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EU: Commission Proposal Would Allow Candidates To Delay Land Sales

Brussels, 2 May 2001 (RFE/RL) -- The European Commission today proposed a seven-year delay before candidate countries must allow land sales to foreigners.

According to the proposal, Hungary, the Czech Republic, Poland, Slovakia, and Bulgaria would be able to restrict sales of agricultural and forestry land to foreigners for seven years after enlargement. In addition, Hungary, the Czech Republic, and Poland would be able to enforce a five-year delay on the sale of secondary homes -- in effect holiday homes -- to foreigners.

The EU offer on secondary residences is likely to satisfy the three candidate countries which requested transitional periods, given that Cyprus had earlier accepted a similar separate deal.

However, on land sales there is likely to be some disagreement, as all candidates concerned had asked for longer transition periods. Poland, for instance, requested an 18-year transition period covering not only the sale of agricultural and forestry land, but also land used for industrial purposes. The EU offer, however, specifically rules out a delay on the sales of industrial land, citing likely adverse effects on foreign investment.

The commission proposal also exempts self-employed EU farmers who want to reside in the future member states. According to the commission, the freedom to establish commercial enterprises is a core element of the EU's internal market legislation which cannot be compromised. The commission also says self-employed farmers are unlikely to cause serious disturbances in candidate countries' real estate markets.

The proposal -- provided it is approved by the 15 EU member countries and agreed to by the candidates concerned -- would be reviewed three years after enlargement. Provided property prices in the EU and candidate countries have converged sufficiently by then, the transition periods could either be shortened or dropped entirely.

The commission today denied that the move is a compensatory gesture for the EU's recent decision to delay candidate workers access to its labor markets. However, the commission's enlargement spokesman, Jean-Christophe Filori, said both were equally sensitive issues.

"It is absolutely clear that these are two very sensitive problems for the public opinion. One -- the free movement of labor -- is sensitive for the EU member countries, the other is sensitive for the public opinion in candidate countries. Both of these issues have to do with [freedoms of] the internal market, and we have taken into account the concerns and fears of the voters."

Accordingly, the president of the European Commission, Romano Prodi, and his enlargement commissioner, Guenter Verheugen, have in recent weeks indicated that they expect a tacit deal, where in exchange for restrictions on labor movement, the EU would offer candidates concessions in other important areas.

Those candidates that did not request transition periods on the sale of land and holiday homes, and which have no other distinctive requests, could now face certain political problems. Other potentially sensitive areas like energy and environment policy pose similar problems for all candidates and any EU offers of transition periods are likely to involve similar terms for all.

Estonia, Lithuania, and Slovenia have all closed talks on the chapter of EU law dealing with land and property sales -- entitled "free movement of capital" -- without requesting any delays in implementing EU legislation. The same applies to Latvia, which is yet to close talks on the chapter, but has also refrained from seeking any transitional arrangements.

Until late March, Slovakia was also among the candidates requesting a delay on the sales of secondary residences to foreigners. Hoping to speed up accession talks, however, Bratislava then decided to drop a number of transition requests, including that concerning secondary homes.