Prague, 1 July 1998 (RFE/RL) -- Austria took over the European Union's six-month rotating presidency today, only hours after the EU's new European Central Bank officially opened for business in Frankfurt. Here are brief accounts of both events, as well as a progress report on the EU's 15 member states' efforts to reform the group's agricultural policy --essential before it can begin its planned expansion to the East.
--Austria's EU presidency is likely to be overshadowed by general elections in its northern neighbor, Germany, which itself will take over from Austria in January. A lot of the Union's urgent business --reforms both to its institutions and major policies, needed before enlargement can start-- has been on hold for much of this year, awaiting the outcome of German general elections on September 27. The elections will determine whether Germany continues to governed by a conservative-center coalition led by Chancellor Helmut Kohl, who has been the strongest national leader within the EU for much of the 16 years he has held office.
Meanwhile, Austria has joined Germany and the Netherlands in calling for a reduction in its net contributions to the EU. The three countries pay in the largest amounts of any of the 15 to the Union's coffers. Austrian Chancellor Victor Klima said yesterday (in an interview with Bonn's "General Anzeiger" daily) that, in his phrase, "the principle of fair and efficient burden-sharing must apply" in the EU. He also said that "it is not a question of populism," but many analysts believe the popularity of the anti-EU, far-Right People's Party was in large part behind the initiative.
As for expansion itself, Austria --which borders three of the East's active candidates, the Czech Republic, Hungary and Slovenia-- has made clear it is in no hurry for a-n-y of the 10 Eastern candidates to participate in one of the EU's most important benefits, the free flow of persons among member states. Chancellor Klima told the Reuters news agency recently that, in his words, Austria "will require transition periods before we have full freedom of movement for workers" from Central Europe. He denied that this position, too, was influenced by the anti-immigrant People's Party.
About all that is likely to happen from now until the end of the year is a special EU Vienna summit meeting in October on making the Union more relevant to, and therefore more popular among, its 370 million people. The usual end-of-the-presidency summit in December will discuss, but probably not take much concrete action on, the chronically high unemployment rate in many EU member-states. A more important summit, scheduled to reach accord on basic EU reforms, will take place next March in Germany .
--Yesterday's official ceremonies in Frankfurt opening the European Central Bank (ECB) was attended by a host of EU top officials and national leaders, as befits a truly important event. The ECB has been set up to supervise the EU's new single currency, the euro, which comes into existence as an important money of account in six months and, three years later, will replace all national currencies as the bills and coins used throughout the Union.
The highlight of the launch party were performances by a Dutch male-voice choir and an Irish dance group in Frankfurt's opera house. Both groups had been scheduled to perform at a special EU summit two months ago in Brussels that decided on the ECB presidency. But that gathering spent an embarrassing 12 hours deciding on a compromise that will allow the ECB's Dutch President Wim Duisenberg to step down four years into what, by EU treaty, is supposed to be an eight-year term of office. The singing and dancing were put off until yesterday. If the compromise is respected by Duisenberg, who has since indicated he is not so sure of resigning, he will be replaced four years into the eight-year term by Jean-Claude Trichet, the present head of the Bank of France. It was French President Jacques Chirac who insisted on the arrangement, despite opposition from most other members. Since unanimity was needed on the decision, Chirac simply wore down all his opponents.
Yesterday, Duisenberg told the assembled dignitaries --seven member-state prime ministers and most of their finance ministers and central bank chiefs-- that the ECB also had to win the confidence of EU citizens, many of whom are concerned about giving up their national moneys for an untested currency. Chancellor Kohl, whose personal commitment to the single currency played a large part in bringing to life, warned that the euro could n-o-t solve the EU's current economic problems, particularly its high joblessness (overall, more than 10 percent).
--Last week, after four days of contentious meetings in Brussels, EU farm ministers took a first, if still minimal, step toward reforming the Union's Common Agricultural Policy (CAP), which eats up more than a third of its budget in subsidies to farmers. The ministers agreed to take out of production 10 percent --rather than the present five percent-- of the land used to grow grain and oilseeds. The idea was to lift prices and reduce the amount of money the EU spends to buy surpluses, an indirect but still expensive subsidy.
The EU started setting aside arable land six years ago in an attempt to reduce so-called grain mountains. Farmers still either receive a compensatory income for the land they leave fallow or are guaranteed a minimum price --well above the world price-- they cannot sell on the open market. EU dairy farmers also continue to produce mountains of butter and cheese, far more than what the Union's consumers can digest. But so far not even minimal reform has affected dairy production.
The four days of tough talking and late-night brinkmanship among the ministers gave the EU a foretaste of what it can expect when they begin to discuss major overhaul of the CAP ---an absolute necessity before it can start enlargement. The reform is due to be decided on within nine months, so it can be endorsed by national leaders at their special German summit in March. But if matters follow previous EU scenarios for this kind of difficult bargaining, the full CAP reform will not be settled until late in the night of that summit's last meeting day --if it is settled at all.