The Vienna Institute for International Economic Studies Wiener Institut für Internationale Wirtschaftsvergleiche (wiiw) Introduction Sándor Richter

Triangle of the enlargement process

The existence of a functioning market economy is assessed an the basis of whether:  Equilibrium between demand and supply is established by the free interplay of market forces; prices, as well as trade, are liberalised;  Significant barriers to market entry (establishment of new firms) and exit (bankruptcies, liquidations) are absent;  The legal system, including the regulation of property rights, is in place; laws and contracts can be enforced; The existence of a functioning market economy (1)

 Macro ‑ economic stability has been achieved including adequate price stability and sustainable public finances and external accounts;  Broad consensus about the essentials of economic policy;  The financial sector is sufficiently well developed to channel savings towards productive investment. The existence of a functioning market economy (2)

This sub ‑ criterion is assessed on the basis of the following:  the existence of a functioning market economy, with a sufficient degree of macro ‑ economic stability for economic agents to make decisions in a climate of stability and predictability;  a sufficient amount, at an appropriate cost, of human and physical capital, including infrastructure (energy supply, telecommunications, transport etc), education and research and future developments in this field;  the extent to which government policy and legislation influence competitiveness through trade policy, competition policy, state aids, support for SMEs, etc; The capacity to withstand competitive pressure and market forces within the Union (1)

 the degree and the pace of trade integration a country achieves with the Union before enlargement. This applies both to the volume and the nature of goods already traded with Member States;  the proportion of small firms, partly because small firms tend to benefit more from improved market access, and partly because a dominance of large firms could indicate a greater reluctance to adjust. The capacity to withstand competitive pressure and market forces within the Union (2)

Negotiated Chapters 1Free movement of goods 2Free movement of persons 3Free movement of services 4Free movement of capital 5Company law 6Competition & state aid 7Agriculture 8Fisheries 9Transport 10Taxation 11EMU 12Statistics 13Social policy & employment 14Energy 15Industrial policy 16SMEs 17Science & research 18Education & training 19Telecommunications 20Culture & audiovisual 21Regional policy 22Environment 23Consumers & health protection 24Justice & home affairs 25Customs union 26External relations 27Common foreign & security policy 28Financial control 29Financial & budgetary provisions 30Institutions