Sunday, January 26, 2003

EU Expansion Agreement Proving Difficult

With a summit aimed at admitting 10 more countries to the European Union only two days away, the candidate governments are still bargaining hard for better financial terms of membership, and the member governments are still trying to decide how much to offer. According to the experts, with so much unresolved, the summit that opens Thursday in Copenhagen could well extend beyond its scheduled two days. In fact European officials are saying that the most difficult issues will not be resolved until government leaders sit down behind closed doors for last-minute deal-making. Of course, the main sticking point in the negotiations between the 15 EU countries and the candidates is money. The countries joining the union will get direct cash payments in the form of development aid and support for farmers, far beyond the amounts they will have to pay into the EU. But they are joining at a time of economic constraints in Europe generally. In return for the aid the new countries would have to accept a series of strict agricultural production quotas. Poland, which has more farmers than Germany and France combined, has been particularly vocal in crticising the proposed terms, pressing for more farm aid and higher production quotas in areas such as milk. The nub of this problem is that all this comes at a time when the leading EU countries are experiencing far more economic difficulties than were expected at the time of proposing entry. Germany in particular is having to propose a very difficult package to its own citizens this winter to maintain its commitment to the stability pact, while having higher than desireable interest rates due to Euro membership. This means that it is in no position to be especially generous. Hence we have an 'expectations gap', the new, poorer, countries being in a worse position that the existing members imagine, while the existing members are unable to meet the generosity expectations of the newcomers. All-in-all it is difficult to see how this can work well long-term.

"This has to be in the hands of the heads of state and government," said Romano Prodi, president of the European Commission, the EU's appointed executive body. "The decision is too important a decision to be taken beforehand." He added, "Miracles are always possible." Prodi said he did not expect the haggling to derail plans to formally issue membership invitations to the 10 countries -- Poland, Hungary, the Czech Republic, Slovakia, Slovenia, Malta, Cyprus, Latvia, Lithuania and Estonia. "The deep sentiment of all the heads of state and government -- I repeat, all -- is in favor of enlargement," Prodi said. "The enlargement is seen as an historic goal. It is not a decision of 'if,' it is a decision of 'how.' "
Source: Washington Post

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