This document has been made available in electronic format by the International Co-operative Alliance (ICA) 

Agenda 2000: For a Stronger and Wider Union - ‘An historic opportunity’ (1998)
 

March, 1998
(Source: Studies and Reports. Thirty-first in the series
The Impact of the European Union’s Enlargement on Co-operatives. Papers presented at a seminar held in Prague 3-4 November 1997,  p. 90-101)
 

Agenda 2000: For a Stronger and Wider Union - ‘An historic opportunity’
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At the beginning of his mandate in January 1995, President Jacques Santer set the European Commission two fundamental objectives: strengthening the Union and preparing enlargement. On July 16 1997, after agreement on the Treaty of Amsterdam had cleared the way, he presented Agenda 2000 to the European Parliament, the Commission's detailed strategy for strengthening and widening the Union in the early years of the 21st century. He said Europe faced "an historic opportunity."

Agenda 2000 is a strategy for strengthening growth, competitiveness and employment, for modernising key policies and for extending the Union's borders through enlargement as far eastwards as the Ukraine, Belarus and Moldova. As President Santer explained to the Parliament, these objectives are closely related: "We cannot think of pursuing agricultural reforms or the reform of structural policies without at the same time taking into account enlargement and the financial constraints," he said. "It is this mix of equations that the Commission has sought to solve in developing the communication, Agenda 2000."

The Commission's 1,300-page communication gives a scrupulous assessment of the preparedness for membership of the ten applicant countries from central and eastern Europe and recommends that accession negotiations start with Hungary, Poland, Estonia, the Czech Republic and Slovenia. These are judged closest to fulfilling criteria set by the European Council at its summit in Copenhagen in June 1993. Negotiations with them will open early in 1998, as well as with Cyprus whose application has already received a favourable opinion from the Commission. The first accessions could be as soon as 2001, although Agenda 2000 assumes 2003 as more likely.

Meanwhile, the door remains open to Bulgaria, Romania, Latvia, Lithuania and Slovakia and they will be invited into partnerships with the EU to help speed up their preparations for membership. "It is not a process of exclusion. On the contrary, it is a process of inclusion that will be pursued permanently," said President Santer.

Agenda 2000 makes it clear that enlargement "will entail substantial extra costs for the existing 15 members," although they will be spread over a lengthy period of time. The Commission puts the total at ECU 75 billion - "a veritable Marshall Plan for the countries of central and eastern Europe," said President Santer. Nevertheless, the Commission believes that the task will not need an increase in the ceiling on the Union's revenues ("own resources").

After giving it close study, the General Affairs Council will present a detailed report on Agenda 2000 to the European Council of Heads of State or Government meeting in Luxembourg in December 1997. While unlikely to deal with all of the issues raised by the communication, the European Council is expected to give the green light to the start of enlargement negotiations early in 1998.

A triple challenge
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Agenda 2000 confronts three challenges facing the Union:

Strengthening the Union:
"Concentrate on what is essential .... and provide real added value."

The Commission's purpose is to orient internal policies much more resolutely towards Europeans' economic and social goals while also reshaping key policies with an eye to enlargement. Its main agenda items are:

Further institutional reform and a review of the Commission's  organisation and
operations

The Commission says institutional reform has still not been completed despite the achievements of the Treaty of Amsterdam of June 1997 in strengthening a "citizen's Europe" and clearing the way for the start of enlargement negotiations.

It wants a political decision before the year 2000 on the weighting of member states' votes in the Council and on reducing the numbers of Members of the Commission. It also calls for another Intergovernmental Conference as soon as possible after 2000 to prepare for enlargement with far-reaching institutional reforms, including the generalised use of qualified majority voting in the Council.

The Commission's own organisation and working methods will also be touched by reform. Its profile and effectiveness will be raised by the Amsterdam Treaty's strengthening of the status and power of the Commission President and the Commission has decided that it is time to launch a thorough review of its organisation and operations.

Develop internal policies for growth, employment  and quality of life

Policies are steadily falling into place to achieve these objectives, but the Commission believes that some need completing and refining, and others pursuing more vigorously. Its priorities are:

Maintaining economic and social cohesion through more effective structural funds
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Cohesion is essential and will be even more so after enlargement because per capita incomes in the applicant countries are only one third of the Union's average. Its importance in the existing Union is rfelected by comprehensive programmes for regions where development is lagging behind (Objectives 1 and 6), for declining industrial areas (Objective 2) and rural areas (Objective 5b). Much effort is also being devoted to employment and industrial change (Objectives 3 and 4).

The Commission has decided that the structural funds' efficiency and visibility would be enhanced if the seven Objectives were reduced to three and if their management was simplified and decentralised - essentially by means of a new partnership between the Commission, the member states and the regions. It also proposes that spending on Objectives1 and 2 ( which would be redefined to cover areas undergoing major economic and social restructuring) should be concentrated on 35-40% of the Union's population by 2006, rather than the current 51%.

Since average unemployment levels in Objective 1 regions are 60% above the overall EU average, it is proposed to allocate to them about two thirds of the Structural Funds available for the 15 member states. The Commission says that in future there must be stricter enforcement of the qualifying criterion for Objective 1, that a region's per capital gross domestic product must be below 75% of the EU average. Priority will be given to programmes for improving competitiveness in Objective 1 areas and for economic diversification in Objective 2. A new Objective 3 will be introduced for regions not covered by Objectives 1 and 2 that need help to adapt and modernise their systems of education, training and employment.

The Cohesion Fund, which benefits member states with per capita GNP less than 90% of the Community average and funds environmental and transport infrastructure projects, will remain unchanged. The Commission proposes that its financial endowment will be, for the present member states, of 3 billion ECU per year at the beginning of the period 2000-2006.

Further Reform of the Common Agricultural Policy
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The Commission wants to make agriculture more competitive in world markets, more consumer friendly and, by giving a new priority to rural development, more environmentally sensitive. In framing its reform proposals, it has also had to keep firmly in mind that the potential impact of eastwards enlargement firmly is a 50% increase in agricultural land and a doubling of the farm labour force. If the present levels of CAP support prices and direct payments were available in the central and eastern European Countries, the Commission says major income differences and other social distortions would be created by an inordinate flow of cash into rural areas while the Union's surpluses for sugar, milk and meat would rise.

The Commission's reform proposals build on the reforms of 1992 that have successfully cut product surpluses without prejudicing an average 4.5% increase in farmers' incomes.

The CAP's future policy objectives:

Cereals, beef and milk would be the main products affected by the reform. A 20% cut in the cereals intervention price in 2000 coupled with an area payment should avoid a heavy potential increase in cereals surpluses that the Commission calculates could rise to 58m tonnes by 2005.

Despite the effects of BSE, stocks of surplus beef could reach 1.5m tonnes by 2005 without a change of policy. The Commission proposes to cut the price guarantee by nearly 30% per cent between 2000 and 2002, and to compensate for losses of income with direct payments.

A similar approach is put forward for the dairy sector. While retaining the present quota system, 10% cuts in average support prices by 2006 will be counterbalanced by a yearly payment for dairy cows. Further changes are to be announced in the arrangements covering tobacco, olive oil and wine.

Rural Policy: growing demands for a more environmentally sensitive agriculture coinciding with the increasing use of the countryside for recreation create new obligations and opportunities for agriculture. The Commission favours giving a more prominent role to agri-environmental measures, especially those which call for an extra effort by farmers such as organic farming, maintenance of semi-natural habitats. Other aspects of sustainable rural development will be pursued by a reorganisation to make existing structural policies more targeted.

CAP Management: a new emphasis will be put on a radical simplification of the rules and applying them in a more decentralised way. Although the last reforms made the CAP more effective and transparent, they also bred inconsistencies and overlaps between policies. The Commission believes member states and regions should be given more responsibilities for implementation.

The Challenge of Enlargement
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"A new impetus for the development and integration of the European economy as a whole."

Applying the criteria
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At the request of the Council, the Commission prepared opinions on each membership application, drawing on the countries' responses to a questionnaire, assessments made by the member states, European parliament reports and resolutions and the work of other bodies. Its task was different from the three previous enlargements because it went beyond assessing the candidates' capacities to apply the whole body of EU laws, regulations, norms and standards that are known as the ‘acquis communautaire’. This in itself has greatly expanded, but the Copenhagen criteria include broad political and economic judgements (see ‘box’). They required the Commission to look into the future and assess the progress candidates could be expected to make, and also to anticipate future developments in the Union's policies.

In June 1993, the European Council meeting in Copenhagen adopted the criteria for membership to be applied to the countries of central and eastern Europe. Membership requires:

The Commission's Conclusions
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Democracy and the Rule of Law: on the whole, all of the applicant countries have constitutions and institutional arrangements that clearly correspond to the principles of democracy. But subscribing to principles is not enough - they have to be practised daily.

Even though a number of applicant countries still have to make progress in their practice of democracy, only Slovakia fails to meet the required political conditions.

Functioning market economy, competitive pressures and market forces: all countries have made good progress in their transition to a market economy but, in general, structural reform still has a long way to go, especially in the banking, financial and social security systems.

While none of the applicants fully meets the economic criteria, some should be able to do so in a few years time. Hungary and Poland come closest to meeting the conditions with the Czech Republic and Slovenia not far behind. Estonia has a market economy but needs to do more to be able to withstand competitive pressure. Slovakia meets this criterion but cannot be regarded as a functioning market economy.

Aims of political, economic and monetary union: the applicants have already demonstrated their readiness to contribute to effective common foreign and security policy action. On EMU, however, the applicants are unlikely to be in a condition to join the euro area immediately on accession. Nevertheless, they must conform to the rules governing prospective members of EMU which means granting independence to their central banks, coordination of economic policies, adherence to the relevant parts of the Stability and Growth Pact and abandoning any direct central bank financing of public sector deficits.

Taking on the obligations of membership (the ‘acquis’): the applicants have scarcely begun the task of embodying Union legislation in their national laws. While transition periods may be justified in some cases, accession after only partial adoption of the acquis has been ruled out by the European Council. An important related question is the capacity of their administrative and judicial systems to apply and enforce the acquis.

Main trends in the candidate countries suggest that, with stronger efforts, Hungary, Poland and the Czech Republic should be able to take on and apply the main part of the acquis in the medium term. Slovakia, Estonia, Latvia, Lithuania and Slovenia will need a considerable and sustained increase in their efforts.

Impact of enlargement on EU policies
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Agenda 2000 concludes that enlargement will bring considerable political and economic advantages. But the differences between member states will be more marked and adjustments in economic sectors and regions will need to be well prepared. The candidate countries will need heavy investment in areas such as environmental protection, transport, energy, industrial restructuring, agricultural infrastructure and rural society. Nuclear power stations will have to be brought up to internationally accepted safety standards.

Stronger Preparations for Enlargement
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Essentially, measures to step up preparations for enlargement must try to ensure that the applicant countries take on as much of the acquis as possible before accession. This allows negotiations to be based on the principle that it will be applied at accession - the Commission is firmly opposed to allowing countries to secure opt-outs or derogations from policy obligations.

Anxious to bring more drive to the pre-accession period, the Commission recommends a new framework, an Accession Partnership with each applicant country, and a new system of planning and assessing each country's performance.

Accession Partnerships will bring together all forms of assistance to the countries of central and eastern Europe within a single framework. They would involve:

The Commission recommends that as they progressively adopt the acquis, applicant countries should have the opportunity to participate in Union programmes.

The European Conference: emphasising that enlargement is a long term process affecting the whole of Europe, the Commission proposes an annual conference at heads of State or Government level and the President of the Commission, involving EU member states and all aspirant members. The conference would be a forum for consultations on a broad range of issues in the areas of common foreign and security policy and justice and home affairs.
 

The Financial Framework for 2000-2006
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“The new financial framework ........will have to provide coherent coverage within reasonable budget limits, for the development of Community policies and the impact of the union taking in new members...”

The Commission has concluded that there will be no need to raise the current expenditure ceiling of 1.27% of member states' gross national product. The new financial framework aims to satisfy three requirements:

On the basis of an average 2.5% growth rate in the EU and 4% in the applicant countries, it expects additional resources by 2006 of around ECU 20 billion. Projected total spending would rise by 17%, which would leave a cushion of reserves because it is less than the 24% anticipated rise in GNP: Other spending should rise in line with GNP growth, although the Commission expects a faster growth of expenditure on policies which can make the biggest contribution to growth and employment.

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Official document of the European Commission
http://europa.eu.int/comm/agenda2000/rapid/over_en.htm