26 January 1999 • Political and Economic Perspectives of the EU Eastern Enlargement • Helmut Kramer

The extent to which the economy will benefit from the EU's eastern enlargement will hinge primarily on political factors: the kind of institutional reform the EU will have undertaken up to that time, the balancing of conflicting interests between those who gain from the enlargement and those who lose, the adaptability of social structures in the countries aspiring to membership, and the intensification of contacts in the information society. Moreover, the question remains as to how the transition countries would develop if they were not allowed to join the Union within a reasonable time period. As a close neighbour of these countries, Austria can expect to benefit from the increase in economic opportunities associated with the enlargement, but it must also face greater adjustment problems, especially in the border regions. Some of the most difficult problems to be expected during the transition period will be arising from the labour market. An increase in financial transfers to the prospective member countries could be at odds with Austria's desire to reduce its net payments to the EU.