The Design of the EU after Enlargement: Customs Union or Common Market with New Members ?

The Design of the EU after Enlargement: Customs Union or Common Market with New Members ?

The present paper tries to give support for the decision whether to let the candidates for European Union get members of the Single European Market or just build a customs union with them and hinder free migration while capital movements were still allowed for. On the basis of a simple theoretical analysis we will see that there is no rationale for the EU not to let the new members get full members of the Union. As soon as capital is free to move, it can serve for factor price equalisation even if mass immigration to the Union is kept away.