,Noordwijk, October 4, 2004,Prof. Roland Berger Chairman, Roland Berger Strategy Consultants,EU enlargement new opportunities for the chemical industry,The changing face of Europe Challenges and opportunities of enlargement for EU 15 Opportunities for EU 15 chemical players in CEE and CIS Conclusion,Contents,A.,The changing face of Europe,% of EU 25,France, Germany, Italy and Benelux: Six wealthy core countries start economic integration process in 1957,1.1,EU 6 (1957)*,* 2003 data, Europes core countries had sluggish growth over the last ten years: Average growth 1.3% p.a. in Germany, 1.7% in France, 2.5% Netherlands,118.0%,75.5%,% of US,GDP USD bn,6,494,58.9%,59.0%,Denmark, Ireland and the United Kingdom: First acces-sion round after 16 years increases economic power,1.2,EU 9 (1973)*,* 2003 data, As a result of EU integration, Irelands economic growth has been out-standingly high over the past ten years: 7.6% p.a. (DK 2.1%, UK 2.8%),120.2%,76.9%,GDP USD bn,8,655,78.5%,78.8%,% of EU 25,% of US,Greece: A poorer country joins the European Union in 1981 first discussions about dilution,1.3,EU 10 (1981)*,* 2003 data, Greece now has high average growth rates (3.8% p.a. from 1995-2004) partly due to European money from structural / regional funds,GDP USD bn,8,827,80.0%,80.3%,118.3%,75.6%,% of EU 25,% of US,Spain and Portugal: Accession of two less developed southern countries reduces EUs average wealth,1.4,EU 12 (1986)*,* 2003 data, Today, the southern countries contribute to EU growth: Spain (3.3% p.a. since 1995) and Portugal (2.4% p.a.) achieved high average growth rates,GDP USD bn,9,816,89.0%,89.3%,112.8%,72.2%,% of EU 25,% of US,Sweden, Finland and Austria: Europes northern enlargement pushes up the average GDP per capita,1.5,EU 15 (1995)*,* 2003 data, Stimulus to EU growth over the past ten years: Finlands economy grew 3.5% p.a. on average, Swedens 2.7 % p.a., and Austrias 2.0% p.a.,GDP USD bn,10,534,95.5%,95.9%,114.1%,73.0%,% of EU 25,% of US,Eastern Europe, Malta and Cyprus: The biggest round of enlargement ever changes the face of Europe,1.2,EU 25 (2004)*,* 2003 data, GDP growth rates of up to 6.5% p.a. in CEE (average 4.4% p.a. since 95) But: Enlargement is a big challenge for European Union to create wealth,64.0%,% of US,50 years of enlargement: Compared to the US, the EU has gained size at the expense of average wealth, Today, Europes GDP per capita is only about two-thirds that of the US in terms of total GDP, both economies are now comparable,EU vs. US* US=100%,59.0,77.5,80.3,89.3,95.9,100.4,78.0,102.0,106.2,123.8,130.5,156.0,75.5,76.9,75.6,72.2,73.0,64.0,1957 EU 6,1973 EU 9,1981 EU 10,1986 EU 12,1995 EU 15,2004 EU 25,GDP,Inhabitants,GDP per capita,US = 100,* based on 2003 data,1.3,Wealth gap: Ten years ago, the north of the European Union was rich and the south was poor,2.1, South gained wealth in EU: From 34.4% of EU-9 (1986) to 59.8% today,1995: Gap between north and south*,1995,* 2003 data * EU 12 * Portugal, Spain, Greece,GDPUSD bn,Unemployment%,Populationm,SOUTH*,NORTH*,1,161,9,373,13.4,9.2,62,319,RATIO,9:1,GDP per capitaUSD,18,726,29,383,3:2,2:3,5:1,Today, the gap is between east and west GDP per capita in the EU 15 is four times higher than in EU 10,2.2,2004: Gap between east and west, EU support will help EU 10 economic development to reach EU 15 wealth,2003,EU 10,EU 15,493,10,534,10.5,8.5,74,381,RATIO,21:1,4:5,5:1,GDPUSD bn,Unemployment%,Populationm,GDP per capitaUSD,EU 25 vs. US vs. Asia: Enlarged EU is a still powerful, but the slowest growing economic region in the world,3., Opportunity: Ten new states give the EU momentum to increase growth,ECONOMIC POWER GDP, USD bn,Comparative indicators 2003,POPULATION m,WEALTH GDP per capita, USD,GROWTH avg. GDP growth 1999-2003, %,10,988,290,3.3,11,028,455,2.3,US,EU 25,ASIA*,* Aggregated data for Japan, China, ASEAN,8,458,1,947,4.8,37,890,24,237,12,058,B.,Challenges and opportunities of enlargement for EU 15,Eastward enlargement entails threats and opportunities for economies, companies, and governments,Economies Unit labor cost advantages in EU 10 challenge existing value creation structures in EU 15, but also offer momentum for structural change / innovation in EU 15 Companies Competition in EU 15 as well as in EU 10 is increasing, but also new sales, investment, growth and relocation opportunities for EU 15 companies in Eastern Europe Governments Existing institutional setups in EU 15 are challenged by lower taxes / contributions and higher flexibility in EU 10, but also momentum for polit