The Treaty of Nice (2001) strongly protects the interests of the current 15 European Union member countries. The new voting structure in the enlarged European Union preserves the existing members blocking influence over new policies. In addition, there is a cap on the Unions total expenditure. It is on these terms that the European Union is ready to enlarge eastwards. Eight countries with economies in transition (the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia and Slovenia) and two market economies (Cyprus and Malta) are due to join the European Union in 2004. Bulgaria and Romania may follow, but not before 2007. The final operational entry conditions set by the European Councils in Brussels and in Copenhagen (2002) are such that this enlargement may be relatively cheap for the European Union in financial terms, but much costlier and slower for the accession countries than expected by politicians, both in the European Union and in the accession countries. The reasons for this include the self-imposed limits on European Union expenditure and the increasingly stringent standards that come from the ever-growing acquis communautaire that are costly to introduce, implement and enforce, but enlargement will take place for political reasons.

JEL Classification: F15