Doubts over success of Europe’s new ‘Marshall Plan’

Date: 25/09/1997

WHEN US President Bill Clinton commemorated the 50th anniversary of the Marshall Plan in the Netherlands this May, he wasted no time in pointing out the modern-day parallels.

For the second time in half a century, Europe was at a crossroads, he said. Whatever turning it took would profoundly affect regional and global security for years to come.

Almost gleefully, he twisted the knife in. Given US generosity last time, the EU's apparent lack of support looked mean.

“We cannot simply say to these countries, we want you to be for democracy and we want you to support economic reform and good luck,” said Clinton.

The lesson was not lost. When the European Commission revealed its Agenda 2000 in July, it made big play of its new and revamped pre-accession funding programme, proclaiming it a second Marshall Plan.

The current Phare programme, worth 1.2 billion ecu a year until 1999, will be raised to 1.5 billion ecu a year from 2000-2006 if Commission proposals are accepted.

On top of that, 500 million ecu will be made available annually from 2000 onwards to help the applicant countries reach EU standards in agriculture, and another 1 billion a year will help them improve environmental conditions and build transport infrastructure.

But Marshall aid was about more than money. It was also about encouraging recipients to trade freely with each other, lowering barriers and fostering cooperation.

By contrast, EU member states continue to impose trade restrictions on applicant countries to protect their farms and industries.

No one suggests Marshall aid was purely altruistic - after all, much of the money went back into American pockets - but it did have a sense of vision. Its value was as a seed from which successful intercontinental trading grew.

Unless the EU can cast aside short-term concerns and allow its pre-accession funds to flourish in the same way, this 'second Marshall Plan' may prove to be a rather second-rate sequel.