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U.N. report warns against premature expansion of European Union

December 11, 1996

GENEVA (AP) _ Expansion of the European Union by the start of the next century is unrealistic and undesirable, U.N. economists said in a report released Tuesday.

Instead of rushing toward a premature marriage, the EU and Eastern European countries should focus on practical steps such as lower trade barriers, the Economic Commission for Europe said in its year-end report.

The 15-country EU has not said when it might expand, but indicated that talks with potential members could begin as early as next year and that 10 or more nations could join during the coming decade.

Even for reform-minded countries such as Poland, Hungary and the Czech Republic, joining the EU by 2000 is too optimistic, the U.N. report said.

``The most advanced transition economy would be unlikely to join before the middle of the next decade,″ it said.

The Mediterranean islands of Malta and Cyprus are also in line for possible EU membership, along with Bulgaria, Romania, Slovenia, Estonia, Latvia and Lithuania.

Nations seeking EU membership are hoping to take advantage of its trade and security benefits.

The report said the EU should do more to remove trade barriers, even to sensitive products like farm goods. And it should target financial aid more carefully, include Eastern European nations in overhauling outdated industries and help prepare nonmember governments to adapt to the thousands of EU laws, according to the report.

For their part, Eastern European countries should remove export and import barriers among themselves and prepare their industries for the greater competition that EU membership would entail, it said.

The report said economic growth in Eastern Europe this year was likely to average 3.5 percent _ below last year’s level of 5.5 percent and down from forecasts of 5 percent to 6 percent for this year.

The sluggish growth was due partly to slack Western demand for imports, as well as currency fluctuations and rising wages. For 1997, the report cited forecasts that Eastern European growth might again increase to 4 percent or 5 percent.

Growth in Western Europe was likely to be about 1.5 percent this year and 2.25 percent in 1997, the report said.

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