EU Enlargement Offers Communications Opportunities

The new EU

The way businesses are run across Europe will fundamentally change as a result of the enlargement of the EU, which will have ten new member states from May 1 this year. Very few companies have fully understood the exact nature of these changes and the effect that they will have on the EU.

Companies are now deliberating major strategic questions, such as: how value chains can be improved in an enlarged Europe; what will be the right location for production, services or research and development; and whether new member states should be treated as EU markets or emerging markets.

There are many opportunities for communications activity in Europe as a result of enlargement, in all fields of public relations.

Stabilised economies with dismantled customs will make consumer goods more affordable in the accession countries, and the newcomers’ GDP growth will continue to over-perform that of the EU15 countries in the short run.

In the search for margins and future market share, companies will increase their presence in the new EU10 countries, leading to growing competition. This market expansion and the increased necessity for differentiation will require communications support, and consumer PR opportunities will increase significantly.

Foreign investment will flow to the new member states, resulting in the creation of new businesses and jobs. Companies will require communications support, not only to reach future employees and customers, but also to reach potential investors. There is likely to be a great deal of competition between new member states to attract inward investment, and so local corporate communications and public affairs expertise will be essential.

There will also be a growing need for good internal communications and industrial relations, as companies face staffing decisions due to the new enviroment that they will now be operating in. These changes will affect staff, require explanation, and will inevitably be accompanied by hostility from trade unions, all of which will present organisations with critical communications issues.

With strong European competition heading to the EU10 markets, local companies may expand, find partners or even go under. Mergers and acquisitions will increase as markets consolidate, and more M&A support will be required from financial communications experts.

Many major local companies in the new member states will find growth opportunities in their neighbouring countries, and will be looking at regional expansion. International companies are also likely to move regional hubs into the new EU member states to reach non-EU neighbours, and there will be more co-ordination of regional communications activities in these business hub countries.

A tender consultancy business sector will spring up in the new member states, as EU funding starts to officially flow and competition to acquire EU funds begins. In order to receive subsidies, local companies and governments will need to generate projects and write applications. Consulting services to advise applicants on developing projects, putting together bids, and lobbying around submitted bids offers exciting opportunities for communications professionals.

Following on from this, there is a requirement to inform the public of EU-funded projects, and almost all major EU projects will be accompanied by communications activities. For instance, Weber Shandwick’s office in Budapest has been helping to tell the public about the development of the largest waste water treatment plant in Central Europe, which is supported by EU funds.

On a more general level, government and European institutions will require communications support to inform the public in old and new EU member countries about EU enlargement and what it will mean for them. Weber Shandwick, for example, has been operating the Hungarian Foreign Ministry’s information service, to educate the Hungarian people about the benefits of being part of the EU.

A shift is also expected in local government spending within the new member states as a result of enlargement, and lobbyists will be in high demand to help companies use the opportunities to influence changing priorities in government spending.

Lobbying expertise will also be needed as companies in the new EU states adapt to a changed regulatory environment and adopt EU directives. Companies will need help with the interpretation and adoption of EU regulations, and to influence decision makers locally and in Brussels.

New decision makers will flood the European institutions. After the EU parliamentary elections in June 2004, 28% of the total MEPs will be from the new member states. Each country will have one commissioner, and a total of 41 directors and 189 mid-level staff will arrive from the new member states. Above all, large numbers of support staff will be recruited: in 2004-2005 the European Commission alone will employ 2,132 new working staff.

It’s clear that EU enlargement will bring a plethora of opportunities and challenges to communications professionals across Europe, and that our colleagues lobbying in Brussels will need to buy new Rolodexes.

By Ervin Szûcs, managing director, Weber Shandwick in Hungary.