Opening up of Eastern Europe and Eastward Enlargement of the EU. The Impact on Austria

Through simulations using the WIFO macro model it is possible to estimate the effect of changes in trade policy – i.e., of East European opening up and of EU eastward enlargement – on the Austrian economy: although competitive pressure has considerably increased in some economic sectors because of East European opening up, its effect on the Austrian economy as a whole has been beneficial since it brought increased export opportunities. The envisaged eastward enlargement of the EU would stimulate trade and growth, but, due to the Central and East European countries' low level of development, it would also involve considerable costs related to the EU's Common Agricultural Policy and to its structural policies. In the case of EU accession by Austria's four neighboring countries, i.e., Slovakia, Slovenia, the Czech Republic and Hungary, the growth advantages would prevail over the cost disadvantages in Austria.Opening up of Eastern Europe and Eastward Enlargement of the EU. The Impact on Austria