BALEARICS COULD LOSE OUT TO EU EXPANSION

THE Balearics, along with Spain's other self-governed Communities whose exported or imported products coincide with those countries who are on the waiting list to join the European Union could suffer negative consequences in their economy. This was clear from the report “The Self-Governing Regions of Spain facing increased membership of the European Union” produced by the Economic Forecast Centre (CEPREDE). Added to this possible negative repercussion was the reduction of investments that could put a stop to the new community co-operatives because of the “undoubted geographic advantage” of the proximity of the new member states to Germany and because of their lower labour and transport costs. The creation of a very important market and the development of infrastructures was highlighted amongst the advantages of the report.
Regarding the repercussions for external business, the study points out that Cantabria, Madrid, Catalunya, the Basque Country and Galicia would be the areas most seriously affected if Spanish exports were to be substituted with those of new member States of the European Union. The effect of reduction in community exports on the Spanish economy would be most felt in Galicia, Navarra, Castilla-La Mancha, Castilla y León, and Aragon. During 2002, 70.5 percent of Spanish exports were destined for countries of the European Union, principally France, Germany and the United Kingdom. Extremadura (with 86.7) headed up the list of self-governing areas with its exports going to the EU, followed by Castilla y Leòn with 85 percent, Galicia 80.9 percent and Aragon with 80.8 percent. In contrast, the Canary Islands, showing a figure of 37.3 percent was the region that exported least to the European Union, followed by the Balearics with 66 percent and the Community of Valencia, also with 66 percent. Given that 70.5 percent of exports go to the European Union, the countries who are waiting to become member states jointly account for a total of 4.6 percent of this export figure. Navarra tops the list exporting 9.7 percent of its produce to these areas, followed by Castilla y León with 5.7 percent and Catalunya with 5.4 percent.
Castilla y León, Extremadura, Castilla-La Mancha and Aragon were the self-governing regions that imported most from the EU in 2002, while Murcia was the area that imported the least with only 21.5 percent. Regarding imports from the countries who are candidates for the European Union, Aragon showed highest on the index with 6.5 percent, followed by Navarra and the Community of Valencia. The majority of the regions have the EU as the destination for a major part of their investments, which in the case of the Balearics, Catalunya, the Community of Valencia, Extremadura and Murcia reached a figure more than 50 percent of the Direct Foreign Investment (IDE) going out in the period 1993-2002, whilst Cantabria didn't even reach 2 percent. The Community of Valencia is at the head of the league regarding direct investment in the EU candidate countries, with 14.3 percent registered between 1993 and 2002.