SMALL COUNTRIES IN THE INTERNAL MARKET Fritz Breuss Austria, Finland and Sweden in the European Union Economic Effects EU integration has made rapid progress over the past decade. After establishing the Internal Market in 1993, the EU achieved the highest possible level of economic integration in 1999 by completing the eco- nomic and monetary union (EMU) with the introduction of the euro as the common currency. Austria, Finland and Sweden joined the EU in 1995, but Sweden is not yet participating in EMU. Against this back- ground, the present article analyses economic developments in these three member states and, using an integration model, sets out to estimate the respective macro-economic effects of EU membership. The re- sults suggest that Finland has benefited most from accession to the EU, ahead of Austria and Sweden. Fritz Breuss is an economist at WIFO and Jean Monnet professor at the Vienna University of Economics and Business Administration (Research Institute for European Affairs). The author is grateful to Wolfgang Pollan and Michael Wüger for useful and constructive comments. The data were processed and analysed with the assistance of Christine Kaufmann • E-Mail-addresses:
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[email protected] In the fourth round of enlargement, Finland, Austria and Sweden joined the Euro- pean Union on 1 January, 1995, bringing the number of member states to 15. The new members were all "rich" countries, whereas in the two preceding rounds with Greece (1981) and Portugal and Spain (1986) "poor" countries had acceded to the EU. The accession process of the most recent round lasted between three and over five years, counting from the submission of the request for EU membership (Austria 17 July 1989, Finland 18 March 1992, Sweden 1 July 1991; Norway 25 November 1992, Switzerland 20 May 1992).