New member states could take up to 40 years to catch up

RICHARD CARTER

23.04.2004 @ 09:46 CET

The Chief Economist of the European Bank for Reconstruction and Development (EBRD) has delivered a surprisingly downbeat assessment of new member states' economic prospects after enlargement.

In an interview with the Financial Times Deutschland, Willem Buiten said, "Poland will need 40 years to catch up with the EU average". The others will need between 15 and 30 years, according to Mr Buiten.

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Moreover, another representative of the top bank expressed the concern that the new member states might become too dependent on EU handouts rather than implementing necessary economic reform.

"There is a danger that the accession countries will leave the reforms of their economies to one side and rely on payment transfers from the EU", said EBRD Vice-President Hanna Gronkiewicz-Waltz.

"We saw something similar after the entry of Spain, Greece and Portugal", she added.

And Mr Buiten adds that some countries, such as Poland or the Czech Republic "could be better prepared for enlargement than they actually are".

Well placed

The EBRD is well placed to assess the state of the Eastern countries' economies. It is the largest single investor in the Central European region and helps to build market economies and democracies in 27 countries from central Europe to central Asia.

However, positive economic data from Poland yesterday seemed to defy the bank's pessimism.

Economy Minister Jerzy Hausner announced yesterday (Thursday 22 April) that Poland's economy had grown by six percent in the first quarter of this year, beating expectations.

And Poland seems also to be stopping the rot in unemployment. Its statistics agency indicated that unemployment had shrunk slightly to 20.5 percent - which is still by far the highest rate in the enlarged EU.

About 3.26 million of the population of 38.2 million were out of a job, said the agency, according to AFP.