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EU: Vital Issues Remain To Be Decided As Expansion Looms

With the European Union heading toward its historic expansion into Central and Eastern Europe, work is only beginning on vital issues like how to divide the union's vast budget between old members and the 10 newcomers. There is also nervousness emerging that the expansion will see some Western members inundated with immigrants, and that jobs in the expensive West will be lost to the East.

Prague, 20 January 2004 (RFE/RL) -- The long years of preparation are ending at last. The expansion of the European Union is set to take place this spring, when 10 countries, mostly from Central and Eastern Europe, join the bloc.

Irish Prime Minister Bertie Ahern, the head of the union's present Irish presidency, emphasized the importance of the moment in a speech to the European Parliament.

"The Irish presidency has begun in a union of 15 member states and will end in a union of 25," he said. "It is a particular privilege to hold the presidency at a time when history is being made. We look forward to welcoming the new members of the family at an official ceremony in Dublin on the 1st of May."

The newcomers are Estonia, Latvia, Lithuania, Poland, the Czech Republic, Slovakia, Hungary, Slovenia, Malta, and Cyprus. In the next six months, as rotating president, Ireland will bear responsibility for successfully bringing them into the fold, at a time when relations among new and old members have been soured by disagreements over the Iraq war, and also by the failure to adopt a new EU constitution.

Ahern has pledged to do his best to solve the thorny issue of the constitution. More immediately, Ireland will also be trying to guide the start of a debate on a crucial and divisive issue -- namely, how funds will be shared between the new and old members.

Analyst Ben Crum of the Centre for European Policy Studies in Brussels says the debate is bound to be difficult.
"The people of those [new member] countries that have voted for accession in referenda will very much think that money is the first tangible way to express solidarity across Europe, and to make it worthwhile for them to join. Of course, it is clear that there are long-term economic benefits for the newcomers. But of course there are a lot of economic wishes and ambitions in the new countries, and the way to meet those most directly is by re-directing money."

Maneuvering has already started on the apportionment of the new seven-year budget starting from 2007, with the European Commission calling for half of all regional aid to be assigned to the 10 newcomers. The body says Regional Policy Commissioner Michel Barnier is working on the principle of a 50-50 division between the current 15 members and the 10 new members.

However, six of the EU's wealthiest members are demanding a cut in the bloc's spending. The six -- Germany, France, Britain, the Netherlands, Sweden, and Austria -- want the budget capped at 1.0 percent of gross national income for the next budget period.

The commission, pointing to the needs of the poorer newcomers, wants the union to maintain its current overall spending ceiling of 1.24 percent. EU Commission President Romano Prodi has rejected the budget cap demand.

Prague-based analyst Jan Hrich of the Czech Institute of International Relations says the Westerners may well not get as much financial support from the EU as they had hoped. "We have to be prepared for the event that the financial amounts may not be very high for the acceding countries in the next budgetary framework," he says. "Very complicated discussions are to be expected over the next two years and I think for the new member countries it will not be very easy to make financial compromises."

Another tension which has resurfaced, at least in Britain and Ireland, is the worry that the West will be flooded with immigrants from the East.
Present EU members are permitted under accession agreements to delay the free movement of labor for some years, but the British and Irish governments have already said they will allow free entry of labor from 1 May, the first day of the expanded union.
"The Irish presidency has begun in a union of 15 member states and will end in a union of 25."

This has led the British popular press to run reports that poverty-stricken Roma -- who number over 1.5 million in Eastern Europe -- plan to travel en masse to Britain. The biggest-selling British tabloid, "The Sun," says its reporters have spoken to many Roma in Slovakia and Poland, who are planning an immediate move.

Analyst Crum in Brussels sees these new fears, however, as "snow from yesterday." "We had those stories with earlier accessions as well. If you go back to the accession of Spain and Portugal in the 1980s, there was a lot of debate about the whole population of those countries moving to the north, and in the end it did not turn out that way [at all]," Crum said.

Crum says the main migration pressure on the EU is not from mass movements of people from within, but from those who are still coming from outside Europe.

Another resurfacing worry is that jobs will move from the increasingly expensive Western member states to the East. A case in point is Ireland, long known as the "Celtic tiger" on account of its rapid economic growth and spectacular accretion of wealth.

But that success has made Ireland one of the most expensive countries in the EU, and companies are beginning to look elsewhere -- often to the accession countries -- in hopes of cutting costs. Last week the Irish business organization ISME urged the government to make efforts to offset high labor costs or risk a "torrent" of job losses.