In this post for Social Europe, Branko Milanovic discussed the inequality successive EU enlargements have enhanced.
Excerpt:
We know that there is such a thing as an ‘optimal currency area’, although it is possible that the framers of the Lisbon treaty were not aware of it. The Greek crisis has popularised the concept. As the name says, it puts limits to what should (ideally) be a single currency area.
Similarly, in the 1990s, when at one end of the European continent countries like the USSR, Czechoslovakia and Yugoslavia dissolved, with their constituent member states applying to join the European Union, a like question was asked: why would you leave one union and join another, rather than keep your full independence? One of the answers came in a 1996 article, where I argued that there was a trade-off between independence in policy-making (say, full fiscal and monetary authority) and income. Countries such as Estonia and Slovenia were quite willing to give up monetary and (to a large degree) fiscal independence, in exchange for monetary transfers and the institutional framework provided by the EU.
But this reasoning still left the question: was there a point where a country might find the cost, in terms of forgone policy discretion, too onerous and so decide to stay out (thus placing a limit to the expansion of the union)? Perhaps Switzerland and Norway are such non-EU examples.
Read the entire piece by Branko Milanovic via Social Europe.