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

Speaker Johannes ter Haar (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. 16-20 )

Ladies and gentlemen,

It is a great pleasure for me to be able to contribute today to this seminar dealing with the enlargement of the European Union and its impact on the co-operative movement. Since other speakers have a lot more to say specifically on co-operatives, I would like to update you on the progress of discussions regarding enlargement, make a few remarks on the priorities facing the Union and say a few words on what we think are the most important aspects of this process for you to bear in mind as members of the co-operative movement.

You will be aware that the Commission recently released a package of documents entitled “Agenda 2000”. “Agenda 2000” endeavours, in one coherent package, to answer two pressing questions: “How do we respond to those countries which have requested to join the EU?” And “How should we manage the policies of the Union in a new millennium, and with a large and more diverse membership?”

The question that is of most relevance to our discussion today is, of course, the Commission’s opinions on the applications for membership. You will be aware that, of the ten Central and Eastern European applicants, the Commission recommended that the council open negotiations for membership with the Czech Republic, Estonia, Hungary, Poland, and Slovenia. The Council will take the final decision on this recommendation next month. Once that decision is taken, the Commission will begin the long and complex process of negotiations, which are designed to achieve one aim, that of ensuring that the countries concerned are, indeed, able to join the Union within a relatively short space of time, and with a minimum of special arrangements.

The Commission’s recommendations regarding the readiness of a country to join the EU is based on an extensive and objective analysis of the ability of the countries concerned to assume the obligations of membership. Broadly speaking, that implies that they be open, democratic, and market-oriented states, capable of playing a full and constructive role in the European Union at all levels. The Commission rejects the idea of first and second class members and will endeavour to ensure that all those who join the Union do so well prepared for the obligations of membership. What does this preparation consist of? Let me give a few examples that appear in the Commission’s opinions.

The governments of the applicant countries will have to continue the structural reforms that have enabled their economies to become closely integrated with the EU. For example, the Commission has drawn attention to the need to strengthen the many bodies that supervise and regulate the functioning of parts of the economy such as capital markets, competition policy, public auditing etc. These will ensure that the market reforms are sustainable and benefit all.

Another particular point for the applicant countries to deal with, and which is of direct relevance to the negotiations themselves, is the preparation of the civil service for membership. Due to its very nature, the Union functions according to a complex decision-making process and, in order to maintain confidence in that process and also to maximise the benefits of membership for their own citizens, it will be vital that the countries that are preparing for membership have at their disposal a civil service that can navigate in the occasionally turbulent waters of the Union’s legislative and administrative machinery.
A factor to which the Commission paid very close attention in developing its opinions is the development of, and respect for, democratic institutions. By democratic institutions I do not mean simply the structures of government, but also the non-governmental organisations, associations, unions, and, indeed, the co-operative movements, which build links between citizens, independent of government.

I would not like to imply by these words that enlargement is a one-sided process, with the burden of change falling only on the side of the applicant countries. Enlargement can not simply be a matter of mechanically attaching new member states to the existing Union, but requires adaptation on both sides. The most pressing need is to reform the way in which the EU works as an institution. While we recognise the importance of respecting the principles which make the European Union the unique body it is, it is difficult to imagine the structures designed for six member states stretching themselves far enough to be able to accommodate themselves to a Union of 20 members or more.

Moreover, it is also important that we take a long look at the policies that currently form the basis of much of the Union’s work. Following earlier reforms, the Commission recommended changes to the Common Agricultural Policy that will ensure that we can expand without placing intolerable burdens either on the Union’s budget or on the incoming members; we also recognised the need to reform the Structural and Cohesion Funds which are the expression of solidarity between more and less prosperous regions of the Union, so that the less wealthy regions of future member states can receive the kind of support which has been so crucial in helping many regions of the Union tackle the unemployment and social problems that frequently follow industrial decline, overcome geographical isolation or lessen their dependence on outmoded industries. Alongside the need to adapt as the world around us changes, one should not underrate the importance of continuing to ensure that the European economy enjoys the gains of the single market, which has been so successful in promoting business across the frontiers of member states, an essential process if companies are to avoid becoming trapped in small markets. The single market action plan, adopted a couple of months ago, contains four strategic targets: making the rules more effective; dealing with key market distortions; removing obstacles to market integration; and delivering a single market for the benefit of all citizens. The final building block to the single market is, of course, monetary union. As of 1 January 1999, the Euro will be the single currency of the Euro area. National currencies will no longer have an independent existence but will be merely denominations of the Euro. The result of this will be the biggest market in the world with 370 million people using one single currency. Enlargement will eventually bring into this market 100 million further consumers, from countries which have different economic and social situations, but which represent an historic challenge, and a great opportunity for business.

As part of a dynamic business sector, co-operatives will have a great opportunity to profit from enlargement. The Commission activities directed towards business in Central and Eastern Europe are very extensive, particularly through the Phare programme, which provides technical assistance and financial support, helping companies to grow and create the kind of links with partners throughout Europe that are essential in a fast moving economy.

Within the Union, the Commission established the Social Economy Unit many years ago. This unit is designed specifically to strengthen the co-operative sector. The support which it provides is guided by a multi-annual programme which recognises the unique features of co-operatives in a sector which is key to the competitiveness of the European economy, vital for the creation of employment, and, frequently, the birthplace of much innovation. Co-operatives play a key role in the SME sector, both in their own right, and in serving other SMEs, and hence provide a useful channel for the transmission and dissemination of information on European regulations, promotional programmes and new technologies to SMEs. The Commission has proposed a set of Statutes for the European co-operative society, the European Mutual Society and the European Association, which have been making their way through the legislative process for the past few years, although rather more slowly than you may wish. These Statues will permit co-operatives, mutuals and associations to take advantage of the single European market without sacrificing their intrinsic character. In order to provide financing for co-operatives, the Soficatra Consortium has been formed, with Commission support, by 11 financial institutions in 6 countries to invest in European-scale projects in the sector. This will also be accompanied by the launch of two unit trusts, directed towards co-operatives. The Aries project offers a Europe-wide telematic information network based on the world wide web, computer bulletin board, on-line databases and related paper-based information products. As the reality of the single market imposes itself on business, companies are confronted with the need to co-operate. The “European third sector training network” aims to survey the use of existing programmes and ensure that groups can make good use of them, by making information regarding training projects and other resources available to co-operatives. The co-operative movement is defined by its closeness to the citizens, its network of links across Europe, and its commitment to social justice. Through its ongoing work, and through events such as this seminar, the co-operative movement can play a key role in shaping Europe on the basis of these values.

I hope that these words have served to demonstrate the commitment of the European Union to co-operatives, in the Union of today, and in the Union of tomorrow. I wish you every success with this seminar. Thank you.

Joannes ter Haar
Head of Delegation of the European Commission in Prague