European Council: Leaders agree on a framework to pay for enlargement, October 2002

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Series Details 28.10.02
Publication Date 28/10/2002
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After two days of tense negotiations at the Brussels European Council, leaders from the 15 EU Member States finally agreed on the financing of enlargement on 25 October 2002, paving the way for an 'EU of 25'by 2004.

At the first European Council to be held in Brussels during a presidency of another nation - Denmark - for reasons of cost and security, leaders finally reached agreement on the financing of the Common Agricultural Policy and the structural funds in an enlarged Union as well as instruments for monitoring the progress of the candidate countries once they have joined the European Union and safeguard clauses concerning operations of the internal market.

The most contentious issue - the future of the Common Agricultural Policy - was agreed after French and German leaders reached a compromise in a bilateral meeting before the European Council opened on 24 October 2002. It means farm subsidies for new Member States will be gradually phased in over a period of nine years, according to the following schedule:

  • 2004: 25 per cent
  • 2005: 30 per cent
  • 2006: 35 per cent
  • 2007: 40 per cent
  • 2007-2013: 10 per cent increments so that new Member States reach the support level of current Member States by 2013

As a result, the current farm budget of €40 billion will rise to €45 by 2006. The deal dismayed some Member States, notably the United Kingdom and the Netherlands, who had argued for an overhaul of the CAP and a reduction in the size of subsidies offered to European farmers but they had to make do with a line in the final declaration stating that the agreement to continue with CAP subsidies until 2013 was 'without prejudice' to a more fundamental overhaul of the system before then.

On the issue of structural funds a figure of €23 billion was agreed for the first three years with future years likely to be discussed in 2006 as part of the next EU budget period for 2007-2013. The leaders of the Member States also agreed on a budgetary compensation mechanism in the years 2004-2006 to ensure that the candidate countries do not become net payers immediately. Although the exact figures have yet to be finalised, the methodology of calculating the payments has been agreed.

The agreements means that the final obstacles to enlargement have effectively been removed and talks with the candidate countries began in Copenhagen on 28 October 2002 to conclude the remaining budgetary chapters. The Danish Prime Minister, Anders Fogh Rasmussen, said that the Copenhagen meeting 'marks the beginning of the concluding round of negotiations on the enlargement' following 'a very successful summit which represents a major step forward towards the historic decision on enlargement'.

Leaders also reiterated their support for Bulgaria and Romania to achieve the objective of EU membership in 2007 and encouraged Turkey to continue on the path to EU membership with promises that a decision on the next stage of Turkey's candidature would be taken at the Copenhagen Summit in December 2002.

Headway was also made on the Kaliningrad issue, which concerns the passage of Russians to the Baltic enclave, which will become isolated within the EU after its neighbours - Poland and Lithuania - join the European Union. EU leaders agreed to a proposal for a cheap, easily available travel document for residents of Kaliningrad to pass through Lithuania to the rest of Russia. The proposal will be presented to the Russian President, Vladimir Putin, at the EU-Russia Summit in Copenhagen on 11 November 2002.

Overall the Brussels European Council has been heralded as a 'successful summit' and it could turn 2002 into a landmark year for the European Union that began with the introduction of the euro as the common currency of 12 Member States and looks set to end with a European Union stretching from the Atlantic to Cyprus and the old Cold War border with Soviet Russia a certainty for 2004.

Links:
Council of the European Union:
25.10.02: Presidency Conclusions: Brussels European Council, 24-25 October 2002
21.10.02: Presidency report on Kaliningrad to the European Council
18.10.02: Preparation of the European Council (24-25 October 2002) - Annotated draft agenda
 
European Commission:
DG Enlargement
2002 Regular Reports
 
BBC News Online:
25.10.02: EU reaches landmark expansion deal
25.10.02: Summit's hot air and high drama
24.10.02: Funding issue hangs over EU talks
25.10.02: Blair anger at EU farm deal
25.10.02: Q&A: The EU's farm deal
24.10.02: Deal paves way for EU accession
 
European Sources Online: Financial Times:
26.10.02: EU farm accord angers Blair
25.10.02: EU leaders reluctantly back farm spending deal
 
European Sources Online: In Focus
Enlargement: 10 countries get green light as all eyes turn to Ireland, October 2002
Kaliningrad, June 2002
 
European Sources Online: Topic Guides
Enlargement of the European Union

Helen Bower
Compiled: Monday, 28 October 2002

Leaders from the 15 EU Member States finally agreed on the financing of enlargement on 25 October 2002, paving the way for an 'EU of 25'by 2004

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