0,I,Click to edit Master text styles,Second level,Third level,Fourth level,Click to edit Master title style,Noordwijk,October4,2004,Prof.RolandBerger,Chairman,RolandBerger Strategy Consultants,EUenlargement,newopportunities forthechemicalindustry,ThechangingfaceofEurope,Challenges andopportunities of enlargement forEU15,Opportunities forEU,15,chemicalplayers in CEEandCIS,Conclusion,Contents,A.,ThechangingfaceofEurope,%of EU 25,France,Germany,Italy andBenelux:Sixwealthycore countriesstarteconomicintegrationprocess in 1957,1.1,EU6(1957),*,*2003data,Europes corecountries hadsluggishgrowthoverthelasttenyears:Averagegrowth 1.3%p.a.inGermany,1.7%in France,2.5%Netherlands,GDP/capita USD,28,608,118.0%,75.5%,%of US,Population m,227,50.0%,78.0%,GDPUSDbn,6,494,58.9%,59.0%,Denmark,Ireland andtheUnited Kingdom:Firstacces-sion round after 16 years increaseseconomicpower,1.2,EU9(1973)*,*2003data,As aresult of EU integration,Irelandseconomicgrowth hasbeen out-standingly highoverthepasttenyears:7.6%p.a.(DK2.1%,UK2.8%),Population m,297,65.0%,102.0%,GDP/capita USD,29,141,120.2%,76.9%,GDPUSDbn,8,655,78.5%,78.8%,%of EU 25,%of US,Greece:A poorercountry joins theEuropeanUnionin1981 firstdiscussionsaboutdilution,1.3,EU10(1981)*,*2003data,Greecenowhas highaveragegrowthrates(3.8%p.a.from 1995-2004),partlydue to European money fromstructural/regional funds,GDPUSDbn,8,827,80.0%,80.3%,Population m,308,67.7%,106.2%,GDP/capita USD,28,659,118.3%,75.6%,%of EU 25,%of US,SpainandPortugal:Accessionoftwo lessdevelopedsoutherncountriesreducesEUs averagewealth,1.4,EU12(1986)*,*2003data,Today,thesoutherncountries contributetoEUgrowth:Spain(3.3%p.a.since 1995)andPortugal(2.4%p.a.)achievedhigh averagegrowth rates,GDPUSDbn,9,816,89.0%,89.3%,Population m,359,78.9%,123.0%,112.8%,72.2%,GDP/capita USD,27,343,%of EU 25,%of US,Sweden,Finlandand Austria:Europesnorthernenlargementpushesupthe averageGDP percapita,1.5,EU15(1995)*,*2003data,Stimulus to EU growthover thepast tenyears:Finlands economygrew3.5%p.a.onaverage,Swedens2.7%p.a.,and Austrias2.0%p.a.,GDPUSDbn,10,534,95.5%,95.9%,Population m,381,83.7%,130.5%,GDP/capita USD,27,648,114.1%,73.0%,%of EU 25,%of US,GDP USD bn,11,028,100.4%,Population m,455,156.0%,Eastern Europe,Maltaand Cyprus:Thebiggestroundofenlargementever changesthe faceofEurope,1.2,EU25(2004),*,*2003data,GDPgrowthratesofupto6.5%p.a.in CEE(average4.4%p.a.since95),But:Enlargementisabigchallenge forEurope,an,Uniontocreatewealth,GDP/capita USD,24,237,64.0%,%of US,50yearsofenlargement:ComparedtotheUS,theEUhasgained sizeatthe expenseofaveragewealth,Today,EuropesGDPper capitaisonly about two-thirdsthatoftheUS,intermsoftotalGDP,botheconomies arenowcomparable,EUvs.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,GDPpercapita,US=100,*basedon 2003data,1.3,Wealth gap:Tenyears ago,the northoftheEuropeanUnion was richandthesouth was poor,2.1,South gainedwealthin,EU:From,34.4%ofEU-9(1986)to59.8%today,1995:Gap between northandsouth*,1995,*2003 data,*EU 12*Portugal,Spain,Greece,GDPUSDbn,Unemployment%,Populationm,SOUTH*,NORTH*,1,161,9,373,13.4,9.2,62,319,RATIO,9:1,GDP per capitaUSD,18,726,29,383,3:2,2:3,5:1,7,429,27,620,4:1,Today,the gap isbetween east and west GDP per capitain the EU15 isfourtimes higher than in EU10,2.2,2004:Gapbetween east and west,EU supportwillhelpEU 10 e,conomic,development toreachEU 15 wealth,2003,EU 10,EU 15,493,10,534,10.5,8.5,74,381,RATIO,21:1,4:5,5:1,GDPUSDbn,Unemployment%,Populationm,GDPpercapitaUSD,EU25vs.USvs.Asia:EnlargedEUisastillpowerful,buttheslowestgrowingeconomicregionintheworld,3.,Opportunity:TennewstatesgivetheEUmomentumtoincreasegrowth,ECONOMICPOWER,GDP,USDbn,Comparativeindicators2003,POPULATIONm,WEALTHGDPpercapita,USD,GROWTHavg.GDPgrowth1999-2003,%,10,988,290,3.3,11,028,455,2.3,US,EU25,ASIA*,*,AggregateddataforJapan,China,ASEAN,8,458,1,947,4.8,37,890,24,237,12,058,B.,ChallengesandopportunitiesofenlargementforEU15,Eastwardenlargemententailsthreatsandopportunitiesforeconomies,companies,andgovernments,Economies,UnitlaborcostadvantagesinEU10,challengeexistingvaluecreationstructuresinEU15,butalsooffer,momentumforstructuralchange/innovationinEU15,Companies,Competition,inEU15aswellasinEU10,isincreasing,butalsonew,sales,investment,growthandrelocationopportunities,forEU15companiesinEasternEurope,Governments,Existing,institutionalsetupsinEU15arechallenged,bylowertaxes/contributionsandhigherflexibilityinEU10,butalso,momentumforpoliticalchange,Effectsofenlargement,on,macroeconomic,and,microeconomiclevels,Macroeconomicthreats:PressureonEU15labormarketsandcompetitionforbestinstitutionalsetup,Lowwage-competition/unemploymentthreats,Migration,(upto,3.8m,peoplefromCEEwillmove to theEU15),Offshoring,(e.g.,830,000 people,inCEEemployedbyGerman firms in 2004),Lowtax/social contributionscompetition,Also:,Less regulation,(e.g.IMDbureaucracyindex:Estoniaranked 9th,UKranked 33rd),Financial burden(EUbudget