Edited by Klaus Liebscher, Josef Christl, Peter Mooslechner and Doris Ritzberger-Grünwald
Chapter 3: Capacity building challenges in the run-up to EU enlargement and beyond
Jean Lemierre1 Looking ahead, the major challenge for the EU acceding countries is that transition has not yet been completed. To quote an example from previous enlargement rounds, Spain and Portugal took another ten years after their accession to the EU to make further reforms and to adapt their economies and their societies. The main challenges the new EU members states now face include, apart from implementing the acquis communautaire, reining in the ﬁscal deﬁcit, making structural reforms – and responding to the pressure of the people, who want a reward for the extraordinary eﬀorts they have made already over the past ten years of transformation. They have been very good, they have done a lot. But they want rewards, and they will get some. Those measures and measures taken to enhance competitiveness mean costs, in the ﬁelds of environment, education, and so on; so the acceding countries will continue to be under pressure. Finally, unemployment can come and it is coming. In many countries in Central Europe and for the same reasons, transition has thus been both destruction and creation. So what is the answer? The way forward will be to boost the private sector. Against this background, the ﬁrst priority will be to reform the banking sector, to improve its capacity to ﬁnance the real economy suﬃciently. The level of ﬁnancial banking intermediation in central Europe is still very low, much lower than in the other countries of the EU. The ﬁnancial sector continues to be...
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