Select Committee on European Scrutiny Fifteenth Report


REPORTS ON PROGRESS BY APPLICANT COUNTRIES


(22959)

14117/01

ELARG 296

and ADDS 1 - 13


Making a success of enlargement. Strategy Paper and Report of the European Commission on the progress towards accession by each of the candidate countries.

2001 regular reports on progress towards accession of:

Bulgaria, Cyprus, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Romania, Slovakia, Slovenia and Turkey.

Legal base:
Documents originated:13 November 2001
Forwarded to the Council:15 November 2001
Deposited in Parliament:Between 5 December 2001 and 24 January 2002
Department:Foreign and Commonwealth Office
Basis of consideration:EM of 17 December 2001
Previous Committee Report:None
Discussed in Council:19 November 2001 and 10 December 2001 General Affairs Councils
Committee's assessment:Politically important
Committee's decision:For debate in European Standing Committee B


Introduction

  5.1  On 13 November 2001, the European Commission issued its Strategy Paper on EU enlargement, its annual Regular Reports on the progress of each of the applicant states, and its proposals for revised Accession Partnerships for all the candidates which have started negotiations.

  5.2  The Strategy Paper sets out the timetable for enlargement, assesses progress on the 31 chapters of the negotiations, summarises the Commission's conclusions to the Regular Reports and discusses various issues arising from them. The Regular Reports assess the progress of each candidate over the past year against the Copenhagen Criteria[19]. The Accession Partnerships draw on the Regular Reports to identify priority areas for progress by the candidates on which Community assistance should be targeted. We consider separately the Commission's proposals for revising them to take account of the Regular Reports[20].

The Commission Strategy Paper and Conclusions to the Regular Progress Reports

  5.3  The Minister for Europe (Mr Peter Hain) describes the key points of the Commission's Strategy Paper as follows:

  • the EU should continue to agree its negotiating positions in line with the road map. Provided candidates sustain their efforts, it should be possible to conclude negotiations by 2002 with those who are ready so they can join the EU in 2004.The Commission's 2002 Regular Reports should enable the Commission to recommend which candidate countries are ready for accession. The principle of differentiation should continue to apply, allowing candidates to continue to progress on their own merits in the negotiations;

  • it will be possible to finance an enlargement of up to ten without breaking the financing ceilings agreed at Berlin in 1999. The negotiations should take place on the basis of the existing acquis "and the principles inherent in the Berlin agreement";

  • priority areas for implementation and enforcement for all candidates are: administrative and judicial capacity (for which a new Supplementary Institution Building Facility under the Phare programme, worth _250 million, is announced); protection of EU citizens, e.g. border security and food safety, the Single Market and effective financial control systems;

  • the Commission will enhance its monitoring of implementation through increased use of peer review involving the 15 existing Member States. Monitoring will continue between signature of accession treaties and ratification. Beyond accession, monitoring will continue as for all EU Member States, with possible increased use of twinning arrangements between national administrations to share best practice;

  • the Commission plans an "updated road map" for those countries that do not form part of the first wave of accession. The report stresses that the EU will continue to lend full support to the accession preparations of these candidates; and

  • it would be highly desirable to reach a Cyprus settlement before accession, but a settlement is not a precondition for accession. All parties should make use of the window of opportunity for the settlement to take place before the completion of accession negotiations. The provisions of a political settlement can be accommodated within EU accession arrangements for Cyprus".

  5.4  The Minister says that the key points of the Commission's Regular Reports are:

"—  Bulgaria meets the political criteria but the judicial system remains weak and Roma continue to suffer discrimination. Across the board, legislative alignment has been good, for example on environment, agriculture and fisheries, but implementation and the costs of alignment are still a major challenge and there are problems with administrative capacity. Bulgaria is close to being a functioning market economy. Provided it continues implementing reforms and intensifies the effort to remove persistent difficulties, it should be able to cope with competitive pressure and market forces within the Union in the medium term;

  • Cyprus meets the political criteria. Legislative alignment with the acquis has accelerated, with much progress made on Financial Services, Capital Movements, Transport, Customs, and Environment; but there are still a number of key laws to be adopted. Administrative capacity is already largely in place. Cyprus is a functioning market economy and should be able to cope with competitive pressure and market forces in the Union. The Report notes that the north is heavily dependent economically on Turkey. With a view to the accession of a united island, it outlines priority objectives for the north, such as the establishment of a supportive and stable financial environment, public and private investment and improvement of physical infrastructure. It notes that the Customs Union with Turkey will ensure that no new trade barriers are created following accession. And, in the context of matters arising from a settlement, it notes that a Member State is free to determine its own constitutional and security arrangements;

  • the Czech Republic meets the political criteria but still lacks a Civil Service Act. There has been progress on judicial reform and in improving the situation of the Roma. On the acquis, there has been progress in most areas and administrative capacity has been strengthened although more efforts are needed in the area of managing EC funds. The Czech Republic is a functioning market economy. Provided it makes further progress towards medium-term fiscal consolidation and completes the implementation of structural reforms, it should be able to cope with competitive pressure and market forces in the Union in the near term;

  • Estonia meets the political criteria but needs to maintain the momentum of implementing measures to help non-citizens. In general, Estonia has made good progress in both aligning and implementing the acquis, e.g. on Justice and Home Affairs and now needs to concentrate on strengthening the institutions needed for implementation. Estonia is a functioning market economy. It should be able to cope with competitive pressure and market forces within the Union in the near term, provided it continues with, and fully implements, its reform programme;

  • Hungary meets the political criteria but needs to implement and enforce measures in place to improve the situation of the Roma. There has been significant progress on Justice and Home Affairs. Under Common Foreign and Security Policy, Hungary needs to comply with the Council of Europe's Venice Commission findings on the Status Law and come to an agreement with its neighbours on the issue. The Law will need to be aligned with the acquis before accession. Hungary is a functioning market economy. It should be able to cope with the competitive pressure and market forces within the Union in the near term, provided it fully maintains and implements its reform programme;

  • Latvia meets the political criteria but will have to ensure that implementation of the Language Law meets international obligations and that it continues its efforts to promote the integration of non-citizens. Legislative alignment has continued at a steady pace but more efforts are needed on Telecoms and Regional Policy and on building the administrative capacity to implement the acquis. Latvia is a functioning market economy. It should be able to cope with competitive pressure and market forces within the Union in the medium term, provided it makes further substantial efforts in maintaining the pace of, and completing, its structural reforms. Latvia has to continue work in all areas;

  • Lithuania meets the political criteria. There has been significant progress in legislative alignment and implementation of the acquis in most areas, including Transport and Agriculture, but considerable efforts are needed in those areas related to the use of EC funds. Overall, administrative capacity has improved. Lithuania is a functioning market economy. It should be able to cope with competitive pressure and market forces within the Union in the near term, provided it makes further substantial efforts to continue with the vigorous implementation of its structural reform programme;

  • Malta meets the political criteria. Progress in legislative alignment has been uneven. Progress is most notable on Free Movement of Goods, Social Policy, Taxation and Telecommunciations. Malta's capacity to enforce the acquis is a concern, particularly in the fields of Environment and Agriculture. Malta is a functioning market economy and should be able to cope with competitive pressure and market forces in the Union;

  • Poland meets the political criteria but needs to accelerate reform of the judiciary. The business climate needs to be improved by introduction and implementation of market entry and exit legislation and the avoidance of indirect state aids. There has been an intensive programme to adopt legislation in the past year but much less progress on implementation, where administrative capacity remains weak. A coherent strategy for agricultural reform is still lacking and there have been few developments in Regional Policy. Poland is a functioning market economy. It should be able to cope with competitive pressure and market forces within the Union in the near term, provided it continues and intensifies its present reform efforts in a consistent policy environment;

  • Romania meets the political criteria: it has made progress since last year, but needs to continue to improve the situations of the Roma and children in institutions. Advances in legislative alignment have not always been matched by the necessary improvements in administrative capacity. Agriculture, Trade Policy and Financial Control are particular problems. Romania has made progress towards establishing a functioning market economy and although it would not, in the medium term, be able to cope with competitive pressure and market forces within the Union, it has taken measures that would allow its future capacity to develop, provided that it keeps to the economic reform path;

  • Slovakia meets the political criteria. Progress on legislation has been good on Free Movement of Goods, Company Law, Social Policy and Customs Union, but weaker on Agriculture and Regional Policy. Administrative capacity needs to be strengthened across the board. Slovakia is a functioning market economy. It should be able to cope with competitive pressure and market forces within the Union in the near term, provided it makes further substantial efforts in medium-term fiscal consolidation and in developing and fully implementing the announced structural reform programme;

  • Slovenia meets the political criteria. Slovenia has made significant progress on Company Law, Transport, Agriculture, Energy, Audio-visual and Telecoms. But progress on Regional Policy, Free Movement of Persons, Social Policy and Consumer Protection has been weak. Administrative capacity has been strengthened but further efforts are needed, particularly on the management of EC funds. Slovenia is a functioning market economy. It should be able to cope with competitive pressure and market forces within the Union in the near term, provided it implements the remaining reforms to increase competition in domestic markets;

  • Turkey doesn't meet the political criteria. Implementation of the recent constitutional amendments will be a step forward but a number of restrictions remain. The basic features of a democracy exist in Turkey but fundamental issues still need to be addressed (such as civilian control over the military). Progress to strengthen administrative capacity has been limited. Confronted with two financial crises, Turkey has been unable to make further progress towards achieving a functioning market economy. Considerable parts of its economy are, however, already competing in the EU market, under the framework of the Customs Union."

The Government's view

  5.5  The Minister comments:

"The Government broadly welcomes the Commission's Enlargement Strategy Paper, Regular Reports and revised Accession Partnerships. The Government agrees with the Strategy Paper that the EU should continue to agree its negotiating positions in line with the road map (the timetable for negotiation agreed at Nice). And we welcome confirmation that, provided the candidates sustain their efforts, it should be possible to conclude negotiations by 2002 with the first candidates so they can join the EU in 2004. The Prime Minister was the first EU leader to call for the first candidates to be admitted into the EU before the 2004 European Parliament elections. And he played a key role in helping turn this into an EU objective at the Gothenburg European Council in June.

"The Government agrees with the Commission that the principle of differentiation should continue to apply, allowing candidates to continue to progress on their own merits in the negotiations. We support the view that it is too early to make decisions on which countries will be in the first wave of accession. As the Prime Minister said in Warsaw last October, there are no guaranteed places. We welcome the conclusion that next year's Regular Reports should enable the Commission to recommend which candidate countries are ready for accession. We have encouraged the Commission to make its recommendations in time for decisions at the October 2002 European Council.

"The Government supports the view that effective implementation of the acquis will be an important factor in the remainder of the accession process. We welcome the increased emphasis on monitoring of implementation, particularly on issues of public concern, such as food safety and citizens' security. This should build confidence in both the EU and the candidate countries. Monitoring should be conducted in a fair and transparent way, within the timeframe for enlargement, and should not ask more of the candidates than is asked of Member States.

"The areas highlighted by the reports as requiring further progress demonstrate the importance of continued UK assistance. Since 1989, the UK has provided £350 million through the Know-How Fund to help the candidates prepare for accession. We now have "Action Plans" with 11 of the candidates which draw together the UK's practical assistance to the candidate countries. The UK is involved in more than 90 Twinning projects — the third highest number of any Member State. These cover a broad range of sectors, targeted on each candidate's priority areas for EU accession, including a cleaner environment, the fight against drugs, organised crime and money laundering, and the promotion of racial and ethnic equality.

"The Regular Reports provide an overview of progress achieved and of areas where further efforts are required, with the revised Accession Partnerships a useful guide to candidate countries and Member States on how to achieve this. In particular:

  • the Government welcomes the Commission's recognition that the candidates have made significant progress in the adoption of the acquis in most areas. We support the view that effective implementation and enforcement of the candidates' commitments is an important factor in the accession process. The candidates will need to focus resources on building administrative capacity and strengthening judiciaries over the remainder of the accession process;

  • the candidates will have to take further measures to combat corruption and fight organised crime before accession. The UK provides considerable assistance to the candidates in these areas: we are involved in 11 Twinning projects where UK experts work with their counterparts in the candidate [countries] to address organised crime, money laundering and strengthening of the police services; we have already completed 7 similar projects;

  • the Government strongly supports Cyprus's candidature for EU accession. Our objective is to see a united island in the EU. The Helsinki European Council underlined that a settlement would facilitate, but would not be a pre-condition, for Cyprus's accession. We and our EU partners have welcomed the recent meetings between the leaders on the island in the context of the UN settlement process, and the clear signal that the provisions of a political settlement can be accommodated within the terms of Cyprus's accession to the acquis. We look forward to further progress in subsequent discussions, scheduled to begin in mid-January; and

  • we welcome the Commission's proposals for enhancing the EU dialogue with Turkey. They will help to take forward Turkey's candidature in a concrete way. The Commission is right to apply the same standards to Turkey as to other candidates. The Government welcomes the recent adoption by Turkey of a series of constitutional reforms as a step towards addressing those priorities. We look forward to their rapid implementation."

The timetable to date

  5.6  The Minister comments:

"The Commission presented its Enlargement Strategy Paper and Regular Reports to COREPER on 14 November and to the General Affairs Council on 19 November. These informed the Conclusions on the progress of the accession negotiations agreed at the General Affairs Council of 10 December, reflected in the conclusions of the Laeken European Council on 15 December. The revised Accession Partnerships have been discussed by EU Member States, and were formally agreed by the General Affairs Council of 10 December. The Strategy Paper, Regular Reports and revised Accession Partnerships will continue to guide the accession negotiations over the coming year".

The General Affairs Council Conclusions of 10 December 2001

  5.7  In these Conclusions, under the heading Making a success of enlargement[21], the Council invites the Commission to submit the next regular reports for consideration at the Brussels European Council in October 2002.

  5.8  The Council notes that it intends the negotiations to be conducted on the basis of the existing Community acquis, the principles of the Berlin Agreement and the financial perspective in force until the end of 2006, without prejudging the forthcoming reforms of Community policies. It asks the Commission to present it with a proposal for a coherent financial framework by the end of January 2002 at the latest.[22]

  5.9  The Council invites the Commission to provide it in good time with all the elements needed for the drafting of the Treaties of Accession, which will begin under the Spanish Presidency.

  5.10  The Council goes on to state that "If enlargement is to be a success it is vital to run an effective campaign of communication with the people of the Member States and of the candidate countries". It invites the Commission to present a report to the Seville European Council, outlining activities under way and measures to be taken.

Memorandum from the Minister on the progress of enlargement

  5.11  Attached to a letter dated 29 January 2002, the Minister has provided us with the third in a series of six-monthly progress reports on enlargement. It covers:

  • progress in the negotiations under the Belgian Presidency;

  • a forward look at the issues facing the Spanish Presidency; and

  • an update on the UK's activities in support of the enlargement process.

  5.12  We shall place this in the Library and ask for it to be included in the pack of papers provided for the members of European Standing Committee B for the debate recommended below.

The timetable to December 2002

  5.13  In October 2002, the Commission will present its next regular reports on progress made by the applicant states and its strategy paper in which it will make its recommendation on each. The Council has asked it to produce these documents in time for them to be considered at the Brussels European Council that month. In Brussels, the Council is expected to welcome the reports and decide which candidates should be invited to join in 2004. It will mandate the Commission and the Presidency to complete negotiations with the candidates by the Copenhagen European Council in December.

Conclusion

  5.14  Negotiations with the States applying for accession to the European Union are entering a critical stage. The next Commission progress reports in October will include recommendations on which applicants should be invited to join the EU in 2004. Meanwhile, many of them need to demonstrate greater capacity to implement the acquis and some of the more difficult issues remain to be negotiated successfully.

  5.15  The Commission's strategy paper and progress reports were issued on 13 November and work is continuing apace. We therefore now recommend that this document be debated in European Standing Committee B and that the debate take place before the Easter recess.

  5.16  We consider that the documents raise a number of questions which might be raised with the Minister, and which we set out below.

— Completing the negotiations

  5.17  The Minister says that the Government welcomes confirmation from the Commission that "provided that the candidates sustain their efforts" it should be possible to conclude negotiations by 2002 with the first candidates so that they can join in 2004. The EU has been urging the candidates to make greater efforts in certain areas for some time and it may be that, not for lack of trying, it will be difficult for some to achieve the level of preparedness at present expected by the EU before the Brussels European Council in October 2002. Some issues will, doubtless, have to be settled at the Copenhagen European Council in December.

Q:  If negotiations are not completed with a candidate at the Copenhagen Council in December 2002, will some later date be set which will still allow them to join by 2004?

Q:  In which areas, and with which candidates among those now expected to qualify, does he expect that negotiations might continue beyond the end of 2002?

— Shortfalls in implementing the acquis

  5.18  Despite exhortations in the Reports for more effort to be made in building administrative capacity, it looks increasingly likely that some of the candidates will not be able fully to implement the acquis for some time. The Minister says that the Government welcomes the increased emphasis on monitoring and peer review.

Q:  If the capacity of many of the candidates to implement the acquis is still weak when the Commission reports in October, will this be regarded by the Council as a bar to accession? How rigorous should the EU be in deciding which states should be invited to accede? Will the invitations be made conditional on performance against specific targets?

Q:  What concerns does the Government have about implementation of the acquis after accession? How effective will peer review be? What can the EU do to ensure that the momentum for reform is maintained after accession?

Q:  The Minister says in his six-monthly memo on EU enlargement[23] that membership of Schengen will be a two-stage process. Will there be a similar process, requiring applicants to demonstrate commitment and capacity to implement the acquis effectively, in any other area?

Q:  The Minister refers in the same memo to a candidate showing a credible enforcement record on the competition acquis. Does he envisage any specific period over which such a record should be maintained?

Q:  Do any aspects of Justice and Home Affairs, such as organised crime, give cause for concern? Do any candidates appear to lack the will to tackle problems?

— Justice and Home Affairs

Q:  Has the increase in EU Justice and Home Affairs measures following 11 September affected the ability of candidates to cope with preparations for enlargement?

— Agricultural reform

  5.19  The pressure for agricultural reform has been eased with the understanding that it will be possible to finance enlargement within the ceilings agreed at Berlin in 1999.

Q:  Does the Minister foresee any particular difficulties for accession if Poland, for instance, does not move faster to reform its agricultural sector?

— Cyprus and Turkey

Q:  If a political settlement has not been achieved before the Copenhagen Council, does the Minister fear that either Greece or Turkey will raise strong objections to Cyprus being invited to accede?

— Communicating with the people

  5.20  The Accession Treaty will have to be ratified by the Member States. Public perceptions within the existing Member States of the impact of enlargement will be important. In the Conclusions of the General Affairs Council of 10 December 2001, to which the Commission refers in the Strategy Paper, the Council invites the Commission to present a report to the Seville European Council in June on communication on enlargement to the people of the Member States and of the candidate countries.

  5.21  Whilst politicians and officials involved may be familiar with the broad implications of enlargement, it would be appropriate to raise questions about the perception of the average voter, along lines such as:

Q:  Does the Government believe that the electorates in the 15 existing Member States, and in particular those of the UK and the Republic of Ireland, have an accurate perception of the impact of enlargement, generally and with particular reference to:

—   the cost to individual countries with much lower GDP per head joining the Union. Should they fear that this will drag down their own standards of living?

—  the cost to the national budget?

—   the effect on national pension provision?

—   the impact on job opportunities at home with the opening of borders?

—   the impact of cheap imports on home producers, for instance in the agricultural sector?

—   the intentions of the Member State Governments. Does the Government expect the Union eventually to expand further, perhaps beyond the borders of the Central and Eastern European Countries (CEECs)?

—   the implications for defence. What obligations will enlargement impose?

Q:  Has any thought been given by the Member States to how to proceed if the Irish vote in a further referendum against the Treaty of Nice?

Q:  What measures does the Government plan to communicate with the UK electorate on the implications of enlargement?


19  Agreed at the last Copenhagen European Council, these are grouped into political criteria relating to respect for the rule of law and human rights; economic criteria which require the candidate to have a fully operating market and be able to withstand the pressure of competition in the Single Market; and the ability of the candidate to take on the obligations of membership, which requires the adoption, implementation and enforcement of the acquis. Back

20  (22961) 14297/01 and others - ELARG 308-319 inclusive; see paragraph 14 of this Report. Back

21  Press Release 15078/01page 8 at: http://ue.eu.int/Newsroom. Back

22  Expected to be issued by the Commission on 30 January. Back

23  See paragraph 5.11 above.  Back


 
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