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European Affairs
Special Report: Implications of European Enlargement
A Wider Europe Is a Win-Win Proposition
By Günter Verheugen
The enlargement of the European Union to encompass as many as 13 new members is a historic and strategic undertaking. What is at stake is political and economic stability throughout Europe based on the fundamental rights of freedom, justice and democracy. It will further strengthen the unity of the European continent and help create an area of lasting peace and prosperity.
At the same time, for more than 50 years, a strong Transatlantic partnership has been essential for stability, security and economic development. That partnership is based on common values and mutual understanding. This common interest becomes even more important in a time of global unrest and instability.
Almost ten years ago, at a meeting of the European Council in Copenhagen in 1993, EU leaders opened up the perspective of enlargement to include the countries of Central and Eastern Europe. Six candidate countries have been negotiating since March 1998 (Cyprus, the Czech Republic, Estonia, Hungary, Poland and Slovenia), and six more countries began negotiations in early 2000 (Bulgaria, Latvia, Lithuania, Malta, Romania and Slovakia).
In striving to fulfill the political and economic criteria for EU entry and in adopting the European Union's regulatory framework, these candidate countries have accelerated domestic reforms at the same time as they have been preparing for EU membership. This has led to significant political and economic progress.
Stable democracies have emerged in Central and Eastern Europe, rooted in common European values: democracy, the rule of law, respect for human rights and the protection of minorities. Causes of conflict, such as minority issues and border problems, have been removed. A stable political framework is a precondition for lasting peace and neighborly co-existence, as well as for a successful economy.
This means that the candidate countries have an opportunity to improve their living standards and their prospects in global competition. The rapid growth in trade across the former Iron Curtain has already helped to develop new markets and investment.
Once the candidate countries become full EU members and adopt all the European Union's common rules and standards, their participation in the world's largest single market will further improve their prospects of achieving socially and environmentally sustainable growth.
Europe-wide political and economic stability will make the enlarged European Union better equipped to confront global challenges; it will be a stronger partner for the United States in combating international crime and terrorism. In terms of military security, Poland, Hungary and the Czech Republic have successfully joined NATO, and other Central European countries will probably soon follow.
It is clear that EU and NATO enlargement - although often considered complementary - are two different and distinct processes. Nevertheless, EU entry will reinforce the economic and institutional pillars of the new member countries, thus contributing to their security. They are already participating in European Security and Defense Policy structures that are currently taking shape.
The conditions for membership agreed by EU leaders in Copenhagen in 1993, the so-called Copenhagen criteria, were divided into three categories - political, economic and legislative. The political criteria require candidate countries to establish democracy, the rule of law, respect for human rights and the protection of minorities.
The economic criteria require candidates to have a functioning market economy as well as the capacity to cope with competition and market forces. Finally, candidates have to adopt and implement the whole corpus of EU legislation, which has proved to be the hardest of the three criteria to fulfill.
The European Commission has recently concluded that ten countries (Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, the Slovak Republic and Slovenia) will be ready for membership from the beginning of 2004 and, therefore, recommended that negotiations with these ten countries be completed at the meeting of the European Council that is due to take place in December, once again in Copenhagen.
After accession treaties are signed at the beginning of next year, the treaties will have to be ratified in both the existing and future member states. The aim is that the new members should join in time to participate in the elections that the European Parliament is due to hold in 2004.
The Copenhagen European Council will also decide on a road map for further negotiations with candidate countries that will not join in the first wave. It is clear that Bulgaria and Romania are not in the position to conclude negotiations by the end of the year. Both countries have set 2007 as their target date for accession.
The Copenhagen summit meeting is also expected to take a closer look at Turkey, which was granted candidate status in 1999, but without the opening of negotiations. Before starting negotiations, the European Union wants to see Turkey become a stable democracy, respecting the rule of law and human rights. Turkey's recent adoption of a political reform package is encouraging, but, despite these efforts, Turkey does not yet fully comply with the political criteria for membership.
On the economic side, enlargement will create a single market of over 500 million consumers, an area without internal borders in which goods and services can circulate freely. Trade will facilitate growth and expansion. It is not surprising that the European Union is already the number one trading partner of the countries seeking membership.
Candidate countries are already as integrated into EU trade as the existing member states - some even more so. In 2001 the European Union accounted for more than half the exports of all the candidate countries except Malta, where the figure was 45 percent. Hungary's sales to the European Union rose to 74 percent of its total exports.
The candidate countries' purchases from the European Union are also running at well over 50 percent of their total imports, except for Bulgaria (49 percent) and Lithuania (44 percent). Taken together, the 12 countries currently negotiating EU membership have become the European Union's second biggest trading partner after the United States, accounting for 12.3 percent of the European Union's total external trade.
The final decision to conclude negotiations with a candidate will not be made unless the EU authorities are convinced that the country concerned is ready to embrace competitive market economies. The Commission's view is that all the candidate countries have made major progress in implementing internal reforms. We can now say that most of them are functioning market economies and that they will withstand the forces of competition.
These decisive changes are giving foreign investors the security they require, and the current EU member states have already invested considerable amounts in the candidate countries. In 1998 foreign direct investment from EU countries accounted for almost two-thirds of the total. Next in line were investors from the United States, with 15 percent - the second biggest share for an individual country, after Germany with 19 percent.
The United States is the second biggest investor in Hungary and Latvia, and the third in Bulgaria, Estonia, Lithuania and Poland. It is obvious that U.S. investors are already profiting from the economic stability generated by the enlargement process.
Public support for enlargement is generally strong in the candidate countries. In the current EU countries, however, it will be important to educate public opinion about the new members and to explain the results of the enlargement process. More must be done to explain the benefits of an enlarged European Union in terms of increased stability and prospects for sustained economic growth, as well as the striking economic and political reforms that the Central and Eastern European countries have achieved since the fall of the Berlin Wall.
The Commission has developed a communications strategy to help both member states and candidate countries explain enlargement to their citizens. The clear message is that enlargement is a win-win game. Given that the accession treaties have to be ratified by a referendum in each prospective new member state, it is extremely important that citizens are convinced of the benefits of this historic undertaking.
The European Union has set its course to new horizons. After successfully completing its single market and introducing its single currency, the euro, the European Union is preparing the next steps toward further integration. The enlargement process is in its final phase. All candidate countries have made considerable progress over the last years.
I am confident that the first round, with up to ten countries, can be concluded by the end of this year in Copenhagen. This will not only benefit the European Union but will also strengthen the Transatlantic partnership. It is in all our interest that the area of stability, peace and prosperity be enlarged.