European Affairs

Fall 2000

 

A Bigger EU Will Be Good For America, Too
by Günter Verheugen

The enlargement of the European Union to take in as many as 13 new members is the biggest challenge facing the EU at the dawn of the new millennium.

For us Europeans, enlargement is a political imperative and part of our European vocation. But, it could also redefine the transatlantic agenda in the coming decade and bring great benefits to the United States as well.

EU enlargement is a strategic undertaking. In this venture the important point is not trade preferences, quotas, uniform rules, or joint certification, but the spread of political and economic stability throughout Europe. The history of the 20th century teaches us that there is only one sure way of achieving this goal, and that is to guarantee democracy, constitutional government, respect for human rights, and protection for minorities.

Twice in short succession war in Europe has led Americans to use military force to reestablish peace at great cost to themselves. Today's American leaders clearly understand that a democratic and peaceful Europe must be a prime U.S. objective, just as it is for Europeans.

On the American side of the Atlantic, however, I sometimes sense a degree of impatience over the EU's seeming slowness in completing the enlargement process. Many Americans would appear to favor a single bold maneuver, rather than the current complex negotiations.

The problem is that the EU is not simply about trade agreements, but about pooling sovereignty. The closest parallel to the EU's enlargement in the Western Hemisphere would be an attempt to expand the United States to include Mexico and Central America. In fact, the European undertaking is rather more difficult even than that since the east and central European applicants for membership are also having to come to grips with the changeover from one system to another.

After decades of communist rule they now have to establish democratic forms of government, an open society and a functioning market economy. They have come a very long way but they have not yet completed the task.

In other words, it is a question not of speed but of quality. Enlargement is a painstaking process requiring not just creativity but also a great deal of patience. Nevertheless, I can state with certainty that the process is already irreversible. There is no going back.

The coming enlargement will be different from any of the earlier accession rounds - and unprecedented in scope. It will increase the EU's population from 375 million to 550 million, and nearly double the number of Member States from 15 to 28 or more. Unlike former accession rounds, the negotiations will include such complex new policy areas as economic and monetary union, justice, home affairs, and security and defense policy.

Never before has there been such a huge economic gap between the EU and candidates for membership. Gross Domestic Product per head as a percentage of the EU average varies from about two-thirds for Slovenia and the Czech Republic to less than one-third for Lithuania, Latvia, Romania and Bulgaria. Inflation rates range from normal or moderate in the Czech Republic and Poland, to exorbitant in Romania and Turkey.

New members will have to take on all the economic and political obligations of membership with no possibility of opting out of any of them. This is no easy task. More than 20,000 European legal acts have to be transposed into national law.

But the EU also has to do some homework. Skeptics say that the process of further integration will come to a halt when even more countries join. It is true that institutions designed for six members, which are already reaching their limits with 15, will not be able to manage a union of 28 or more countries. The current intergovernmental conference aims to introduce the indispensable institutional reforms needed to make an enlarged union work.

One of the hottest issues on the table is the relative voting powers of bigger and smaller member states in the Council of Ministers. The current weighted voting system is deliberately tilted against bigger countries. But if it continues as it is, the imbalance between population and voting power will become unsustainable. The new members consist mostly of small or medium-sized countries - only three of the 13 candidates have a larger population than the average of the existing member states.

We have recently streamlined the negotiating process. Ongoing negotiations with Poland, Hungary, the Czech Republic, Estonia, Slovenia and Cyprus - underway since March 1998 - will continue with the same or increased momentum. This February, negotiations began with six more countries: Bulgaria, Romania, Slovakia, Latvia, Lithuania, and Malta.

The strategy is designed to allow for a speedy negotiation process - we do not want to lose the momentum of change in the transformation countries. The EU has said it should be ready for enlargement from the end of 2002, and we expect that the first wave of new members will enter before the term of the current European Commission ends in January 2005.

But, I cannot make any predictions about which of the candidates will be the first to cross the finish line. The timing of a country's entry will depend entirely on the speed with which it manages to meet all the criteria for membership.

We want to ensure that the pace of the negotiations reflects each candidate country's program in preparing for membership. This includes the opportunity for countries that started negotiating later to catch up with those in the first wave within a reasonable period of time.

At the same time we have to make sure that progress already achieved toward integration will remain intact and, if possible, be strengthened in a union of up to 28 members.

All the candidate countries have already shown their determination and their capacity for change. Their economies are increasingly integrated with that of the EU, and huge efforts are being made by parliaments, governments, and the public and private sectors to prepare for membership.

When Spain and Portugal entered the then European Community, almost 20 years ago, the main objective was political. We wanted to prevent further dictatorships and to establish democracy. The same holds true today. Our aim is to promote political and economic stability - and make this process irreversible.

This requires solidarity both among member states and vis-à-vis the candidates. Economically strong members have to provide considerable financial funds to support the others. But, we all benefit from the stability and prosperity this policy achieves. Spain, which was economically weak when it became a member, is today a stable democracy with a flourishing economy. Without any doubt, today's candidate countries will witness a similar development.

The same applies to Turkey, which was granted candidate status at the meeting of the European Council in Helsinki last December. We want Turkey to be a stable democracy, respecting the rule of law and human rights. The EU considers Turkey a reliable partner in foreign and security policy. And we expect Turkey to play a constructive role in contributing to peace and stability in the Eastern Mediterranean.

The visible improvement of relations between Turkey and Greece after the Helsinki decision has been widely welcomed. And I sincerely hope that this has created a solid basis for further positive developments.

As for political improvements in Turkey, we expect a firm commitment to continue the process of domestic policy reform, including, for instance, the penal code, the new civil code and enhanced independence of the judiciary. Important human rights issues must be addressed.

Negotiations with Turkey have not yet started. The ground has to be properly prepared. Full compliance with the EU political criteria - stability of institutions guaranteeing democracy, the rule of law, human rights, and the protection of minorities - is a precondition for negotiations to start with Turkey, just as it is for all other candidates.

The positive developments in Greek-Turkish relations, Turkey's candidate status and the resumption of proximity talks aiming at a comprehensive settlement of the Cyprus problem have all contributed to an improved political climate and the chance for new dynamism.

The Helsinki Summit concluded that a political settlement will facilitate Cyprus's accession to the EU, but if no settlement is reached by completion of the accession negotiations, the EU will decide on admitting Cyprus without a political settlement being a pre-condition.

The Cyprus question is one of the big unknown variables in the enlargement equation. It would certainly not be ideal to accept a divided island as a new member, but this may be unavoidable in the end. The EU has kept both options open and therefore has a great deal of leverage when it comes to selecting a political solution.

The actual task of finding a solution is the responsibility of the United Nations. However, close coordination between the talks on solving the Cyprus conflict and the accession negotiations is making the Cyprus peace process easier rather than harder to conduct since - for both island communities, the Greek and the Turkish - EU accession represents a prospect of security and prosperity.

Turkey now also has more of a motive to deal constructively with the conflicts in the Eastern Mediterranean since it knows that solving the conflicts could speed up its own accession to the EU. For the EU, accepting Turkey's application for accession was first and foremost a strategic decision bound up with the Union's security policy.

Turkey is one the few European countries that has maintained its strategic importance even beyond the end of the cold war. For Europe, a stable, western-oriented Turkey is an essential component of security policy. Turkey in turn is bent on modernization and does not want to be left behind when the European economy takes off again.

The difficult political problem is that, from Turkey's point of view, the fundamental reforms which the EU has set as a precondition of accession would be easier to push through after accession. Here the only way forward is a patient, step-by-step process in which neither side makes impossible demands on the other.

The overall political benefits from an enlarged EU will be enormous. First and foremost, the enlargement process is vital for securing political stability, democracy, and respect of human rights on the European continent as a whole. We are creating a transatlantic community of democratic nations - defending our common values on a global scale.

Political stability and freedom will be increased throughout Europe. Against the background of many years of crisis in the Balkans, we all understand the importance of this process. The only way to achieve lasting stability in Europe is further integration.

In the case of the Balkans, the Stability Pact agreed in Cologne in June 1999 represents a historic opportunity. Full integration in Europe - even EU membership - is the prize that beckons for countries in this area if they achieve the goals of the Pact. To do so they have to resolve conflicts over borders and minorities, strengthen the structures underpinning democracy and a civil society in their countries and cooperate in economic matters.

Crisis is not the ineluctable destiny of the Balkans. Potentially all the States of former Yugoslavia are candidates for accession to the EU. In fact, Slovenia has already applied for membership and that means that even Serbia and Bosnia-Herzegovina have prospects. Not in the short term, certainly, but the prospects are real.

The enlargement process also contributes to greater political stability within and between candidate states. We are reducing the risk of potential regional conflicts.

Today, for example, minorities in candidate countries are better protected than only a few years ago. The situation of the Hungarian minority in Slovakia has improved; and language laws including safeguards for the Russian minorities in Estonia and Latvia are being drafted in close cooperation with the Organization for Security and Cooperation in Europe.

The expansion of the EU will have many other advantages. It will enable us to enhance environmental security and reinforce the EU's non-proliferation policies. It will help us to tackle common transnational problems such as crime and money-laundering more effectively.

I will not speculate as to which of the candidates that are not NATO members might join the Alliance, or when. EU and NATO enlargement - although often considered complementary - are two different and distinct processes. But EU membership reinforces the economic and institutional pillars of these countries, thus contributing to their security, and they are, of course, participating in European Security and Defense Policy structures that are currently taking shape.

The present enlargement process will also have a profound impact on the EU's relations with its neighbors to the East - particularly, Russia and Ukraine - and to the South. Although I do not exclude that additional countries could become candidates for accession in the long term, the scope for further extending the Union is limited. But the Union will deepen relationships with its immediate neighbors.

With Russia and the Ukraine, the EU will establish strategic partnerships. And we are seeking new contractual relations with the Mediterranean countries in order to create a huge free trade area in an arc from Morocco to Jordan by 2010.

Enlargement of the EU itself will create a single market of over 500 million consumers and an open, border-free area where goods and services can circulate freely. When the Mediterranean countries are added in, a market of over 1 billion consumers will be formed around the EU.

Trade continues to be the dynamo for market integration and expansion. Intra-EU foreign investment is forging ahead, as is the value of cross border mergers and acquisitions among EU firms. Capital market integration is accelerating. The poorest areas in the Union are catching up with the rest.

This is of particular importance for candidate countries. Their readiness to participate in a competitive market economy will be decisive for the final decision on concluding accession treaties.

Our assessment of candidate countries' implementation of the internal market legislation is that they have all made progress towards alignment. The most advanced ones say they will complete their legislative alignment by 2002 or 2003.

A solid legal basis of internal market legislation is in place in most candidate countries, but the related institutional framework still has to be finished. The administrative capacity to enforce internal market rules is essential for our assessment of candidate countries' ability to comply with EU legislation.

All candidate countries have increased their trade integration with the EU, to the point where they are already as tied in with the EU as the EU's own member states.

The EU is now by far the most important trading partner of all 13 candidate countries. Their imports from the EU and exports to the EU range between 50 percent for countries like Bulgaria and Lithuania to more than 70 percent for Poland and Slovenia. Taken together, these countries are now our second trading partner after the United States. Direct investment by the current member states in the candidate countries is also growing fast. In that sense they are already enjoying the economic benefits of integration.

Europe's top priority remains vigorously to pursue its unification process. We will make enlargement a success story. The enlarged EU will be different from today's. Europe's face will change. And these changes will also affect our future common agenda.

My conclusion is that we have every reason to intensify our already close transatlantic relations in the future. There is no other political partner in the world with which we share so many interests and values. The role of our partnership may change, but it remains essential to both of us to maintain and strengthen it.