Opening to the East: Enlargement Perspectives of the European Union

by Peter Hobbing

End of the Cold War

Soon after the end of the Cold War, the one-time members of COMECON and former "satellites" of the USSR turned their eyes westward: the countries of eastern Europe became not only the target of a "European Marshall Plan" (the so-called PHARE program) to upgrade their economic and democratic infrastructure but also expressed their immediate interest to join the European Union.

Originally the European Commission just served as a coordinator of Western aid given to Poland and Hungary on the basis of a mandate obtained from the 1989 G-7 summit in Paris. The aid was to come from a group of 24 countries (the G-24) consisting of the then EC and EFTA states plus Australia, Canada, Japan, New Zealand, Turkey and the US. Then in December 1989, the European Council decided to launch the PHARE-program ("Poland-Hungary-Assistance-for-Reconstruction") which was soon extended and eventually covered all central and eastern European countries including Albania, the Baltic states and Slovenia. The funds provided were considerable: they rose from $640 million given in 1990 to an annual amount of $1.3 billion in 1996. But the beneficiary countries wanted more than just financial aid. They also claimed closer contractual ties. The EU responded to this claim by concluding a number of "Europe-Agreements," i.e. association agreements in the sense of Article 238 of the Rome Treaty (TEC): Poland, Hungary and Czechoslovakia in 1991, Bulgaria and Romania in 1993, the Baltic states in 1995, and finally Slovenia in 1996. Formal applications for full EU-membership were submitted by all preceding countries between April '95 and June '96.

Dealing with the applications for EU-membership

How does the EU deal with these applications for membership? Article F of the Maastricht Treaty (TEU) stipulates that any acceding country must have a system of government founded on the principles of democracy. Furthermore, Article 3a (1) of the TEC provides that new members adopt an economic policy which is conducted in accordance with the principle of an open market economy based on free competition. The Copenhagen Council of June 1993 which first treated the question of new members from Eastern Europe clearly recalled these accession conditions and set out a concrete check list for the candidates. The following five criteria must be fulfilled: stability of democracy and its institutions (the rule of law, a multi-party system, respect for human rights, protection of minorities, pluralism); a functioning market economy to cope with the competitive pressure within the Single Market; the ability to assume the rights and obligations arising from the EU law; adherence to the aims of the political union and the economic and monetary union; and finally the capacity to be absorbed by the EU without the latter loosing the momentum of integration. The Madrid Council of December 1995 further specified that the Commission should continuously monitor the developments made by the applicant countries and establish a final report on each country by mid-1997. Accession negotiations with the qualified countries should start during the course of 1998.

Besides looking at the qualities of the accession candidates, the EU also needs to review its own procedures. Taking into account that most of the candidates have a predominantly agricultural infrastructure, fundamental reforms of the Common Agricultural Policy (CAP) must be envisaged. Already in 1994, about half of the EU budget was spent on agricultural subsidies: adding further members with a basically agricultural orientation would clearly go beyond the limits of what the EU can afford in budgetary terms. The strategy paper "Agenda 2000" established by the European Commission in 1997, on the basis of the new Amsterdam Treaty, therefore addresses a number of reforms in the agricultural system as well as regional funds needed before the accession of new members may take place. Other urgent reforms are mentioned by the Amsterdam Treaty itself. This concerns the streamlining of European institutions: the EU cannot afford a number of Commissioners greater than 20, the members of the European Parliament (MEP) must be limited to 700, and finally there is the question of the linguistic procedures: up to now there are 11 official languages (whereby one third of the EU-staff by now consists of translators and interpreters). Further languages would trigger off an explosion of costs far beyond the budgetary resources available.

Why consider enlarging the Union?

Taking into account that some of the potential members will have problems reaching the benchmark of 75% of the EU average per capita income within 15 years, the question is often asked as to whether it really pays off to consider the general inclusion of Eastern Europe into the EU. The answer is not an easy one. Certainly sacrifices will have to be made and considerable funds put into the accession area to make it fit for full EU-membership. But there is the threat of what the preamble of the Amsterdam Treaty refers to as "migratory pressure". If the living conditions in the eastern neighbor countries are not considerably upgraded, immigrants from the poor neighbors will continue to knock on the doors of what they consider to be the "Golden West". Border controls, even if reinforced, can do something about this phenomenon, but they cannot eliminate it. The tragic incidents recently leading to the killing of two German customs agents at the German-Polish border underline this fact. Also there is the assumption that an impoverished Eastern Europe will provide for a permanent threat to peace in the European region. What better solution thus than improving the living standards at origin -- and what better means to achieve this objective than including the target countries directly into the EU economic and political system?

Evaluation of the candidate countries through the "Opinions" delivered by the Commission

In compliance with the decisions of the European Council of Copenhagen and then Madrid, the Commission thus elaborated a detailed document, the so-called "Opinions," which was published in July 1997 as part of Agenda 2000. The document scrupulously evaluates the progress made by the candidate countries and their capacity to be members in good standing of the EU. Often the "Opinions" are referred to as a teacher's report card given to more or less qualified students, something that would not appear in compliance with courteous behavior on the international level. Nevertheless, the "report cards" are now out in public, the candidates, despite some criticism, have accepted the grading and are furthermore comforted by the assurance that no one is ruled out, but membership negotiations are just postponed.

The detailed "grading" for each applicant

The following grading was given to the candidate countries:

- Bulgaria: not qualified for immediate negotiations

Although Bulgaria now possesses stable democratic institutions and provides for sufficient integration of minorities (except the Roma), its economic achievements are considered not at all satisfactory. In fact, it is seen only at the beginning of the process of structural transformation. There are the problems of negative growth (-10.9% in 1996), worsening public deficits, a situation of hyper-inflation (311% in 1996), and depreciation of currency. The per capita GDP is at only 24% of the EU average. Regarding its capacity to take on the obligations of membership, Bulgaria implemented only a small part of the acquis of fundamental elements of the Single Market, with specific deficiencies in the telecommunications, agricultural sectors as well as other areas.

Therefore, Bulgaria can be considered for accession negotiations only when substantial further progress is made.

- Czech Republic: qualified for negotiations

The Czech Republic, presenting the characteristics of a stable democracy and a functioning market economy, as well as having sufficiently implemented the Union acquis, is considered qualified for negotiations to begin in 1998. There is continuous economic growth (4.0% in 1996), a reduced inflation rate of now 8.8% and the per capita GDP is considerable (55% of the EU-average). Efforts still have to be made in the areas of agriculture, environment and energy. All other requirements are well met.

- Estonia: qualified for negotiations

Estonia, just like the Czech Republic, complies with the three-fold accession criteria and therefore qualifies for immediate negotiations in 1998. There was a continuous economic growth (4.0% in 1996), decreasing inflation rates (still at 23.1% in 1996), and the per capita GDP is at 23% of the EU average. Additional efforts will still have to be made in the field of administrative infrastructure, environment, and justice and home affairs.

- Hungary: qualified for negotiations

Hungary, like the Czech Republic and Estonia, complies with the three-fold accession criteria and therefore qualifies for immediate negotiations. There is continuous economic growth (1.5% in 1995, 1% in 1996), a stabilized inflation rate is now at 19.8%, and the per capita GDP is at 37% of the EU-average. Efforts still have to be made in the areas of environment, consumer protection, and customs controls. All other requirements are well met.

- Latvia: not qualified for immediate negotiations

Latvia complies with the democracy criteria, but not with the requirements of a functioning market economy and the capacity to take on the obligations of membership. In the first three years of independence its output declined by 50%. In 1996, the growth turned positive again (2.8%), but there is a high trade deficit. GDP per capita is at only 18% of EU average. The weakness of its public administration affects the pace of approximation of legislation as well as the quality of its implementation and enforcement. Particular difficulties exist with regard to the naturalization of the Russian-speaking non-citizens as well as the areas of environment and agriculture.

- Lithuania: not qualified for immediate negotiations

Lithuania complies with the democracy criteria, but not with the requirements of a functioning market economy and the capacity to take on the obligations of membership. In the first three years of its independence there was a serious decline of output. In 1996, the growth turned positive again (3.6%), and the inflation rate is now down to 24.6%. GDP per capita is at 24% of EU average. Particular difficulties, including investment, exist with regard to the areas of environment, energy and agriculture.

- Poland: qualified for negotiations

Poland, just like the other qualified candidates, is considered to comply with the three-fold accession criteria and therefore qualifies for immediate negotiations. There is continuous economic growth (6.0% in 1996), a stabilized inflation rate of now 19.9%, and the per capita GDP is at 31% of the EU-average. Efforts still have to be made in the areas of agriculture, environment, consumer protection and transport as well as the procedures for compensating those whose property was seized by the Nazis or Communists. All other requirements are well met.

- Romania: not qualified for immediate negotiations

Romania complies with the democracy criteria, although a fuller respect of the rule of law at all levels of government, especially fundamental rights, must still be established. Romania does not yet comply with the requirements of a functioning market economy and the capacity to take on the obligations of membership. There is a diminishing rate of growth (1995: 7.1%, 1996: 4.1%), and an accelerating inflation (1996: 56.9%). The GDP per capita is at 24% of EU average. Particular efforts are still needed in the areas of environment, energy, transport, social affairs, justice and home affairs as well as agriculture.

- Slovakia: not qualified for immediate negotiations

Slovakia is the only candidate country which does not comply with the democracy criteria: the Commission, in particular, points to the instability of Slovakia's institutions, their lack of rootedness in political life, and shortcomings in the functioning of its democracy. The report asserts that the "government does not sufficiently respect the powers devolved by the constitution to other bodies and too often disregards the rights of the opposition". There is a permanent tension between the government and the President of the Republic. Equally, the government repeatedly ignored decisions of the Constitutional Court. A number of recommendations by the European Union, also regarding the treatment of the Hungarian and Roma minorities, have been ignored.

This circumstance is all the more regrettable as Slovakia meets the economic criteria in quite a convincing manner. Slovakia has achieved high levels of growth (1995: 6.8%, 1996: 6.9%), while inflation has been drastically reduced (1996: 5.4%). Its GDP per capita is at 41% of the EU average. Also Slovakia is seen as firmly committed to take on the EU acquis, in particular concerning the internal market.

- Slovenia: qualified for negotiations

Slovenia, just like the other qualified candidates, is considered to comply with the three-fold accession criteria and therefore qualifies for immediate negotiations. There is continuous economic growth (3.1% in 1996), a falling inflation rate, now 9.1%, and the per capita GDP is at 59% of EU-average. Efforts still have to be made in the areas of environment, employment, energy and social affairs. All other requirements are well met.

The relationship between EU- and NATO-enlargement

The question is often asked to what extent EU and NATO enlargement will have to be synchronized. With the objectives of both organizations being different, there is certainly no automatic parallelism "neither in the timing nor in the choice of candidates", as recently confirmed Hans van den Broek, EU Commissioner responsible for Central and Eastern Europe. The EU aiming for a more complete economic and political integration quite naturally feels that it has to proceed in a more selective manner than the military alliance. Negotiations for NATO-membership may be expected "a lot shorter" than those for the EU, as stressed US-Ambassador to NATO, Robert Hunter. Nevertheless, with the EU since Maastricht also focusing "on the security of the Union, including the eventual framing of a common defense policy," the differences may not be so great after all. This is confirmed by the fact that three out of five primary EU candidates are also found on the top candidate list as established by NATO at its July 1997 summit in Madrid, namely Czech Republic, Hungary, Poland. Furthermore, both organizations pragmatically coincide in offering the secondary candidates some consolation in form of the NATO Partnership for Peace (PfP) initiative on the one, and the Europe-Conference on the other side.

The further road to enlargement

The further road remains largely in the dark. What we know by now is that the first negotiations are to start within the first months of this year -- but when will they be completed? Agenda 2000, the strategy paper of the Commission, mentions 2001 as possible moment for the first completed accessions, but admits that 2002 or 2003 may be more realistic. The further convergence of the candidates with the EU accession criteria will continue to be closely monitored all through the negotiation process, and it is unlikely that any accession will occur without full satisfaction of the acquis-requirements. There is no deadline nor fixed order of procedure -- and as high-ranking EU-officials have pointed out, those that come later to the accession process may be among the first to complete it.

It may be reasonable to believe that history books of the future will refer to the period between 1994 and 2014 when speaking of the EU eastern enlargement. This makes sense all the more as Europe's last frontier is not reached yet with the eastern border of Poland: Ukraine, Belarus and Moldavia might equally decide to join -- and who would categorically exclude a membership application lodged by Russia?

Peter Hobbing is a senior official at the European Commission in Brussels, with specialisation in recent years on enlargement issues, notably in the field of justice and internal security. During the 1997/98 academic year, he is teaching European Studies at the University of Washington. He received his J.D. (Dr.iur.) in comparative criminal law from Freiburg University in 1982.