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transforms the composition of industry, mak-

Still other regulations have a more immedi-

ing it more sophisticated and cleaner.63

ate impact on the economy and can be met only

through substantial expenditure. The EU envi-

Similarly, the World Economic Forum's 2001

ronmental regulations include directives con-

Environmental Sustainability Index found that

cerning the quality of drinking water, bathing

environmental standards rise with increases in

water, and groundwater.58 They set national

per capita GDP.64

emission ceilings for atmospheric pollutants

"As [a] country sees its standard of living

such as sulphur dioxide, nitrogen dioxide, and

rise through economic liberalization and

other oxides of nitrogen and limit emissions

trade expansion," Cato scholar Daniel

from large combustion plants, compression-

Griswold explains, "its industry can more

ignition  engines,  and  positive-ignition

readily afford to control emissions. Its citi-

engines.59 The EU also requires compliance

zens have more to spend, above what they

with costly directives on all types of waste.60

need for subsistence, on the `luxury good' of

improved environmental quality. . . . That

Compliance with EU environmental stan-

explains why the most stringent environmen-

dards will have to be policed by scores of addi-

tal laws in the world today are found in devel-

tional public officials. In 2002 the EU approv-

oped countries that are relatively open to

ingly noted that the Czech Ministry of the

trade."65 To put it differently, the EU should

Environment beefed up its staff, which then

carried out about 19,500 inspections and

have focused on rapid growth in CEE, which

imposed 2,627 fines worth approximately 2.1

would be followed, not preceded, by improve-

million euros.61 Overall, the EU Commission

ments in environmental standards.

The EU is clearly aware of the impact that its

estimated the cost of CEE compliance with

legislation will have on the CEE economies. As

the new environmental regulations at between

80 billion and 120 billion euros.62

the EU Commission states, when it comes to the

environment, "there will be no lowering of stan-

That expense will have to be met by the end

dards--a basic principle that applies to all aspects

of the transition period, which most CEECs

of the enlargement process. This is important

negotiated in order to spread the costs of envi-

also for the unity of the Single Market, to ensure

ronmental adjustment. The conclusions of

a level playing field for business."66Unfortunately,

the transition periods vary, but most will come

to an end by 2013. In other words, over the

the EU will create that "level playing field" by

next 10 years, the CEECs will have to meet

making the CEECs less competitive.

environmental expenditures of as much as 10

billion euros per year. The CEE governments

Common Agricultural Policy

By insisting on

will have to assume the increased financial

The Common Agricultural Policy is one of

burden and meet it out of general taxation or

the most controversial parts of the European

Western environ-

borrowing. Private enterprises will see their

project. The CAP consumes 46 percent of the

mental standards,

profits diminished by increased taxation; con-

EU's total annual budget of 100 billion euros.

sumers will have to pick up the tab for lower-

As one European commentator, William Rees-

the EU will likely

ing emissions; and municipalities will have to

Mogg, noted: "The annual dairy subsidies given

contribute to the

find the funds to improve standards for waste-

by the CAP and the European governments put

prolongation of

water and solid waste.

together come to more than $800 per cow. That

By insisting on Western environmental stan-

is greater than the individual income of half the

economic malaise

dards, the EU will likely contribute to the pro-

world's population including more than one

in CEE.

country from the former Soviet Union."67 Of

longation of economic malaise in CEE. That is

especially troubling since the EU approach to

course, agricultural subsidies are common

the environment goes against a growing body of

throughout the world and amount to an annu-

research that links environmental improve-

al $300 billion in OECD countries alone. Still,

ments to economic growth. One OECD study,

the EU spends almost twice as much to subsi-

dize its farmers as does the United States.68

for example, found that economic development

10