Breuss, Fritz and Luptácik, Mikulás and Mahlberg, Bernhard
How far away are the CEECs from the EU economic standards? A data envelopment analysis of the economic performance of the CEECs.
EI Working Papers / Europainstitut, 35.
Forschungsinstitut für Europafragen, WU Vienna University of Economics and Business, Vienna.
In October 1999 the European Commission published the second progress report on the state of convergence of the Central- and Eastern European candidate countries (CEECs). The report encompasses an assessment, which is based on the three Copenhagen criteria. From an economic point of view, a country must have a functioning market economy and be able to withstand the competition on the European single market. In this paper we present a synthetic performance measure which helps to assess the economic preparedness of the ten Central and Eastern European Countries (CEECs) to become members of the European Union (EU). With the aid of the Data Envelopment Analysis (DEA) we construct a best practice frontier, which is supported by the best performing EU-countries and which serves as a benchmark for the candidate countries. The preparedness of any CEEC is measured as the relative distance to this frontier. The results confirm that the macroeconomic performance of most of the CEECs lies far behind the EU standards, in foreign trade some of the CEECs already perform better than some EU countries. Interestingly, we find out that some CEECs are already better prepared for the EMU than many EU member states. (authors' abstract)