EU applicants stuck in the slow lane

Date: 12/11/1998

The European Commission's criticism of countries in the second wave of applicants for EU membership in a series of reports last week has not produced the backlash that might have been expected. Simon Taylor reports

LIKE naughty children, the five countries making up the second wave of EU applicants have meekly accepted being told off by the European Commission in its series of progress reports.

Even Latvia, which has made the best progress towards meeting the requirements for Union entry since July 1997, will have to wait until next year before being invited to join the lead group of countries negotiating with the EU.

But, for the time being at least, it is not complaining. “We are satisfied with the recommendation given by the Commission,” said a spokeswoman for the Latvian government. “We are happy that a year has been named, although it's not a blank cheque. We have to continue making progress.”

Although there could be pressure at next month's Vienna summit to make even stronger commitments to the best-performing second-wave applicants, the key message from last week's reports is that the enlargement process is still moving very slowly.

Failing to get on board the negotiating train this year is not as serious as some candidates initially feared, because the locomotive on which the first-wavers are already travelling will not pick up real speed until autumn 1999, when the screening process has been completed.

But some of the strongest candidates in the second group will press hard for the call-up to be issued before the end of June 1999.

The Latvians hope that the invitation will be sent by the time EU leaders meet in Brussels to agree on the Agenda 2000 package of reforms to key EU policies in March, at the latest, while the Maltese expect the Commission's report on their application to be ready by February, clearing the decks for a decision on whether to add them to the first wave before June.

Privately, some EU diplomats say an accession date of 2005 is more realistic than the 2002-03 target cited by the applicant countries. This assumes that the full negotiations will take three years, and governments will need a further 18 months to two years to ratify the final deal.

However, there is no doubt that next year will be a watershed in the enlargement process.

At a meeting last week to discuss the Commission's reports, EU ambassadors discussed the implications of increasing the number of countries actively negotiating with the Union to ten, given that Latvia, Lithuania, Slovakia and Malta may all be added to the first wave in 1999. The debate focused on the impact of shutting Bulgaria and Romania out of the enlargement process for the foreseeable future.

Despite the phenomenal progress made by Latvia since the Commission drew up its last report in 1997, officials are recommending that none of the second-wave applicants should be rewarded yet in a bid to avoid bitter arguments at the Vienna summit over existing member states' favourites.

As the Commission report illustrates, Latvia enjoys one of the highest growth rates in the applicant countries and the lowest inflation rate, and has attracted the highest level of foreign direct investment at 7.6&percent; of gross domestic product in 1997. It has also moved a long way towards having a functioning market economy.

But the Commission stresses that some of the economic reforms were introduced too recently for it to say decisively that Latvia has met the criteria in a lasting way.

Lithuania's performance has been more mixed, according to the Commission, with greater effort needed to establish legal structures and strengthen market institutions.

Meanwhile, the Slovakian government fully accepts the Commission's criticisms that it has fallen behind in the race to qualify for EU membership. But Eduard Kukan, foreign minister in the new Slovakian government formed two weeks ago, is adamant that the blame lies with the former administration of Vladimir Meciar.

“Most of the time covered by the Commission report belongs to the previous government and does not reflect the new phenomenon in Slovakia,” he said last week, adding that he would be asking the Commission to produce a new report by next spring.

“This would allow the summit under the German presidency to recommend starting negotiations by the end of 1999,” he explained.

Kukan, leader of the Movement for Democratic Slovakia Party, stresses that the country's new four-party coalition government has promised to tackle a number of issues urgently, ranging from holding presidential elections and introducing new laws on minority rights to tackling irregularities in the privatisation process under the previous government and cleaning up rules on aid to struggling state-owned enterprises. Above all, says Kukan, his government wants to “clean up Slovakia's image”.

Malta, too, has accepted without much argument that a decision on its bid to join the first wave of negotiating countries will be delayed until after the Vienna summit.

Maltese Foreign Minister Guido de Marco told European Voice last week that there were “valid reasons” for the Commission to change its timetable. “I have no reason to doubt the good faith of the persons concerned,” he added.

But De Marco rejected suggestions that the absence of a value added tax system in Malta represented a serious obstacle to the accession process. “Most of the legislation is in place. This will have no effect on our chances of membership,” he insisted.

The foreign minister and deputy prime minister also rejected fears that Malta's renewed commitment to EU membership could be undermined once again by a change of government.

“Cross-party support for membership in Malta is stronger than it was in the UK or Ireland at the time of joining. Fifty-two per cent of the electorate are behind my party. Show me another country in the European Union which even has 52&percent; support, let alone 52&percent; of votes,” he said.

The situation is much bleaker for Bulgaria and Romania, following the Commission's warnings that their performances left a lot to be desired.

The report on Bulgaria concluded that it could not yet be regarded as a functioning market economy despite progress in pursuing reform and stabilising the economy.

Romania fared even worse, criticised for failing to make further progress towards creating a market economy because of a lack of political consensus to adopt the necessary reforms.

However, all was not rosy in the gardens of the first-wave candidates either.

The Commission attacked the Czechs for making “only limited progress” in meeting the requirements of membership. It said that while Prague had done well on standards and certification, there had been little progress on key internal market rules such as intellectual property rights, public procurement and state aid control. Prague was also accused of breaking the terms of the Europe Agreement in a dispute over imports of EU apples.

Slovenia too received a dressing-down for failing to make adequate progress, especially in terms of state aid control and internal market legislation.

Overall, Hungary and Poland received the most accolades for coming closest to meeting the criteria for Union entry, with Budapest singled out for praise for keeping up the momentum of reform. Where the pace of passing new legislation had slowed, said the Commission, efforts were focused on ensuring that laws were being properly implemented.

Poland had a more mixed record, with particular problems in the areas of standardisation and certification. The report also warned that controls on state aid and shortcomings in environmental legislation needed to be improved.

Despite the Commission's message to the applicant countries that they need to reinforce and accelerate the pace of reform, their defenders argue that the candidates are trying to achieve a degree of economic modernisation, privatisation and deregulation which some existing EU countries have not reached.

They point out that in a week when Romania, the back-marker in the enlargement process, announced it was selling off 35&percent; of its telecom company to a single foreign owner, French Finance Minister Dominique Strauss-Kahn drew a line in the sand round the privatisation of publicly owned industries by declaring that 65&percent; of France Télécom would remain in state hands.