Europe needs more Union

History in the making

The date of 16 April 2003 will perhaps one day be remembered as ’historic’, along with dozens of others. On this day, an EU summit of a very particular kind was held in the Greek capital Athens. Twenty-five heads of State and Government gathered in the very birthplace of European democracy, at the Stoa of Attalos, the ancient Agora of Athens, to sign the Accession Treaty for ten new EU members from Central and Southern Europe. The 4,900 page Treaty, the result of five years of sometimes arduous negotiations (and translated into 21 languages), provides the legal basis for the historic and biggest ever enlargement of the European Union in 2004 which will put an end to the division of postwar Europe, creating a united continent at peace with itself for the first time in history.

While enlargement will no doubt help Europe overcome the consequences of the Cold War and reduce the wealth gap between the Western and Eastern half of the continent, there are legitimate doubts whether expansion will at all contribute towards the traditional goal of ‘ever closer Union’ or whether it will only encourage the emergence of a multi-tier, multispeed Europe. And despite the historical overtones, the signing ceremony in Athens could not help being overshadowed by the war in Iraq and last year’s wrangling over the financial details of the Enlargement Treaty which preceded its adoption at the EU Summit in Copenhagen in December.

The Copenhagen Summit

One Europe, whole and united – thus read the motto of the EU Summit in Copenhagen on 12-13 December 2002, after the fifteen Heads of State and Government from the EU member states and their ten counterparts from the accession countries had finally agreed on the financial framework for the first three years of enlargement. The agreement completed four years of negotiations on the harmonisation of technical and legal standards, also known as the acquis communautaire, of some 80,000 pages. The negotiations did not always go smoothly, since they essentially amounted to the accession countries adopting wholesale all of the existing EU legislation, with very little room for manoeuvre, virtually no ’opt-outs’ and only a limited number of transition periods for the trickier issues, such as the acquisition of land by Westerners in the new member states. And although the negotiations on the adoption of the acquis were officially concluded in December, there are still many outstanding issues, which have to be addressed by the candidates before the enlargement date of 1 May 2004, or during the first years of their membership. Among the most important shortcomings are the weak state of the administration in the former communist countries, high levels of corruption and weak judiciaries.

The thorniest issue of the enlargement talks, however, was the question of finances. The new member states quite understandably had been casting their sight on the manna from Brussels for their farmers and underdeveloped regions, expecting similar largesse as the one attributed to present member states. Yet in the absence of substantial reform of existing EU programmes (especially in the field of agriculture), and given the still limited absorption capacity of the new members, promised allocations of EU funds after enlargement fell short of many of the Easterners expectations. The final deal agreed amounted to EUR 40.8 bn in commitments or 25.1 billion in payments over the period 2004-2006, which was less than the maximum ceiling fixed by the Berlin 1999 EU Summit of 42.8bn. And over the threeyear period, 14.8 billion of this sum will be covered by the new member states’ contributions, so that the net cost of enlargement for the EU-15 would only be 10.3 billion over three years or 3% of total EU spending over these three years (i.e. 0.09% of EU 2 GDP*). The annual cost of enlargement, if broken down by country (e.g. about 28% for Germany), will therefore be almost irrelevant when compared to the huge impact achieved by this historic undertaking.

Now for the real reforms

In light of these figures, one feels seriously tempted to question the seriousness of the commitment to solidarity by the existing EU members, especially by those who are currently benefiting most from EU largesse. If the term solidarity is to be taken literally, a considerable part of EU assistance should from now on go to the new members. Yet before this can happen efficiently – and to avoid that funds will be misallocated or abused – many of the existing EU programmes need reform, above all the “world’s biggest economic absurdity”, in the words of The Economist, i.e. the Common Agriculture Policy (CAP).

In order to make the EU’s main programmes, which also include the structural funds, economically viable and politically as well as socially just, major (painful) concessions will be needed, especially from the programmes’ current key beneficiaries (Spain, Greece, Ireland and Portugal). Although it is true that many of these countries’ regions will not become richer after enlargement, when Europe’s per capita GDP will drop by 13% and therefore disqualify many Western (especially Spanish) regions from structural funds, a solution can surely be found that will insure funding during a transition period before redirecting Europe’s focus on the regions in genuine need, i.e. mainly those in Central Europe. Yet even this is not fully free of difficulty, given the still limited absorption capacity of the new members**, which means that despite the need of substantial funds for infrastructure and regional development, most of the accession states can’t even handle the amounts currently on offer from the EU for adjustments in the agricultural and environmental sector. This poses a particular headache for both Brussels and the new members, which will take considerable time to solve. At the same time, the entire philosophy of EU structural funding is in need of a major rethink, given that past experience has shown that it is not always producing the desired results and that it can seriously distort investment priorities to the extend of being counterproductive***.

Given the persisting economic divergence between East and West, the main focus of the EU-25 should be on how to reduce the considerable wealth gap that exists between the old and new members and which is likely to persist for at least a generation****. Although progress achieved after a decade of reform in the accession countries has been impressive, there is still a lot that has to be done, especially in the field of administrative and judicial reform****** and regional development. Yet the divisions are not only economic. Over the last few months, a number of political rifts have also been opening.

A divided continent

The signing of the Accession Treaty on 16 April constituted an important step on the road towards a united continent, overcoming half a century of post-war division. It was made possible by the fall of the Berlin Wall in 1989 and a decade of sometimes painful reform. This is clearly a moment of rejoicing for Europe, yet the signing could not have come at a worse time for the Union, for it was overshadowed by the recent controversy surrounding the Iraq war and the divisions between those who supported the US led invasion and those who didn’t. The chasm which was opened across the continent has already had numerous negative implications for Project Europe, especially on its plans for a united voice in the world, its Common Foreign and Security Policy (CFSP). The Iraq war proved once more that ’European’ foreign policy, especially in times of crisis, continues to be run from 1 http://europa.eu.int/comm/enlargement 2 Polish Supreme Chamber of Control, www.nik.gov.pl, March 2003 3 The Economist, 27 March 2003 4 Vienna Institute of Comparative International Studies, WIIW, www.wiiw.ac.at 5 Kilian Strauss, Beyond the Numbers, Study on the obstacles to EU Enlargement, ING Bank, January 2002 3 national capitals and not from Brussels, and that there is little hope that this is going to change in the near future. At the same time, the rift which opened, was not between the proverbial ’old’ and ’new’ Europe, but rather between atlanticists and supporters of France’s ’l’Europe forte’ position (cf. below).

Although the events of recent weeks will not destroy Europe, they should nonetheless give everyone pause for thought. Will there be a future for a single European Foreign Policy ? Will there ever be a Defence Europe ? It behoves to bear in mind that EMU took some 30 years to materialise while the idea of CFSP has only been with us for 11 years now, with initiatives for a more integrated European defence for only five. Europe no doubt still needs more time to find its place in the world, with regard to its main partners and especially the US. And Europe also needs more vision and courage. Without vision it would have never achieved the Single Market, EMU or the current Enlargement process.

But Europe also has to be careful not to start running into the wrong direction. The ’Meeting of Four’ on 29 April 2003 between Belgium, France, Germany and Luxembourg on closer defence cooperation may look like a step ahead, but actually opened up more questions than answers. The fact that Britain, Italy and the Netherlands were not associated with the initiative was a bad sign for many. So was the fact that some of the involved countries’ Ministries of Defence did not want to be involved, thus making it a rather empty gesture of diplomatic activity. Especially Germany suffered from being associated with an ‘essentially good idea at a bad moment’*******.

The German Dilemma

The current situation represents a genuine (and rather unpleasant) dilemma for the EU’s biggest member, Germany : after narrowly winning the September 2002 elections thanks to an anti-war platform, Chancellor Schröder stuck to his promises and did not support the American war effort in the Gulf. This was the first time that a German post-war government had dared to openly defy the United States, a position which has met with strong criticism not only in Germany, but also in other countries, despite the apparent popularity of the anti-war stance. In the event, Germany aligned itself with France and Russia against the US, Britain and Spain – an unheard of coalition in post-war international relations. Yet this situation is rather awkward for Germany, given that the country should in theory never have to choose between its main Western allies, between France or the US, and even less so between France or Britain. Now, with the war over, Germany’s primary goal must be to repair the damage done and mend its strained relations with its main Western allies. This could prove difficult with regard to the US, since it looks as though German-American relations have been irreparably damaged, at least as long as George Bush will be President (and Gerhard Schröder Chancellor). Which still leaves the road through London, first steps on which have already been made.

The situation for France is somewhat different. The French stance was not so much driven by anti-war feeling but rather a visceral anti-Americanism which is part of the Gaullist tradition. This includes, inter alia, the decades-old French desire to encourage the rest of Europe to stand up to the US and to follow Paris in opposing American global leadership. However popular the French anti-war stance may have been among the people of Europe, the French position did not show much concern for a concerted European position on the issue and proved to what extend Paris will be difficult to integrate into a future Common Foreign and Security Policy (as has been the case with NATO).

Which future for Europe ?

Europe may not yet be in crisis, yet its future looks decidedly uncertain. With 25 members as of next year, expected to rise to 27 or 28 in 2007 and to 30 and higher after 2010, it is becoming increasingly clear that the existing institutions can no longer guarantee the 6 Süddeutsche Zeitung 4 smooth functioning of the Union. The need for streamlining the institutions was behind the creation of the European Convention last year, which intends to reform both the rules and mechanisms of Europe in order to avoid gridlock in an enlarged Union. Yet although the Convention’s plan for a European Constitution received an unexpected boost at the end of last year, progress towards an agreement which satisfies all sides is extremely difficult, especially on the issue of political cooperation and foreign policy.

Yet in the light of recent disagreements, who, if not the Convention, can give EU the urgently needed vision to move on, and who else could bring it closer to a genuine Common Foreign Policy ? By simultaneously addressing highly complex questions such as the institutions and foreign policy, a constitution for Europe could actually kill several birds with one stone. If the Union is not profoundly reformed now, European integration risks being fatally stymied with future summits turning into total farce : European leaders behaving like children, bickering over pet issues while paying mere lip service to notions such as solidarity. This means that there is no alternative to reform, given that with 25 or more members, chaos would be certain to loom in Europe. The most basic step needed would be to adopt most measures by majority vote, along with simplification of the 80,000 pages of acquis communautaire. Yet despite the obvious need for reform, success of the Convention is not (yet) guaranteed. Very strong political will is needed to reform EU finances, which will involve concessions by everyone, especially today’s beneficiaries of EU largesse. The EU can only work with genuine solidarity when everyone cedes a little. The latest developments in the Convention have raised fears that apart from limited willingness to reform, there is a rift emerging between smaller states which generally favour the Community method, i.e. a stronger Commission and reduced influence from individual member states, whereas the bigger states tilt the other way, as they fear to be outvoted by small states with limited economic and political weight. Although this opposition of big vs. small could become commonplace in a bigger EU, a split of Europe should be avoided at all costs. There is no guarantee that the Convention will succeed in reaching a reasonable compromise between the two camps ; yet it is the best hope for a more workable Europe at present. Given the wide array of contentious issues to be addressed, the Convention had best focus its efforts on those areas in which Europe possesses a comparative advantage already today.

Conclusion

The upcoming Enlargement of the European Union to ten countries from Central and Southern Europe constitutes an important achievement in the quest for a united continent, but represents at the same time a major challenge to the functioning of the Union and its institutions. Only genuine and radical reform of both the institutions and the way the Union works can avoid a paralysis of Project Europe. But in order to streamline Europe, both vision and willingness to make sacrifices will be needed. The current and future members of the Union must realise that Europe is not only about money, but also (and more importantly) about cooperation, coordination and genuine solidarity, as was for example shown during last year’s great floods. Moreover, the idea of ’One Europe’ has to be filled with content, by making Europe more tangible in daily life, an undertaking for which even more commitment and more European spirit is needed. Europe, its people and above all its leaders have to grow up to turn the EU into a mature organisation with a voice in world affairs. The alternative would be a multi-tier Europe, in which different groups of countries pursue different goals – hardly what the founding fathers of Europe had in mind.

* http://europa.eu.int/comm/enlargement

** Polish Supreme Chamber of Control, www.nik.gov.pl, March 2003

*** The Economist, 27 March 2003

**** Vienna Institute of Comparative International Studies, WIIW, www.wiiw.ac.at

***** Kilian Strauss, Beyond the Numbers, Study on the obstacles to EU Enlargement, ING Bank, January 2002

****** Süddeutsche Zeitung