Travel, Trade to Usher In European Expansion

HEGYESHALOM, Hungary -- Two months before the European Union rolls over the old Iron Curtain into central and eastern Europe, truckers queue at Hungary's western border with Austria, waiting for seemingly endless customs controls.

From May 1, when the European Union welcomes 10 new members, one of the few tangible changes will be that the queues will vanish and trade will be faster and cheaper.

"From May 1, trucks won't be stopped here," said Katalin Czegledi, deputy commander of the Hegyeshalom customs office.

"But the really big change will only come when we join the EU's (border-free) Schengen zone in three or four years' time."

Once the bunting and spent fireworks are swept away and the hangovers cured, few of 75 million new EU citizens will see much change on the first day.

After 15 years of tough reforms on the road from communism to the gates of the EU's single market of 450 million consumers, most of the changes have already been made. Others will take time.

Some 95 percent of EU trade with the 10 new members, mainly from central and eastern Europe, has already been liberalized.

May 1 will see EU law take primacy over national legislation, the removal of most customs duties on cross-border traffic inside the bigger EU, and easier access for travelers within the 25-state bloc.

"For the bulk of people, nothing will change," said Thomas Glaser at the European Commission's office in Budapest.

In surveys, most central Europeans cite freer travel and studying abroad as two of the biggest benefits of EU membership.

Most look forward to being able to flash an ID card at the "EU-only" gate at borders rather than queue for hours to have their passports checked.

For business, much of the red tape should be gone by May, though dismantling tariffs may play havoc with local shop prices for a while.

"There will be a significant shift in prices of some goods," said Mariusz Biedun at the UKIE information centre in Warsaw.

"As a result of tariff elimination, goods like textiles, alcohol, perfume, electronic devices, high-tech equipment and new cars from Asia will all become cheaper.

"Other products, like new cars from the EU and most consumer goods, will rise in price as a result of adjusting central European businesses to EU health and safety standards," he said.

Manuel Rebelo Maioral, a Portuguese wine distributor, who imports some 80,000 bottles into Poland each year, said ending tariffs would save him up to 20 percent on every bottle.

"This will make me a millionaire," he quipped, adding that while the shop price for his wines would drop by up to a third, he would hopefully win new customers.

"Competition for Polish alcohol producers will increase from May, though this will probably affect the vodka market more than wine. Foreign drinks will be cheaper, so more Poles will buy imports, which may be a problem for local spirit producers."

Estonians can expect prices to go up because the ex-Soviet state has run a free-trade economy for years, while goods sold into newcomer states with an export subsidy, like Danish bacon, will become dearer -- good news for local pork producers.

With truckers wasting fewer hours queuing at borders, car makers like Opel and Audi will be able to plan their logistics and schedules more efficiently.

Csemy Katalin at Audi's Hungarian unit, one of the country's biggest exporters, said administration would be much less of a burden after May, "especially in the customs department."

"May 1 will bring a big change in my job, it'll be a huge relief," said Cornelis Van An Rijn, a Dutchman who runs a small firm importing flowers from the Netherlands to Poland.

"For seven years I've been paying huge tariffs on each lorry, from 15,000 to 40,000 zlotys ($4,000 to $10,550) on a truckload of roses. I'll be able to build a small palace every month from the money saved on tariffs."

While most existing EU members will only gradually welcome job seekers from the East, students from the ex-communist states will be eligible from May to attend university anywhere in the EU, paying less for tuition as "home" students than they do now.

But, while the cost of getting a Western degree may be lower, the higher cost of living in cities like Paris, London or Berlin may deter some would-be traveling scholars.

Many degrees -- from architecture to veterinary -- will be recognized EU-wide from May, no matter where they were obtained.

As the date nears, some customs issues still need to be clarified or re-drafted, but there is little sense of panic.

"There is a Hungarian genius for brilliant improvization," said one Budapest-based diplomat. "It looks a shambles until five to midnight and then turns out to be very well organized."