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EU: Germany Determined To Introduce Spending Reforms

Prague, 6 January 1999 (RFE/RL) -- Germany, now the president of the European Union, has a clear goal for its six-month term of office. That is to achieve internal spending reforms in the EU -- an extremely ambitious goal which will not be achieved easily.

The new German government of Chancellor Gerhard Schroeder has openly linked successful reform to the EU's eastward expansion. Schroeder's blunt message is that without a fairer sharing of burdens within the EU, the union cannot think of taking on new members. He says the days of Germany writing checks for everybody in the EU are gone.

So in effect, the 10 Central and East European candidate members are being held hostage to an EU reform process which is notoriously difficult and which has defied previous efforts to find a solution.

Bonn, of course, has come in for some international criticism for its new, tough approach, with sniping about the return of the German bully mentality. But a Foreign Ministry official in Bonn, who spoke to RFE/RL on condition of anonymity, says it's a mistake to suppose that Germany is unilaterally forcing the pace of reform or blocking enlargement.

The official said that the internal reform program, called Agenda 2000, must be settled at a special summit by the end of March. This is because it contains the projected spending plans for the period 2000 to 2006, and only by sticking to that timetable can the program be submitted to the European Parliament in sufficient time. The deputies face mid-year elections and, beginning in May, will be preoccupied with campaigning. To wait for a new parliament to be installed would mean the EU would have no spending program for the start of 2000.

The Agenda 2000 document contains reform proposals developed by the EU Executive Commission covering three main areas -- the common agricultural policy, regional funding, and members' financial contributions to the EU.

The official said Germany sees enlargement eastward as a historic task, and Germany remains an advocate of expansion as quickly as possible. Once Agenda 2000 is successfully dealt with, as he put it, all cards will be on the table. The German position is that, late this year or early next year, a target date must be fixed for the entry of the first batch of new members.

His reference to setting a date is significant. The same formulation was used initially by German Foreign Minister Joschka Fischer in Vienna earlier this week (Jan. 4).

The German presidency will be followed in the second half of this year by a Finnish presidency, and the Finns have already said they want their term to be dedicated to the question of enlargement. If dates for taking in the front-running easterners can be agreed upon, then a major step will have been taken.

During the past year, the process of harmonization between the EU and the candidate members has continued apace, and substantive negotiations have opened with front-runners Poland, Hungary, the Czech Republic, Slovenia, and Estonia. But the EU is still perceived as being lukewarm in heart about eastward expansion. Naming of target dates would cut through the suspicion and provide a firm framework which is presently lacking.

Of course, the time scale may not be as quick as the Eastern candidates, particularly Poland, would like. Schroeder and his ministers have spoken of the need for "realism" in viewing expansion, a formulation meant to dampen expectations of anything happening quickly. Dates as late as 2006 have been suggested, and although subsequently downplayed, they linger in the air.

So, much hangs on a successful reform summit in March. In EU members states, task forces of experts are already engrossed in formulating positions which safeguard key national interests while offering some scope for compromise in Brussels. In Ireland, a Foreign Ministry official told RFE/RL that practically all the country's policy areas relevant to the EU are currently under review. Ireland, like France, is a major beneficiary under the hugely-expensive common agricultural policy, and German and Dutch-led attempts to bring financial sustainability to the agricultural sector are of crucial importance to Dublin, as to Paris.

The Netherlands, small though it is, is the second largest net contributor to the EU budget after economic giant Germany. In fact, in per capita terms, it pays even more than Germany. A Dutch briefing paper made available to RFE/RL states that The Hague -- like Germany -- wants agricultural spending capped at present levels in real terms. It also wants part of the farm subsidy bills to be paid by national governments instead of by the EU, thus easing the burden on the EU budget. Certainly the present arrangement of ever-escalating farm costs would be unsustainable when the Easterners join.

The Dutch and the Germans also want regional funding, the second most expensive item in the EU budget, to be more strictly controlled. They say that only this way can money be available to help the easterners. The Spanish and the Portuguese on the other hand consider the continuation of present funds to poorer regions to be essential.

The Bonn Foreign Ministry official said, however, that many of the EU regions still receiving special funding have in fact grown wealthier and are now above the official cut off-point for aid. He said this problem -- like so many in the EU -- is simple to solve in theory, but politically difficult in practice.