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The Challenges Of EU Enlargement

For more than 50 years, Europeans have shared aspirations for closer economic cooperation and political ties. The accession of ten new countries to the European Union earlier this year opened the latest and perhaps most dramatic chapter in this process. Expansion of the world's second-largest market offers historic opportunities for economic renewal.

But with enlargement come challenges. At a time of slow growth, lingering high unemployment, and difficult fiscal situations in some countries, it is understandable that longer-standing members of the EU sometimes focus more on the potentially disruptive difficulties than the opportunities.

Those problems are real, but their solutions lie in the new vistas of the enlarged EU: more trade in goods and services, integration of markets and better allocation of capital, and the potentially disciplining effect of economic unification on economic policies.

The advantages for trade and investment - more than 450 million people in 25 countries - are self-evident. The addition of the faster-growing, middle-income economies of Central and Eastern Europe offers a larger, more diverse internal market with rising purchasing power and a well-educated workforce.