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Full EU member-

other things, it mandates that the legality of

Introduction

bananas be determined "in millimeters, of

ship comes with

the thickness of a transverse section of the

considerable

fruit between the lateral faces and the middle,

Pending approvals in national referenda,

costs to optimal

perpendicularly to the longitudinal axis."3

on May 1, 2004, 10 countries will officially

join the European Union. Eight of those are

Other legislation is more economically

economic growth.

Central and Eastern European countries

damaging. For example, as a result of the

(CEECs) that were part of the former

enlargement negotiations, Estonia was

Communist bloc. They include the Czech

forced to introduce 10,794 new tariffs

and Slovak Republics, Hungary, Poland,

against imports from outside of the EU.

Slovenia, Latvia, Lithuania, and Estonia. The

Estonia was also forced to adopt a number of

EU enlargement will increase the size of the

nontariff barriers, such as quotas, subsidies,

European common market from 370 million

and anti-dumping duties. Unfortunately,

to roughly 470 million people. Many of the

such protectionism increases food prices and

lowers Estonians' standard of living.4

barriers to trade, investment, and movement

of labor will disappear. Exchange of knowl-

Government expenditures needed to meet

edge, technology, and new ideas will become

the cost of the EU regulations will also neces-

easier. Foreign competition will improve

sitate greater debt and higher taxes. According

business  transparency  and  corporate

to the EUobserver, an English-language daily

accountability. Access to the common mar-

newspaper in Brussels: "Due to the large

ket will improve the attractiveness of the

expenses involved [in accession, the new mem-

CEECs as a destination for foreign invest-

bers] will have to ask public or private finan-

ment. Economies of scale will drive down

cial institutions for money. Governments may

prices and transaction costs. Productivity of

also have to adopt economic measures, such

capital and labor will increase. Consumer

as increasing taxes, to finance EU law imple-

goods will become cheaper, better in quality,

mentation." Compliance with the EU regula-

and more diverse.

tions will also significantly affect the perfor-

Such are some of the many advantages of

mance of the economies. The EU Commission

joining the European common market.

expects that the EU environmental legislation

However, unlike Switzerland, Norway, and

alone will cost between 2 and 3 percent of the

Iceland, the CEECs were never given the

CEEC's annual GDP during the transition

period of five to seven years.5

option of joining just the free-trade area.

From the start, the EU was prepared to con-

The economic benefits of the common

sider the CEECs for only full EU member-

market may be able to mitigate many of the

ship.1 But full EU membership comes with

negative consequences of accession in the

long term, but the economic growth that the

considerable costs to optimal economic

CEECs enjoy will be suboptimal. That is a

growth. Membership will subject the CEECs

worry explicitly expressed by economists

to 97,000 pages of EU rules and regulations

from the Institute of M. R. Stefanik, a Slovak

and thus deprive them of many of their com-

parative advantages.2

think tank. According to them, EU accession

will prevent further liberalization of the

To be sure, some of those regulations are

Slovak economy and require Slovak firms to

more ridiculous than economically damag-

provide too high a level of worker benefits.6

ing. Regulation 2257/94, for example, speci-

fies the size and shape of bananas that can be

Mirek Topolanek, head of the Civic

sold in the EU. The regulation limits the size

Democratic Party (ODS), the second largest

of bananas to at least 14 cm and insists that

political party in the Czech Republic,

they should be free of "abnormal curvature."

expressed his misgivings about the EU's regu-

The EU suffered much ridicule as a result of

latory drive. According Topolanek, in order for

that legislation but did not rescind it. Among

the Czech economy to grow, the Czechs must

2