Select Committee on Foreign Affairs First Special Report




Recommendation 4

  We believe that the CAP must be reformed, though the Government should aim to ensure that any such reform should enable sustainable and affordable enlargement to proceed. Any reform which creates long-term discrimination between existing and new Member States will be both unsustainable and unacceptable. We support the Government in its efforts to secure substantial reform of the CAP through the introduction of co-financing and degressive direct-aid payments. (Paragraph 41)

  41.  The Financial Times of 2 March reported Commissioner Fischler as saying that direct payments for farmers in the new Member States should be phased in over five to seven years. However, his reported remarks do not represent an official Commission position. In June, the EU agreed a Common Position on agriculture, which defers adopting a formal position on direct payments until a later stage in the negotiations. The Government is of the view that the main priority at this stage is to get the negotiating process on agriculture underway and to begin to tackle the vast amount of technical detail in this chapter (agriculture comprises around 50 per cent, or 40,000 pages, of the acquis communautaire).

  42.  The Government is willing to explore all options for integrating new Member States into the CAP. The Government agrees with the Committee's view, in its original report, that the EU's objective should be to avoid long-term discrimination between existing and new Member States. The Government believes that EU payments to new Member States should serve to promote agricultural restructuring, and is concerned that extending direct payments in their current form could inflate land prices and hinder structural reform. The Government also supports the progressive reduction of direct payments to farmers in the existing Member States. The terms of accession should be consistent with the Berlin Financial Perspective.

Recommendation 7

  The Government must ensure that, at this stage in its history, Northern Ireland should continue to receive special dispensation in relation to the Peace Initiative and the International Fund for Ireland. (Paragraph 50)

  43.  The Berlin European Council agreed a package of support for Northern Ireland, including the continuation of the programme for Peace and Reconciliation and an EU contribution to the International Fund for Ireland.

  44.  "Peace I", the first phase of the Peace and Reconciliation programme, worth £400 million, will end in December 2001; its successor, "Peace II", is worth £709 million from 2000 to 2004 (funded 75 per cent from the EU and 25 per cent from the UK and Irish governments). It has the same priorities as Peace I, and operates, as before, in Northern Ireland and the six "border counties" in Ireland. The Northern Ireland and Ireland Authorities jointly are now finalising details of the Peace II Operational Programme with the Commission and expect funding to come on stream early next year. (There will be no hiatus in spending as money from Peace I will continue to be disbursed in 2001.)

  45.  In 1999, the EU released a three-year tranche of funding (£45 million) for the International Fund for Ireland, whose aims are "to promote economic and social advance; and, to encourage contact, dialogue and reconciliation between unionists and nationalists throughout Ireland." This brings the total received so far from the EU's International Fund for Ireland to £229 million. Along with contributions from other international donors (Australia, USA, Canada, New Zealand), this money will be used to promote cross-community activity and job creation. The International Fund Secretariat places its annual reports in the Library of the House (most recently in March 2000).

Recommendation 8

Bilateral work

  The Committee believes that more should be done to explain the implications and opportunities of EU enlargement, and considers that the Government should put forward specific proposals to improve public understanding and knowledge in the United Kingdom and throughout the EU. (Paragraph 51)

  46.  Since the Committee's report, the Government has significantly increased its bilateral activities to promote the benefits of EU membership and enlargement, in the UK and in Member States and candidate countries.

  The measures include:

    —  Increased Ministerial contacts with EU and candidate counterparts.

  The Prime Minister, the Foreign Secretary, Mr Vaz and Mr Battle have all given keynote speeches on the EU and enlargement in the last nine months. The number of contacts by government ministers with their EU colleagues has grown rapidly: there was one contact a day on average in 1999. Contacts with candidate counterparts (where EU enlargement figured prominently) have also increased in the past two years; these contacts receive high profile coverage in local media.

    —  New initiatives, including the Europe Day in the FCO, and Mr Vaz's event for colleagues from the Visegrad Four at Hanbury Manor. On 28-29 November, Mr Vaz will visit Prague and Bratislava with a team of MINECOR colleagues, to demonstrate UK support for enlargement.

    —  Launching publications, including DTI's "EU Enlargement and the Single Market: Opportunities for Business" on 28 September 2000.

    —  Active participation in conferences, academic debate and research.

Work with the Commission

  47.  In May 2000, the Commission announced that it had set aside £160m to promote enlargement in Member States and candidate countries. There have been some delays in establishing a strategy. But as a first step, the Government will be co-operating with the Commission delegation in London to prepare a poll to establish more information about levels of support for enlargement in the UK.

Work with other Member States and Candidates

  48.  The Government has also established a pattern of co-operation with selected Member States and candidates to promote enlargement together. The first phase has consisted of jointly signed articles in the press. In the next phase, we plan to include joint seminars with Austria and the Netherlands later this year and are discussing with a selection of EU partners the possibility of joint visits by Ministers for Europe to candidate countries.

Recommendation 15

  We believe that the Government should consider measures which would allow applicant states to have a more formal role in consultations on future EU positions and policies at Ministerial and official level. (Paragraph 63)

  49.  The Europe Agreements, Association Agreements and Accession Partnerships provide the framework for the EU to discuss with each candidate progress towards accession as well as co-operation and international issues. In practice, this means that EU Ministers meet their counterparts from the candidate countries three to four times per year in EU+1 format, There are more frequent meetings at senior official level.

  50.  The EU has received position papers from each of the candidates on the current Inter-Governmental Conference and the Presidency provides regular briefing on progress of discussions to the candidate states. UK officials supplement this with regular briefing for representatives of candidate embassies in London. Candidate countries can also submit position papers on current EU issues, as did Hungary, for instance, before the Lisbon European Council earlier this year.

  51.  Under CFSP, candidate countries have the opportunity to align themselves with EU Common Strategies, Common Positions and Joint Actions. They are kept informed of developments in CFSP by the regular political dialogue between Member States and candidates and on a day to day basis keep up to date through the Associates Communication Network. However, this does not extend to consultation on individual positions. Given the fast pace at which CFSP moves, it is not always possible for the candidates to align themselves with Common Positions before they are declared.

  52.  The French Presidency will convene two meetings of the European Conference, bringing together Ministers on 23 November and Heads of State and Government on 7 December. The meetings are intended to provide a forum for the EU to discuss institutional reform and wider questions about the future of Europe with senior political representatives from the candidate countries.

  53.  Heads of Government, Ministers and officials from the UK and Member States continue to discuss EU positions and policies whenever they meet their opposite numbers and the Chief Negotiators from the candidate countries. The Prime Minister did so when he visited Warsaw on 5-6 October and so did the Foreign Secretary when he visited Budapest and Prague on 25-26 July.

Recommendation 18

  The Committee supports the view that enlargement must not involve a differentiation between different classes of Member States and considers that the four freedoms of the single market—the free movement of goods, capital, services and persons—should apply upon accession or as soon as practicable thereafter. (Paragraph 78)

  54.  The Government's objective continues to be that new Member States should participate as full and equal members of the EU as early as possible.

  55.  With almost all of the negotiating chapters now opened with the Luxembourg Six countries (29 out of 31), we now have a better view of the issues that need further negotiation. In his speech in Budapest in July, the Secretary of State called for a new phase of negotiations to solve these issues: we need to tackle the candidates' requests for transition periods in order to make progress, and maintain the momentum of negotiations.

  56.  The Government agrees with the Committee; the EU should not accept transitional period requests that might:

    —  seriously distort the operation of the Single Market or compromise the health and safety of its citizens; and/or

    —  seriously impair a candidate's ability to function as a market economy, or

    —  seriously compromise the ability of its administrative structures to implement EU legislation and/or meet the Copenhagen criteria.

  57.  The Government believes that the EU should be prepared to grant requests for transitional periods that fall outside these areas if there is a strong economic or other rationale for doing so. In determining whether a request is sensible or not, the EU should be fair, realistic and generous. The EU should, on a case by case basis:

    —  be cautious in assuming that any transitional period will automatically produce an unfair competitive advantage for the acceding country;

    —  look seriously at requests in areas where existing Member States have had, or still enjoy, transitional arrangements;

    —  recognise that, for economies in transition, some of the obligations of membership will be exceptionally expensive to implement, and we should ask ourselves whether it makes sense for them to try to comply fully from the date of accession with those directives requiring heavy investment.

  58.  Nevertheless, the Government still expects transitional periods to be the exception rather than the rule. It also believes that transitional periods should be limited in time, scope and duration and be accompanied by a plan with clearly defined stages for full implementation.

Recommendation 19

  The Committee believes that the Government should urge the EU to give closer attention to the impact of its current enlargement policies on relations between countries in the region and to ensure they do not exacerbate divisions between countries. (Paragraph 79)

  59.  The Government continues to believe that regional groupings have an important role to play in promoting EU integration, free trade, conflict resolution, and economic co-operation both among candidates and between candidates and non-candidate countries.

  60.  The Government therefore welcomes the co-operation that has grown up between the Luxembourg Six countries and the Helsinki Six countries. The Visegrad Four (Poland, Hungary, the Czech Republic and Slovakia) has members in both groups, but all four countries share the same focus on enlargement, and in particular seek a satisfactory solution to border control in an enlarged EU. The Government has increased its dialogue with the Visegrad Four. The leaders (with the Hungarian Foreign Minister representing Prime Minister Orban) met the Prime Minister in Warsaw on 6 October and Mr Vaz hosted his counterparts at a meeting at Hanbury Manor on 31 March-1 April 2000.

  61.  The Baltics comprise another important regional grouping that cuts across the Luxembourg/Helsinki divide. This group meets also within the wider context of the Northern Dimension. The Government fully supports the Action Plan for the Northern Dimension, adopted at the Feira European Council, which offers a forum for the EU's northern neighbours, including Russia, to work together.

  62.  The Government is keen to find ways of ensuring that cross-border co-operation between candidates and their neighbours is strengthened, not weakened, as a result of EU enlargement. It is working closely with the Governments of Poland and Ukraine on a number of trilateral economic transition projects. It has been instrumental in ensuring that the EU's objectives on enlargement and the promotion of Balkans stability are compatible, and in particular will lead to the growth of intra-regional co-operation and trade patterns. The EU Common Position on the external relations chapter notes the importance of maintaining good links between the EU candidates and their eastern neighbours, so that the EU candidates are not discouraged from maintaining their existing agreements with their neighbours, including free trade agreements. Funds continue to be available under the EU's PHARE programme to support cross-border co-operation projects.

Recommendation 23

  We believe that commitment to the process of enlargement must mean a commitment of resources to increasing relations with applicant states at all levels: diplomatic administrative, commercial and industrial. We look forward to witnessing the "good results . . . in the near future" which Ms Quin promised would result from the increased commitment of FCO resources and diplomatic activity in the applicant states. (Paragraph 92)

  63.  The Government will continue to commit resources to relations with the candidates. Last year, the FCO established 11 new UK-based and 12 locally engaged slots in candidate countries.

  64.  The main vehicles for support to the candidate countries are individual country "Action Plans". The first was launched in October 1999. These plans enable better co-ordination and targeting of the Whitehall effort on pre-accession assistance, and use FCO programme budget money on specific, new projects. So far, Action Plans have been launched with Poland, Hungary, Czech Republic, Slovenia and Malta. One for Estonia is in preparation, and Plans for the remaining "candidate countries" will follow next year. In financial year 2000-01, £500,000 of FCO funds will be spent on Action Plans. A further £500,000 will be committed to training courses for candidate countries' officials run by the Centre for Political and Diplomatic Studies (CPDS), training projects run by the British Association for Central and Eastern Europe (BACEE), twinning projects administered by the FCO, and various continuing commitments such as Romanian diplomatic training and assistance to the Latvian EU Integration Bureau.

Recommendation 26

  The Committee concludes that now is not the time to reduce Know How Fund expenditure to the "first wave" applicant states. (Paragraph 97)

  65.  Expenditure should reflect the relatively advanced state of development of candidate countries and the availability of resources from the EU, World Bank and other multilateral agencies to which the UK contributes.

  66.  The currently agreed framework figures for 2000-01 to 2001-02 are:

Czech Republic
Estonia (Baltics)

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Prepared 9 January 2001