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Central Europe: EU Warns Candidates Against Links With 'Nomenklatura'

European Union enlargement commissioner Guenter Verheugen is warning Central and East European candidate countries about what he calls damaging links between the old political nomenklatura of communist days and new economic structures. RFE/RL correspondents Breffni O'Rourke and Ahto Lobjakas examine Verheugen's concerns.

Brussels, 27 July 2000 (RFE/RL) -- Guenter Verheugen, the European Union commissioner in charge of eastward enlargement, has told candidate countries to keep communist-era nomenklatura out of their economies and politics.

Verheugen delivered the unusually blunt warning in Brussels this week during a presentation of an enlargement-related study.

He said not all candidate countries satisfied the so-called "Copenhagen" criteria for enlargement: democracy, the rule of law, respect for human rights, and respect for and protection of minorities. The economic criteria include the need to have a functioning market economy as well as the ability to cope with competitive market pressures within the EU.

He added that in some candidate states, there are what he described as "damaging" links between the old political nomenklatura and new economic structures.

Verheugen says the commission will keep a close eye on developments and publish its findings in the annual progress reports on candidates, expected in October. He did not say which candidate countries he had in mind.

Verheugen's spokesman Reijo Kemppinen tells RFE/RL that Verheugen's warning is not an off-hand remark and should be taken seriously. Verheugen voiced similar concerns a week ago (20 July) in London. Speaking at a lunch attended by the ambassadors of all 13 candidate countries -- including Cyprus, Malta, and Turkey -- he said the EU would not tolerate a situation where certain political circles controlled parts of the economy. This observation, he said, did not apply only to the Ukraine or Russia, but also to some Eastern candidates. Again, Verheugen did not specify which countries he had in mind.

Krassen Stanchev, the director of the Bulgarian Institute of Market Economy, says Verheugen may well be concerned by what he has seen in the negotiation process with the candidates:

"He is summarizing the general impression from the negotiation procedures, in that you have on Brussels' part an accumulation of experiences which creates a negative impression, a feeling of something wrong going on, that negotiations on harmonization of laws and other things is taken more as a ritual instead of being really implemented."

Stanchev says in a number of Central and East European countries, when the old system collapsed, the former political establishment retained much decision-making and economic power. He says participation of the broader society and new business elements in the planning of reform has been relatively limited.

Another analyst, Brussels-based Nicholas Whyte of the European Policy Center, says in terms of the over-concentration of economic power, Slovenia is a clear example:

"Nobody looks at Slovenia and says that's an undemocratic country. On the other hand, the economy is not as open as it could be, and it is a question of the extent to which the EU's Copenhagen criteria are observed; namely that there should be a functioning market economy. One of the things for which Slovenia has been regularly criticized in the EU accession reports is that control of the economy is concentrated in too few hands and that it is not open for most Slovenians themselves to break into, let alone sufficiently for investment from the outside world."

Stanchev also sees "old-style" thinking as a barrier to economic progress. He says in Bulgaria, for example, the authorities are incapable of understanding and promoting necessary projects like joint ventures in the electrical power sector. He says other candidate countries also offer examples of how the presence of the old-style mentality has complicated progress.

As to what is to be done, Stanchev says he does not see a "quick-fix" solution. But he says there are some transparency measures which can be taken as essential steps. He lists the measures:

"These standards are: openness of government decision-making, access to government information, and preliminary impact analyses of regulations. And gradually I think these will open-up the government process and will set new standards for administrations to meet."

Analyst Whyte says the old nomenklatura system cannot in the long run survive in an open and free market system. Therefore, he notes, the development of a healthy entrepreneurial culture is a basic requirement.

He also says that the long process of EU accession itself will, to a certain extent, break down the problem in time.