An inclusive Europe II

June 24, 2005 - nr.5
Summary

Nummer 5, november 1998

On 12 June 1997, the Advisory Council on International Affairs (Advisory Council) was asked to produce two reports on the enlargement of the European Union. In October 1997, the Advisory Council published the first of these reports, entitled An Inclusive Europe. The present report, entitled An Inclusive Europe II, discusses a number of points connected with the issue of enlargement.

As far as Economic and Monetary Union is concerned, the Advisory Council believes that the use of a transitional regime will encourage prospective Member States to achieve the necessary convergence. If a transitional regime is agreed, it should incorporate a timetable stating when any restrictions on capital movements are to be lifted. The bans on monetary financing and on privileged access to financial institutions14 should be strictly applied in all situations, given that a healthy state of government finances coupled with the absence of excessive deficits are key elements in the convergence process that is needed to prepare the way for accession to EMU.

The fact that countries which are not adopting the euro will have a greater degree of political freedom may have an adverse impact on the economic and monetary situation in the Union. The Advisory Council takes the view that, when the third stage of EMU commences, the Union will have to decide how best to deal with this situation, so that Member States which have discarded their own currencies in favour of the euro are not at a disadvantage compared with those which are not prepared to take such a step.

As regards the question of institutional capacity, the countries of Central and Eastern Europe will need to do more than simply accept and enforce the existing acquis communautaire. For this reason, the Accession Partnerships adopted by the Council on 30 March 1998 were right to identify the need for strengthening the institutional and administrative capacities of the states in question as being one of the short-term and medium-term priorities. This includes such things as improving the various regulatory procedures and bodies, strengthening the judicial system and the organisations responsible for border controls, the police, the ministries and courts, enhancing the legislative process and training judges in community law.

The Advisory Council adheres to the basic principle that new Member States must accept the acquis communautaire. The Advisory Council proposes that more funds should be allocated to the pre-accession strategy as a means of showing that the current Member States and the acceding countries of Central and Eastern Europe have a shared responsibility for the adoption of the acquis communautaire.
Under the proposals put forward by the European Commission, ECU 7 billion of the ECU 45 billion earmarked for the acceding states is intended for the pre-accession stage, while ECU 38 billion is available for spending during the period (until 2006) following their accession. In formulating this proposal, the European Commission assumed that Estonia, Hungary, Poland, Slovenia and the Czech Republic would join the European Union in 2002. It is not clear, however, whether it would be wise to distribute the funds in this way, particularly as it is looking increasingly likely that the countries in question will not be joining the European Union until a later date. Only a relatively small amount has been allocated to the pre-accession stage compared with the amount that is to be spent during the period after accession. Because it is so important that the new Member States from Central and Eastern Europe are prepared in good time for adopting the acquis communautaire, more funds should be earmarked for the pre-accession stage. The Structural Funds could form a prime source of such funding, since they were established precisely for developing the governmental and administrative capacity of the Central and East European countries and thus placing them in a better position for adopting the acquis communautaire.

It is clear from practical experience that the adoption of the acquis communautaire should be seen as a dynamic process rather than as a static incident. It is inevitable, given the relative underdevelopment of the candidate countries in Central and Eastern Europe in terms of economic growth and governmental refinement, that considerable use will need to be made of transitional provisions. How long the transitional period should be is also a matter that will need to be decided on a case-by-case basis. The Advisory Council is of the opinion that a balance will need to be sought between the desire to minimise the number of exemptions and derogations granted on the one hand, and the risk of overestimating the ability of the new Member States to implement the acquis communautaire on the other, i.e. the possibility of expecting too much from them.

The question of the adoption of the acquis communautaire should not lead to the misunderstanding that this is a matter which is of concern only to the prospective Member States from Central and Eastern Europe themselves. The Advisory Council believes that it is a shared responsibility, affecting both those countries which wish to join the European Union and its current members. In no circumstances should a desire to see the adoption of the acquis communautaire in full lead to the postponement of the accession of Estonia, Hungary, Poland, Slovenia and the Czech Republic. Such a negotiating strategy would be inconsistent with the prospect which has been held out to these countries of EU membership within a period of five to seven years; nor would it do justice to the political significance of the next wave of enlargement.

The Advisory Council believes that deferring the accession of countries from Central and Eastern Europe (and possibly rejecting their membership applications entirely) on the grounds that the countries in question are not able to enforce the acquis communautaire in full would not be in the interests of the Union in its intended future constellation. At the end of the day, therefore, the Union will need to accept that countries can become full members without having adopted the acquis communautaire in its entirety.

The existing opt-out clauses in the Treaties of Maastricht and Amsterdam were designed for a number of specific situations. The Advisory Council has discussed the question of the future policy on opt-outs. There are a variety of good reasons for adopting a more flexible approach, e.g. in order to deal with a situation in which a country has committed itself firmly to membership of the Union, but is unable (either more or less permanently or at least for a very long time) to accept certain parts of the acquis communautaire. If the acceding countries were given a choice, thus enabling them to exert more influence over their own destinies, this would help to strengthen political support for enlargement. Obviously, any opt-out should not include those features of the acquis communautaire which are essential to the effective operation of the single market, such as competition policy and trade policy. All things considered, the Advisory Council has decided not to make a general recommendation on the inclusion of opt-out clauses, believing instead that any requests for opt-outs should be assessed on their individual merits. It is clear that, from a broad Community perspective, the question of opt-outs should be approached with caution.

As far as the Common Agricultural Policy (CAP) is concerned, the Advisory Council believes that the reforms should be both intensified (within those sectors to which they already apply) and broadened (to encompass other sectors), for the following reasons:
 

  • so as to prevent the imminent formation of surpluses, especially of cereals and beef;
  • so as to anticipate the measures to liberalise trade which are likely to ensue from the forthcoming WTO (World Trade Organisation) talks;
  • so as to facilitate the integration of new Member States;
  • so as to retain access to global markets.

    The European Commission takes the view that additional action needs to be taken to supplement the current policy, notably by prioritising rural development. The Advisory Council believes, however, that, if the subsidiarity principle is correctly applied, the promotion of rural development should be regarded as being the responsibility of the Member States themselves and not of the European Union.

    The Advisory Council sees only one solution for the long term, especially for the period after the expiry of the transitional period. This would be to reduce the level of income support to an EU-wide basic level, which individual Member States could then top up to a given maximum, provided that they met a number of predefined conditions. Such national top-up schemes would have to take account both of the relative prosperity of the Member State in question and of the cost of living in that state.

    Hardly any attention has been devoted to an analysis of the social aspects of enlargement, and this is puzzling for a number of reasons. The first is the announcement made by the European Council that employment is to be a top-priority issue within the European Union. The accession of East European countries is bound to affect employment both in the current Member States and in the acceding countries themselves. A second reason for paying more attention to the social aspects of enlargement relates to the political debate now taking place on the free movement of workers and its impact on the labour markets in the current Member States. In Germany in particular, a growing body of public opinion is in favour of instituting a transitional period for the free movement of workers from the new Member States, in order to protect the current Member States from a flood of East European labour. The Netherlands would not appear to require any 'protection' of this sort, as Dutch workers are unlikely to be displaced by cheap East European workers. This is because the fundamental principle underlying the free movement of workers is that employers in one Member State may not discriminate against employees from another Member State, who are therefore entitled to the same pay as employees from the 'home' Member State. In spite of the understandable objections raised by Germany, the best option would seem to be to encourage all Member States to enact clear legislation on minimum wages, with the Member States themselves bearing the primary responsibility for preventing the disruption of their own labour markets. There is a third reason why social aspects need to be given greater emphasis, and this relates to the question of finality. It is precisely the high European standard of living and the European social model which are regarded as the characteristic features of the Union, which set it apart from Japan and the US. The European model consists of national systems supplemented by a framework of European legislation regulating the free movement of workers, by standards on the equal treatment of men and women, by policies on the protection of health and safety at work, and by various provisions on matters such as employees' rights to information and consultation. The enlargement of the Union will inevitably have an impact on the development of the European social model.

    One of the more striking aspects of the Commission's proposals for the distribution of the Cohesion and Structural Funds is that the current Member States will continue to be the Funds' prime beneficiaries. In the Advisory Council's opinion, this does not do justice to the gap in economic development that exists between the countries of Central and Eastern Europe and the current Member States. The Advisory Council therefore advises the government not to support the adoption of the proposals put forward by the European Commission in this respect, and instead to press for a higher rate of degression in relation to the current Member States which are the beneficiaries of the Funds at present, so that a corresponding amount can be made available for those regions of the new Member States which qualify for support. This would allow the Funds to be used in a credible manner to support the efforts made by the new Member States to adopt and apply the acquis communautaire in practice. The Commission claims that the aid should be subject to a ceiling of 4 percent per annum because of the limited ability of the Central and East European countries to absorb such additional funding. The Advisory Council is of the opinion that this ceiling is too static and is based too much on budgetary and distributional considerations. It would be better if a more dynamic approach were to be adopted, the objective of which would be to increase the countries' absorption capacity by strengthening their institutional capacity. If more funds were spent on strengthening their institutional capacity, it could be agreed, for example, that the aid intended for the countries of Central and Eastern Europe could be increased by 10 percent per annum during the period from 2000 to 2006.

    In other words, there are good reasons for allowing the countries of Central and Eastern Europe to benefit more (albeit degressively) from the Cohesion Fund than the current Member States.

    In conclusion, the Advisory Council feels it is vitally important that Agenda 2000 should lead to a different strategy than that envisaged by the Commission. Specifically, the Union should decide to gradually reduce the flow of funding and, in implementing the results of the fundamental spending review, should allocate considerably more funding to relevant regions in the candidate countries. This would help to create a realistic prospect of both accession and adoption of the acquis communautaire. The Advisory Council's reasons for urging such a course of action are based not only on political idealism, but also on a conviction that it will lead to a new economic dynamism and growth in the European Union.

    As regards the way in which the Union is funded, the 1998 coalition agreement is based on an assumption that the Netherlands will be receiving a larger amount from EU funds while its contribution will be reduced by an amount increasing to ECU 1.3 billion in 2002. However, such a situation can arise only as a result of negotiations on a range of issues, some of which are subject to the unanimity requirement. It is at the very least presumptuous to take it for granted that such negotiations will definitely generate the desired quantitative result. The Advisory Council takes the view that the problems surrounding changes in the net positions of the 15 current Member States should not be allowed to hamper the achievement of further steady progress in the negotiations, culminating in the accession of the new Member States.

    The enlargement of the Union will also have an impact on its institutional structure. The Advisory Council believes that a limit should be imposed on the number of Commissioners in order to ensure that the Commission is still able to operate effectively, and that this limit should be within the range of 10 to 15. This necessarily means that it would no longer be possible for each nationality to be represented on the Commission. The Advisory Council is of the opinion that this should also apply to the large Member States, which should not be guaranteed a permanent seat on the Commission.

    The recent proposal made by 'Notre Europe' (an institute headed by Jacques Delors)15 for the President of the Commission to be appointed on a more political basis would help the Union to achieve its goal of strengthening its democratic legitimacy and turning remoteness into familiarity.

    The Advisory Council is in favour of retaining the present system of weighting of votes in the Council, by which the Member States are divided into six clusters16. This would result in the continuation of the stable relations which the Member States have enjoyed during the past few decades. The Advisory Council is of the opinion that the acceding countries should also be placed in these clusters, according to their population sizes. This would mean allocating Poland (which is comparable with Spain) 8 votes, the Czech Republic and Hungary 5 votes each, and Estonia and Slovenia 3 votes each. In order to prevent the relatively small Member States from being over-represented in the decision-making process (given the increase in their number), the large Member States could be allotted a larger number of votes.

    The Advisory Council takes the view that the EP should enjoy the right of codecision as a general principle, and that this should also apply, for example, to the framework regulations for the CAP. This principle should be abandoned only in exceptional circumstances. As regards the EP's budgetary powers, the Advisory Council believes that no distinction should be made any longer between 'compulsory' and 'non-compulsory' expenditure, and that the EP should also be entitled to amend proposals relating to spending on the CAP. In order to exercise its power of control effectively, the EP should be empowered not only to remove the Commission as a whole from office, but also to dismiss individual Commissioners. This would be a logical move once the Commission no longer consists of representatives from all the various Member States.

    The Advisory Council believes that, in order to improve the credibility of the EP, the legal status of MEPs should be harmonised and that the Parliament's attempts to prevent the system of allowances from being abused should be supported.

    The Presidency of the Union is held in turn on a six-monthly basis by each Member State. The present situation, with a 15-member Union, is that each Member State holds the Presidency every seven and a half years. If the present formula is retained, future enlargements will mean that the gap between each Member State's tenure of the Presidency will get longer and longer. This is not conducive to the effective functioning of the Presidency. The Advisory Council takes the view that a system of rotating the Presidency of the Union will no longer be effective once the Union consists of 20 to 25 Member States. The Advisory Council is therefore in favour of adopting a system by which a President is appointed for a longer period (i.e. at least two years) and is supported by the Council's General Secretariat.

    Meetings of the Council of Ministers are prepared by the Committee of Permanent Representatives of the Member States (Coreper). To date, this Committee has been chaired by one of its members, viz. the representative of the Member State currently holding the Presidency. If the system were changed so that the Presidency was held on a more permanent basis, Coreper should be chaired by the Secretary-General of the Council17.

    The Advisory Council's judgement on the Common Foreign and Security Policy (CFSP) is that, although the Union's inability to perform an effective role has not had any disastrous effects on its own functioning, it is regrettable, in the light of the Union's wish to become a key player on the global political stage, that it has not been able to formulate a credible CFSP. The Advisory Council believes that there are good reasons for the Union to pursue a more active and more wide-ranging foreign policy in the future; this policy should encompass human rights and relations with developing countries in addition to political relations in general.

    In the Advisory Council's view, it is desirable that future members of NATO should also join the WEU when they become members of the EU. The countries concerned in the first instance are those to which an undertaking has been given that they will be admitted to NATO, i.e. Hungary, Poland and the Czech Republic. These three countries should also join the WEU if the institutional structure is not to become even more fragmented than it already is. It is important not to follow the example set by Denmark, which is a member of NATO without being a member of the WEU. Future Member States of the EU should be required to give an undertaking that they will join the WEU if they become members of NATO.

    In the light of the flexibility clause included in the Treaty of Amsterdam, it is worth investigating whether a 'coalition of the willing and able' within the EU could form a more tightly knit unit in the field of the CFSP18.


    14 The term 'privileged access' means that governments oblige financial institutions to lend them money to meet their financing requirements.

    15 Under this proposal, each of the European political parties (or groups of such parties) would designate one of the candidates on its list for the European elections as being its preferred candidate for the presidency of the European Commission. This would allow voters to express a preference for the presidency of the Commission. The assumption is that the European Council, when appointing the President of the Commission, would be unable to ignore the candidate who had amassed the greatest support in the EP elections, particularly since the President of the Commission also needs to have the confidence of the majority of members of the EP. This proposal could be implemented without any Treaty amendments, and would represent the first step on the road to an elected President of the European Commission.

    16 The scale of weightings is as follows at present:

    10 votes: Germany, France, Italy and the UK;
    8 votes: Spain;
    5 votes: Belgium, Greece, the Netherlands and Portugal;
    4 votes: Sweden and Austria;
    3 votes: Denmark, Finland and Ireland;
    2 votes: Luxembourg.

    17 The Advisory Council feels that there would no longer be any need for the Presidency of the Council of Ministers to be held on a longer-term basis if the proposal made by 'Notre Europe' (discussed in Section IV.1) were to be adopted.

    18 On 27 October 1998, the Minister of Foreign Affairs, the Minister of Defence and the Minister for Development Cooperation announced at a meeting with the Advisory Council that they would be asking for the submission of an advisory report on the security situation, in connection with the preparations for the new Defence Review. In this context, the Advisory Council will be able to discuss the relationship between the CFSP and the development of a European defence policy, partly in the light of the views recently expressed by the UK government in this connection.
Advice request

Mr R.F.M. Lubbers
Chair, Advisory Council on International Affairs
Postbox 20061
2500 EB The Hague


Date
12 June 1997
Ext.no.
(348) 6212
Ref.
DIE/AB-526/97

Unit
European Integration Department
Re
Request for advisory report on enlargement of the European Union


We should like to put before you a request for an advisory report on the enlargement of the European Union.

Enlargement is presenting the European Union with a historic challenge. The aim is clear: a stable, democratic, and prosperous Europe, for which six countries laid the foundations in Rome 40 years ago. Ten associated Central European countries, Cyprus and Turkey have applied to accede to the European Union. Norway, Switzerland and Malta may also be regarded as candidate countries, although a majority of the people of each of them has voted against joining the EU for the time being.

Enlargement has been discussed at a number of meetings of the European Council:
 

  • Copenhagen (June 1993):

    The criteria
    The Council concluded that a country may accede to the European Union if it has stable institutions guaranteeing democracy, the rule of law, human rights and respect for the rights of minorities, if it has a functioning free market economy and can cope with competition within the EU. Candidate countries should also assume the obligations of membership and endorse the EU's political, economic and monetary objectives;
     
  • Essen (December 1994):

    The strategy
    The Council concluded that accession negotiations with Cyprus and Malta (note: in November 1996 the people of Malta voted against accession for the time being) should begin six months after the conclusion of the IGC. The structured dialogue was also initiated;
     
  • Cannes (June 1995):

    The resources
    The Council concluded that the financial resources for support to the process of social transformation in the countries of Central Europe via the PHARE programme would be linked to the duration of the EU's own resources decision;
     
  • Madrid (December 1995):

    The calendar
    The Council concluded that accession negotiations with Malta and Cyprus would begin six months after the conclusion of the IGC and expressed the hope that the first phase of negotiations with Central European countries would coincide with those with Cyprus and Malta. The Council also asked the Commission to issue a number of reports and documents shortly after the completion of the IGC:

    * separate opinions (avis) on the applicant states, containing an analysis of the current situation in the state in question and an evaluation of its expected progress before accession;
    * an impact study on the effects of enlargement on Community policy, particularly agricultural policy and structural policy;
    * an overview of enlargement to supplement the avis and the impact study;
    * a communication on the future financial frameworks of the EU, taking account of prospective enlargement.
    - Florence and Dublin: these meetings of the Council confirmed the time frame for the enlargement process laid down at Madrid. The Commission assured the Council that the documents referred to above would be available immediately after the closure of the IGC. The Council meetings also welcomed the Commission's plans for a general reinforcement of the pre-accession strategy.

    The Council will discuss these documents at the special enlargement summit which the Luxembourg Presidency plans to hold on 16 and 17 October 1997. On the basis of this, the European Council, meeting in Luxembourg in December 1997, will decide inter alia on the modalities for the accession negotiations. The enlargement process will then probably be launched with a group photograph. The Council will then adopt a negotiating mandate for the Presidency, supported by the Commission.

    We Would therefore request the Advisory Council to advise the Government on the enlargement of the Union and the strategy to be adopted, taking account of the above-mentioned Commission documents. The Advisory Council should compile, before October 1997, a list of the countries whose accession would be of most benefit to the Netherlands in economic, financial and political terms. It could also outline the advantages and disadvantages associated with the accession of individual countries, and indicate the relevance of the timetable.

    By December 1997, the Advisory Council should answer the following questions:
    - What role should the Netherlands play in the enlargement process?
    - Should the Netherlands support a particular country or group of countries, such as the Scandinavian countries or the Baltic states?
    - The wording of the Copenhagen criteria is fairly general; what internal and external conditions must at all events be met by countries wishing to accede?
    * Internal: what directives must the countries take on board? Only those in the fields of economic and financial affairs, agriculture, the environment, customs duties and indirect taxes? Or also those in the fields of industry, competition, social affairs, transport, audio-visual affairs, telecoms, energy and consumer protection?
    * External: How can the Union ensure that tensions relating to cross-border minority issues and potential border disputes are nog brought into the Union on the accession of the applicant countries?
    - Should a new Member State be able to exercise a veto in respect of later accessions?
    - How can enlargement make the maximum contribution to stability in Europe and what is the relationship between EU enlargement and NATO enlargement?
    - What are the potential consequences for European integration of enlargement? How can the Union cope with possible consequences?

    One of the principal questions to be considered is that of relations with countries not included in the first group to accede. We would ask the Advisory Council to advise us, before December 1997, on the minimum elements to be included in a reinforced pre-accession strategy. Should the strategy be concerned more with the countries which need one last push to be able to accede, or should the focus rather be on countries that cannot form part of the first group because they have not yet accepted EU legislation? Is the idea of a permanent conference in combination with the PHARE programme, which since March 1997 has been fully concerned with preparing candidate states for accession, sufficient consolation for those left out of the first wave? Or should the EU come up with a new idea?

    The advisory Council's report will be of great help in determining the Netherlands' standpoint for the European Council meeting in Luxembourg in December 1997, where enlargement and the enlargement strategy will be at the top of the agenda.


    (signed)

    H.A.F.M.O. van Mierlo
    Minister of Foreign Affairs

    (signed)

    J.J.C. Voorhoeve
    Minister of Defence

    (signed)

    J.P. Pronk
    Minister for Development Cooperation

    (signed)

    M. Patijn
    State Secretary of Foreign Affairs
Government reactions

This document is not yet available

Press releases

No press release has been published for this advice.