EU fears German calls could undermine reform drive

The European Union’s efforts to agree important reforms this year to prepare for new members are under renewed threat, just when member states had seen a glimmer of hope of success.

The 15 EU member states are holding an intergovernmental conference (IGC) to discuss reforms intended to ensure decision-making is not paralysed when membership of the Union swells in the next few years. The 15 agreed a more ambitious agenda for the IGC, which is due to end in December, during a summit in Portugal last week. But two days later Germany said the EU should also make a commitment to hold another IGC by 2004 to discuss major reforms. The proposal has alarmed some officials at the European Commission, the EU’s executive.

Germany is a driving force behind reform and deeper European integration but wants to appease its federal states which have threatened to block the IGC over concerns about the division of powers in the EU between federal, national and local levels. Officials at the Commission say privately they fear member states might try to postpone taking the difficult decisions needed to reach agreement on major reforms, if they know this IGC will soon be followed by another.

“You can’t blame Germany for what it has said because the German government has to think about its regions,” said a Commission official who is familiar with the negotiations. “But the fact that it has said this could prompt other member states to take their foot off the pedal and leave everything to be decided at another IGC.”

Implications for enlargement

The implications for the EU’s enlargement are unclear, but some EU officials fear failure to agree on major reforms at the IGC in time for a summit in the French city of Nice in December would risk delaying enlargement. “This IGC is the first stage on a path we should continue down without hesitation,” French European Affairs Minister Pierre Moscovici said on Friday.

“There will be others. But watch out – if we fail in Nice, the construction site for Europe’s institutions will be devastated.” The European Commission’s aim is certainly not to delay entry for would-be members. Poland, Hungary, the Czech Republic, Slovenia, Slovakia, Cyprus, Malta, Estonia, Latvia, Lithuania, Romania and Bulgaria are already holding membership talks. But officials acknowledge privately that the talks on the IGC are progressing painfully slowly and that the candidate countries, some of which want to join the EU in 2003, are unlikely to start joining until 2005. “The IGC is intended to make enlargement a success, not to postpone it,” said one Commission official.

“But failure to go far enough at the IGC would result in a poor bargain which would be a way of offering newcomers institutions which do not work properly – a European Union which would be of no use to anybody.”

Differences over reforms

The EU member states agree that reforms are needed to ensure the Union, designed in the 1950s for six members, can function properly when there are up to 27 or 28 members. But they do not agree how far or how fast those changes should go. The key issues under discussion are the size of the Commission, the weighting of votes to reflect member states’ population and importance, and increasing the use of qualified majority voting rather than decision-making by unanimity.

In addition to the “Amsterdam leftovers”, the member states are trying to agree on a mechanism known as reinforced cooperation which would allow some member states to proceed with economic and political integration faster than others. Germany wants another IGC after the current negotiations to ensure the division of powers at the various levels of the EU are also discussed. This responds to the threat by its federal states to block approval of the IGC.

The EU is aware of the danger. The German federal states were partly responsible for blocking agreement on extending use of qualified majority voting in 1997 when the last major treaty revisions were made in 1997 because they feared this would strip them of some of their power. The German proposals, outlined by a government source in Berlin, were largely raised in a speech last month by Foreign Minister Joshka Fischer calling for a European federation with a constitution, two-chamber parliament and government.

Such ideas are controversial in countries with euro-sceptic public opinion such as Britain, Denmark and Sweden. The German haste in making its desire for another IGC public also suggests it has not reached full agreement with France on the way forward for Europe, further underlining the difficulties that lie ahead at the IGC.

The European Union has overestimated the burden of investments needed by eastern European trcandidate countries to bring their environments into line for membership of the bloc, a think-tank said on Tuesday.

A 1998 assessment cited by the EU has said that eastern candidates will need 120 billion euros to adapt to the tough standards, particularly in the area of water and power legislation. On the basis of that estimate, candidate countries have said they will need long periods of grace before taking on the EU’s standards, meaning that the issue is expected to be one of the toughest to crack in the EU’s expansion talks. But the Centre for European Policy Studies said in a report presented to the European Commission the figure could be revised downwards, making negotiations on the environment less difficult than expected.

It said the bill for the manufacturing industry would be lower than expected as part of these countries’ capital stock will have been replaced anyway to achieve the quality, productivity and energy efficiency necessary to compete in the EU’s single market.

It said the investment burden for the public sector could also be lessened by transferring it to privatised utilities, relieving the strain on the public purse. The EU’s Enlargement Commissioner Guenter Verheugen said on Tuesday that the environment, along with agriculture and the free movement of people, was expected to be one of the most difficult issues in the expansion talks. Reuters