EU enlargement has stalled since the last member joined over ten years ago, marking the longest period without expansion since 1973. This elapsed time contrasts with the potential income gains membership promises. Drawing on the biggest EU enlargement in 2004 and employing a synthetic difference-in-difference estimator on regional data, we estimate that EU membership has increased per capita incomes by more than 30 percent. Capital accumulation and higher productivity contributed broadly equally, while employment effects were small. Gains were initially driven by the industrial sector and later by services. Despite substantial regional heterogeneity in gains—larger for those with better financial access and stronger integration in value chains prior to accession—all regions that joined the EU benefited. Moreover, existing members benefited too, with average income per capita around 10 percent higher. The estimated gains suggest that deep integration carries significant additional economic benefits beyond simple trade unions, providing valuable lessons for future EU enlargement and regional integration efforts elsewhere.

Subject: Capital accumulation, Debt default, Economic integration, Economic sectors, External debt, Income, Industrial sector, National accounts, Regional integration

Keywords: 2004 EU Enlargement, Accession gain, Capital accumulation, Debt default, Deep Integration, EU accession effect, EU enlargement, EU membership, European Union, GDP Growth, Global, Income, Industrial sector, Membership promise, NUTS2 Regions, Regional integration

Publication Details

You May Also Be Interested In...

Slovak Republic: Selected Issues

March 24, 2025

Cameroon: Seventh Reviews Under the Extended Arrangement Under the Extended Fund Facility and the Arrangement Under the Extended Credit Facility, Request for a Waiver of Applicability of Performance Criteria, and Second Review Under the Resilience and Sustainability Facility Arrangement-Press Release; Staff Report; and Statement by the Executive Director for Cameroon

March 24, 2025

Republic of Congo: Sixth Review Under the Three-Year Arrangement Under the Extended Credit Facility, Request for Waivers of Nonobservance of Performance Criteria, and Financing Assurances Review

March 24, 2025

Republic of Madagascar: Staff Report for the 2024 Article IV Consultation; First Review Under the Extended Credit Facility Arrangement; Request for A Waiver of Nonobservance of Performance Criteria; and Financing Assurances Review; and First Review Under the Arrangement Under the Resilience and Sustainability Facility-Press Release; Staff Report; and Statement by the Executive Director for Republic of Madagascar

March 21, 2025