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Research Project

Enlargement of the European Union

The aim of this project is to guide you through using the Biz/ed site and the Internet to help you in your studies, whilst at the same time researching a topic that will enable you to apply a variety of concepts you either have, or will, come across in economics and business studies.

All exam boards have questions that expect you to draw on stimulus material or evidence of various kinds. The evidence in this case is related to the issues associated with the enlargement of the European Union in May 2004 from 15 to 25 members.

Your Task

Produce a report of 1500 words outlining the key issues facing the EU following the expansion of member states to 25 and assess the prospects for the UK economy of enlargement.

EU Enlargement map

The Scenario:

In May 2004, the European Union will expand membership from 15 to 25 members. The expansion of the EU will present many problems and challenges to all existing and new members. These challenges arise out of the differences between the economic performance and development of the new states in relation to the existing states and the implications of new cultures, new financial pressures and new markets become apparent. The expansion could lead to significant benefits to all members of the EU in terms of economic development but the pressures relating to the expansion could cause potential problems for all members.

Map courtesy of www.theodora.com/maps used with permission.

This research project will take you through the following steps in helping you build the information, knowledge and understanding to do the task:

  1. Look at the background to the issues involving enlargement of the EU
  2. Identify the key economic and business issues relating to the topic
  3. Identify the relevant arguments on enlargement
  4. Quantify some of the effects
  5. Identify the prospects for the UK economy of enlargement
  6. Write the report

1. Look at the background to the issues involving enlargement of the EU:

On May 1st 2004, the European Union will formally extend membership from 15 states to 25. The ten new states that are joining include former members of the Eastern Bloc and smaller 'island' states. The former Eastern Bloc states had been under a 'communist' command economy since the end of the Second World War and as such had a great deal of adjustment to complete prior to entry into what is essentially a market based economic union. Many have come a long way but the process of adjustment to a market system has had its problems. In general, it could be argued that the level of economic development of the new states is behind that of existing members. This in itself will present a significant challenge to the whole of the EU.

Disused nuclear power plant in Lithuania

Some areas of industry in the new states are behind that of existing members. This nuclear power plant in Lithuania will be closed with the support of the EU. Copyright: European Commission, EPA PHOTO / AFI / GATIS DIEZINS.

The EU has been remarkably successful in helping to generate economic growth since the very beginning of the formation of a 'Common Market' in the 1950s. The original signatories to the Treaty of Rome in 1958 had a number of issues in common - a vivid memory of significant economic disruption and a relatively recent history of political and economic instability resulting in all too frequent outbreaks of hostilities. The Common Market was the first step on the road to a greater understanding between the peoples of Europe and the growth of peaceful co-existence and economic prosperity for all. In addition, the Common Market provided some element of communal defence against the perceived threat of the Russian dominated Union of Soviet Socialist Republics (USSR) and the economic threat provided by the USA.

The collapse of the Soviet Union and the resulting drives for independence from former satellite states of Russia and the dismantling of command economies presented a new order in Europe and it was only a matter of time before these new states asked to be considered for membership of the EU.

Customers at a bank in Ljubljana, Slovenia

Customers at Ljubljanska Bank in Slovenia - the country's economy has grown quickly in recent years, shaking off their communist past. Copyright: European Commission, EPA PHOTO / STR.

For existing members of the EU, there are significant problems that still needed work. Economic and Monetary Union, reform of major policies like the Common Agricultural Policy and the Common Fisheries Policy, budgetary reform, alleged corruption in the European Commission and the rifts caused by health scares from BSE and the opposing attitudes to conflict in the Middle East and the Arab world made the task of overseeing the enlargement of the EU all the more complex.

The matter was not helped when one of the new members, Poland, stood its ground over the issue of voting rights in a new enlarged EU constitution in the Autumn of 2003; existing members it seemed, wanted to retain a grip on the policy making and direction of the EU which left some, existing and new members, feeling marginalised.

Task 1:

Now you have a very brief background to the enlargement process, it is time to find some more detail on the process.

Use the following links to build up some understanding of the main issues involved in the enlargement process. Your initial research should establish the following points:

  • The main aims of enlargement
  • The perceived advantages of enlargement
  • The potential disadvantages of enlargement

The first two links take you to sections within Biz/ed. There are over 15,000 pages on the Biz/ed site so we have a massive range of resources and in some cases and for some tasks, you do not need to look any further!

Within some of those pages on Biz/ed there are other suggested links relevant to the issue under consideration but remember that whilst Biz/ed can direct you to what may be helpful sites, we have no control over what those sites include. You need to balance the need to get a decent amount of information with the temptation to get so much information that it becomes impossible to read through it all!

This report is 1500 words in length - that is about 3 complete sides of typed A4 using a font size of 12! You must be careful to be selective therefore.


2. Identify the key economic and business issues relating to the topic:

The Mind map below highlights the main concepts and theories you need to be aware of in this project.

EU economic and business issues mind map

Task 2:

Ensure that you understand the meaning of the above terms, concepts and theories.

Again, you can get much of the information on this from the Biz/ed Web site through using the Notes on the EU from the 'Learning Materials' section (http://www.bized.co.uk/learn/economics/international/eu/notes/euindex.htm) or through the glossary (http://www.bized.co.uk/glossary/glossary.htm) and diagram bank (http://www.bized.co.uk/glossary/diagram.htm).


3. Identify the relevant arguments on enlargement:

This is going to represent the bulk of your research. You will need to look at the problem from the perspective of the new member states and the existing ones. The following is a guide to the key areas you need to be researching:

  • The potential impact on economic growth throughout the EU
  • The potential impact on unemployment and employment
  • The impact on competition - will, for example, existing states' dominant firms be able to 'swallow' up their smaller and possibly less efficient rivals in the new member states?
  • The impact of the potential for a large influx of labour into the more prosperous regions of the EU
  • The impact of the potential for the rise in crime as a result of the relinquishing of border controls
  • The impact on the budget contributions of member states - who would be the winners and who would be the losers?
  • The impact on the distribution of funds for regional and structural development projects
  • The extent of the opportunities for businesses to expand and take advantage of the larger market
  • The impact on major areas of spending - for example the CAP
  • The difficulties associated with maintaining 'EU standards' across the enlarged Union
Farmers at work in Slovenia

Farmers at work in Slovenia - what will be the impact on CAP spending in order to modernise farming in the new member states? Copyright: European Commission, EPA PHOTO / STR.

Task 3:

Using the links below, compile a set of notes on the costs and benefits of enlargement.

When making your notes on these areas, remember that you do not need to take detailed accounts of each point - you are looking to identify the main issues. When you come to write up your report, you will have to think carefully about how you use the information you have collected and what significance the information has for the points that you are trying to highlight.

Study Skills Research Tip! - Skim Reading

The technique of skim reading is important when conducting large-scale research and you have to identify relevant information from a number of sources.

In most cases, you will not have to read all of a book or article to get the information that you require; if you do come across something interesting and useful you may wish to read that book or article in more detail.

To skim read, try reading the first and last sentences of a paragraph; the aim is to try to get an idea of what the paragraph is talking about. If you do this through the whole of the chapter or article, you should get a good idea of the value of that chapter or article for your research. If it is going to be useful, bookmark it for later use when you can go back and look at the information in more detail.


4. Quantify some of the effects:

Whenever you do some research, the necessity of getting some hard facts and figures to help support your arguments is important. The reason we wish to quantify things is that it helps to provide backup to the judgements being made. Much of economics and business is about making such judgements, especially in terms of the relative costs and benefits of a decision. If we can quantify those costs and benefits it serves to reinforce any judgements that are made.

Finding specific data to help support your arguments can be difficult and time consuming. Quite often you will spend a good deal of time searching for information through Google or similar and end up with nothing. The feeling that you have wasted the last hour or so is not the best motivator for getting on with a project such as this. In some respects, this frustration is part of the process of research but there are ways to make the search a little easier. You can try using the 'Advanced Search' facility available through Google and other major search engines. This helps to narrow down the search and makes it more likely that the material you get shown will be relevant.

Firemen in Hungary with a new crane provided by the PHARE programme

The PHARE programme which helps new member states to meet accession requirements cost over 6 million euro in the period 2000-03. This crane is one of the technological vehicles given to Hungary's national fire service as part of the programme. Copyright: European Commission, EPA PHOTO / LAJOS NAGY.

Task 4:

Collect some data on the impact of EU enlargement. Your data should, if possible, quantify the potential effects on GDP of member states and new members as well as looking at the trade position of the UK in relation to the existing and the new Europe.


5. Identify the prospects for the UK economy of enlargement:

Having gathered a range of data in the task above, you can almost certainly use those same sources or the same data to extract information about what the likely prospects are for the UK economy.

Task 5:

Try to get some data on the likely impact on the UK economy of the enlargement of the EU.

It will be worthwhile trying to identify the pattern of UK trade with the EU, the US and with those countries that will be joining the EU in May. What is the extent of the current trade with these countries and how do the forecasts for EU development influence the likely trends with those countries? Will the UK experience problems from labour seeking to move to the UK to find work for example or are such reports exaggerated?

The City of London

The following list is a guide to the types of questions that you may want to seek answers to. Remember, that in research you may not be able to find the answers you want to every question in which case it is often sensible to draw informed conclusions about the likely consequences - the balance of probability - in terms of what might happen.

  • What is likely to happen to UK GDP over the next 10 years
  • What is the size and nature of our trade with the EU and with existing and member countries?
  • What is the likely impact for businesses of the increase in opportunities in the new members?
  • What is the likely impact on businesses of the increase in competition from new members?
  • What is the likely impact on the UK labour market of immigration to the UK from new members?

Image: The City of London - What impact will EU enlargement have on the UK's financial markets?
Source: Simon Stratford, stock xchng (http://www.sxc.hu)

The following sites may provide further help - again be selective!

  • Forecasts for the UK Economy - HM Treasury comparison of forecasts from major economic analysts - scroll down to find forecasts for the period up to 2008 (http://www.hm-treasury.gov.uk/media//E7910/ACF11CB.pdf)
  • The Balance of Payments 'Pink Book' - look at Chapter 9, Geographical breakdown of UK trade. Not only does this provide the overall picture it also gives detail of our trade with individual countries within the EU and with the 'new members' (http://www.statistics.gov.uk/downloads/theme_economy/Pink_Book_2003.pdf)
  • Monthly Review of External Trade Statistics - ONS. Scroll down to find the geographical data section (http://www.statistics.gov.uk/downloads/theme_economy/MM24_Dec03.pdf)
  • The impact of immigration from the new members on the UK - an outline from the Independent Newspaper (http://news.independent.co.uk/uk/politics/story.jsp?story=492821)

6. Write the report:

The information you have collected should now allow you to be able to write up the report - in fact this should be the easy bit! If you have done your research properly, then you should have all the data and information to hand. It is now time to organise that information to present a coherent and well-argued report.

First of all, refer back to the title of the report:

Outline the key issues facing the EU following the expansion of member states to 25 and assess the prospects for the UK economy of enlargement.

The two key words in the title are 'outline' and 'assess'. The command word 'outline' implies offering an overview of the main issues surrounding the enlargement of the EU; you are not expected to go in to great detail so selection of the information you have collected is going to be important.

The second key word is a higher order skill - 'assess'. Here you will have to make a judgement, based on the research you have conducted, on just how significant this major change in the EU is going to be for the UK. It is here where the quantitative data you have collected is going to be important in helping to support the arguments you put forward.

Below is a suggested outline plan for the report. The planning stage is important to ensure that the report is concise (i.e. you keep within the word limit) and that it is logical and coherent (that each paragraph and section follows from the other).

  1. Introduction: Give a brief (around 150 words) background to the issue of enlargement.
  2. Outline the key issues: Devote a paragraph each to the key issues that you have identified. Remember that you need to present a balanced account of the issues so consider both the potential benefits of enlargement and the possible costs. This might take up around 750 words.
  3. Deal with the UK aspect: Comment on what you think, from your research, are likely to be the costs and the benefits to the UK economy. Use the data to quantify those effects and make informed judgements about how significant these effects are. Again, ensure you provide some element of balance to your argument - don't get drawn into the trap of giving all good points or all bad points! This should take up around 500 words.
  4. Conclusion: Summarise you main conclusion with regard to the MOST IMPORTANT issues facing the EU and the major impact on the UK economy. This should be around 150 words.

If you go over the word limit it is not that important - provided it is only a relatively small amount, 200 words or so. If you end up writing 2000+ words, then you are in danger of neglecting the skills of selection and organisation of information and may have included too much information that is not analysis but description. For a guide on assessment objectives and what they mean, look at our guide to Assessment Objectives and Command Words (http://www.bized.co.uk/reference/studyskills/command.htm).

Good Luck!