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June 2004
Joining the party
No other region in the UK has felt the impact of pending EU enlargement in recent years more than the Midlands.
Although I cannot back up the bold assertion with precise figures, I make the claim because of what I have learnt from speaking to directors of countless Midlands businesses over the last few years. Namely, that attracted by low costs, skilled labour and underdeveloped markets, they have been pouring into Eastern Europe in their droves.
In particular our automotive industry has been investing heavily along the new frontier, underscoring a massive expansion of car manufacturing capacity in Eastern Europe.
As such the momentous accession of ten states on 1 May probably meant little to these shrewd directors who got into Eastern Europe early. They will have doubtless been planning for the day when these countries became fully-fledged members of the European club for several years and have all the financial and legal systems in place to ensure their business move is a profitable one.
These same directors are probably the ones who are already eyeing the next wave of EU entrants - Romania, Bulgaria, Belarus and Ukraine - for the next big deal.
However, for those who are arriving later to the bigger European party, there are serious issues to take on board. Firstly, how quickly the competitive advantage of being there in the first place will be lost as the new states raise their living standards; and secondly, whether legal and financial issues (documented by Andrew Macleod in our report on page 35) surrounding a move east could become too cumbersome.
For the wider health of the new member states - in terms of raising their living standards - it is to be sincerely hoped that Brussels bureaucracy doesn't get in the way of their growth. The early signs are good, with most commentators agreeing that the new states will be reluctant to cede too much sovereignty to Brussels or embrace anything that could impair their growth.
Some have even suggested that the new states could be a dynamo for reform of the EU machine, a move that would surely be applauded by every Midlands director bombarded daily by Brussels diktats.
It might appear a faint hope but let's hang on to it, and here's too to plenty more opportunities for Midlands business to trade with our new partners.
Going for gold
Surprise surprise, London's Olympics bid looks like being floored by its chronic transport system (having attended a global sporting event at the Stade de France last year I believe we might as well give it to Paris now).
However, what caught my eye was the simultaneous proposal by a consortium of leading business figures to help the government address the problem by dipping into their pockets, via a one-off hike in business rates, to help fund the £310bn Crossrail scheme across the capital, a scheme that desperately needs to happen if the Olympic bid is to stand any chance of success.
This all got me thinking whether something similar could ever get off the ground in Birmingham to fund improvements to its chronic rail network and New Street Station. Would directors of leading Midlands companies consider dipping into their pockets in similar fashion? Just a thought.
Jim Pendrill, editor
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