Malta loses out as EU bids to avoid enlargement row

Date: 29/10/1998

By Simon Taylor

MALTA'S hopes of being invited to join the first wave of enlargement candidates at the Vienna summit look set to be dashed by a move to head off arguments between governments over adding more countries to the list of front-running applicants.

EU leaders had been expected to decide whether to invite Malta to join the six countries already in the 'first wave' at their December summit, after Prime Minister Eddie Fenech Adami revived the country's membership application following his election victory in September.

But a key report by the European Commission assessing Malta's readiness for EU membership is likely to be delayed until after the meeting, providing Union leaders with a face-saving way to avoid an embarrassing political row at their summit on 11-12 December.

Diplomats fear that if Malta - arguably the best-prepared applicant - is invited to join the front runners, the carefully constructed deal reached at last December's Luxembourg summit could unravel as other governments insist on their own favourites being added.

New Swedish Foreign Minister Anna Lindh has already insisted that Latvia and Lithuania are ready to start formal negotiations, without waiting for the Commission's own reports on progress in the applicant countries which are due to be unveiled next week. "It is time that these countries were considered right to start negotiations," said one Swedish diplomat this week.

Publicly, Commission sources insist that they are still on track to meet the early December deadline for producing the Malta report. But privately some are admitting that it is unlikely to be ready in time.

A Commission official closely involved in drawing up the study said the institution had not yet received enough information to finalise it. However, Maltese officials said they had submitted a 20-page report on the state of tax, monetary policy and financial services, and had not yet received a questionnaire setting out what additional information was required. They claim that the Commission should find it relatively easy to complete the work, because it only has to analyse legal changes since March 1995 when the institution produced an updated report on Malta's readiness to join the EU, rather than going back to 1993 when the original opinion was written.

Delaying the study offers one way out of a difficult political dilemma for Union governments.

As Commission research on the progress made by the five countries in the 'second wave' group will show next week, Latvia and Lithuania have made significant economic progress since the institution produced its first assessment of their readiness for EU entry 18 months ago.

Latvia, in particular, has turned in a very strong performance, registering the lowest inflation rate of all the applicant countries at just 3.5%, becoming the first Baltic state to join the World Trade Organisation and successfully privatising 95% of its key industries and 90% of agricultural land.

Given the strength of the arguments for inviting Latvia to join the first wave, which will be made forcefully at the December summit by the country's champions in Stockholm and Copenhagen, EU sources suggest that delaying a decision on Malta until next year would make it easier to fend off demands for any of the Baltics to be added to the list of front runners in Vienna.

But the Union will be under pressure to send a positive signal to encourage the applicant countries to continue their difficult reform efforts. EU leaders are expected to agree a statement at the summit praising the work they have done so far and holding out the promise of an early decision on whether any are ready to join the leading applicants next year.