The Catalan economy and European enlargement: so close and yet so far

Catalonia has been experiencing a long period of economic growth since 1994, a cycle that has progressed in parallel with the process of European convergence of our economy. For Catalonia, Europe has always been both a challenge and a great opportunity. Europe has demanded that we be competitive and, at the same time, has offered us markets in which to grow, innovate, and internationalize. We have taken advantage of this, and today it is impossible to explain our current situation without considering the importance of the Europeanization and internationalization we are experiencing.
However, in this scenario, the Catalan company has largely ignored what is happening in the neighboring countries that will benefit from the upcoming European Union enlargement. The enlargement will initially affect ten countries with a combined population of over 100 million, representing a one-third increase in the EU's citizens. However, the EU's GDP will only grow by 5%, as these countries have a per capita income significantly lower than the current average for the fifteen-member Union. But no one should underestimate the immediate growth potential of these economies.
There are two important reasons why it is advantageous for the Catalan company to focus on the countries of Central and Eastern Europe. The first is that these countries constitute a production platform with reduced costs and the capacity to supply the entire European market, including the countries that benefited from the enlargement and also the group of Eastern European countries that were excluded. A significant part of Europe's growth over the next two decades will be driven by these economies.
The second reason is defensive: lower production costs in the new member countries will increase European competition in our markets, so positioning ourselves correctly in those countries is a guarantee to strengthen our current markets.
In order to foster economic relations between Catalonia and the future member states of the European Union, the Government of Catalonia, through COPCA (the Catalan Council for the Promotion of Trade), maintains three offices located in Poland, the Czech Republic, and Hungary. It also promotes the organization of trade missions to almost all the countries that have applied for enlargement. By 2001, more than thirty missions to these countries will have been organized, with the aim of opening export markets or initiating investment processes. Furthermore, the Catalan Foundation for Europe, with the support of the Ministry of Foreign Affairs, the European Commission, and the European Parliament, has launched an Action Plan on EU Enlargement 2001-2003 to raise awareness among Catalan society about the process and its effects. Currently, investments and exports are limited. In 1999 and 2000, Catalan investment in these countries exceeded 5.200 billion pesetas annually, while exports surpassed 370.000 billion pesetas, more than double the amount exported four years earlier. These are relatively small flows, but they reflect the optimistic outlook of Catalan companies that have chosen to establish themselves in those markets.
In short, European enlargement is a very near reality, both in terms of time and distance, but Catalonia's economic relations with the beneficiary countries have remained distant until now, relegated to a discreet background role. Therefore, it is crucial that businesses analyze the possibilities and opportunities offered by these economies. They are nearby and accessible markets, especially for small and medium-sized enterprises like those we have in Catalonia, and these countries often offer investment opportunities that are sometimes sought in much more distant markets.