On 20 March, Rosemary Radcliffe, PricewaterhouseCoopers' Chief Economist in Europe, gave a presentation "Lithuania in New Europe" at an EU enlargement seminar held by PricewaterhouseCoopers as part of the British Week.
She noted that a variety of changes are operating across Europe - social, political, technological economic and environmental - that pose new challenges to businesses. These drivers give rise to a series of important business issues - globalisation, industry convergence, e-business, innovation and many others. As a result, they mean further economic integration, new and greater benefits for consumers and new opportunities but more competitive intensity for businesses.
Rosemary Radcliffe pointed out that previous experience suggests that the EU enlargement will have a positive effect on FDI inflows and international business will play a crucial role in the development process in CEE. Enlargement may also mean such benefits as lower transaction costs, access to enlarged markets, greater opportunities for scale economies, and access to low cost but high skill labour.
Rosemary Radcliffe also reviewed the findings of a survey conducted by PricewaterhouseCoopers' New Europe Programme, of which she is the leader, focused on what strategic significance businesses attach to the EU enlargement. The survey of international and local businesses across Europe shows that major international businesses have already anticipated much of the impact of enlargement, therefore, it will not play a strategic role in their future business plans. Meanwhile, a few local businesses have capitalised on the opportunities presented by the enlargement and most feel that they lack information about the opportunities. Moreover, local businesses overstate the expected increased competition by joining the EU. Many of the businesses viewed direct benefits of the EU enlargement as operationally relevant but not strategically significant.
According to Rosemary Radcliffe, the EU enlargement implications for Lithuania will be the same as for other CEE countries - easier physical movement of goods, more common product standards, strengthened company law, and easier movement of people. She acknowledged that Lithuania has achieved greater political stability and made progress in restructuring its industry since 1990s. However, Lithuania is still viewed as less integrated with the EU than other Baltic States. "Nevertheless, valuable opportunities exist for Lithuania in New Europe - given that Scandinavian countries have invested heavily in Lithuania and contributed to the Lithuanian economic development, Lithuania should capitalise on the support offered by Swedish presidency of the EU, reap the benefits of economic reform and attract "second wave" investment. It should also focus on a clear strategy for identifying niche markets in which its businesses can have a competitive advantage and become regional leaders. Moreover, Lithuania should also maintain popular support for enlargement," said Rosemary Radcliffe at the seminar.
Rosemary Radcliffe works at a PricewaterhouseCoopers' office in London and has 30 years' experience working with top management, helping them to respond to strategic economic and policy issues. She is a highly sought-after commentator on European economic issues and has written and spoken widely on public policy issues.
Notes to editor
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