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EU: Industrialists Group Lobbies For Expansion Eastward

Since 1983, the powerful European Roundtable of Industrialists has quietly -- and effectively -- lobbied the halls of power at European Union headquarters in Brussels. In the second of a two-part series, RFE/RL correspondent Tuck Wesolowsky examines the roundtable's current efforts to influence the EU's planned expansion eastward.

Prague, 30 March 2000 (RFE/RL) -- Access to economies in Central and Eastern Europe has been a goal of Western business ever since the fall of the Berlin Wall. The region's cheap but skilled workforce is one major attraction. Another is the market represented by some 150 million consumers, many of whom covet Western goods and services.

According to the European Bank for Reconstruction and Development, over the past 10 years Western businesses have invested some $50 billion in Central and Eastern Europe. Western companies want to see the region fully integrated economically into the EU, creating a trade-barrier-free market of some 500 million consumers. That's why one of the strongest backers of rapid EU enlargement to the east is the European Roundtable of Industrialists, or ERT, one of the most effective business lobbies in Brussels.

The ERT is working for expansion in several ways. The group has set up three regional offices, called "business enlargement councils," to solve problems faced by Western businesses operating in the region. It has issued a report touting the advantages of foreign direct investment in the region for both East and West. It has also met with environmentalists in a effort to influence ecological policy in the East.

In addition, the roundtable of industrialists works closely with the EU's executive body, the European Commission. In fact, the chairman of the roundtable's own committee on EU expansion, businessman Percy Barnevik of Sweden, also chaired an EU advisory group of business and labor representatives. ERT officials say the business lobby is advocating the kind of internal reforms needed for countries like the Czech Republic, Hungary, Poland, Estonia, and Slovenia to be admitted to the EU. But those who monitor the ERT's activities say it is merely championing the interests of the 35 companies active in its work group on EU enlargement.

The roundtable's three business enlargement councils are located in Romania, Hungary and Bulgaria. The Bulgarian council was the first to open, in December 1998, at a ceremony attended by Bulgarian President Petar Stoyanov. The Sofia-based council is "sponsored" -- that is, at least partially financed -- by the Belgian petro-chemical concern Solvay, which since 1997 has owned a 60 percent share in SODI Devnja, one of the world's largest synthetic soda ash plants.

In Hungary, another council was set up last May, this time under the sponsorship of Royal Dutch Shell. Shell has been active in both the Czech Republic and Hungary financing programs to encourage the development of small and medium-size businesses.

The Romanian council was established under the leadership of the French company Lyonnaise des Eaux (now a part of France's Vivendi conglomerate). The company has been active in water management projects in the Czech Republic and Hungary.

France's Eric Vaes is the organizer of the roundtable's committee on EU enlargement. He explains the logic for establishing regional business enlargement councils:

"We decided that working on enlargement out of Brussels is useless. In other words, if we want to take enlargement seriously -- with the pros and the cons of enlargement -- as investors we have to go into the field, and not by tackling, like most of these organizations are doing, by sitting comfortably in Brussels, talking to the guys [who] are in the enlargement task force."

Vaes says the councils have been well received in all three countries, where he says they work with local government and business leaders on such issues as corruption, public procurement and intellectual property. Vaes denies the councils are tools for companies pursuing their own particular interests in the region, saying no individual firm is allowed to pursue any specific business interest in the councils.

The dual role played by Swedish businessman Barnevik in the ERT lobby group and as an EU adviser seem to indicate that the European Commission welcomes the input of the ERT. Oliver Hoedeman of the monitoring group Corporate Europe Observatory says such thinking on the part of the European Commission points to deeper problems in Brussels:

"That is the way the European Commission generally talks about lobbyists, particularly from industry. And that is the way decision-making goes in Brussels, but you can't call it democratic. Democratic decision-making is about citizens having a role in deciding and citizens organized in all kinds of organizations or in political parties, and so on."

Our correspondent reports that the roundtable plans more business councils in Central and Eastern Europe in the near future, with one soon to open in Slovakia. The ERT's Vaes would not identify the Slovak council's sponsor, saying only that it would be headed by a company with what he called "significant" business interests in the country.
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    Tony Wesolowsky

    Tony Wesolowsky is a senior correspondent for RFE/RL in Prague, covering Belarus, Ukraine, Russia, and Central Europe, as well as energy issues. His work has also appeared in The Philadelphia Inquirer, the Christian Science Monitor, and the Bulletin Of The Atomic Scientists.