Giant ‘green’ mountain to climb…

Date: 25/09/1997

By Michael Mann

FOR all the talk about how difficult it will be to integrate the central European economies into EU farming and single market policies, it is the impending clean-up of the environment which looks set to present the applicants with the biggest headaches.

Quite simply, after 40 years of full command economics and little scope for environmental protest, the ecology of the region is a mess.

This would be bad enough for states with a bit of spare money to spend on environmental policies, but for the cash-strapped countries of central and eastern Europe (CEECs) - already struggling with modernisation and the transition to a market economy - it is a monumental challenge.

Earlier this month, the European Commission tried to quantify the problem, estimating that the CEECs would have to find around 120 billion ecu to bring environmental standards up to the EU norms necessary for them to join.

The Commission's report said the Union hopefuls needed particularly to concentrate investment on improving drinking water and the management of waste water and solid waste, quite apart from cutting pollution from industrial plants and power stations.

So complex is the web of environmental legislation the CEECs will have to transpose into national law that Environment Commissioner Ritt Bjerregaard presented them with a 'guidebook' on how to do it.

But passing laws in line with 91 major pieces of EU environmental legislation is just part of the problem. Aside from the political difficulties of forcing costly new rules through fledgling parliaments, most of the CEECs lack the administrative infrastructure to manage such upheavals, according to the Commission's analysis.

It is perhaps in the area of administration that the EU executive can be of the greatest assistance to the prospective members, particularly as the financial assistance granted under existing schemes is a mere drop in the ocean compared to the CEECs' overall requirements.

The Union currently provides around 120 million ecu annually to help eastern Europe clean up its act. Bjerregaard's officials claim this could rise to as much as 1 billion every year between 2000 and 2006 under what has been dubbed the 'new Marshall Plan' for the region.

But whatever assistance the Union can offer, the lion's share of the money will have to come from eastern European taxpayers. This could mean dedicating between 2-5&percent; of their gross domestic product to the task over the next 20 years, two to three times what the rich countries of the Organisation for Economic Cooperation and Development (OECD) spend.

In absolute terms, most investment is needed in Poland - around 35 billion ecu or 927 ecu per capita, according to a recent Commission report. But in relative terms, the cost will be even higher for Hungary and the Czech Republic, which will have to spend an estimated 1,306 and 1,437 ecu per capita respectively.

For their part, CEEC governments are looking hopefully in the direction of western investors to bring state-of-the-art - and cleaner - technology to the region in return for low-cost manufacturing conditions and a well-trained workforce.

More optimistic commentators argue that the cost figures should thus be treated with caution as they do not reflect the benefits eastern industry would gain from such investment.

They point to a recent OECD report on 'environmental information systems and indicators', which shows sulphur dioxide emissions in Hungary and Poland continuing to fall as GDP increases. Unfortunately, this pattern is not repeated elsewhere, making it impossible to draw any firm conclusions.

Likewise, the slump in economic activity following transition saw a decline in the use of fertilisers, one of the main causes of water pollution, but this has picked up again as economies have recovered.

In its opinion on the CEECs' applications for EU membership, the Commission stressed that “enlargement does not create problems, but will rather highlight them and improve the framework for their solution”.

Bjerregaard has made it plain she will not countenance any watering down of existing EU standards to accommodate enlargement. Absolute compliance with Union standards will also help the CEECs ward off any attempts from member states suspicious of expansion to block their membership of the club.

“I don't think any of them would want to undermine their negotiating position by saying 'I want to join your club but I really can't afford it',” said a Commission official.

The smart money is on a lengthy transitional phase before the CEECs are 100&percent; integrated into Union environmental policies.