2004 EU enlargement and its social effects

Employment and Social Affairs

Estimated time of reading: ~ 3 minutes

On May 1, 2024, the whole European Union celebrated the 20th anniversary of the formal adhesion of ten countries. This is a cornerstone in the EU integration process and a real success story, a potential example for those countries that are still waiting for their time to become member states of the European Union, especially in the Western Balkans.

The ten countries that entered the EU in 2004 came from different areas of the European continent, but the majority of them (8 out of 10), i.e., Estonia, Latvia, Lithuania, Poland, the Czech Republic, Slovakia, Hungary, and Slovenia, shared a common past as former members of the Soviet or socialist bloc. When those countries joined the EU, they were coming from a long process, lasting a decade and a half, of social and economic transformation, following the collapse of communism. Since then, Central and Eastern Europe has witnessed a remarkable evolution, in a journey that has been one of both progress and challenges. After 20 years, we can easily state that, economically, EU accession acted as a springboard for growth. Free movement of goods, services, and capital boosted trade and investment for these nations, while foreign direct investment (FDI) surged, fostering technology transfer and industrial modernization. In a 20-year span, countries like Poland and Slovakia emerged as manufacturing powerhouses, particularly in the automotive sector, and the integration with the single market also opened new export opportunities, further propelling economic expansion.

As expected, this growth translated into tangible improvements in living standards for the citizens of these nations. Gross Domestic Product (GDP) per capita across the region rose significantly, narrowing the gap with Western Europe. Countries like Slovenia almost equaled the GDP per capita of other EU members that joined the Union decades ago. In the whole Central and Eastern European area, poverty rates declined, and social safety nets were consequently strengthened. At the same time, access to education and healthcare improved, contributing to a healthier and more educated population. 

However, the path to prosperity wasn’t without its bumps, twists and turns, as the global financial crisis of 2008 showed a few years after their entrance into the EU. Together with Southern Europe, Eastern Europe received a hard blow, in a way that exposed vulnerabilities in some economies heavily reliant on foreign capital. During that period, unemployment soared and growth stalled. While in the next years recovery followed, such a dynamic was not homogenous, with some nations bouncing back faster than others in the same region.

Another key challenge has been the persistence of income inequality. While the middle class has grown, a significant portion of the population still grapples with low wages and limited social mobility. Additionally, depopulation, particularly among young professionals seeking better opportunities in Western Europe, has hampered growth prospects in some countries in the region. Brexit and its tumultuous evolution somehow helped the rebalancing of such a dynamic, as many workers from Central and Eastern Europe moved to the United Kingdom in the period between 2004 and 2016.

The social transition has been equally complex, as the dismantling of communist structures led to a period of uncertainty and cultural upheaval. While individual freedoms flourished, social safety nets were initially inadequate. Democratic institutions, though established, are still maturing in some countries, and there have been growing concerns in the last few years about the situation in Poland and especially in Hungary, while Slovakia is also raising concerns after the recent elections. As in other parts of Europe, populist and nationalistic sentiments have emerged in the last decade, reflecting anxieties about globalisation and cultural change but also highlighting the limits of European dreams for many of the citizens. 

Written by: Francesco Marino

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