Volume 9 Number 4

Fall 2000

Feature

EU Enlargement: An Overview
     Milada Anna Vachudova

In the year 2000, the enlargement of the European Union (EU) to include the states of postcommunist Central and Eastern Europe finally edged toward center stage. After a decade of difficult economic and political reforms in the applicant countries, the key questions have shifted from East to West: several of the applicants will be ready to join the EU by 2003, but will EU institutions and public opinion in EU member states be prepared to admit them? The spotlight has turned back upon Western Europe.

The state of reform in the candidate countries
Surveying the ten Central and East European applicants more than 11 years after the Polish roundtable, there is cause for satisfaction. Everywhere there is democracy and economic growth; nowhere are ethnic groups in open conflict or neighboring states at war. The overall trend has been one of political change in favor of liberal democracy and market reform. People in Central and Eastern Europe have lived, more or less stoically, through sharp drops in their standard of living and sudden increases in economic insecurity: the predictions of 1989—that democracy and austerity would not mix, that strikes and popular uprisings would prevent economic reform—never came true. Meanwhile, the tensions that existed between various majority and minority ethnic groups throughout the region at the beginning of the decade had, in every case, abated by the end of it.

The five most successful Central and East European candidates have rebuilt their political and economic systems over the last ten years with an eye to qualifying for membership in the EU. On the basis of the Commission’s 1997 "Opinions," evaluating each candidate’s progress, the Luxembourg European Council summit of 1997 tapped Hungary, Poland, Slovenia, the Czech Republic, and Estonia as the front-runners and invited them to begin accession negotiations in 1998 (along with Cyprus).

The five less successful Central and East European candidates were, broadly speaking, sidetracked in the early 1990s by some combination of economic backwardness and political leaders who exploited fear—fear of economic reform and fear for the well-being of the nation. In some of the candidate countries, partial economic reforms brought high social costs for the public, but also high profits for small groups of ruling elites, which therefore had no interest in launching more comprehensive reforms to pave the way for sustained economic recovery. However, by the late 1990s, alternative elites had come to power in all the remaining candidate countries and put comprehensive economic reforms on the agenda. These regimes and their policies proved successful everywhere but in Romania, where infighting, incompetence, and popular protest have continued to cripple reform.

In recognition of progress and in pursuit of Balkan stability, the Helsinki European Council summit of 1999 invited Slovakia, Bulgaria, Lithuania, Latvia, and Romania to begin negotiations in 2000 (along with Malta). This has raised the question whether any applicants from the Helsinki group will be able to catch up to the Luxembourg group and take part in the eventual first wave of enlargement; the favorite has been Slovakia. The question has also been raised whether any of the EU’s new negotiating partners will suffer a political reversal. The only real concern is Romania, where the November 2000 presidential election returned Ion Iliescu to power. As president from 1990 to 1997, Iliescu pursued disastrous policies of partial economic reform and intolerance toward Romania’s ethnic Hungarian minority. The coming months will show how much Iliescu has reformed himself and how much he will allow policymaking to be constrained by a desperate need for economic reform and by negotiations with the EU for membership.

Do the candidate countries qualify for membership?
Democracy and economic reform may have earned all ten candidates a place at the EU’s negotiating table, but the road to membership is still a very long one. The applicant countries are impatient because the EU is procrastinating on the work it must do to prepare its institutions and citizens for enlargement. Beyond the modest institutional reforms of the EU’s December Nice treaty, much work remains to be done, as discussed below. But what about the candidates: Have they finished the necessary preparations for accession? What are the requirements for membership, and who decides when they have been met?

The EU’s accession requirements can be divided into roughly two groups: the Copenhagen political and economic requirements and the acquis communautaire. The Copenhagen requirements, issued in 1993, are very general. They call for stable institutions guaranteeing democracy, the rule of law, human rights, and the protection of minority rights; a functioning market economy able to cope with competitive pressures and market forces within the EU; and a state administration able to take on the obligations of membership. The acquis communautaire is much more specific: in some 80,000 pages it organizes into a single body all of the laws, norms, and standards that are in force throughout the EU today. The negotiations between the EU and the candidate countries are structured around the acquis, divided into 31 chapters. Of these 31 chapters, by October 2000, the EU had provisionally "closed" negotiations on as many as 14 chapters with Estonia and as few as 6 with Bulgaria and Romania; Slovakia could boast that its 9 closed chapters put it within hailing distance of Poland’s 11. Though the candidates compete with each other to close the most chapters, other factors will also play a role in determining the timing of accession, as discussed below.

Whether or not the national parliaments adopt the acquis is a more or less transparent, technical question; but EU leaders also have insisted that the state administrations actually implement the acquis—an enormous task for each candidate. While states cannot function as EU members without implementing the acquis, implementation involves highly subjective questions of interpretation that candidates fear could be used to stall enlargement. Meanwhile, certain issues only come under the broad Copenhagen requirements because they have never been the subject of legislation within the EU. Therefore, in theory, the EU could close all 31 negotiating chapters with an applicant state but postpone accession because, in the judgment of the member states, the quality of democracy, the treatment of ethnic minorities, or the rule of law might have deteriorated from the time the applicant originally was found to fulfill the Copenhagen political requirements as a condition for the start of negotiations.

In addition to the declared requirements of membership, there are also various informal yardsticks by which the Central and East European candidates are measured and which add further ambiguities. There are, of course, no blueprints for how the postcommunist applicants should tackle the many aspects of the modern European welfare state, including health, education, the pension system, and the social safety net. But European specialists observe and sometimes advise on the creation of new systems, and the Commission in its regular reports notes whether these are—in its opinion—successful and sustainable. There is also no rule to the effect that the applicants may simply be too poor to accede. But adjusting for differences in purchasing power, the ten accession states’ average GDP per capita is only about 40 percent of the EU average—though Slovenia’s is as high as 68 percent and Bulgaria’s as low as 23 percent ("Composite Paper on the Commission Reports, European Commission, October 13, 1999"). As discussed below, EU politicians worry that higher wages and higher welfare benefits will motivate large numbers of Central and East Europeans to move West after accession.

Among EU leaders, there is a tension between using the conditionality of EU accession as a tool to build democratic, prosperous states in Central and Eastern Europe and using the shortcomings of the candidates to delay enlargement. While the evaluation of the candidates by the Commission in the published opinions and in the annual regular reports has so far been based more or less on actual merit, and generally with positive results, enlargement will take place only when EU leaders make the political decision to conclude the negotiations and the resulting treaties are ratified. The essential point of departure for the EU’s negotiating position is that the entire acquis should already be adopted and implemented by the candidates at the moment of accession. This, however, is not possible, and in reality the EU accepts the need for numerous transition periods in areas where candidates cannot afford or otherwise cannot manage to meet EU standards in the years to come. The decision about whether a candidate has done enough to prepare for accession will, in the end, be a political one.

The domestic politics of EU enlargement in Western Europe
In comparison with previous enlargements, the eastern enlargement is a much greater undertaking for the EU. The candidates are more numerous, politically more diverse, and economically more backward. Meanwhile, the extent and complexity of European integration has continued to grow, with ambitious projects such as European Monetary Union (EMU) and the Common Foreign and Security Policy (CFSP) pushing the boundaries of what the average citizen considers the legitimate work of the Union. In this context, enlargement is sometimes viewed as one project too many.

Voices have been heard urging EU leaders to slow down enlargement in order to shore up the euro and the CFSP. In Germany, some central bankers and the wider public both fear that the euro will remain weak if a large number of economically backward states are allowed to accede rapidly to the euro-zone. One Bundesbank council member proposed in July 2000 that Central and East European states be barred from adopting the euro unless and until their per capita GDP has reached 70 percent of the EU average. Other economists, however, have disagreed with the notion that introducing greater economic diversity into the euro-zone will have adverse effects (Financial Times, September 26, 2000). In any case, new member states will have to clear substantial hurdles before being allowed to adopt the euro. Only after aspiring euro-zone members satisfy the Maastricht convergence criteria will existing euro-zone members face the political decision whether or not to admit them. Publics throughout the EU have also expressed concerns that forging a common defense is a risky enterprise if so-called unstable new members from Central and Eastern Europe are included, not realizing perhaps that Poland or Bulgaria’s foreign policy arguably did more to foster European stability in the 1990s than did that of several existing EU member states.

Overall, the greatest stumbling block for EU enlargement is the low level of public support that it enjoys among current EU member states: about 43 percent, according to the Financial Times (October 24, 1999). For years, more or less successfully, most Central and East European political leaders have explained to their publics that the long-term benefits of EU accession outweigh the short-term costs of economic adjustment under the watchful eye of Brussels. But West European political leaders have failed to make the case for an enlarged EU, or to outline the benefits to their electorates, or to allay their fears. By and large, they have remained silent on the subject of enlargement. Consequently, only the voices of populists and extremists have been heard—voices that raise the specter of rising immigration, unemployment, and international crime, all flowing from enlargement. Studies show that Germany and Austria may expect the greatest surge in economic growth following enlargement, resulting in a permanent GDP increase of .5 percent and 1 percent, respectively (Europe Weekly 102, October 28, 1999). But these frontline states, notably Austria, show the lowest level of public support for enlargement, and in Austria, in 2000, the Freedom Party has come to share power on a strongly xenophobic, antienlargement platform.What do the EU’s current members fear from enlargement? The poor members—Spain, Portugal, and Greece—worry that the monies they now receive through the EU’s cohesion funds will be redirected to poorer new members. A significant rethinking of the allocation of funds to the former appears inevitable, but they will likely strike a bargain with the rich members for compensation. The richer members—especially Germany—worry that enlargement will substantially increase their financial contribution to the EU budget. But for Germany, at least, the economic growth resulting from enlargement will likely swell the tax base sufficiently to pay for Germany’s share of the fiscal cost.

The agricultural members—France, Spain, and others—worry that the impossibility of extending the existing Common Agricultural Policy (CAP) to the candidate countries means than agricultural subsidies will be drastically reduced. They are also mildly concerned about the complete liberalization of trade in certain agricultural products, although the EU’s current exposure to agricultural products from the east indicates that adjustment will probably be minimal. The neighboring members—Germany and Austria—fear that an increase in low-skilled workers from the new members will drive down wages and drive up unemployment. But forecasts have been greatly exaggerated by politicians and the press; moreover, previous enlargements, to include Greece, Portugal, and Spain, teach us that only small numbers of people leave their homes to seek work abroad, even if the wage differentials are substantial.

Citizens of EU member states, especially those of Germany and Austria, most strongly fear that as the EU’s external border moves eastward, it will become less secure, and the EU will suffer an increase in international crime and illegal immigration. As a result, in October 1999, the Tampere European Council reaffirmed that the candidates must implement in full the Schengen acquis on control of the borders. (Internal border controls, however, will only be lifted when existing EU members decide that external border controls are sufficiently impermeable; this may not happen at the moment of accession but at a later date.) Fortifying their eastern and southern borders while abiding by the EU’s common visa list will impose costs on the acceding states: on Hungary, in the closing of its borders to visa-free travel for ethnic Hungarians in neighboring states; on Poland, in the loss of economic activity along its eastern border; and on the Czech Republic, in the possible elimination of its customs union with Slovakia. This restriction risks stunting the democratization, Europeanization, and economic revitalization of the states beyond the Schengen wall as, for example, visa requirements cut Ukraine and Belarus off from Poland, or Romania and Yugoslavia off from Hungary. This, in turn, will undermine the EU’s foreign policy goal of bolstering democracy and stability in the whole of Europe. Nevertheless, the Schengen acquis, the sine qua non of membership, will be adopted in full by all candidates.

Yet to be seen is whether EU leaders will take up the cause of the EU’s eastern enlargement with their respective publics in the years to come. If they fail, in the worst-case scenario, ratification of the accession treaty of one or more candidates may be vetoed by a national parliament. For its part, the European Commission has launched a "communication strategy" that provides opinion leaders in existing as well as aspiring members with information about enlargement.

What are the benefits of enlargement for existing EU members? By and large, they are diffuse, long-term benefits, which consequently resonate little with West European voters. Internally, after enlargement, the EU as a whole will register an increase in economic activity and prosperity. Regionally, the EU will gain from the stabilization and economic revitalization of its border lands, especially the Balkans. This will open new markets for EU products and investments while saving the money and blood that would be expended in the event of further economic upheaval and war. Internationally, the EU will enjoy greater clout as a geopolitical actor: not only will it be bigger but it will have proved (to the Americans) that it can take care of its own backyard. Javier Solana, the head of the EU’s fledgling foreign policy establishment, has already put the United States on notice that an EU stretching to the borders of Iraq will be a very important player in world politics. Reflecting on this list of benefits, some Europeans would add still another: the historical opportunity for the EU to build an undivided, peaceful, and democratic Europe.

Reforming the EU’s institutions to prepare for enlargement
Alongside the problems enlargement poses in the context of domestic politics in existing EU states, there are the problems it poses for the functioning of the EU’s institutions. This is partially a question of numbers; with each enlargement, it becomes more difficult to make decisions among a greater number of states using the EU’s current institutional procedures. If successive enlargements take place, the EU could grow to some 27 members: the 15 existing members, plus the 10 Central and East European candidates, plus the 3 other official candidates—Cyprus, Malta, and Turkey.

The EU could grow even further—to 33 members—if it admits the five countries that were promised the prospect of EU membership in the EU’s July 1999 Stability Pact for South Eastern Europe—Croatia, Macedonia, Bosnia and Herzegovina, Yugoslavia, and Albania. In fact, thanks to its economic prosperity, once Croatia begins negotiations it could possibly move ahead of the candidates in the Helsinki group within a year or two.Be that as it may, the addition of just five more members to the EU was widely viewed as unbearable for the EU’s institutions unless the current decision-making system were streamlined and made more representative. To that end, the European Council Summit in early December 2000 produced the Nice treaty containing three major institutional reforms, each limited in scope by the interests of certain member states. First, EU leaders agreed to replace unanimity with qualified-majority voting (QMV) in 29 areas of EU policymaking. They had hoped to adopt QMV in 40 areas, but many countries insisted on preserving their pet vetoes. France, for example, kept its veto on cultural products, such as film and music; Germany on the free movement of professionals; Germany and France on asylum and immigration legislation; Spain on EU cohesion funds; and the United Kingdom on tax and social security. Second, the EU’s largest members—France, Germany, Italy, the UK, and Spain—gave up their second commissioner as of 2005. The small members, however, refused to give up their one commissioner—something proposed in order to adopt a system of rotating commissioners in the European Commission.

Finally, EU leaders reached an agreement on how to reweight national votes in the European Council. The present system gives small members much more voting power per capita than larger members, and a reweighting had been demanded by the latter in exchange for giving up their second commissioner and in light of the future entry of many small countries. The "Nice system" does increase the influence of large countries, but it is much more complex than the present system because it requires a triple majority for any decision. The system is as follows: in order for a decision to be taken, 71 percent of the weighted votes must be cast in favor, countries representing 62 percent of the EU’s total population must be in favor, and a straight majority of member states must cast their vote in favor as well. It is far from clear that this is an innovation that answers the call for a streamlined decision-making system in an enlarged EU.

Also adopted at Nice were French and German proposals for "enhanced cooperation," which will enable a core group of EU states to push forward with integration in certain policy areas without waiting for the others. Such proposals have also been called "flexible cooperation" and a "two-speed Europe." While posing a danger of exclusion for various current and future members, enhanced cooperation seems to address decade-old concerns among political leaders in France, Germany, and the Benelux countries that "widening" the EU will forsake further "deepening" (though it is not clear that these leaders really want more deepening).

The decisions taken at Nice were modest. Nonetheless, consensus was hard to find. In the next decade, EU members will have to strike even more difficult bargains—about how to reform the Common Agricultural Policy, how to allocate assistance from the cohesion funds, and how to share out the burden of financing the EU budget after 2006.

Timetables for accession
What is the likely timetable for the EU’s first eastern enlargement? France, no more than a rhetorical friend to a distant enlargement, assumed the presidency of the EU in June 2000. The French prevented the Nice summit from making any headway in setting a date for the conclusion of the negotiations. With regard to the six candidates of the Luxembourg group, all 29 substantial, acquis-related chapters of the negotiations are now open. By the end of the Swedish presidency in June 2001, the Commission hopes to tell each candidate, in a concrete sense, what else will be expected of them before accession—and what may go undone. In 2001, the Commission also hopes to begin negotiations on transition periods in the least sensitive areas of the acquis. Transition periods in the most-sensitive areas will be negotiated last; these are areas where producers in the existing EU member states fear that transition periods will give an unfair advantage to enterprises in the new member states, or where the EU fears, more generally, that transition periods could interfere with the workings of the internal market.

Politicians in the East and pundits in the West are calling for an enlargement timetable that fixes January 1, 2003, as the date of entry for the first group. The British government and the European Parliament have weighed in, calling for enlargement in time for the new members to take part in the 2004 elections to the European parliament. This would require that negotiations be concluded in 2002 to allow for timely treaty ratification. Looking at the candidate states, Hungary, Estonia, and Slovenia would technically pass muster, although the Commission has justifiable doubts about whether Poland and the Czech Republic would be prepared. Among the member states, however, there is a strong feeling that the first enlargement should not go forward without Poland.

There is also substantial opposition to setting any dates for the conclusion of the negotiations. EU leaders, rallied by the French, argue that a preset timetable will undermine the force of the accession requirements. That may be, but the political reality seems to be that some EU leaders are more concerned with delaying any commitment to enlargement since it is unpopular with voters at home. The Swedes will make a determined bid to reach agreement on target dates at the Gothenberg European Council, in June 2001. But they are likely to fail, and a decision to fix a timetable for the first enlargement is unlikely before the German parliamentary and the French presidential elections scheduled in 2002.

A realistic scenario is that negotiations will be completed in 2003, and the first enlargement will take place on January 1, 2005 (though several member states and the Commission are pushing for it to be sooner). Which states would accede? The first group could be limited to Hungary, Estonia, and Slovenia, but more likely it would also include Poland, the Czech Republic, and possibly Slovakia. One scenario gaining favor is that the first enlargement should be a "big bang," which would come at a later date, necessarily, and include all the Central and East European candidates except Bulgaria and Romania. The big bang, so called, is comforting to West Europeans who are eager to postpone enlargement, and to Slovakia, Lithuania, and Latvia, which are eager to enter in the first wave, however delayed. But it may create problems for pro-European politicians in applicant states where publics resent being asked to wait so long for their neighbors. It may also create problems for Bulgaria; for all of its faults, Bulgaria’s impressive pace of economic and political reform over the last four years certainly should exempt it from being classified with Romania.

By any measure, the candidates in the Luxembourg group still have work to do preparing for accession. This is particularly true for Poland and the Czech Republic, which lag behind in implementing the internal market and in reforming the state administration. Hungary, Estonia, and Slovenia already declare themselves fit for immediate membership—and, according to the Commission’s regular reports published on November 8, 2000, this will very soon be the case. It is perhaps premature to level the charge that EU enlargement has been stalled, but for this to be the case, and the charge legitimate, it is only a matter of time, given the visible lack of political will among EU leaders to embrace enlargement as the overriding project of the new decade.

Milada Anna Vachudova is a Jean Monnet Fellow at the European University Institute in Florence.

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