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EU: Competitive Enlargement -- An Analysis

By Michael Mihalka

Garmish, 24 July 1997 (RFE/RL) -- The European Union would rather have set its own house in order before proceeding with the enlargement process which the European Commission set in motion on July 15.

The commission recommended that the European Union begin accession talks with the Czech Republic, Hungary, Poland, Slovenia and Estonia.

NATO's announcement on July 8 of its own enlargement dictated both the EU's timing and its the selection of candidates for the first wave of EU enlargement.

The EU set three main criteria for beginning accession talks:

Political -- stable institutions which guarantee democracy, the rule of law, human rights and the protection of minorities.

Economic -- functioning market economies which could meet the competitive pressures from other countries in the European Union.

Ability -- Capacity to take on the obligations of membership, in particular progress towards implementing the common law of the EU called the acquis communitaire.

Of the ten Central European applicants, the Czech Republic, Estonia, Hungary, Poland and Slovenia seemed best able to meet the criteria in the mid term. Bulgaria, Latvia, Lithuania, Romania and Slovakia were not.

Only Slovakia of the latter five was deemed to meet the economic criteria. But Slovakia failed to make the first tranche because of the instability of Slovakia's institutions, the lack of rootedness in political life, and the shortcomings in the functioning of Slovakia's democracy.

Vladimir Drozda, foreign policy vice chairman of the opposition Slovak Social Democratic Party (SDSS), said the day after the commission's announcement that Slovak Prime Minister Vladimir Meciar's government had betrayed historical interests of Slovakia by proving itself to be incapable of guaranteeing Slovakia the integration into NATO and the European Union.

In contrast, the European Commission held that Latvia and Lithuania had met the political criteria but did not yet have competitive market economies. Bulgaria and Romania provided a special case. The commission determined that recent changes in government in both countries meant that they were well on their way to meeting the political criteria. It judged, however that neither country as yet had an economy capable of withstanding international market pressures.

The Romanian minister for European integration, Alexandru Herlea, admitted that "we cannot afford now to accede to the European Union." Nevertheless, Romania argued that the EU summit in December in Luxembourg should agree to start accession talks with all candidate countries and not just those singled out by the European Commission.

The European Union had hoped to resolve its institutional and policy problems before proceeding with enlargement. The EU summit in Amsterdam last month failed to do either. Now enlargement will prove the engine for EU reform.

The small states within the EU had wanted to exclude both Estonia and Slovenia from the first wave of accession talks to avoid triggering the institutional reform that would weaken their power. The Amsterdam summit had called for yet another intergovernment conference to deal with institutional reform if enlargement led to an EU composed of more than 20 states. Excluding Estonia and Slovenia would have left the enlarged EU with 19 members. Unfortunately for the small states, both Estonia and Slovenia met the criteria. And perhaps just as important, both had been left out of NATO enlargement.

NATO had excluded the Baltic States from the first wave of its enlargement partly because it did not want to antagonize Russia. But while opposing NATO enlargement, Russia has not raised any objections to other states joining the EU. On 15 July, Russian Foreign Ministry spokesman Gennadii Tarasov said that Russia actively supported the Baltic States' membership in the EU. The Scandinavian countries had actively championed their cause with regard to both NATO and the EU.

Slovenia and Romania had made the short list for NATO enlargement, having received the support of nine of the 16 members. However, the U.S. had insisted that the first wave of enlargement be restricted to the Czech Republic, Hungary, and Poland. Slovenia was left out of NATO enlargement partly because of concerns that its military contribution to NATO would be limited. But in the economic sphere, Slovenia has been a sterling performer with a GNP per capita almost on par with that of Greece. The states that had pushed for Slovenia's NATO candidacy also ensured that it would be in the first wave of EU enlargement, despite the objections of the smaller states.

By contrast, Romania remains a backward country economically. Even Romania's own ministers admitted that Romania was more qualified to join NATO than the EU. The proportion of the labor force in the agricultural sector, some 24 percent, is a good indicator of Romanian economic backwardness. Corresponding figures for Austria, the Czech Republic, and Hungary are 8 percent, 11 percent, and 15 percent, respectively. According to the World Bank, Romanian GNP per capita has not increased since 1970.

With some 27 percent of its labor force in agriculture, Poland will bring a backward agricultural sector into the EU. Some studies have suggested that extending membership to Poland and other Central European states could double the amount of money that the EU pays for agricultural support through its Common Agricultural Policy. In addition, the EU will need to rethink its so-called structural funds, which go to poorer areas within the EU. Germany has insisted that those funds not be increased, while Spain is demanding that they not be cut. Since the prospective new members are all poorer than current ones, funds will have to be redistributed.

(The author teaches at the George C. Marshall European Center for Security Studies, Garmisch-Partenkirchen, Germany.)