What the 2004 and 2007 enlargements teach

The 2004 and 2007 enlargements are the closest available precedent and they have now been running long enough to be assessed rather than predicted.

What happened to output

Convergence, substantial and sustained. Incomes in the new member states rose considerably faster than in the older ones over the following two decades, closing a large part of a very large initial gap.

The convergence was not uniform: it was faster in countries that combined accession with domestic reform and slower in those that treated membership as the destination.

What happened to investment

Foreign direct investment rose sharply, particularly in manufacturing, and it arrived in anticipation of accession rather than after it. Investors moved when the outcome became predictable, not when it was formalised.

That timing is the most directly relevant lesson for a country currently negotiating.

What happened to people

Substantial emigration, concentrated in the years immediately after accession and among the young and skilled. Several countries lost a significant share of their working-age population.

Return migration followed later, as wage gaps narrowed, but not in equal numbers. This is the cost side and it should be stated without euphemism.

What the transition periods did

They worked. Sensitive sectors received phased timetables, the adjustments were absorbed, and the arrangements expired without crisis.

The applicable lesson

The benefits arrive before membership and depend on domestic reform; the demographic costs arrive immediately after and depend on wage differentials. A country that plans for both is planning correctly.

I followed what happened in those countries from the commercial side: in the five years after accession investment came in, wages rose and some of the skilled people left. All three happened at once and all three were to be expected. The applicable lesson is that transition periods work — they were the only instrument that softened the shock.