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The Treaty of Amsterdam
Although initial reaction to the Treaty of Amsterdam was rather muted, with the majority of commentators speaking of only "modest" achievements, a closer examination reveals that significant progress was made in a number of key areas. With regard to co-operation in the sensitive areas of justice and home affairs, there was agreement to treat asylum and immigration policies under the Community pillar. There was a significant extension of powers for the European Parliament and a considerable simplification of its legislative procedures. There was agreement on new chapters covering employment, the environment and public health. There was agreement to an extension of majority voting. There was agreement on closer co-operation in the common foreign and security policy, including the creation of a Mr CFSP and the establishment of a policy planning unit. Perhaps the most disappointing aspect was the failure to agree on any major institutional reform, which was previously decreed a precondition for the opening of enlargement negotiations. Decision on these issues was postponed until a future date when the number of new entrants becomes more apparent.
Enlargement
Agreement at Amsterdam opened the door for the enlargement process to begin. The European Council described the enlargement of the Union as a "political imperative and a major opportunity". It is true that never before has Europe had such an opportunity to unite under democratic conditions. Never before have so many countries wished to join the Union. Until the end of the Cold War, the eastern half of Europe had no opportunity to participate in the process of European integration. Since 1989, the transformation process in the CEECs has brought these countries to the stage where they have all applied for EU membership. The EU has an unavoidable duty to respond positively to these developments and contribute to the development of a stable political and economic order for all of Europe.
But never before has the Union envisaged an enlargement of such dimensions - it could add more than a 100 million to its population of 370 million - and in terms of the different economic and social situations involved. The combined GDP of the ten potential new members in central and eastern Europe is less than 4% of that of the Union (roughly equivalent to that of the Netherlands) and their average national income per head is still only 30% of the EU average. The percentage of GDP arising from, and percentage of working population engaged in, agriculture (7.8% and 26.7%) is far above the EU average (2.5% and 5.7%). But these problems should not obscure the potential political and economic benefits that will flow from an enlarged EU with an extra 100 million consumers.
Successful enlargement of the European Union will be a major factor in spreading peace and prosperity throughout the European continent because it will support the newly liberalised market economies by further opening up markets in goods and services between East and West, North and South, stimulating economic growth in Europe and offering new trading opportunities. Moreover, it will bind the countries of central and eastern Europe into western European political and economic structures and thus enhance security and stability whilst increasing effective co-operation in the fields of Justice and Home Affairs, helping to fight international crime and the menace of drugs, the effects of which are felt throughout Europe. Finally, enlargement will bring higher environmental standards to central and eastern Europe, benefiting all of Europe by reducing cross-border and global pollution.
EU Policy towards the CEECs
Since 1989, the European Union has been in the forefront of international efforts to support the reform process and thus to increase stability in central and eastern Europe. The Union's involvement includes substantial economic assistance, closer political links, wide-ranging association or "Europe" agreements, rapidly growing trade relations and now a pre-accession strategy, the centre-piece of which is a White Paper on the adjustments which the central and east European countries will have to make to meet the requirements of the Internal Market. Thus the Union has a range of policies tailored to the situation and needs of each country and which is constantly evolving to meet changing circumstances.
Since Copenhagen, the Union has put into place an unprecedented pre-accession strategy to prepare for the next enlargement. The principal elements of this strategy are as follows:
- First, wide-ranging association or "Europe" agreements which provide for comprehensive co-operation in political, economic, trade, cultural and other areas. Association Councils meet regularly to discuss issues of common concern, as do parliamentarians from the associated countries with their European Parliament counterparts. This dialogue is part of a process of political and economic rapprochement which is without precedent. The Europe agreements, whose very name conveys a sense of their ambition, provide the framework for rapid progress towards free trade. The Union has already eliminated tariffs and quotas in all industrial sectors and improvements in market access are being made in agriculture. Overall, a massive reorientation has taken place in trade flows, with the Union today accounting for 60% of the associated countries' trade. This compares, incidentally, with less than 5% for trade with the United States, and less than 2% for trade with Japan. At present, the EU runs a trade surplus with the associated countries but this is quite normal given their current stage of development. There would be little point in the Union opening up its markets if barriers remain in trade among the associated countries themselves. For this reason the Union strongly supports the Central European Free Trade Area (CEFTA) and its extension to all associated countries. As trade barriers fall, direct investment should increase, with further gains to productivity and competitiveness.
- Second, the Phare technical assistance programme, amounting to over one billion ECU annually, which promotes economic reform in fields ranging from energy and transport to agriculture and privatisation. It has recently been agreed to concentrate Phare on two main areas : 70% for infrastructure and 30% for institution building.
- Third, a regular structured dialogue with ministers and senior officials of the Union on an increasing range of Union policies. Never before have candidates, or potential candidates, been invited, well in advance of accession, to participate on a regular basis in joint meetings with the institutions of the Union. Today, it has become normal for the associated countries to hold joint ministerial meetings with the member states, prepared in advance by officials. A permanent dialogue among twenty-five states on issues such as the trans-European networks or international crime prevention can be of immense practical value.
- Fourth, the White Paper, approved at the Cannes European Council in June 1995, on the steps which the associated countries must take in order to prepare themselves to operate in the Internal Market. This provides a guide to the complexities of the internal market and suggests a logical sequence in which the associated countries should go about bringing their legislation into line with that in the Union. Legislation, to be effective, must be properly implemented and enforced, and so the White Paper also provides guidance on the necessary regulatory and administrative structures.
The principal responsibility for implementing the White Paper's recommendations lies with the associated countries themselves. The sooner their laws, conformity tests, standards institutes, and judicial procedures are adapted to those in the Union, the sooner their businesses will feel the benefit. However, the Union recognises that advice and support are needed and so the Commission is establishing a new technical assistance office for the purpose. It will draw on the experience of the member states in transposing Union legislation into national law in order to advise partners in central and eastern Europe. The Commission will be working with each associated country to devise its own strategy for alignment with the internal market taking into account its economic situation and reform priorities.
The Need for Continuing Reforms
This brief and by no means comprehensive outline of the pre-accession strategy is sufficient to indicate the Union's deep commitment to the preparations for future enlargement. Equally important, however, are the preparations being made by the associated countries themselves. The first priority in preparing for Union membership is the consolidation of political and economic reform. The free flow of information and the independence of the media and judiciary are essential elements in the consolidation of democracy. On the whole, the record is good. But there are worrying developments in some candidate countries.
Good relations with neighbouring states and the often related question of respect for minority rights are also important in preparing for membership. Here, too, a great deal of progress has been made thanks largely to the efforts of the countries concerned, partly within the framework of the Stability Pact. But again a number of sensitive issues remain to be resolved.
Just as important as the consolidation of democracy and stability is the pursuit of sound macro-economic policy and economic reform. The adoption of internal market legislation, as provided for by the White Paper, will only produce the expected benefits if accompanied by the right economic policies. The Treaty on European Union sets out clear criteria for macro-economic policy with a view to achieving the degree of convergence needed for participation in economic and monetary union. Some associated countries consider that they are already in a position to satisfy these criteria. In others, however, further progress is needed in bringing inflation, debt and government deficits under control.
Privatisation is another key feature of economic reform in all associated countries. In general, it is proceeding well. But mere changes in ownership are not sufficient to improve competitiveness - restructuring is also essential. In addition, privatisation must take place in transparent and objective conditions without discrimination or favour if it is to create a climate of confidence which will attract new investment. Foreign investment is a source of growth, development and innovation in all market economies and it should be welcomed as an opportunity and not regarded as a threat.
Competition policy and state aid controls also need to be brought into line with the Union in order to create equitable conditions for trade and investment. This will bring distinct benefits both for the Union and for the associated countries. For once satisfactory implementation of competition law and state aids control - as well as other White Paper measures - is achieved, the Union could decide to phase down the use of commercial defence instruments since there would then be a guarantee of fair competition comparable to that inside the Union itself.
Potential investors will also want to be sure that host countries provide adequate protection for intellectual and industrial property rights before they supply sophisticated new goods and services. Here, again, adequate mechanisms for implementation and enforcement are as important as the legal framework itself.
The Commission's Opinions and Agenda 2000
Following the European Council in Madrid in December 1995, a new phase in the enlargement process began with the request from the Council to the Commission to start preparing the opinions on the applicant countries with a view to their being forwarded to the Council "as soon as possible after the conclusion of the IGC". Despite the enormity of the task, the Commission was able to meet the deadline and published the Opinions on 16 July. In carrying out this mandate, the Commission was guided by the criteria established at the Copenhagen European Council in June 1993. These requirements included stability of political institutions, respect for human rights and the protection of minorities, a functioning market economy, capacity to cope with competitive pressures, and acceptance of the Union's objectives as regards political, economic and monetary union.
The Commission recommended that accession negotiations should be opened with five countries - Poland, Hungary, the Czech Republic, Estonia and Slovenia. The other candidates - Latvia, Lithuania, Slovakia, Romania and Bulgaria - would benefit from increased financial and technical assistance, and would have their progress monitored on an annual basis in order to prepare themselves for accession negotiations as soon as possible.
Accompanying the Opinions on the ten candidate countries, the Commission also published a far-reaching report "Agenda 2000" in which it examined the challenges facing the Union as result of enlargement and proposed reforms in a number of key areas. Given that there was no likelihood of the overall budget increasing during the 2000-2005 period, the Commission proposed that there should be a gradual reduction in the regional funds paid to existing member states and a corresponding shift in resources to the potential new member states. The expensive common agricultural policy (CAP) would also have to be changed to bring prices more into line with world prices. Finally, the Commission stated that enlargement without further institutional change would lead to paralysis within the Union. It will now be up to the European Council meeting in Luxembourg in December to take the final decisions on the modalities of the enlargement process.
The EU and Regional Co-operation
In recent years, the EU has become increasingly supportive of initiatives to promote regional and sub-regional co-operation, recognising that they can be important instruments to promote security, stability and prosperity. This position has been emphasised by several statements in support of such co-operation, albeit with certain conditions, at the most recent meetings of the European Council. Within the framework of the OSCE, the EU has played an important role in developing the concept of regional and sub-regional co-operation as a factor of security and stability which has become a key element in the OSCE concept of security, in particular its economic dimension. The previous enlargement of the EU to include Austria, Sweden and Finland provided a boost to sub-regional co-operation. The prospect of a further round of enlargement to the CEECs will also increase the importance of sub-regional co-operation in the new Europe.
In post Cold War Europe, regional co-operation has an important role to play in breaking down old barriers and promoting stability, security and prosperity. Amongst the most important new initiatives one might mention the Council of Baltic Sea States (CBSS), the Barents Euro-Arctic Council (BEAC), the Central European Initiative (CEI), the Black Sea Economic Co-operation (BSEC) and the Central European Free Trade Agreement (CEFTA).
The EU has not only welcomed these initiatives but has sought to support them in a variety of different ways. The EU is closely involved in the BEAC which may be described as a model of top down/bottom up approaches. The ministerial meetings allow for wide-ranging political discussions (and reassurance for Moscow about the participation of the oblasts involved in the initiative), whilst the local management of the various projects, particularly environmental, has promoted strong links between local authorities and actors. The EU also strongly supports the CBSS which has developed some important initiatives having a direct bearing on soft security as well as seeking to prepare the Baltic States for EU accession and to develop closer relations with Russia. In 1996, the Commission presented to the Council and the European Parliament a communication on regional co-operation in the Baltic Sea region which has resulted in the so-called Visby initiative and the Kalmar Action Programme. Together, these form the basis of Community action in the Baltic Sea region. The Visby declaration outlined a promising agenda for co-operation on transport and trade, tackling cross-border crime, improving border and customs controls, environmental and nuclear safety issues.
Although not as developed as the CBBS, the CEI has nevertheless sought to promote diplomatic co-operation between its members and to encourage joint projects in the economic and statistical fields. Arising out of the Visegrad four, CEFTA has provided a useful framework for discussion and co-operation on trade-related issues. Still in its infancy, the members of BSEC have made a reasonably encouraging start in setting their political differences aside in order to concentrate on promoting co-operation in transport, energy, banking, environmental and other issues. The Commission is currently preparing a communication on how best to support BSEC.
Apart from supporting these initiatives, the EU has also introduced a number of programmes to promote cross-border co-operation. Amongst the most important are Interreg, the Phare Partnership Programme (to promote local and regional development), the Phare and Tacis LIEN Programme (to promote NGOs working in the social sector), the Phare Ecos-Ouverture Programme (to strengthen the capacity of local and regional authorities to design regional development strategies), the Phare and Tacis Democracy Programme (to strengthen NGOs and civic institutions).
Regional and sub-regional co-operation in Europe has become particularly important for the EU in the perspective of the Union's enlargement to the East and is an important element in the Union's pre-accession strategy. The Union's main objectives are twofold: promoting regional co-operation involving the CEECs which are candidates for accession to the EU in the recognition that such co-operation is an important element in the preparation of these countries for accession; and involving those countries which are not able to join the EU in the near future in regional co-operation arrangements and promoting the development of close links with their neighbours and with the EU in order to avoid re-emergence of divisions in Europe.
It should be emphasised, however, that EU support for regional co-operation initiatives should be seen as complementary to, and not as a substitute for, the EU's bilateral relations with each of the countries involved in such initiatives. Equally, it is important to note that the EU's support for regional co-operation is not unconditional. It depends on regional co-operation complying with UN and OSCE principles, being based on the voluntary participation of all states concerned, being to the mutual benefit of all states concerned i.e. providing added value, and being compatible with existing international economic agreements.
Support for sub-regional co-operation is provided through existing Community instruments and existing budget lines in accordance with existing procedures and regulations and on the basis of co-financing. The Community instruments which can be drawn upon for this purpose are in principle demand driven. It is therefore important that the right signals are given by the states/regions which would benefit from such assistance. Some useful lessons from regional co-operation include the importance of starting concrete projects as soon as possible in order for co-operation to take off, the need to involve central and local authorities/actors, the neccessity of sound financing, and finally the positive influence of an EU presence.
The EU and Regional Co-operation in the Balkans
The overriding objective of the EU in the Balkans is the successful implementation of the Dayton/Paris peace agreements and the creation of an area of political stability and economic prosperity. The EU is prepared to contribute towards this aim by promoting political and economic reforms and the respect for democratic principles, human and minority rights. Co-operation and the establishment of good neighbourly relations between the countries of the region is an essential element in this context. The EU aim is to counteract trends towards de-stabilisation and marginalisation. In short, the EU has a real interest in the European perspective for the whole of the Balkan region.
The EU has different contractual relations with each country in the region. Greece is a member state of the EU. With Turkey, the EU has signed a Customs Union - the successful functioning of which is an essential step before re-visiting the question of EU membership. Romania and Bulgaria have Europe Agreements with the EU and are actively pursuing their membership applications despite obvious difficulties which both countries face. Slovenia has also signed a Europe Agreement (ratification outstanding) and applied for EU membership. EU relations with other states in the region may be divided into two categories: Croatia, FRY, Bosnia; and Albania, FYROM.
This division arises from the fact that the first group were engaged in the Bosnian conflict and EU policy towards the three countries is based on the follow-up to the Dayton/Paris agreements with considerable emphasis on conditionality (support for democracy, protection of human and minority rights, willingness to engage in regional co-operation, willingness to cooperate with International Tribunal, etc). If these conditions are met, it will lead towards full contractual relations with all three. Conditionality is also important for Albania and FYROM, both suffering major political instability.
How will enlargement affect regional co-operation? In light of past experience, there should be a positive impact, but this may not happen automatically as the new member states will inevitably give priority to their new responsibilities as EU members. The EU itself will thus have to ensure that regional co-operation does not suffer as a result of enlargement. This will be particularly important in dealing with those countries not in the first enlargement wave (perhaps also not in the NATO first wave), as well as in the EU's relations with Russia, Ukraine and other CIS states. Russia is of course already involved in a number of regional initiatives (BEAC, CBBS, and BSEC). But Ukraine will need particular attention, not least because of its lengthy border with Poland.
Conclusion
All European institutions have an important part to play in the development of a new European security architecture, but the EU, further strengthened as a result of the Treaty of Amsterdam, has a particular role and responsibility due to its multitude of financial, economic, trade and other instruments (eg Stability Pact), and its ultimate carrot of EU membership. The enlargement process is now well underway and is designed as an inclusive process with the candidate countries themselves deciding their own timetable.
Regional and sub-regional co-operation is a key element in the effort to create a more stable and secure Europe because it promotes interdependence and solidarity in both the political and economic fields. A judicious mix of top down and bottom up approach is likely to achieve the best results, and the EU is prepared to intensify its efforts to support such co-operation provided that the states involved meet the necessary conditions.
Footnotes
The views expressed are those of the author and do not commit the European Commission.
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