European Union Enlargement

Background, Developments, Facts

Michael Schwarzinger

• Publisher: Routledge
• Year: 2017
• Print ISBN: 9781412806671
• eBook ISBN: 9781351311106
• Topic: Politics & International Relations
• Subtopic: International Relations
• Index: Politics & International Relations

European Union Enlargement offers an intense and detailed analysis of the almost ten-year process of preparing and negotiating the accession of Eastern, Southeastern, and Central European countries, as well as Mediterranean countries to the European Union. In the end, ten joined in 2004, with two more to follow in 2007. European Union Enlargement was written by two diplomats who were directly involved in that process.

Sajdik and Schwarzinger relate their first-hand experience of proceedings that occurred behind closed doors. They detail how the vision of adding some countries gradually developed into the concrete policy intended to enlarge the European Union. A special chapter explains the Accession Process as well as the Union's strategy that prepared the candidate countries, in legal and economic terms, for membership.

The authors describe in detail the complex negotiations that occurred from 1998 to 2002. These include activities of EU member states as well as the European Commission with respect to the candidate countries. They further offer a brief analysis of future possibilities of EU-accession by Balkan nations and Turkey. A number of topical chapters deal with particular key issues involved in the process: free movement of workers, agriculture, financing of the enlargement, transport, and nuclear safety. Other chapters deal with the enclave of Kaliningrad as well as the Stability and Association Pact for South East Europe.

In addition to providing key information about the process, this volume is also a case study of European policies and diplomatic practice. The enlargement negotiations from 1998 to 2002 were the most complex ones the European Union had ever conducted. In consequence, this work gives insight into the working methods of both the institutions in Brussels and of the representatives of the member states that made them a success. It will be of interest to those concerned with European politics, international organizations, and area studies.

1

Uniting a Divided Continent

It has often been said that the historical importance of the EU enlargement of 2004 was that this step reunited the European continent. Therefore, the present chapter presents a historical retrospect of this division of Europe, how it came to be that Europe was politically and economically deeply divided due to the Cold War.

The World War II (1939–1945) ended with large parts of Europe being occupied by the Allied Forces. In those countries and territories that were occupied by the Soviet Red Army, that is, the Baltic countries, Poland, the Eastern parts of both Germany and Austria, Czechoslovakia, Hungary, Romania, and Bulgaria, the Soviet Union grasped--with the exception of Austria--at establishing communist governments. The Russian policy of conferring forcibly its political system to other European countries and the reaction of the United States and Western European countries to it led shortly after the World War II to the outbreak of the “Cold War.”

In March 1947, President Harry S. Truman pledged American support for “free peoples who are resisting attempted subjugation by armed minorities or by outside pressures.” In the same year, the United States offered comprehensive economic aid to Europe under the “European Recovery Program” (ERP), also known as the Marshall Plan. While sixteen nations in Western Europe agreed on the recovery plan and on the setting-up of the Organization for Economic Cooperation (OEEC), the Soviet Union rejected the American initiative for itself and for the countries under its domination.

In 1949, Jean Monnet proposed to the French Foreign Minister Robert Schuman, to pool the coal and steel resources of both France and Germany under a common High Authority. Schuman was convinced that “the coming together of the nations of Europe requires the elimination of the age-old opposition of France and Germany. Any action taken must in the first place concern these two countries.” However, rather than to propose a complicated scheme, Schuman offered for consideration a limited, clearly defined and concrete project of cooperation. Secondly, Schuman made sure that the project was available to each other European state for joining immediately or any time later.

The Schuman Plan was the basis for the European Coal and Steel Community (ECSC) that was founded in 1952 by Belgium, France, Italy, Luxembourg, the Netherlands, and West Germany. A few years later, the same states in 1957 established the European Economic Community (EEC). The ECC pursued the ambition of harmonizing the general conditions of economic life among its Member States, for example, in areas like indirect taxation, industrial regulation, agriculture, fisheries, and monetary policies.

Britain attempted to join the EEC in 1963 and 1967, and was finally admitted only in 1973. Denmark and Ireland also joined at the same time. Greece joined the EEC in 1981. This was followed by Portugal (1986), Spain (1986) and--in the framework of the German unification--the Eastern part of Germany (1990). In 1993, the organization was renamed the European Union (EU). Austria, Finland, and Sweden joined the EU in 1995.

Thus, to sum up, the Marshall Plan, NATO, the European integration (EEC, EC, and EU), progressively liberal regimes for trade and foreign investment, free enterprise and research as well as modern management methods, assured an overall positive and stable economic development in Western Europe. In comparison to that, in the East communism and plan economy brought misery.

In August 1961, Walter Ulbricht, the East German leader, ordered West Berlin to be isolated first by means of barbed wire and later by a circular wall of almost 100 miles in length, which existed for twenty-eight years. The Berlin Wall (1961–1989) was the most famous part of the Iron Curtain, which cut off from North to South Western Europe from the Eastern bloc consisting of the Soviet Union itself and the countries that were ruled by pro-Soviet governments.

The Iron Curtain hindered in the first place the free movement of persons. This led to an alienation of the populations and to cultural differentiation on both of its sides. Especially in Western Europe, both the interest in and the firsthand knowledge of the Eastern part of the continent noticeably declined. The education of “Eastern languages” in schools went down. Tourism from West to East was running low.

In economic terms, the communist plan economies proved largely unsuccessful. This led to a far lower standard of living in the East than in the West. In addition, communism limited the possibilities of the population to freely choose their way of living. This attitude and also political persecution of anticommunists destroyed many personal ambitions and schemes of life. Also red tape, corruption, poor infrastructure, and inadequate health care made life in the East rather miserable.

When communism collapsed in the East Bloc, the huge differences in average income levels and technological standards became fully visible. Also the legal systems, institutions, and ownership structure under communism were largely different from what is needed for a modern, capitalist economy.

There are examples in history of how to impose communism. That took place following the October Revolution of 1917 in Russia and after World War II in a number of countries. However, history had no example to offer in 1989 for how a communist country could be retransformed into a free market economy. In other words: anyone can turn an aquarium into fish stew, but it is much harder to turn fish stew into an aquarium.

The communist inheritance had several important dimensions for Eastern Europe. The socialist ownership structure had placed industry, services, and (with the exception of Poland) agriculture mainly in state hands. Central planning and high customs duties had led to inefficient and unprofitable industrial structures, which depended on not market related, artificial pricing, and subsidies. In particular, prices for energy and household necessities such as food, rent, and heating were kept very low. Imported goods often were severely rationed or available only at high black-market prices. A large part of the economy could only exist under the conditions of a closed, uncompetitive--and manipulated market. The people of Eastern Europe found goods increasingly unavailable at official prices, longer queues and bigger shortages, an absence of imported consumer goods, and, in some cases, public services and basic utilities deteriorated. In fact, in the late 1980s across Eastern Europe, state subsidies, largely financed by foreign credits, prevented the economic collapse, but they could no longer mask acute shortages, balance of payments crises, and financial chaos.

The labor market also depended on the conditions of a command economy. Instead of liberal employment regulations, the communist regimes attempted to guarantee life-long employment in overstaffed companies. The companies often offered a range of fringe benefits like cheap vacations and care for superannuated fellow-workers.

When communism collapsed, the new governments immediately decided to transform their states and economies into liberal market economies. What happened was that the old structures of the command economy disintegrated before market economy structures could develop. Many firms soon became insolvent when subsidies were stopped and competition set in. Therefore the transforming states were not only confronted with the task of dismantling their old systems and rebuilding adequate ones but they also almost immediately fell into a serious economic crisis. Consequently, freedom came to these nations not together with the wealth and leisure time that everybody was familiar with from Western TV soap operas but it came accompanied by additional sacrifices and it was perceived by many with a sense of disappointment.

The transforming states were in desperate need of financial funds, trade opportunities, transfer of technology, training and education of their human resources, and expert guidance in numerous fields. The international financial institutions (World Bank, IMF) intervened and the Western industrialized Member States of the OECD (G–24) agreed on a substantial joint aid program.

The European Union saw itself confronted with the task of establishing first generous economic relations and political dialogue and then also of thinking about a viable long-term strategy for a positive relationship between Eastern and Western Europe. After a short while it became apparent that accepting as many former communist countries into the EU as possible was a superior strategy over all other eventual alternatives. But that was not easy since, as is explained above, both parts of Europe had, for over forty years, developed in dramatically different ways, and practically had been drifting away from each other. It was therefore difficult to imagine in the early 1990s how Europe as a whole could be brought together forming one large supranational political union, with a common harmonized internal market, with free movement of goods, capital, services and labor, with schemes of solidarity and cohesion, and unified trade and monetary policies. And yet the European Union succeeded in doing it with skillful support programs and reform schemes, also with help from outside, and not least with a complex and many-sided negotiating process. Incorporating ten or more post-communist European states into the European Union was a huge achievement of intra-European diplomacy.

2

“Perestroika” and the Restructuring of Eastern Europe’s Relationship with the EC

In the era of Brezhnev (1964–1982) and that of his short-time epigones Andropov (1982–1984) and Chernenko (1984–1985), there was an “ice-age” between Moscow and its Central and Eastern European satellites on the one hand and Brussels on the other. The COMECON (Council for Mutual Economic Assistance) and the EC (European Community) remained isolated from each other. Each was a world apart with its distinctive philosophy and its own ideas of cooperation and dynamism. Only later a relationship between both economic blocks emerged as an effect of Mikhail Gorbachev’s policy of perestroika. A public acknowledgement of the positive development in the East-West relations was given in 1987, when the West German Minister of Foreign Affairs Hans-Dietrich Genscher gave his famous speech, “Let us Give Gorbachev a Chance,” at the World Economic Forum in Davos. Hardly one of the political decision makers at that time nurtured the expectation that fast revolutionary changes in the Eastern bloc would soon lead to the fall of the communist system. The best that one could hope for seemed to be improving relations step-by-step and by reaching a “change by rapprochement” (Wandel durch Annäherung), as was the classic definition of the then German Federal Chancellor Willy Brandt of his goals of an appeasing Ostpolitik of the 1970s. In Europe, memories were omnipresent of the frustrated hopes for a détente triggered by the Final Act of the CSCE (Conference of Security and Cooperation in Europe) of Helsinki 1975, which had to give way to a period of renewed confrontation, characterized by the USSR’s invasions in Afghanistan, the deployment of nuclear intermediate range missiles in Europe, and the crushing of the Solidarnosc movement in Poland in 1982. Only when the leadership of the USSR finally recognized that it would not be able to win the arms race with the by far superior technological and economic power of the West, it began to see the relationship to the EC from a different angle.

Economic Relations between the EC and the CEECs before 1989

The period from 1970 to 1989 was characterized by an unequal progress in the developments of the relationship between the EC and its Member States to the various members of the COMECON. From the perspective of the USSR, the EC was the prolonged arm of NATO. Direct official contacts between EC and COMECON were avoided. The fundamental technical problem that hindered the cooperation was the fact that the COMECON was neither disposed to a common economic policy nor a common system of external tariffs nor of shared sovereignty. The cooperation among its Member States was organized only on an ad-hoc basis. Nevertheless, individual COMECON members actively sought to conclude agreements with EC Member States.

In December 1969, the European Community decided to apply its economic policy in respect to the Central and Eastern European countries (CEECs) in the same manner as to any other third world country. In May 1974, the EC Council offered to conclude trade agreements with each individual COMECON member and accepted later in the same year to offer to these countries the most favored nation treatment. However, the CEECs rejected or simply ignored these offers. Therefore, in spring 1975, when the then existing bilateral trade agreements expired, the European Community saw no other choice for regulating its trade exchanges with the CEECs but to introduce autonomous measures. The then resulting autonomous regime embraced the larger part of the mutual trade in the 1970s and the 1980s. Only Romania and Yugoslavia entered into Trade Agreements with the EC. In 1970, the EC signed a non-preferential trade agreement with yugoslavia, followed by a Five Years Agreement in 1973 and a Cooperation Agreement in 1980. Already in 1971, Yugoslavia had participated in the General System of Preferences (GSP). The advantages of the GSP were also extended to Romania, and, in 1980, the EC signed a Cooperation Agreement with Romania.

The GATT (General Agreement on Tariffs and Trade) provided a common framework for the trade relations of the Community and its Member States with several CEECs, as also Czechoslovakia, Hungary, Poland, and Romania were parties of the GATT. Also, CEECs were permitted to conclude Sectoral Agreements with the EC in those instances where it was economically advantageous and as long as it did not draw into question the general position of the COMECON. This arrangement led to Textile Agreements on the basis of the MultiFibre Agreement (MFA) and to agreements on trade with steel as well as on trade with mutton and goat meat.

In May 1985, Gorbachev declared the intention of the USSR to recognize the European Community. One month later, the COMECON proposed establishing relations on the basis of a Common Declaration--but not on the basis of a treaty. This Common Declaration of both EC and COMECON was signed the end of June 1988. Even before that, the EC had concluded bilateral agreements with Central and Eastern European satellites of the USSR, and had also entered into diplomatic relations with the Soviet Union, the GDR, Bulgaria, and Czechoslovakia. Also negotiations on a Textile Agreement with Czechoslovakia and with Hungary had gotten under way.

The Community’s relations developed best with Hungary, which had shown the greatest interest of all CEECs in a bilateral agreement with the Community. Following the conclusion of a Textile Agreement in 1978, Hungary and the Community signed in September 1988 a Trade and Cooperation Agreement (TCA). This agreement of the “first generation” abolished all quantitative restrictions in the mutual trade with industrial goods, promoted liberalization of trade by both sides, established safeguard rules, and underlined that barter trade should not be used in bilateral relations.

The TCA with Hungary served as a model for other CEECs. By the end of the 1980s, TCAs were in force with Poland (September 1989), Czechoslovakia, Bulgaria (both in May 1990), and Romania (October 1990). These agreements reconfirmed the most favored nation principle of both the GATT as well as of the GATT Accession Protocols for the relevant countries. All quantitative restrictions were to be abolished within four years. These agreements included strong safeguard clauses and in the case of anti-dumping procedures the CEECs were still treated as plan economies according to the Community regulation on anti-dumping.

The TCAs led to an only limited immediately effective trade liberalization but contained time plans for the abolishment of many obstacles to trade until end of 1995. Import restrictions for sensitive products could be maintained for an indefinite time and also strong safeguard arrangements remained applicable. The TCAs were given only a limited life. Soon they were replaced because new agreements were demanded that reflected the new quality of the relations to free and sovereign states after the demise of communism. Nevertheless it became evident that the old institutional arrangements allowed a reorientation of the CEECs even in a situation when at the end of 1990 the old COMECON system totally collapsed, which, in 1991, generally led to a catastrophic breakdown of the traditional East-West trade relations. In spite of this, in 1990, Polish exports into the Community augmented nominally by one-third while Hungarian exports had grown by 16 percent already in 1989.

In parallel to the normalization of relations to the COMECON, the European Community worked on a draft strategy for Central and Eastern Europe, which was adopted by the European Council in June 1989. This project was based mainly on short-term sectoral support programs and reflected the—then--existing difficulties for arriving at a comprehensive assessment of the probable progress of the further development of the CEECs.

The failure of Perestroika in the USSR led the populations in Central and Eastern Europe to finally come to the conclusion that communism of the Soviet type could not possibly be reformed. Already in 1989 it had lost any credibility as a special economic system. The citizens of the satellites that just before were bou...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Dedication
• Table of Contents
• Preface
• Introduction
• 1. Uniting a Divided Continent
• 2. “Perestroika” and the Restructuring of Eastern Europe’s Relationship with the EC
• 3. Designing the Accession and Negotiation Process
• 4. Negotiations: From the British to the Danish Council Presidency
• 5. May 2004: A Divided Cyprus Becomes EU Member
• 6. Migrants and Commuters
• 7. Agriculture
• 8. Enlargement: An Expensive Amusement or Just Peanuts for the Moneybags?
• 9. More Traffic: Acquis for Eastern Lorries under the Transport Negotiating Chapter
• 10. Entry and Exit: Nuclear Safety and Enlargement
• 11. The Relationship between the European Union and Turkey
• 12. Poor Cousin Kaliningrad: A New Future for the Russian Enclave after Enlargement?
• 13. Preparing the Western Balkan Countries for EU Membership: The Stabilization and Association Process
• 14. Final Considerations and Outlook
• Appendix 1
• Appendix 2
• Appendix 3
• Abbreviations
• Index