With the EU due to decide whether to open accession negotiations with Ukraine before the year’s end, it is urgent now to inform the political debate about the practical consequences of such a decision.
Ukraine’s impact on the EU budget will be an important part of this debate, for which the present paper makes a first quantified assessment, drawing on the cases of Poland and Romania as comparators. The costs will be significant for sure, but alarmist talk sometimes heard, that all member states will become net payers into the budget, is totally unfounded. There are control mechanisms capping both cohesion and agricultural expenditures.
Even with an optimistic assumption of accession in 2030, the full impact will not be felt until the 2040s, given the long transition periods for phasing in agricultural expenditures. By this time, many things will have changed, including catch-up towards the average EU income level by member states acceding since 2004, creating budgetary space for new and poorer member states.
Of course, there remain big uncertainties over how the war in Ukraine will end and how reconstruction will be funded beyond the major commitments being proposed for the EU – i.e., from other G7 donors, the international financial institutions, and possibly Russia’s frozen assets. However, overall, the budgetary dimension to Ukraine’s possible accession looks relatively manageable.
This paper is the first publication of the project on “The political and economic impact of Ukraine’s EU accession on the EU and Estonia” conducted by the ICDS in cooperation with the Centre for European Policy Studies in Brussels and the Ukrainian Institute for Economic Research and Policy. The multi-disciplinary research team assesses the potential political, security-related, institutional, economic, and budgetary implications of Ukraine’s EU accession. The project is led by Dr Kristi Raik, Deputy Director of the ICDS, and supported by the Estonian Ministry of Foreign Affairs.