First and foremost, impact studies pointed out that the adhering of Romania to the European Union in 2007 is the most advantageousprospect to consider both financially and in terms of economic development, as the increase of the living standards and of modernizing processes inRomania is far more evident in this case than in a postponed adhering or in a seclusion scenario. Consequently, if we fail the European Unionadhering in 2007, we would have to face higher costs

Romeo Victor IONESCU

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ŒCONOMICA    7 General Economics  THE COSTS OF EUROPEAN INTEGRATION  Professor Romeo Victor IONESCU, PhD „Danubius” University from Galaţi,   Abstract:  First  and  foremost,  impact  studies  pointed  out  that  the  adhering  of Romania to the European Union in 2007 is the most advantageous prospect to consider both financially and in terms of economic development, as the increase of the living standards and of modernizing processes in Romania is far more evident in this case than in a postponed adhering or in a seclusion scenario. Consequently, if we fail the European Union adhering in 2007, we would have to face higher costs.  Keywords: European Union, Community Funds, impact Jel classification: F15 - Economic Integration;   The costs of integration are, in fact, Romanian modernizing costs, that are to be made ether way, even without any Community support in case of having missed the integration. We may say that we invest in highways for the very need to get integrated, while we had better say we want better roads, that would contribute to the economic development and, implicitly, creating new jobs. Could we simply say that investments meant to reduce pollution or to improve the quality of drinking water have been made for the sake of the European Union? I do think a proper statement would be that we are, ourselves, concerned in having  better  water  and  a  cleaner  environment,  to  the  benefit  of  all  of  us. Furthermore, I think that we all want slaughter-houses and dairy shops to comply with all the rules of hygiene so as to ensure the safety of our food. Thus, most of the costs considered as adhesion-connected are actually meant to improve our living standards.  Such  costs  should  have  been  made  under  any  events;  now  they  are ACTA UNIVERSITATIS DANUBIUS                                                       Nr. 1/2006    8supported by the Community Funds. For instance, environmental costs for the next 20 years were estimated to approximately EUR 29 billion. They are to be covered with money that comes from the central public budget and the local budgets, but also from company’s budget. Between 2005 and 2025, Romania will allot, yearly, approximately 1% of the G.D.P. to environmental and transport activities, while the European Union is to earmark 1.7% out of Romania’s G.D.P., for the same needs.  It is true that our co-financing has to be added to the European Union funds. This doesn’t point out any contribution  to  the  Community  budget,  but  an  investment  in  Romania’s development projects. If such investments supposed to receive a 100% Romanian funding, this would not have been a bearable effort for the population. Subsequently, Romania’s contribution to the Community budget is about EUR 2.5 billion, between 2007 and 2009 (i.e. EUR 800 million in 2007 and about EUR 900 million, twice in 2008 and respectively in 2009) and not about EUR 5.6 billion as published in media. Co-financing does not stand for any contribution to the Community budget. The money does not leave the country, but are invested here in Romanian modernizing projects (roads, sewerages, farming developments, firms, jobs etc.). However, Romania is to receive EUR 11 billion from the Community budget in 2007-2009 out of which some EUR 6 billion payments, other remaining payments being scheduled all along the unfolding projects. The  only  costs  that  are  likely  to  associate  in  their  entirety  with  the integrating process are those connected to setting up several specific institutions e.g.  for  administrating  Community  funds,  for  agricultural  purposes  and  so  on. However, the benefits brought by this management system of European financial inflows are exponentially higher as related to costs.1 And it would also be something else: the monetary costs that are to be taken - as previously mentioned- for economic growth, development or modernizing ones are liable to have some extremely amplified medium and long-term effects for each Euro spent in this process. Nevertheless, the benefits of integration must also be assumed  as  against  the  background  of  non-monetary  effects:  the  altering  of economic  behaviour  now  highly  based  on  moral  hazard;  the  increase  of                                                             1 Ciupangea Constantin, Theoretical and Methodological Approach of the Costs and Benefits related to the E.U. Integration of Romania, Economic Problems, Weekly Economic Magazine, 116th issue, 2004 ŒCONOMICA    9technological, economic and commercial competitiveness; the improvement of the business  environment,  as  considered  predictable  and  uncertain  risk  reducing  the terms. Maybe  the  most  significant  benefit  is  Romania’s  possibility  to  actively participate in working out the new acquis communautaire so that the interests of our country should best be served.  I think it is high time we got over the demagogical approach and asses the adhering impact at a global scale. The European Union does not impose arbitrary standards  to  cause  the  effecting  of  additional  costs,  but  it  establishes  certain standards in order to increase the living standards of each individual and to shape up a dynamic and competitive economic environment. Obviously, there are costs to be used in modernizing Romania, costs that now relate to the European Union adhering process. However these costs have definitely existed in the last years and have been meant to increase the efficiency of the Romanian economy. Now we do benefit of the European Union support and we are to integrate into a milieu that ought to ensure a better living for each of us, other state’s example is very specific in this respect. I  think  that,  instead  of  demagogically  approaching  this  topic,  we  would rather inform companies and citizens on how they should better get ready for the status of the European Union members. I do also think that consciousness, honesty and responsibility in making the assessment  of  the  European  Union  adhering  of  Romania  must  stand  for  the indispensable intellectual ingredients. The bill of integration will probably amount to at least EUR 17 billion in the next five years. The four million wage-earners in Romania will bear an expenditure of EUR 4200 besides the present tax contributions. In the following five years, Romania will have to spend EUR 17 billion in order to reach European Union standards and most of this money is to be paid by Romanian citizens and firms. The adhering costs, that Romanian population will bear, are of three kinds: public costs (having state budget support), private costs (made by companies) and ACTA UNIVERSITATIS DANUBIUS                                                       Nr. 1/2006    10individual costs (that are to be paid by each Romanian citizen in order to: reshape the retirement system, help the professional redeployment, and increase the living standards). The first two types of costs are liable to be assessed, even if roughly, but individual costs can be, by no means, previously estimated. Scientific studies emphasize the important aspects of the European Union adhering,  which  are:  the degree  of  conformity  of  Romanian  legislation  with  the Community legal framework; monetary strategies and exchange course issues; the consequences of adopting the acquis communautaire on the financial control; the European  security  and  defence  policy;  emigration  and  immigration  phenomena; structural  funds  -  the  candidate  states’  experience;  the  plan  of  action  aiming  at storing the industrial waste; the comparative analysis of member states insolvency and  bankruptcy;  financial  management  options  and  solutions  in  ensuring  a  real increase in the value of the retirement pays; the state aids in tender competition sectors; agricultural and rural development priorities; the costs and benefits of the adhering process.1                                                              1 The European Institute in Romania, Impact Studies, PAIS II 

The Costs of European Integration

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