EU Enlargement Could Lead to Major Budget Adjustments for Member States

Expansion Pressures Cohesion Fund Distribution

A new study from the Bruegel Institute warns that the potential addition of nine new EU member states could cost current members an extra €26 billion annually. The expected cost is tied primarily to shifts in the EU’s cohesion fund distribution, which supports less-developed regions across the bloc. As new countries with lower GDP per capita join, existing recipients—mainly Southern European countries—could lose a significant share.

Regions in Spain, Italy, Portugal, and Greece would be reclassified from “less-developed” to “transition” regions. This shift would sharply reduce their access to cohesion funds. Italy and Spain face the biggest losses, with potential reductions of nearly €9 billion each. Portugal, Hungary, and Romania could each lose between €2 billion and €4 billion.

Poland’s Funding Unchanged Due to Cap

Poland, unlike others, will maintain its current funding levels. A cap limits cohesion funds to 2.3% of Poland’s GDP, insulating it from reductions due to regional reclassification.

Overall EU Budget Expected to Grow

Should enlargement move forward, the EU’s overall budget would increase from €1.211 trillion to €1.356 trillion. This would partially offset the redistribution burden, though current beneficiaries of cohesion funds would still face pressure. Bruegel’s analysis also anticipates budget changes in areas like the Common Agricultural Policy and EU administration costs. A transition period is likely to be introduced to ease the integration of new members.

Enlargement Could Boost Economic Growth

Despite the expected cost, Bruegel notes potential long-term gains. Enlargement could promote growth through increased exports, foreign investment, and labor mobility. Western EU countries may benefit from access to new markets and labor pools, helping address skill shortages and boosting competitiveness across the bloc.