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Europe: Will Money Problems Slow EU Expansion?

Prague, 16 September 1997 (RFE/RL) - As if the European Union did not have enough problems in implementing its planned expansion to Central and Eastern Europe, a new quarrel has just erupted among its 15 members over how to share the cost of enlargement.

At a meeting of EU foreign ministers in Brussels yesterday, there were open clashes among the 15 over which countries should pay the largest share of the bill for opening the prosperous West European bloc's doors to 10 candidate states in the relatively poor East. Diplomats attending the meeting reported divisions among three groups of EU nations. They cited those members which now contribute the most to the EU budget, those which receive the most aid from Brussels, and those which are fed up with the bickering and want get on with the reforms needed for the Union to nearly double its size within a decade.

In the first group were Germany and the Netherlands, the two biggest net contributors to the EU budget -- both also face general elections next year -- as well as Sweden, another big net contributor. All three countries' foreign ministers strongly pressed the case for reducing their share of the burden after the Union's current financing agreement expires in 1999. German Foreign Minister Klaus Kinkel, whose country pays in a whopping $12 billion a year, pleaded for what he called "a fairer sharing" of the bill. His Dutch counterpart, Hans van Mierlo, asked for "some sense of proportion." And Swedish Foreign Minister Len Hjelm-Wallen said correcting current pay-ins must be a part of future EU budget calculations.

In contrast, member states currently receiving large amounts of aid from the EU argued that expansion to the East should not be at their expense. Foreign Minister Abel Matutes of Spain, whose country receives almost $7 billion in EU assistance, said his government would not accept an expansion that was, in his phrase, "detrimental to southern countries." Matutes rejected out of hand a German proposal that members qualifying next year for the coming EU single currency should no longer receive aid under the EU's $3.2 billion Cohesion Fund, which distributes cash to the four poorest countries in the bloc -- Spain, Portugal, Greece and Ireland.

All this was too much for the third group of EU members, France, Belgium and Italy, which issued a joint declaration insisting that is was more important to agree on urgent internal reforms than to worry about membership dues. Belgian Foreign Minister Erik Derycke accused his colleague van Mierlo of selfishness in demanding a cut in Holland's contributions, saying that would violate the EU's basic concept of solidarity among rich and poor nations. Italy's Lamberto Dino argued that focusing now on post-1999 EU financing could "lead to blockage and give the wrong impression to candidate countries."

The reforms the three countries are urging were on the agenda of the EU's Amsterdam summit three months ago but, unable to achieve consensus, members simply put them off for several years. The two most important reforms deal with adjusting the size of the EU's Executive Commission and re-weighting the votes for big and small countries in an expanded Union. Both measures are considered essential to enlargement, but because both would change how much say governments would have in the EU they are sensitive questions in national capitals.

In addition, the EU must also reform its Common Agricultural Policy and its regional funding, which together account for three-quarters of its current $100 billion budget. Those reforms were spelled out in its Commission's "Agenda 2000" document, issued two months ago, but have not even begun to be addressed directly by member states.

Yesterday's foreign ministers' meeting did take up for the first time another important Agenda 2000 recommendation --that the EU begin membership negotiations with only five of the 10 Eastern states seeking rapid entry: the Czech Republic, Estonia, Hungary, Poland and Slovenia. That would leave talks with the other five --Bulgaria, Latvia, Lithuania, Romania and Slovakia-- for an unspecified later date. But on this matter, too, there was no consensus shown among the 15.

Diplomats reported that a majority backed the Commission's views. But they also said that Sweden and Denmark strongly argued for inclusion of more countries -- particularly, the other two Baltic states -- in the first wave of new members. And Italy and Greece were said to have urged a larger starting group that would notably include Romania.

EU officials today said it was too early to say whether the Union's new divisions, particularly the dispute over money, would keep its leaders from keeping their promise to designate first-wave Eastern candidates at their mid-December summit meeting. But the "blockage" that Italian Foreign Minister Dini warned of yesterday now seems, at the least, a distinct possibility.