[Journal:] Vierteljahrshefte zur Wirtschaftsforschung [ISSN:] 1861-1559 [Publisher:] Duncker & Humblot [Place:] Berlin [Year:] 2006 [Volume:] 75 [Issue:] 2 [Pages:] 79-90
The theme of this contribution is how Europe will evolve over the next decade. The key message is that over this decade Europe will be busy digesting the 12 members that joined in 2004 and 2007. Digesting in the context means that the new members will only gradually be incorporated and participating in important areas, such as labour mobility, EMU and Schengen. Another challenge for the next decade is for some of the member countries of the euro area to adjust to the loss of the exchange rate as an adjustment instrument. This is an even more basic challenge for the EU because the enlargement challenge cannot be answered if the euro area falls apart because its member countries cannot adjust to the constraints of a stable common currency. This contribution deals with these two basic challenges for the EU over the next decade. It starts with a brief review of forces that might threaten the euro area. The second section then details some crucial facets of the enlargement challenge.