Senior Economist Martin Schulz
The EU has become the world's foremost FDI location, and its enlargement causes significant changes not only in the accession countries but also for the "old" member countries and the union's structure as a whole. First, for the accession countries the fast adoption of EU regulations provides a sound basis for further growth, but the dynamics will change considerably between sectors and regions. Second, for the "old" EU increasing political diversity, economic imbalances, and price competition will likely slow or end the union's current phase of harmonization and economic policy integration, or "ever closer union." Third, the enlarged EU will most likely continue to grow - to the East and to the South. Together, these developments should increase the attractiveness of the European market for international investors by pushing it into the direction of a more flexible and competitive common market.