ENLARGEMENT 

Slovak EU referendum ‘was rigged’ The European Foundation Intelligence Digest reported at the time on the suspiciously high turnout figures, and the absurdly high “Yes” votes, in both Lithuania and Slovakia. Now, a local paper in Slovakia has suggested that the poll may have been rigged. According to the Slovak Spectator, an English-language paper in Bratislava , questions are being raised about the accuracy of the turnout figures, and that these questions throw the legitimacy of the poll into doubt. According to the official figures, 52.15% of eligible citizens cast a vote in the poll on 16th – 17th May 2003. Like many post-communist countries, Slovakia requires a 50% turnout for the result to be valid. But the newspaper has ascertained that a number of voters took two ballot papers with them into the polling booths, and that elections officials turned a blind eye to this. Various people have recounted their experiences to the paper, including people who took two ballot papers by mistake from a pile which had been simply left out on the table. The normal practice – and the requirement of the electoral law - is for each voter to be handed his ballot paper by an official. In addition, there are recorded instances of people coming to vote and finding that their names were already ticked off on the list as having already voted. Local politicians have said that it is fairly easy for commission members to tick off extra people’s names so that the number of ballots cast conforms to the number of ballots in the box. The paper also points out that all the political parties who had representatives on the electoral commissions in each polling station are declared supporters of EU membership, and that they therefore had an interest in ensuring that the turnout exceeded 50%. There were no foreign observers at the poll, and there were no independent local observers. (The Slovak Spectator, 9th – 15th June, 2003)

Old Europe clashed with new Europe at the Iraq Summit in Brussels on Monday. In an extraordinary outburst at the end of the meeting French president Jacques Chirac attacked candidate country behaviour for being "irresponsible" towards Iraq. Speaking of the ten countries (Vilnius Ten) which signed a letter supporting American policy towards Iraq, Mr Chirac said their gesture showed a lack of consideration towards the EU. Referring to Romania and Bulgaria – due to join the EU in 2007 - Mr Chirac commented that their situation regarding EU integration was already delicate and that should they have wanted to make their case even worse, they could not have found a better way to do it. He concluded by underlining that these countries missed a good opportunity to keep silent. (EUOBSERVER 18.02.2003)

The Vilnius 10 group, composed of Slovakia, Lithuania, Bulgaria, Estonia, Latvia, Romania, Slovenia, Albania, Croatia and Macedonia on Wednesday signed a letter in support of American military intervention in Iraq. The ten countries said that US Secretary of State Colin Powell had proved to the UN Security Council that Iraq had clearly violated UN resolutions. The signatories are also willing to participate in the international coalition for the disarmament of Iraq. (EUobserver.com 06.02.2003

I have just returned from a book promotion in Poland, where even those MPs who had been in the forefront of opposition to the Communists told me that they found the EU far more oppressive and dismissive of Polish nationhood than their previous Soviet masters. Laws were being forced through the Polish Parliament, at the behest of the EU, which had never appeared in any party manifesto, with little debate and which were not yet even law in the existing EU member states. Perhaps the most insidious new provision in the Polish Constitution is that a law can be enforced in Poland even if it has not been translated into Polish. There can be no more disgraceful indicator of the true nature of the European Union as it constitutionally imprisons nations which so recently escaped from a different tyranny. (TIMES Letters to the Editor December 04, 2002 Poland and the EU From Mr Rodney E. B. Atkinson)

The Polish bargain is so one-sided that it will probably be adjusted; indeed, it will have to be. Poland is a very poor country. As things stand, Poland will have to pay 100 per cent of its obligations to the EU from the starting date. At the same time the benefits to Poland from the Common Agricultural Policy will only be phased in; the rate at the beginning will be only about 25 per cent. As a result, Poland could start off as a net contributor to the EU, despite being much poorer than any existing EU country. Even Brussels thinks that is absurd, but has not yet found a mechanism to put it right. The rich men of Europe are standing outside their cathedral asking the poor to toss guineas into their top hats. (Rees Mogg in The Times on EU Enlargement November 25, 2002)

Britain's exclusion from the European single currency is not deterring inward investment in spite of government fears, leading companies will tell one of Europe's biggest investment conferences on Tuesday. London First, which includes nearly 300 big companies, will tell the Mipim international trade fair in Cannes that the euro has failed to dent Britain's position as Europe's top location for internationally mobile investment projects. Jo Valentine, the business group's chief operating officer, will tell the conference that member companies say the English language and competitive business methods are more important than the currency issue. (By Kevin Brown FT.com March 11 2002)

Even though the EU contributed nearly 4bn euros to ten Central Europe countries for ISPA projects, only about 200mln euros of the amount has been paid out. For the year 2002, the European Commission proposed 900m euros for ISPA, but finally the Council cut the amount to 650m. The Instrument for Structural Policies for Pre-Accession (ISPA), allocates funds for environmental and transport projects. The 10 countries which enter into this framework are Bulgaria, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia and Slovenia. The obstacle for recipients is a requirement of co-financing, minimum of 25 per cent of the total value of a project. Another requirement is that a total amount for a funded project must exceed 5m euros. Aid from an ISPA fund is also discretionary, and contribution of money for particular projects depends on the EU side. There were examples of investments already qualified by the Polish authorities that did not receive the acceptance of the EU. The European Commission on Thursday launched 94 projects which are going to be financed by the ISPA. Most of the projects focus on the modernisation of urban and municipal water supply, waste water systems, and the rehabilitation and construction of road, motorway and railways. However, some eastern European countries which are supposed to be benefiting from these funds argue that there is slow absorbency in funds, receiving only 20 per cent of the funds supposedly allocated in a year. There are three instruments assisting the applicant countries until they join the EU: PHARE for the consolidation of institutions, participation in Community programmes, regional and social development, industrial restructuring and development of the small-business sector; ISPA for development of transport and environmental infrastructure; and SAPARD for the modernisation of agriculture and rural development. (Euobserver.com 15.02.2002)

The European Commission on Wednesday put forward a proposal for financing the enlargement of the European Union, according to which accession of ten new countries in 2004 will cost less than expected. The proposal provides for 40bn euros to finance enlargement between 2004 and 2006, instead of 42bn, initially foreseen in 1999. The EU will only pay during the three first years of enlargement 28bn euro. The rest represents money committed for longer term projects. However, the financial package for enlargement upsets everybody. (Euobserver.com 31/1/02)

Britain has overtaken Germany in terms of GDP per head (Financial Times 22/12/01). Germany is already by far the largest net contributor to EU funds: its net contribution to the budget was DM 21 billion (over £7 billion) in 1999. Germany pays twice as much into the Brussels coffers as it gets out [Handelsblatt, 24th July 2001]. With the prospect of enlargement German contributions to the budget of the EU might have to rise sharply, there is bound to be far more pressure on Britain to increase its contribution to the EU budget - Ed.

Bavarian prime minister and CSU party leader, Edmund Stoiber, is in favour of EU-enlargement, but he understands the worry of many citizens about the coming clash between economies in the border regions of the old and the new EU countries. In some of the new countries, wage levels are one tenth of the average of those of the present member countries, and GNP is down at between 40 and 50 percent of the EU average, creating unequal competition between small businesses in border areas. "We shall need a temporary limitation of the free movement for services and not only in the areas of building and cleaning," according to Edmund Stoiber, who was interviewed by the German magazine Der Spiegel. (Euobserver.com 13-08-2001)

It would be good for democracy in the EU, good for the efficient workings of its institutions, and good, above all, for enlargement if the treaty of Nice was scrapped. The most thorough, and devastating, assessment has just been published by the Centre for Economic Policy Research*. By applying game theory to the voting system of the EU, they calculate how much easier or more difficult it will be to take decisions with 27 members than with the present 15. Their conclusion is unequivocal: "The Nice reforms will actually make matters worse." Why? The institution that really matters in the EU is the Council of Ministers - the body in which the member states act as both executive and legislature, and decide according to a system of weighted votes. The weights reflect population size, but only to a limited extent. Thus at present Germany, France, Britain and Italy have 10 votes each, although Germany is one-third larger than the rest. Ireland has three votes, although there are 20 times more Germans than there are Irish. The total number of the votes in the council is 87, and the "qualified majority" required to approve a decision is 62 -some 71 per cent of the total. The whole system is intended to achieve an acceptable balance between big states and small. The CEPR study seeks to calculate the likelihood of a randomly selected issue passing in the Council. When there were only six member states that "passage probability" was a respectable 21.9 per cent. It dropped to 14.7 per cent when the UK, Denmark and Ireland joined in 1973, and to under 10 per cent when Greece, Spain and Portugal entered. That was why they introduced the Single European Act in 1987, to increase the use of qualified majority voting. Today, with 15 member states, the same measure has fallen below 8 per cent, the authors say. With 27 members, and no reforms, it will drop to just 2.5 per cent. If the Nice treaty is approved, it will fall even further - to 2.1 per cent. It is a guarantee of gridlock. The reason lies with the absurdly complex voting system agreed by the EU leaders in Nice. On top of weighted votes, they added two more requirements for a positive decision: a simple majority of member states, and at least 62 per cent of the EU population. That is bad enough. But the biggest cause of decision-making paralysis remains the weighted votes. Nice gives the bigger members more votes to compensate for the accession of a flood of small states. That should have made decision-making easier. But they negated the effect by raising the qualified majority threshold. With 27 members, that rises to 74 per cent instead of 71. Thanks to Nice, it will be easier to block an EU decision in three ways, according to each of the three majorities required. The entire system is thus skewed in favour of decision-making paralysis. Far from being a radical shift in favour of more integration, Nice will have the opposite effect - "crippling the Council as a legislating body and thus stripping both the parliament and the Commission of the power they derive from influencing new legislation". In fact, contrary to what Britain's Conservatives are arguing, among others, Nice is a Eurosceptics' dream. *Nice try: Should the Treaty of Nice be ratified? published by the Centre for Economic Policy Research, (Quentin Peel The Financial Times Jul 9, 2001) 

The rejection of the Nice treaty in the recent referendum has placed Ireland at the centre of the debate about enlargement of the European Union. Ireland, a tiny economy that represents less than 1 per cent of economic activity in the EU, has successfully raised its living standards to the European average in barely two decades. It provides the model most aspiring EU member states wish to copy. The main macroeconomic rules operating within the EU are contained in the stability and growth pact specifying limits for government deficit and debt to gross domestic product ratios. But Ireland was not in breach of the pact: the dispute with Brussels revolves around differing assessments of the appropriate response to a rapidly growing economy. But the pact is flawed in one important respect. While the importance of growth is acknowledged in its title, it is based on the rates recorded in the most economically advanced EU member states. By its definition, stability would be consistent with an economy growing at 5 per cent each year in nominal terms. However, the economies of eastern and southern Europe beginning their transitions to EU membership will be expected - indeed, will need - to have higher nominal growth rates if convergence is to be achieved within a reasonable time span. A strict application of the current EU stability rules would unduly hinder these states' use of public finances to stimulate the faster growth. Common rules on fiscal stability are not the only issue. Ireland has suffered withering criticism for rejecting the harmonisation of its corporate tax regime with those of heavier-taxing European states. Taxation is at the core of Ireland's economic strategy - the very strategy that the accession countries are studying with such interest. The aspirant states will have to look very carefully at the tax policies available to them once they are inside the EU. It is getting policies right - not EU development funds - that will secure Irish-type growth. (Danny McCoy is an economist at the Economic and Social Research Institute, Dublin. John McHale is an associate professor at Harvard University- Financial Times; Jul 3, 2001)

It is now likely that the European Union will enlarge by a "Big Bang". Yet very few of the EU's governments have thought seriously about the implications of so many relatively politically immature and economically underdeveloped countries joining. First, enlargement is likely to impair the quality of EU decision-making. Even when the EU takes a decision by qualified majority vote, it will be harder for 25 ministers to reach a good decision than 15. The second challenge is that enlargement is likely to aggravate the already serious problem of the EU's lack of legitimacy. In comparison with western Europe, the accession countries have different and, in many cases, inferior standards of public life, including problems of corruption. By the time they join, not all the new members will have put in place legal and administrative systems that are capable of imple-menting EU rules effectively. Furthermore, the countries that fail to do so are likely to be the conduits, if not the sources, of illegal immigrants, drug-trafficking and criminal gangs. A third issue is that greater diversity will weaken the sense of solidarity that helps to bind the Union together. Will rich west Europeans be as willing to pay for roads in Latvia, for example? The EU should emphasise that common European values apply across the whole continent. Its Charter of Fundamental Rights, approved last December, is a start. If one government mistreats its ethnic minorities, or insists on controlling TV stations, its path to membership should be blocked. A fourth problem is that enlargement leaves those outside the Union at a dis-advantage. The new members will have to impose visa requirements on their eastern neighbours. Europe's leaders must think more seriously about the consequences. (By Charles Grant Financial Times Jun 28, 2001) In his letter to the editor Mr Ronald Harrison, Honorary Research Fellow, Italian Department, University of Glasgow, writes: With reference to the challenges to enlargement cited by Charles Grant it is notable that Italy, one of the European Union's principal members, already fails to meet some of these challenges. For example, Italy does not have "the legal and administrative systems capable of implementing EU rules effectively". It is a "conduit for illegal immigrants" as well as "a source for drug trafficking and criminal gangs". Its prime minister owns Italy's commercial television stations and now controls the three state networks". Moreover, its prime minister faces charges of massive corruption and has alleged links to organised crime; Italy is guilty of fraudulently misusing European aid funds on a huge scale; and its national debt stands at 110 per cent of gross domestic product in contrast to the 60 per cent permitted under EU rules. So perhaps Italy qualifies for expulsion? (Financial Times; Jul 3, 2001)

Eastern enlargement remains a bone of considerable contention between the various EU states. Very basic questions about money remain stubbornly unresolved. Spain, Portugal and Greece, in particular, are proving awkward, demanding cast-iron guarantees that their net receipts from European coffers will not be reduced once new members are admitted. These three countries receive upwards of £50 billion per year from the structural funds and they have every intention of ensuring that the money continues to pour in after 2006. Spain is demanding that guarantees be given before it accedes to the demands of Germany and Austria that, for a transitional period of seven years, the freedom of movement be restricted for citizens of the new member states so that they do not undercut the jobs market there. (European Foundation Digest 17/5/01)

Having waited over a decade before being welcomed into the "European family", citizens of the states of Central and Eastern Europe who expect to become members of the EU will have to wait seven years before being allowed to work in another EU state. The Commission has suggested a seven-year transitional period as a way of defusing fears in the richer Western states, especially Germany and Austria, that cheap labour from the East might undercut wages in the West. The Commission has therefore proposed a maximum of seven years with provisions for making the transition shorter if the other states so decide. The EU is currently negotiating with ten states on membership: these transitional arrangements on employment will not apply to Cyrpus and Malta but to the other eight Eastern European candidate countries. It is expected that the new admissions will occur around 2004 – 14 years after the fall of the Berlin Wall. The plans to impose this transitional period are very unpopular, by all accounts, in Poland and the Czech republic, where the governments want immediate access to EU labour markets for their citizens. [Handelsblatt, 11th April 2001]

Romano Prodi on a visit to Dublin on the 20 June said that, "The Nice treaty is not necessary for enlargement. It's without any problem up to 20 members and beyond 20 it is only required that they put in some notes of change to the accession agreement. But legally it is not necessary although politically it is" (Irish Times various dates, June 2001)