Good afternoon. It is wonderful to be back in Brussels.
Let me start by thanking our hosts at CEPS for bringing us together today. And let me also say how pleased I am that Commissioner Kos is joining this panel discussion.
We are delighted that enlargement is once again on the European Union’s agenda, with a number of countries looking to join in the coming years. This is extremely positive. At the IMF we have seen tremendous benefits from enlargement, for both new and existing EU members. Indeed, we can say that enlargement activates the convergence engine which is, in my view, the most important invention of the 20th century.
Today, we are launching a new paper that focuses specifically on the Western Balkans and Moldova, accession countries which share certain economic features. At the same time, we recognize the importance of continuing engagement with other countries seeking to join, including Ukraine.
The IMF helps all of these countries—including through policy advice and capacity development. In a few weeks, with the support of our development partners (Italy, the European Commission, Greece, and Luxembourg) and beneficiary countries, we will launch a new capacity development center in Rome for the Western Balkan countries and Moldova—the Southeast Europe Technical Assistance Center, or SEETAC. SEETAC will join another IMF center in Vienna that is providing training to countries such as Ukraine. Together these IMF centers complement the work of the Ukraine Capacity Development Fund, as well as our own Fund program for Ukraine.
For me, enlargement is more than a policy issue. It is personal. Having grown up in Bulgaria, I know the opportunity that European integration brings. Because joining the EU made life tangibly better for the people of my home country.
The biggest enlargement wave to date came in 2004, followed by the enlargement of 2007. In 2004, world growth reached 5.3 percent. Trade was flourishing and global supply chains were becoming more integrated, to the great benefit of European firms.
Now consider where we are today. Global growth is projected to be about 3 percent this year. Trade restrictions and geopolitical tensions are high and rising, and Europe faces significant demographic and fiscal pressures.
Does that make enlargement less relevant? No. On the contrary!
Done well, enlargement can provide a much-needed boost to growth in Europe—for both candidate countries and existing members. The world is becoming a more difficult place—and expanding and deepening the EU’s single market will make Europe stronger and more resilient.
Today, candidate countries face a similar opportunity to that of past enlargement rounds: Their gaps in income levels and governance quality compared to existing EU members are sizable—but broadly comparable to those faced by earlier accession countries.
